Repeated to London No. 80.
Conclusion of United States Canada Defence Council and lease of sites for American bases in British West Indies has inspired press references here and elsewhere to possibility of extension of arrangements either or both of these lines to Pacific and Australia.
Whilst I do not believe the United States will consider any such extension before November election for domestic political reasons I think it is not impossible after the elections.
In conversation with Berle  to-day I thought it proper to inform him that cables from Australia speculating on the above did not arise from His Majesty's Government in the Commonwealth of Australia. In reply as regards lease of British West Indies bases he said that he was watching public opinion reaction which he believed would confirm and welcome the arrangement but he believed public discussion of the possibility of the extension of such an arrangement to the Pacific was unwise at present. He went on to say 'If any such arrangement is possible in future, it should be arranged quickly and confidentially.' I suggested [sic] your not building any immediate hopes on the above, but it was a significant remark. I think it would be wise to damp down any public discussion at present.
It would be valuable for me to have from you the views of the Government defence Advisers as to the most telling arguments that I could have up my sleeve for use on appropriate opportunities respecting the value to the United States of joint use existing bases or rights to lease and build their own bases or other such arrangements in south west Pacific.