1. In cablegram No. 21  I asked you to examine the following with the United Kingdom Government and its advisers and furnish me with the earliest possible advice:-
(i) The present and prospective situation at Singapore and the prospect of holding it, including the plans for its reinforcement and relief;
(ii) The effect on the general strategic plan should Singapore be lost or should the Japanese in addition to besieging Singapore use their sea power against the Netherlands East Indies, Portuguese Timor or Australia;
(iii) The disposition of the A.I.F., which is dependent on the ultimate strategical position;
(iv) The adequacy of the naval escorts that can be provided in view of superior Japanese naval and air power and the consequent risks of getting our forces into the N.E.I.
2. In considering the primary responsibility of Australia for its own local defence and the part it can play in overseas co- operation, I am furnishing you with the following observations in order that you will fully understand the setting of the questions referred to you in paragraph 1 and the fundamental background behind them insofar as Australian Defence is concerned:-
PART 1-THE BASIS OF AUSTRALIAN ARMY ORGANISATION 3. The Australian Army was organised on the basis of providing a Force for Home Defence, or, if the situation permitted, the raising of an Expeditionary Force for service overseas. The present disposition of the A.I.F. has to be looked at from these two angles, the latter of which is considered in Part 2 and the former in Part 3.
PART 2-THE THEATRE OF LOCATION OF AN AUSTRALIAN EXPEDITIONARY FORCE 4. It was never contemplated, with war in the Far East, that our Expeditionary Force would proceed further afield than Singapore and Malaya, as the whole of the Forces that we could raise would be required for the local defence of Australia and for helping to reinforce the outer screen extending from Singapore at one end to New Caledonia at the other.
5. An Expeditionary Force was sent to the Middle East because Japan was not an enemy. In the military position then existing there were overseas fronts in Western Europe and a series of Middle East fronts in the Italian African colonies which presented threats to our communications through the Mediterranean. The Empire's unpreparedness necessitated putting into the frontline theatres all the Forces that could be raised in and spared from less threatened centres.
6. Now that the Empire is marshalling its strength with the raising and equipping of forces, it is a natural sequel to review their distribution in the rational manner in which we would have looked at the position had we originally been confronted with it.
it is logical, in view of the situation that has now arisen, that as soon as forces can be made available to relieve them, the whole of the A.I.F. Corps should be transferred to the Pacific theatre.
Whether they should be an Expeditionary Force outside Australia or an addition to the Home Defence strength is dealt with in Part 3.
Part 2 is confined to the most appropriate location of the A.I.F.
as an Expeditionary Force.
7. The general line of strategy agreed upon by Generals Wavell  and Brett  as reported earlier is to hold the Netherlands East Indies and Malay Barrier until we are in a position to take the offensive against the Japanese. To achieve this, adequate forces have to be built up in this area. Portuguese Timor is also an extremely vulnerable spot to us, and it is not improbable that the security of this territory may entirely depend on the speed with which we can dispose forces to nip in the bud any Japanese attempt at occupation. We also lack forces for the defence of the islands to the east of Australia such as New Caledonia.
8. These strategical reasons fully support the case that if we have an Expeditionary Force abroad it should be concentrated in the Pacific theatre.
9. There are also other military advantages. The transfer to the Pacific theatre would mean a shorter line of communication for reinforcements and supplies, and a lesser demand on shipping and escorts. It would also strengthen the defence of Australia. In the last resort, should fortune still further favour the Japanese, it gives a line of withdrawal to Australia for our Forces, which we do not possess at present with the A.I.F. in the Middle East.
10. There are in addition important psychological considerations.
The concentration in this theatre would have a great influence on the morale of the troops, who would feel that they are more directly resisting aggression against their homeland. It would have a stimulating effect on the spirit of the Australian people.
11. Finally, the concentration of the A.I.F. in the Pacific theatre would greatly increase the proportion of Australian Forces in a theatre so vital to us. It ensures the unity of direction and operation of the A.I.F. It greatly strengthens our claim to a voice in the higher direction of operations in this region.
12. The conclusion expressed is that if Australian Local Defence permits of an Expeditionary Force serving abroad it should be in the Pacific theatre. The relation of an Expeditionary Force to Australian Local Defence is dealt with in Part 3.
PART 3-THE PRESENT RELATION OF AN EXPEDITIONARY FORCE TO AUSTRALIAN HOME DEFENCE 13. The important questions of the immediate future are:-
(i) Can we hold the Netherlands East Indies? This depends on- (ii) Will the Japanese establish themselves there before us? (iii) Can we get our forces in and maintain them without superior sea power and air power? 14. In the Malayan campaign, it was originally contemplated that the Japanese should be opposed in Thailand, the next point was northern Malaya, then the frontier of Johore, and finally, before the ultimate withdrawal to the fortress, a line drawn across Johore.
15. It can be argued that it is good defensive-offensive tactics to meet the enemy as far afield as possible and withdraw whilst inflicting losses on him, though suffering losses oneself The enemy is ultimately driven back by a counter-offensive from a suitable base by forces drawn from the main reservoirs of strength or, if the enemy is dependent on remote sources of reinforcement and supply, his lines of communication may be cut.
16. It is however risky to hazard one's main base and largest reservoir in the theatre of operations by stringing out the resources of this reservoir along the line of the enemy's advance where, owing to superior sea power, air power and greater military strength, he can bring stronger forces to bear. This strategy invites progressive defeat along the line and ultimately imperils the capacity to defend the main base through the dispersion of forces.
17. If such is the case, the absolute security of the main base is of fundamental importance and no risk should be taken with its security. It is important to note that Japan's line of communication is shorter than those of the United Kingdom and the United States of America.
18. Applying the validity of the foregoing to Australia as the main base in the south-west Pacific, the following conclusions are to be noted:-
(i) The foundation of the defence of British territories in the Pacific was the Singapore Base with a fleet based thereon.
(ii) Singapore as a fleet base is lost and it will not be until May that fleets of any strength can be concentrated in the Indian and Pacific Oceans. No indication is given as to when a superior fleet will be possible.
(iii) Australia, which is the main base for operations against Japan, is in jeopardy until superior sea power is regained. Even then it can be imperilled by the loss of a fleet action.
(iv) In the meantime Australia, as the main base, must be made secure. This can be achieved by holding Japan on the outer screen extending from the Netherlands East Indies to New Caledonia, or by increasing the local defence strength, part of which would become available for operations outside Australia when strength has been gathered for a counter-offensive.
(v) Holding the outer screen at the risk of weakening the defence of the main base is hazardous if the Japanese can reach the Netherlands East Indies in greater force before us. This appears probable because of their shorter lines of communication and superior sea power and air power.
(vi) Japanese sea power and air power can also greatly limit our capacity to reinforce the Netherlands East Indies and maintain forces there.
(vii) Until superior sea power and air power are attained by the Allies the resistance to the Japanese in the Netherlands East Indies will probably be limited to the forces there and such reinforcements as can be readily despatched, such as submarines and aircraft.
(viii) The alternative method of securing Australia as the main base was stated in (iv) to be the strengthening of its local defence until strength had been gathered for the counter- offensive. In view of the conclusions in (vi) and (vii) it is a matter for urgent consideration whether the A.I.F. should not proceed to the Netherlands East Indies but return to Australia.
The defence of Australia in the short-term period must largely rest on Australian Forces and the degree to which they can be supplemented by forces, and to a large degree equipment, from United States of America. The question of large-scale assistance to Australian Defence by American and Canadian forces has been raised but nothing can be of assistance as quickly as the A.I.F.
(ix) The conclusions expressed above are fully co-operative. Their purpose is to ensure as far as possible the certainty of ultimate victory by defending Australia as a base, even though ground may be given to the enemy. We avoid a 'penny packet' distribution of our limited forces and their defeat in detail. When we are ready for the counteroffensive, superior sea power and the accumulation of American forces in this country will enable the A.I.F. again to join in clearing the enemy from the adjacent territories he has occupied.
19. You will consider the foregoing as observations for your guidance and should put them forward as authoritative, but they have not yet been considered by the Government. I shall communicate with you again as soon as possible. The matter is one of great urgency as the first flight of the A.I.F. is at Bombay.