Reference your E.11  the following information was in course of preparation for communication to you in regard to the last paragraph of Dixon's S.69.  It is also being communicated to General MacArthur with a request that he endorse our statement of the case in order that any misunderstanding in Washington attributed to Lieutenant General Kenney may be removed:
(a) Consequent upon the entry of Japan into the war, Government approved plans early last year for the expansion of the R.A.A.F.
to 73 squadrons to be formed by the end of 1942, which target was within the capacity of the R.A.A.F. and was only reduced to a programme of progressive stages because the aircraft required could not be made available. The present plan of development by another 10 squadrons making a total of 45 by the end of 1943 has been fixed at that figure to conform with aircraft allocated by the Combined Chiefs of Staff and not on account of lack of capacity of the R.A.A.F. to cope with further expansion.
(b) Training capacity of Empire Air Scheme is now fully developed and 4-weeks output of air crews under various categories basically trained in Australia approximates 780 of which 365 are retained in Australia and 415 made available to the Royal Air Force. In addition, air crew partially trained in Australia are sent to Canada to complete their training at the rate of 224 every 4 weeks. In the recent extension of the Empire Air Scheme agreement the United Kingdom Government expressly approved of the R.A.A.F.
retaining from the monthly outputs sufficient air crews [to]  meet local requirements in accordance with the availability of operational aircraft. It will therefore be seen that additional 415 air crew every 4 weeks could be made available to man additional squadrons subject to due notice being given to the United Kingdom Government of our intention to use them in this theatre.
(c) In regard to ground staff, technical training capacity was stepped up last year in anticipation of the development to 73 squadrons that year, but was reduced to keep pace with aircraft allotments.
[Outputs] of trained ground staff can readily be increased to double the present [output] so that additional technical personnel will be available within 6 to 9 months from the date of increased intake. Ground staff and other maintenance personnel are already in training to meet the development to 45 squadrons by December 1943 and quotas are completing courses monthly to fit in with anticipated deliveries of aircraft from local manufacture and overseas assignments. Provided therefore that early advice is given of increased allotments to be delivered this year, recruiting and training arrangements can readily be adapted to meet requirements. The same would also apply to allocations earmarked for next year.
(d) There is no question of the ability of the Royal Australian Air Force to develop and maintain the 73 squadrons originally planned. The rate of development is dependent only upon due notice [of] planned availability of aircraft. The question of allocation of manpower can of course be adjusted here.
(e) It is desired to dispel any doubt that may exist as to the operational use of aircraft made available to the R.A.A.F. Such aircraft are assigned unreservedly for employment under the orders of the Commander-in-Chief South-West Pacific Area. Further, the development of the R.A.A.F. maintenance organization, communications and operational base facilities, which are now unreservedly placed at the disposal of the Allied Air Forces, is capable of being adapted to any additional commitment caused by an [increase] in the number of operational squadrons formed by the Royal Australian Air Force.