Your cablegram No. 2, of 19th April, 1944. 
2. War Cabinet and the Advisory War Council have given consideration to Agendum No. 80/1944  relative to the report of the War Commitments Committee and to Supplement No. 1 thereto containing the observations of Ministers concerned, also the related Agendum (No. 215/1944)  arising from War Cabinet Minute No. (3334)  regarding the strategical review by the Defence Committee as basis for consideration of provision being made for the defence of Australia.
3. You will recall that the War Commitments Committee did not suggest any variation in the existing limit of intake into the services of 3,000 males and 2,000 females per month.
4. In Supplement No. 1 to Agendum 80/1944, the Minister for the Navy sought variation of Navy's present allocation of 150 persons per month to an average of 300 males and 50 females per month as from the 1st February to 31st December, 1944, the Army and Air Force quotas to be reduced accordingly. As quoted in my cable No.
12 of 20th April , the Navy statement is that this increase must be made unless ships now being completed are not to be manned, other essential services abandoned or reduced, and new commitments, e.g. the taking over by the Royal Australian Navy of the Commonwealth Salvage Service, cancelled.
5. The Navy submission also embodies the proposal  previously submitted to the Advisory War Council regarding the possibility of increasing the strength of the Royal Australian Navy by the transfer of vessels from the Royal Navy. It is stated to be certain that a proposal from Australia for such transfer would be welcomed by the United Kingdom authorities. The Naval Board estimate that a force of one aircraft carrier, one cruiser and six destroyers would require an addition of between 4,000 and 5,000 to the strength of the Royal Australian Navy, necessitating an increased monthly intake of 450 persons until the requirement is reached and maintenance thereafter. The 450 is additional to the requirement referred to in paragraph 4 and would thus increase the total Navy allocation to 800 monthly (700 men and 100 women).
6. In submitting this proposal the Minister for the Navy expressed the view that increased Naval Forces are more than justified for the following reasons:-
(a) Admiral Nimitz' opinion that more and more Naval vessels of all types are required in the Pacific in order to carry out a nonstop offensive.
(b) General MacArthur's recently expressed desire for additional Naval Forces in this area.
(c) The desirability of maintaining the highest possible effort by Australia in the Pacific. Additional vessels would permit more adequate Australian representation in the final phases of the war against Japan. Such representation can be provided most readily and appropriately by Naval Forces.
(d) The prestige of Australia in the Naval effort vis-a-vis that of Canada.
(e) These vessels would be a replacement of the heavy losses which the Royal Australian Navy has sustained.
(f) The increase could be obtained at such a modest additional requirement in manpower, readily obtainable by a very slight re- allocation of the manpower now allotted to the Services.
(g) It would be an appropriate Empire gesture at the present time.
7. After full discussion of the proposals and their implications from the aspect of Australian defence and after hearing the views of the Chiefs of Staff, Non-Government members of the Advisory War Council were of the view that the proposal to increase the strength of the Royal Australian Navy by the transfer of ships from the Royal Navy should be adopted and that the personnel strength of the Navy should be increased by 5,000 to provide for the manning of such additional ships. Non-Government members also considered that the increased strength of 5,000 should be in addition to the present numbers of Royal Australian Navy personnel attached to the Royal Navy, i.e. 3,009, in view of the fact that the great majority of such personnel are serving in the Indian Ocean with the Eastern Fleet.
8. War Cabinet did not record a decision on this proposal in view of the consideration which is being given it by you whilst abroad in conjunction with the earlier proposal that the 3,009 Royal Australian Navy personnel overseas should return to Australia.  War Cabinet, however, felt that it would definitely be to the advantage of Australia if the ships mentioned in the Navy proposal could be obtained on transfer from the Royal Navy, but this conclusion was subject to the express condition that modern ships would be transferred.  It was also felt that if it were possible to obtain the transfer of such vessels from the Royal Navy as a gift, on the condition that Australia manned them, a re- allocation of manpower between the Services could be effected to provide the additional 5,000 personnel requisite for their manning without necessarily entailing the return of the personnel serving overseas although having regard to the overall manpower position their return would be of material assistance.
9. Regarding the proposal in paragraph 4 above for the increase of the Navy intake by 200 males per month over the present allotment of 150 persons, War Cabinet, after careful consideration of the matter and hearing the views of the respective Chiefs of Staff, decided that the Army and Air intake quotas of males should be reduced by 130 and 70 respectively in favour of Navy as from 1st May to 31st December, 1944.
This decision is to be subject to review in the light of any arrangement that might be made by you for the return of Australian Naval personnel serving overseas and in any event the position is to be reviewed as at 31st October, 1944. This decision is to provide for all present Naval commitments except the cruiser and destroyer, the construction of which was recently authorised by War Cabinet. 
10. As it is necessary to commence early recruitment of the additional personnel in order that they may be trained and available to man vessels as they are delivered, it would be appreciated if you could give your early consideration to the proposal in paragraph 9 above. I should also be glad to hear from you on the wider question of transfer of additional ships from the Royal Navy as soon as you are in a position to advise.
11. War Cabinet and the Advisory War Council have discussed at length the question of any measures that might be adopted to meet more rapidly the urgent demands for assistance to primary industry and particularly the dairying industry under the existing decisions of the Government. The necessity for maintaining the striking power of the Fighting Forces is, of course, the overriding consideration, but a complete re-examination is being made of the discharges that are being effected under the decision regarding releases for civil employment with a view to high priority being given to discharges for the dairying industry. This whole matter will again come before War Cabinet and the Advisory War Council at an early date.