Following our discussion at the Staff Conference on Friday, May 26
2. With reference to paragraph 13(a) of your letter about the basis on which the Australian Government are to make their future plans, you will find a good deal of the material you require in two papers which you already have, namely, the record of the meeting which we had at Chequers on Sunday, May 21 (C.O.S.(44)447(0)) ; and the report dated May 10 which the Chiefs of Staff prepared in accordance with your request (C.O.S.(44408(0)). 
3. To take the Australian war effort first, we agreed at Chequers that the apportionment should be as follows:-
(a) the maintenance of six divisions for active operations;
(b) the maintenance of the Royal Australian Navy at its present strength, plus additions arising from the Australian Naval construction programme (see my later comments on the naval aspect);
(c) the maintenance of the Royal Australian Air Force at the strength of 53 squadrons, to be achieved under the present programme by December 1944;
(d) Food for Great Britain (with a possible addition for India) to be exported on the 1944 scale.
4. On the question of the additional British forces which may ultimately be sent to the Pacific, no firm estimate can be made until the strategy for the war against Japan and our post-war commitments in Europe have been decided. Meanwhile, however, the report which the Chiefs of Staff prepared at your request (C.O.S.(44)408(0)) sets out the best forecast that they have been able to make of the naval, land and air forces which might be available to be sent to the war against Japan, and the dates by which they might become operational. Although these forecasts are of an essentially provisional character and do not imply any commitment or the adoption of any specific plan, we are agreed, I think, on the desirability of Australia proceeding with the measures necessary for their supply and maintenance, observing, as you point out in paragraph 13(a) of your letter, that these resources could be absorbed in other directions in the war effort of the United Nations if it is ultimately decided that all or part of the British forces in question should not be based on Australia.
5. We are agreed, I think, that whatever strategic policy may be decided upon for the conduct of the war against Japan, it would be prudent to commence the further development of Darwin and Fremantle as a base of operations at an early date. The precise form that this development should take will, of course, depend upon the reports we receive from the Australian Staff after they have consulted with the British Reconnaissance Mission which is now on its way to Australia.
6. With reference to paragraphs 9(a) and 13(b) of your letter under reply, the First Sea Lord has, I think, explained the present position to you. There are approximately 3,000 Royal Australian Naval personnel overseas, manning six destroyers and twenty minesweepers belonging to the Royal Navy. The majority of these ships are now serving in the Indian Ocean. The return of these personnel to Australia would present the Admiralty with a most serious manning problem and would, in fact, mean the demobilization of the destroyers and minesweepers manned by the Royal Australian Navy or of an equivalent number of ships in the Royal Navy. It should, however, be possible, if the Eastern Fleet establishes an advance base in the waters to the north of Australia, for the six Australian-manned destroyers to be the first to move in that direction. You mentioned to me on Sunday, and again on Friday, that some proposal had been made for Australia to provide additional naval personnel to the tune of three or four thousand men. I think there must have been some misunderstanding on this, since I am assured by the First Sea Lord that no such proposal emanated from the Admiralty. Nevertheless, if the Australian Government could see their way to provide the personnel, the Admiralty would be most willing to turn over to Australia an aircraft carrier and one or more cruisers. A more detailed statement prepared by the Admiralty is attached. 
7. With reference to paragraphs 9(b) and 13(c) of your letter, I fully realize the desire of the R.A.A.F. squadrons to get back to Australia and take part in the fighting against Japan.
Nevertheless, to send them back at the present moment could not be justified, since releases would be at the expense of the impact on Germany. This does not mean, of course, that we shall hold these squadrons a day later than is necessary. There are certain complications concerning the admixture of R.A.F. personnel within these squadrons with the R.A.A.F. personnel. These difficulties can, I am sure, be overcome when the time comes for the squadrons to return.
8. As regards the Empire Air Training Scheme, the recent reduction in the Training Organization already allows a very considerable reduction (approximately 40 per cent) on previous contributions of Australian trainees. The Air Ministry would however be prepared to go further and forego any Australian contribution above what is required to maintain the R.A.A.F. regular and Article 15 squadrons. In effect this would mean a complete stoppage of despatch of Australian trainees to Canada for further training, except for those you wish to have trained for your own squadrons.
This question is now for you to decide.
9. I gladly agree to the Australian Cabinet's proposal  that we should release 100 men a month from amongst those who have served two or three years away from home. I am most grateful for the undertaking that 100 men shall be sent monthly from Australia as replacements. This arrangement will be put in hand forthwith.
10. A further Air Force point which you mentioned at the meeting on Friday was your desire to have a senior Royal Air Force Officer posted to Australia. The Chief of the Air Staff said that his Secretary of State proposes to submit some names to you before you leave. I trust that this matter will be satisfactorily settled.
11. Towards the end of the meeting on Friday, Lord Leathers  explained the difficulties in the way of accepting your generous offer to increase the supplies of butter and sugar to this country. He undertook, on your request, to let you have a separate note on the general transport aspect of Australian exports.
12. Finally there is one further matter which I would like to place on record. just before the meeting on Friday, we gave you a copy of a memorandum entitled 'THE WAR AGAINST JAPAN'.  I wish again to emphasise that this paper does not purport to do more than give an indication of the way our minds are working. We propose to press on with our study of the proposition with which it deals with a view to discussing it with the United States Chiefs of Staff round the table at the first available opportunity. Meanwhile I am sure that you will understand my desire that you should not make any reference to this project in your forthcoming discussions in Washington. Similarly I should be glad if you would keep to yourself the very provisional estimates contained in the report by the Chiefs of Staff (C.O.S.(44)408(0)) in regard to the British forces which might be based on Australia.
The apportionment of the Australian war effort is, of course, quite another matter, and so far as I am concerned there would not be the slightest objection to discussing the propositions on which you and I agreed with the United States Authorities.
WINSTON S. CHURCHILL
P.S. Upon further reflection, I think it would be best if you read and studied 'THE WAR AGAINST JAPAN' on the basis that it is not an agreed document here, and then destroyed it by fire, as otherwise it may some day fall into hands that do not know the basis on which it has been delivered and tend to confuse.
[AA:A5954, BOX 5]
1 See Document 167.
2 Document 153.
3 This number refers to a note from Maj Gen L. C. Hollis, U.K.
Senior Assistant Secretary in the War Cabinet Office, covering the minutes published as Document 161.
4 On file AA:A5954, box 5.
5 Dated 26 May. On the file cited in note 4.
6 See War Cabinet minute 3541 of 9 May in AA:A2673, vol. 14.
7 U.K. Minister of War Transport.
8 Undated. On the file cited in note 4.