Following for the Prime Minister.
As you are no doubt aware when Sir A. Gaye , United Kingdom member of the British Phosphate Commission was on his visit to the United States, Southern Dominions and the Pacific in the early months of this year, he raised with various United States and British Service Representatives the question of reoccupation of Nauru and Ocean Island. He reported on his return that he had not been able to obtain any definite information or assurance about the plans for such an operation.
2. In view of the importance of phosphate supplies for Australia and New Zealand from the point of view of the overall food situation and of advantages from shipping and supply aspects of enabling the Southern Dominions to draw phosphate rock from this source, it was decided to ask the United Kingdom Chiefs of Staff to raise the matter with the Combined Chiefs of Staff and to urge that all possible steps should be taken to reoccupy the Islands as early as practicable.
3. The Joint Staff Mission were instructed to raise the matter in Washington accordingly, basing themselves on a memorandum furnished from London which emphasised the great importance of food, supply and shipping aspects and direct interest of the United Kingdom and the United States Governments in this matter.
4. Understand that the matter was discussed at the meeting of the Combined Chiefs of Staff with Generals Blamey and Puttick  on 24th April when the United States side indicated that the 'tremendous importance' of these Islands was realised and that their recapture was ,on the list'. General Puttick stated that he had discussed with the United States Commanders concerned and was satisfied that the islands would be retaken as soon as possible.
5. The situation thus appeared promising but in the absence of any further information as to the prospective plans, we recently made further enquiries through the Joint Staff Mission. The latter have now been informed by the Secretary of the United States Joint Chiefs of Staff that 'there are no operational plans for the recapture of these Islands and it is not possible to predict at this time when they will be reoccupied'.
6. Representations on this subject are, we feel, a matter of some delicacy since- (1) Nauru and Ocean Island are in the United States theatre.
(2) The islands have already been by-passed and operations against them would probably involve recall of men, vessels, and material from advanced areas.
(3) The configuration of the Islands renders their capture by assault no easy operation.
(4) The United States authorities may consider that the garrisons may be 'starved out' or otherwise disposed of without assault on the islands.
7. A further complication arises from the United States proposal (which has been communicated to you through the Australian High Commissioner in London ) to approach the Japanese Government with a view to exchanging Japanese garrisons isolated in the Central Pacific Area including Nauru and Ocean Island against corresponding number of Japanese-held United States prisoners of war.
So long as this proposal is under discussion it seems impracticable to press the United States authorities further on the question of operations to recapture these Islands. In the meantime we are considering whether there is any further action which we might usefully take if as seems not unlikely this proposal does not come to anything.
We will communicate with you again on the matter in due course.