Our 205 of 27th July.  Council of Foreign Ministers.
More recent information on the Potsdam meeting indicates that the Council of Foreign Ministers will be, in effect, a semi-permanent body whose conclusions or recommendations are intended broadly to settle in advance all basic issues affecting the general peace settlement. Nonparticipation in its discussions would, therefore, exclude us in effect from the decisive processes of the peace- making, a situation quite at variance with our definite understandings with you.
2. The suggestion, still to be elaborated, that lesser States will take part on invitation in the Council's discussions does not measure up to our conception of effective participation as a principal in the Council's work. Such an ad hoc arrangement would neither recognise our right to participate as a principal in all decisive stages of peace deliberations, nor assure us the opportunity of stating our views at the time and in the manner most appropriate for our purposes.
3. We have never questioned the leading role of the three Great Powers on such matters as will come before the Council. However, the inclusion among the Council's members of France and, most significantly, China (in respect of European affairs) justifies the inclusion of Australia as a member. Measured in terms of relative war effort and overall contribution to victory, Australia can fairly stand alongside either of these powers, and in terms of European war commitments and post-war interests in Europe, has a more than equal right to effective participation than China.
4. These general considerations have been strongly reinforced by our examination on the information available of specific matters which have been under discussion at the Berlin Conference. We make particular mention of.- (a) Italy. On this we hold emphatically that no preparations for the peace treaty should be proceeded with without our full participation at all stages, mere communication of views by telegram is quite inadequate.
(b) Former Enemy Territories. You will recollect that in April last the Australian Government expressed views regarding the disposition of the Italian Colonies and the general question including the future of former Japanese possessions is of the closest concern to us, particularly in view of the leading part taken by Australia in the trusteeship discussions at London and San Francisco.
(c) Polish Provisional Government. Our concern here is also direct, and we refer to our earlier representation of Polish interests in the Soviet Union.
(d) Turko-Soviet Relations. Australia took a prominent part in the Montreux Conference and is closely interested in the future of the Straits area by reason of its political and strategic importance to the Near East and Mediterranean.
(e) German Merchant Marine. In our telegram No. 161 of 21st June , we reserved full right to lodge a claim for reparations from Germany. We consider we are entitled to an independent share of the allocation of the German Merchant Marine and armed vessels.
Our losses in this respect have been relatively heavy.
(f)Allied Policy in Germany. We have a deep interest in the revival of a genuine democracy in Germany and in the promoting of conditions which will safeguard against any resurgence of German Fascism. A number of specially qualified Australians have been nominated for service with the British Control Commissions in Germany and Austria and we consider that a further essential step would be the attachment of an Australian Military Mission to the Control Council for Germany.
5. For the above reasons, we hold strongly that the Council's present membership should not be regarded as rigid and that in view of its decisive peace-making and other functions the inclusion of Australia by appropriate arrangement as a principal to its discussions is essential as a minimum recognition of our part in the war.
6. In regard to the future of Japan, we have given preliminary consideration to your telegrams D.1243, 1244 and 1245  and will shortly be communicating fully.
Our general attitude is as follows-.- (1) Full Australian participation as a principal in decisions on policy and in control arrangements.
(2) A stern policy.
(3) The Emperor as head of the State and Commander-in-Chief of the Armed Forces to be given no immunity for Japan's acts of aggression and war crimes, which in evidence before us are shown to have been of a most barbarous character.
(4) Full occupation until such time as a democratic and genuinely popular regime is fully established.
(5) Economic disarmament covering all industries, not merely those of a war character. We fear combination of monopoly, interest and imperial prestige as basis for resurgence of aggressive Fascism.
(6) Complete surrender of merchant navy to Allied Nations.