179 Chifley to Fraser

Letter 13 August 1947,

SECRET

CO-OPERATION IN BRITISH COMMONWEALTH DEFENCE

I acknowledge receipt of your letter of 14th July advising me that paragraphs 9 and 10 of my letter of 28th May relating to Machinery for Co-operation in British Commonwealth Defence are not acceptable.

2. The Australian Government fully appreciates that it is a matter for the Government of each part of the Empire to decide the nature and type of any machinery in which it is prepared to participate for Co-operation in British Commonwealth Defence.

3. It is understood from Field Marshal Montgomery as the result of his discussions in New Zealand, that the New Zealand Government would prefer an arrangement as follows:-

'Each country should maintain a Liaison Staff with the other countries, accredited to their Chiefs of Staff organisation.

The functions of the Liaison Staff should be:-

(a) To report to its own Chiefs of Staff the strategic ideas under consideration by the Chiefs of Staff of the country to which it is assigned.

(b) To act as a channel for the exchange of views and information on the military level. To this end, the heads of the Liaison Staffs should attend Chiefs of Staff meetings as necessary.'

This corresponds to the United Kingdom proposal to the Prime Ministers' Conference. While this arrangement is less comprehensive than that proposed in the Australian Government's Memorandum on Co-operation in British Commonwealth Defence, the Government is quite agreeable to the Australian - New Zealand machinery being limited to Service Liaison Staffs, provided that the New Zealand representation in Australia is a Joint Services Representative and Staff as outlined in sub-paragraph 12 (ii) of the Australian memorandum. The Australian Service representation in New Zealand will also be similar. The Australian Government is also willing to accredit the New Zealand representative to the Defence Department which, as indicated in the Australian memorandum, includes not only the Chiefs of Staff Committee, but also the Defence Committee, which is the advisory body on Defence Policy. The functions of the Chiefs of Staff Committee are largely limited, in peace, to strategic matters.

4. While expressing ready agreement to fall in with your wishes, I must point out that the view expressed by you that the Australian proposals do not provide for cooperation 'on the basis of equality' is not in accord with the following information in the Australian memorandum:-

(i) At the Prime Ministers' Conference in 1946, it was agreed:-

(a) That the system for co-ordination should be based upon the national defence organisations to be maintained in the United Kingdom and in each Dominion. (Sub-paragraph 8(b)).

(b) That any system devised must, amongst, other conditions, fulfil the following one:-

Provide the maximum degree of co-ordination on defence matters which the sovereign status of the members of the Commonwealth allows. (Sub-paragraph 8(ii)).

(ii) In paragraph 12 it is stated that the use of the Australian Defence Machinery for matters of Co-operation in British Commonwealth Defence will be in accordance with (i) (a) and (b) above, and, in dealing with procedure relating to Government representation on the Australian Council of Defence, the following passage occurs:-

'As the sovereign control of its Policy is retained by each member of the British Commonwealth, and as the Council of Defence is a statutory advisory body to the Australian Government, any recommendations which it may make on subjects of a British Commonwealth relation, are matters for consideration by the Governments concerned.' (Sub-paragraph 12 (i)).

5. It will be clear from the foregoing that all decisions are the absolute responsibility of the Governments concerned, and that New Zealand participation in the Australian Machinery and Australian participation in the New Zealand Machinery cannot detract in any manner from the basic equality of the sovereign Governments of the two countries. The same principle applies equally to reciprocal representation between Australia and any other part of the British Commonwealth.

6. Confirmation of this view is to be found in the pre-war practice of the Australian (and no doubt the New Zealand) High Commissioner attending meetings of the Committee of Imperial Defence, which was part of the United Kingdom Defence Machinery.

Also, during the war, the Australian Resident Minister in London was the accredited representative to the United Kingdom War Cabinet which constitutionally was part of the United Kingdom Machinery of Government. The procedure in these cases in no way infringed the sovereign equality of the United Kingdom and Australian Governments to whom all decisions on matters of mutual interest were reserved.

7. It is also stated in your letter, 'in any scheme of co- operation, it is an essential condition that we should have an effective voice and vote in matters of policy on administration and control, as well as in the determination of general policy. It would, I am sure, not be impracticable to devise some method of effective partnership and joint machinery for the control of British Commonwealth Defence projects on the level of administrative policy.' 8. Again I would refer to the precise terms of the Australian Memorandum:-

(1) At the Prime Ministers' Conference in 1946, the following proposals were submitted by the United Kingdom Government:-

(a) Each member of the Commonwealth should:-

(i) Accept responsibility for the development and defence of their Main Support Area and the strategic zone around it.

(ii) Accept the principle of joint responsibility between members of the Commonwealth concerned for the protection of lines of communication between Main Support Areas.

(iii) Agree that it is in their strategic interest to assist both politically and militarily in maintaining our position in those protective areas which directly affect the security of their territory and communications. (Paragraph 1).

(b) The following definitions are given in the United Kingdom document:-

(i) Main Support Areas are the United Kingdom, the American Continent, Southern Africa, and Australia and New Zealand.

(ii) Strategic Zones are the areas of which each main support area is the heart.

(iii) Areas of Strategic Importance other than Main Support Areas are stated to be, Western Europe; the Iberian Peninsula and North West Africa; the Middle East; and South East Asia. (Paragraph 2).

(2) In regard to development and defence of Main Support Areas, the Australian Government observed that this is the responsibility of each part of the Empire in accordance with the principle of responsibility for Local Defence accepted by the Self-Governing Dominions at the Imperial Conference of 1923. (Paragraph 4).

(3) In the case of the development and defence of Regions of Strategic Responsibility, which are the areas of which each Main Support Area is the heart, the Australian Government stated that it was willing to make a larger contribution towards the defence of the British Commonwealth in the Pacific, that the acceptance of additional commitments is a matter for consideration by the Australian Government in relation to the priority and importance of other Defence proposals and commitments, and to the amount that can be provided for Defence, but that the responsibility for any commitments accepted must be assigned to the Australian Government Machinery. (Sub-paragraph 5(iii)).

9. New Zealand, as well as Australia, is designated a Main Support Area and the heart of a strategic zone. As stated in sub-paragraph 4(i) above, it was agreed at the London Conference that 'the system for co-ordination should be based upon the national defence organisation to be maintained in the United Kingdom and in each Dominion'. It assumed that the New Zealand Government would similarly want to exercise control through its own machinery of responsibilities accepted by it. The Australian Government's proposal is that liaison between the two countries should be effected on the Government and official levels by mutual representation on each other's machinery as outlined in paragraph 12 of its memorandum. By this means, the sovereign control of each Government's own policy and administrative machinery is retained on a basis of equality while, at the same time, there exists at the Governmental and official levels, the fullest opportunity for the expression of views. The principle of these proposals is also essentially in line with the working of the Combined Chiefs of Staff System in Washington. It is also understood that the Canada - United States Joint Defence Board operates on a similar basis of fullest consultation with sovereign control of policy by each Government.

10. As indicated in the memorandum on the Joint Chiefs of Staff in Australia, the Australian Government is absolutely opposed to the continuation or extension of a Joint Body of this nature responsible to more than one Government. To exercise control in war through a Committee of this kind would invite disaster. In contrast with the Joint Chiefs of Staff in Australia, the Australian Government has proved the efficacy of the assignment to its own machinery of the responsibility of carrying out the extensive commitments which it accepted during the war in respect of the United States Forces and British Pacific Fleet for which Australia was the main base. in both cases the United States Forces and Royal Navy worked through the Australian Government Machinery in the manner now proposed for Co-operation in British Commonwealth Defence.

11. In the light of the experience of these two types of machinery, the Australian Government, as stated at the Prime Ministers' Conference, has laid it down as fundamental that commitments accepted by it of a British Commonwealth nature shall be undertaken by the Australian Government Machinery. To give effect to my statement that Australia would make a greater contribution to British Commonwealth Defence in the Pacific, provision has been made by the Government in its Five Years' Defence Programme of an amount of 33,500,000 for Research and Development and 2,129,000 for a Joint Intelligence Organisation.

These projects are an integral part of Australian Defence Policy, for which the Government is responsible to Parliament. Australian Policy on Research and Development is under the control of the Minister for Defence and its execution under the Minister for Munitions through the machinery of their respective Departments.

Provision has been made for United Kingdom representation on the machinery of the Department of Munitions, but it is essentially Australian machinery responsible to the Minister for Munitions.

Under the Australian Government's proposals for Machinery for Empire Co-operation, the United Kingdom Government would also have representation on the Defence Machinery controlling Policy and on the Council of Defence on matters dealt with at that level. In the case of the Joint Intelligence Organisation, the New Zealand Government has been informed that it is contemplated in regard to matters of intelligence policy affecting New Zealand that New Zealand should be represented on the joint Intelligence Committee, which controls Intelligence Policy. The Joint Intelligence Committee and the administrative and executive machinery which is being established are part of the Defence Machinery, which is responsible to the Minister for Defence. In addition to its voice on the Joint Intelligence Committee, the New Zealand Government, of course, has absolute administrative control of any intelligence activities undertaken by New Zealand and will be a recipient of the information produced by the Australian organisation. [1]

1 On 15 August, following discussions with Foss Shanahan, Assistant Secretary of New Zealand's Department of External Affairs, Shedden noted that New Zealand would not be satisfied with liaison officers, but desired to ensure, through a body like the Joint Chiefs of Staff in Australia, 'an equal and effective voice' on matters concerning commitments involving New Zealand resources.

[AA : A1068 T4, DL47/5/2B]