Thank you for your telegram setting out the views of the Australian Government.  The first question as I see it is whether or not the United Kingdom is to retreat before aggression if it should occur. Having decided to make a stand at Hong Kong the second point is whether the United Kingdom is entitled to look to us for assistance in defending British territory against such aggression having regard especially to the part which we rightly claim and wish to play in the settlement of questions of Commonwealth security in the Pacific Area.
Matters such as the failure of Chiang Kai-shek to reform and liberalize his regime, the combatting of Communism by all positive means, the regularisation of the position in China and the recognition of the Communist Government seem to me to have no bearing on these two points and are in fact matters for consideration and discussion at a later stage.
I agree of course that the recognition of the rights of people to Self-Government and to better economic standards of life is the best way to resist Communism. The record of the New Zealand Government is sufficient guarantee of its support of such positive measures in other countries.
Personally I consider it would be disastrous for the United Kingdom to yield in the face of aggression whether Communist or otherwise and I note from your telegram to me that Australia also does not favour British withdrawal from Hong Kong and feels that the British are entitled and bound to endeavour to retain possession and to this end that a show of force may be desirable and, from your telegram to Mr. Attlee on 30th May , that the Australian Government supports the recent decision to reinforce the Hong Kong garrison.
We in New Zealand entirely agree and in view of the United Kingdom's commitments elsewhere and its depleted resources at the present time we are prepared to give what help we can, especially in an area where we feel our own interests are involved.
While we do not wish to anticipate that aggression would necessarily be undertaken by a Communist China nevertheless in view of the record of newly formed Communist regimes elsewhere we think it would be most unwise to count upon the opposite policy in this particular case. Moreover we know how appeasement failed in the past particularly when it came to conciliating and temporising with Germany and Japan.
I agree that it would be a mistake to give excessive publicity to any measures which might be taken to defend Hong Kong and we would endeavour to avoid publicity unless challenged in Parliament and even then I would hope to limit our statement to a general reply.
We would very much regret any political repercussions in Australia which our offer of material assistance might cause but on the other hand failure on our part to respond to any such requests would involve the Government in most serious political repercussions here. There is no doubt that any assistance we might give would receive the widest support of the New Zealand people.
We fully recognise Australia's continuing commitments in the Occupation Forces in Japan which must rightly be taken into consideration by your Government. Having regard to our own manpower shortages we would not find it possible to offer Army personnel for Hong Kong but on the other hand Naval Units which contain a large proportion of United Kingdom personnel do not represent so heavy a commitment. As for bringing to the Security Council the question of any threat of aggression to Hong Kong I regret to say that I have little faith in the capacity of that Body as at present constituted to settle anything. I am not clear from your paragraph 8 whether you are proposing to bring the situation before the Security Council in the near future or to await developments and see whether any threat of aggression actually occurs.
In any event I assume that the matters would only be brought before the Security Council after full consultation and with the full agreement of the United Kingdom as the Commonwealth Government principally concerned. I would myself wonder whether it would be construed as a friendly gesture by the United Kingdom and other Commonwealth and Foreign Governments, especially if such a course put the United Kingdom in a position whether she might be called upon by a Conciliation Body to make concessions in the face of aggression.
For all these reasons and while we have considered the viewpoint expressed in your telegram I regret that we would feel unable to withdraw the offer we have made of the Frigates. On the general issue it seems to me that the right course is for the United Kingdom to remain firm in the face of any force at a point such as Hong Kong where a stand could and should be made and moreover that in this particular case it is our duty to accord our full support.