Thank you for your letter of 3rd December, 1947 , a reply to which has been deferred pending consideration of a basis on which strategic planning can be commenced by the Australian Defence Machinery in consultation with the United Kingdom and New Zealand Joint Service Representatives, in accordance with the principles and procedure outlined in the Australian Government's Memorandum of 23rd May, 1947.  I refer to this aspect later on.
2. I am glad that we have reached such close agreement on the machinery and methods for consultation between us in British Commonwealth Defence. The directives which you propose to issue to the Head of the United Kingdom Liaison Staff in Australia and to the Service Liaison Staff have been examined. I would refer to sub-paragraph 5 (c) of the directive to the Service Liaison Staff which reads:
'You will communicate, jointly with the other Service Liaison Officers, direct with the United Kingdom Chiefs of Staff Committee on all matters- ... (c) Which are referred either directly to you or through the head of the Service Liaison Staff by the Australian Defence Department or Chiefs of Staff machinery for submission to the United Kingdom Chiefs of Staff.'
You will recall the following from sub-paragraph 12 (ii) of the Australian Government Memorandum of 23rd May, 1947:
'The Governments of the United Kingdom and New Zealand are invited to maintain in Australia a Joint Service Representative and Staff who will be accredited to the Defence Department.'
In paragraph 5 of your reply of 17th August , it was stated:
'What we should like to propose, and it accords with your suggestions, can be briefly put as follows. There should be a single Head of the British Military Liaison Staff-probably of Rear Admiral rank or equivalent-who will be served by a small inter- Service staff. The Head of the Liaison Staff will normally be the British representative to the Australian Governmental Committees you mention, and he will normally be the authority through and from whom will be conducted British Military Liaison business of a Joint Service nature.'
3. In accordance with the principle of a single Accredited Representative, it would be appreciated if, in order to harmonize with our Departmental procedure in Australia, he alone could be the channel of communication on matters connected with the Department of Defence and the Joint Service Machinery which is part of it.
The established channel of communication is with the Secretary as Permanent Head of the Department. Accordingly, all communications to or from the Accredited Representative should be through this channel. This is essential in order to determine the course of action within the Department-whether it is a matter requiring reference to the Defence Committee, or to the Chiefs of Staff Committee, or to some other part of the Joint Service Machinery, or is one that should be dealt with in the course of ordinary administrative procedure. I would add that the prescribed channel for communication with the Australian Accredited Representative in London is between him and the Secretary to the Department. I might mention that, owing to the important implications of Government Policy and commitments that may be involved, I have directed that the development of strategic planning in connection with co- operation in British Commonwealth Defence is to be under the general direction and supervision of the Defence Committee, as the advisory body on Defence Policy.
4. The foregoing has been discussed on the official level with Rear-Admiral Pizey, Head of the United Kingdom Liaison Staff, who has stated that approval has been given by the United Kingdom Authorities to the amendment of the directive to the Service Liaison Staff to meet the points mentioned.
5. I am grateful for the arrangement under which you will invite the Australian High Commissioner, accompanied if necessary by our Defence Representative, to meetings of your Defence Committee when matters of concern to Australia are under consideration, and that you will also invite the Australian Defence Representative to attend meetings of the United Kingdom Chiefs of Staff Committee under similar circumstances. I note the remarks in paragraph 5 with regard to the occasions on which you think it would be advisable for our representatives to attend meetings. I hope, however, that our interest in such matters as overall strategic policy will always be borne in mind, and that you will continue to keep us informed and consult us as appropriate on the broader issues which are outside the more limited sphere of Pacific defence to which you refer in paragraph 5 of your letter.
6. I note also your reference in the same paragraph to the Australian Government taking the initiative in considering the defence of the Pacific. You will recall the following in sub- paragraph 5 (iii) of the Australian Government's Memorandum of 23rd May, 1947:
'The Australian Government is willing that its machinery should undertake the development of the defence aspect of matters relating to Regional Security in the Pacific, in accordance with the principles and procedure outlined in Part 11 for the functioning of the Australian Higher Defence Machinery in this respect. The precise scope of the area to which this would apply will be ultimately determined by the area of any regional arrangement that may be reached.' I am now enclosing, for your information, a copy of the following documents:
(i) Council of Defence Agendum No. 1/1948  and Supplement No. 1 -The Strategic Position of Australia-Review by the Chiefs of Staff Committee.
(ii) Council of Defence observations and conclusions on the above Agenda. 
It will be noted that a basis has now been established for the machinery for Cooperation in British Commonwealth Defence to operate on the official level, and the defence of vital sea communications mentioned in paragraph 7 of your letter has also been referred to the Defence Committee for examination in consultation with the United Kingdom and New Zealand Representatives.
7. I wish to emphasise:
(i) That the strategic planning authorised is to proceed strictly on the official level.
(ii) That it does not involve any committee in regard to Government Policy, except where approval is specifically sought and obtained.
(iii) That the development of the planning is subject to the considerations mentioned in sub-paragraph 3 (iii) of the conclusions of the Council of Defence.
I would also again refer to the remarks in my letter of 16th September 1947 7 on the extent to which the Australian Government has undertaken additional Defence commitments in the current Five Years' Programme for 250-millions, and the fundamental importance of the principle that the acceptance of responsibilities must be realistically related to the ability and capacity to meet them.
8. I note your view with regard to the importance of liaison on the official level with the Defence Co-ordination Committee, Far East. It is suggested, if you agree, that consultation required in connection with the examination of mutually related strategic problems might be arranged with the Service Authorities in Malaya through your Chief Service Liaison Officer in Melbourne, in view of the final responsibility reposed in the Australian and United Kingdom Higher Defence Machinery.