Thank you for your letter of 22nd August, and your comments on the adequacy of the security measures in the brief and progress report on Australian security submitted by me to the United States Authorities.
4. I have been reflecting on the opinion expressed in the last paragraph of your letter that the Americans apparently regard the clearing up of the problem confronting the new Security Service as a prerequisite to the lifting of the embargo, and that the next move is with the new Security Service. Your promised aid in resolving this problem is much appreciated, and, though the lifting of the embargo is a matter entirely for the Americans to decide, I do not think that we in the British Commonwealth should necessarily agree with such a view though we may have to accept it. As explained in paragraph 6 of my letter of 30th June to Mr. Gordon Gray quoted below, and as indicated in the note of my discussions in Washington, a copy of which is enclosed for your records, the embargo is having serious repercussions on British Commonwealth Defence, and the Australian Government may be unable to avoid a public statement on the lags in the Defence Programme that are arising. The Government's awareness of the problem and the need for taking adequate security measures have been demonstrated in the Brief and Progress Reports:-
'I would submit that the enclosed progress report lends full support to the brief on security measures in Australia which I presented and traversed in Washington, and warrants the lifting of the embargo that was imposed. As requested by me in Washington, it is asked that this might be done as soon as possible in view of the period for which the embargo has prevailed and the prejudicial effects which it is having on important aspects of the Australian Defence Programme. This Programme is based on co-operation in British Commonwealth Defence, which is fundamental not only to the security of Australia but also that of the United Kingdom. The measures for co-operation in British Commonwealth Defence are also linked with the United Kingdom's commitments under the North Atlantic Pact.' [matter omitted]