1. Your cablegram 319. [2] We have been considering the
President's proposals in the light of your cablegram and several
cablegrams from Sir Earle Page [3] and a communication received by
me from the President stating that he is in general agreement with
our proposals regarding organisation and command of the Australian
area except as to some details concerning relationship to the
combined chiefs of staff and as to boundaries. [4] In view of the
various observations which have been expressed on the composition
of the higher machinery, its functions, location and the procedure
to be followed, we consider it necessary to summarise our
understanding of the position as follows together with any
necessary comments:-

(1) Division of world war theatre. This is to be divided into the
following three areas-(a) the Atlantic under joint British and
American responsibility; (b) the Indian, Middle East and
Mediterranean areas under British responsibility; (c) the Pacific
including China under United States operational responsibility.

The question of the relationship between operational
responsibility in the Pacific area to the inter-Governmental body
is referred to later.

As already stated the President in his message to me considers
some detailed adjustments are necessary in boundaries. The
significance of the First Sea Lord's [5] point in paragraph 12 of
Dominions Office cablegram 319 relative to the boundary between
the Indian and Pacific areas as it affects the North West and
Western coasts of Australia is not clear in view of advice from
Page that the Pacific War Council agreed to our suggestion [6]
that the proposed line of division should not run to latitude 5
degrees south to Onslow as proposed but on reaching longitude 110
degrees east should run due south along that meridian.

Subject to the foregoing we agree in principle with the
President's proposals for the division of the world theatre into
the three areas mentioned.

The Australian Chiefs of Staff consider that on tactical and
strategical grounds China should be within the Middle area rather
than the Pacific because the only lines of communication with
China that are or are likely to be open are through the Middle
area and the bases for aircraft operating in China must be sited
within the Indian command. Also attacks against the Japs in or
from China must form part of combined operations on the part of
the forces located in the Middle area.

(2) Pacific War Council, London. It is noted that you suggest that
the President should have a representative on the Pacific Council
in London and we fully agree with this proposal.

The functions of the Pacific Council in London are described in
cablegram No. 319 as discussion of the whole state of the war
against Japan and the communication of its opinions from time to
time to the similar body in the United States. This appears
satisfactory subject to the later observations on the Pacific
Council in Washington.

(3) Pacific War Council Washington. The summary of the President's
telegram refers to the setting up in Washington of an advisory
body on operational matters consisting of members of Australia,
New Zealand, Netherlands East Indies and China under the
chairmanship of an American. We have from the first made it clear
that it is imperative that the Commonwealth Government should have
a voice in the higher direction of the war in the Pacific theatre
particularly as the whole of our forces are being placed under the
operational control of the Supreme Commander.

On 21st January we asked that a Pacific War Council be established
at Washington comprising representatives of the Governments of the
United Kingdom, U.S.A., Australia, China, Netherlands and New
Zealand and proposed that this body should be a council of action
for the higher direction of the war in the Pacific. [7] In our
proposals of 4th March we stated that the Council should be
responsible for the higher policy of the war in the Anzac area and
should deal with questions of policy and the provision of forces
and supplies. [8] It is observed in paragraph 10 of Dominions
Office cablegram No. 319 that reference is made to 'the advisory
bodies which will have to be consulted on larger issues'. We would
not be content with an advisory body on operational matters in
Washington.

(4) Machinery for strategical and operational control. The Chiefs
of Staff Committee is the Technical Advisory Body to the Pacific
War Council in London and liaison exists between it and the
Australian Service Advisers in London.

We are in agreement with the President's proposal that the United
States should assume operational responsibility for the Pacific
area. As suggested in our proposals of 4th March we desire to
establish in Washington a staff comprising a naval and army and an
air force officer who would act as the technical advisers to the
Australian Government representative on the Pacific War Council
and who for the purpose of Anzac strategy should be associated
with the American Chiefs of Staff as the joint body for advice to
the Pacific War Council on the larger issue.

Agreement has already been reached on the appointment of the
Supreme Commander in the Anzac area. The directive suggested by us
is complete to the higher machinery and the appointment of the
Supreme Commander. The Australian Chiefs of Staff consider that
the Supreme Commander should be located in Australia because he
must be in close touch with the bulk of the forces under his
orders especially with those in the forward area in order to judge
the capacity and effectiveness of these forces who are undertaking
both offensive and defensive operations.

Instead of the local command in Australia and in New Zealand being
under an Australian and New Zealander respectively as proposed by
the President we prefer that our proposal of 4th March should be
adopted and an Army and an Air Commander appointed for each of the
following.

(a) Australia its territories and New Caledonia.

(b) New Zealand, Fiji and all the islands for which New Zealand is
responsible.

General Brett of the United States army has already been appointed
to command the Allied Air Forces in Australia. In regard to the
grand strategy relating to operations in the three areas it is
understood that advice on this would be the responsibility of the
combined chiefs of staff in Washington and in London.

(5) It is understood that the joint committees on shipping and raw
materials and on munitions will continue to function on their
present basis.

CURTIN