Your cablegram No. 2, of 19th April, 1944. 
2. War Cabinet and the Advisory War Council have given
consideration to Agendum No. 80/1944  relative to the report of
the War Commitments Committee and to Supplement No. 1 thereto
containing the observations of Ministers concerned, also the
related Agendum (No. 215/1944)  arising from War Cabinet Minute
No. (3334)  regarding the strategical review by the Defence
Committee as basis for consideration of provision being made for
the defence of Australia.
3. You will recall that the War Commitments Committee did not
suggest any variation in the existing limit of intake into the
services of 3,000 males and 2,000 females per month.
4. In Supplement No. 1 to Agendum 80/1944, the Minister for the
Navy sought variation of Navy's present allocation of 150 persons
per month to an average of 300 males and 50 females per month as
from the 1st February to 31st December, 1944, the Army and Air
Force quotas to be reduced accordingly. As quoted in my cable No.
12 of 20th April , the Navy statement is that this increase
must be made unless ships now being completed are not to be
manned, other essential services abandoned or reduced, and new
commitments, e.g. the taking over by the Royal Australian Navy of
the Commonwealth Salvage Service, cancelled.
5. The Navy submission also embodies the proposal  previously
submitted to the Advisory War Council regarding the possibility of
increasing the strength of the Royal Australian Navy by the
transfer of vessels from the Royal Navy. It is stated to be
certain that a proposal from Australia for such transfer would be
welcomed by the United Kingdom authorities. The Naval Board
estimate that a force of one aircraft carrier, one cruiser and six
destroyers would require an addition of between 4,000 and 5,000 to
the strength of the Royal Australian Navy, necessitating an
increased monthly intake of 450 persons until the requirement is
reached and maintenance thereafter. The 450 is additional to the
requirement referred to in paragraph 4 and would thus increase the
total Navy allocation to 800 monthly (700 men and 100 women).
6. In submitting this proposal the Minister for the Navy expressed
the view that increased Naval Forces are more than justified for
the following reasons:-
(a) Admiral Nimitz' opinion that more and more Naval vessels of
all types are required in the Pacific in order to carry out a
(b) General MacArthur's recently expressed desire for additional
Naval Forces in this area.
(c) The desirability of maintaining the highest possible effort by
Australia in the Pacific. Additional vessels would permit more
adequate Australian representation in the final phases of the war
against Japan. Such representation can be provided most readily
and appropriately by Naval Forces.
(d) The prestige of Australia in the Naval effort vis-a-vis that
(e) These vessels would be a replacement of the heavy losses which
the Royal Australian Navy has sustained.
(f) The increase could be obtained at such a modest additional
requirement in manpower, readily obtainable by a very slight re-
allocation of the manpower now allotted to the Services.
(g) It would be an appropriate Empire gesture at the present time.
7. After full discussion of the proposals and their implications
from the aspect of Australian defence and after hearing the views
of the Chiefs of Staff, Non-Government members of the Advisory War
Council were of the view that the proposal to increase the
strength of the Royal Australian Navy by the transfer of ships
from the Royal Navy should be adopted and that the personnel
strength of the Navy should be increased by 5,000 to provide for
the manning of such additional ships. Non-Government members also
considered that the increased strength of 5,000 should be in
addition to the present numbers of Royal Australian Navy personnel
attached to the Royal Navy, i.e. 3,009, in view of the fact that
the great majority of such personnel are serving in the Indian
Ocean with the Eastern Fleet.
8. War Cabinet did not record a decision on this proposal in view
of the consideration which is being given it by you whilst abroad
in conjunction with the earlier proposal that the 3,009 Royal
Australian Navy personnel overseas should return to Australia. 
War Cabinet, however, felt that it would definitely be to the
advantage of Australia if the ships mentioned in the Navy proposal
could be obtained on transfer from the Royal Navy, but this
conclusion was subject to the express condition that modern ships
would be transferred.  It was also felt that if it were
possible to obtain the transfer of such vessels from the Royal
Navy as a gift, on the condition that Australia manned them, a re-
allocation of manpower between the Services could be effected to
provide the additional 5,000 personnel requisite for their manning
without necessarily entailing the return of the personnel serving
overseas although having regard to the overall manpower position
their return would be of material assistance.
9. Regarding the proposal in paragraph 4 above for the increase of
the Navy intake by 200 males per month over the present allotment
of 150 persons, War Cabinet, after careful consideration of the
matter and hearing the views of the respective Chiefs of Staff,
decided that the Army and Air intake quotas of males should be
reduced by 130 and 70 respectively in favour of Navy as from 1st
May to 31st December, 1944.
This decision is to be subject to review in the light of any
arrangement that might be made by you for the return of Australian
Naval personnel serving overseas and in any event the position is
to be reviewed as at 31st October, 1944. This decision is to
provide for all present Naval commitments except the cruiser and
destroyer, the construction of which was recently authorised by
War Cabinet. 
10. As it is necessary to commence early recruitment of the
additional personnel in order that they may be trained and
available to man vessels as they are delivered, it would be
appreciated if you could give your early consideration to the
proposal in paragraph 9 above. I should also be glad to hear from
you on the wider question of transfer of additional ships from the
Royal Navy as soon as you are in a position to advise.
11. War Cabinet and the Advisory War Council have discussed at
length the question of any measures that might be adopted to meet
more rapidly the urgent demands for assistance to primary industry
and particularly the dairying industry under the existing
decisions of the Government. The necessity for maintaining the
striking power of the Fighting Forces is, of course, the
overriding consideration, but a complete re-examination is being
made of the discharges that are being effected under the decision
regarding releases for civil employment with a view to high
priority being given to discharges for the dairying industry. This
whole matter will again come before War Cabinet and the Advisory
War Council at an early date.