Addressed to the Acting Prime Minister, Mr. Forde.

Reference your 40 [1] and 54. [2]

Our manpower position as I see it in the light of the discussions
which I have had so far is broadly as follows:-

(i) The basing of British Forces on Australia, apart from
strategical factors still undetermined is largely governed by the
capacity of Australia to augment the Forces and the capacity to
maintain them.

(ii) In view of the fact that we are now stretched to the limit of
our resources we can only make a contribution to this maintenance
by subtracting something from our war effort in another direction.

(iii) We must be wary about accepting additional commitments for
the expansion of any of the Forces, otherwise we shall never
extricate ourselves from our manpower difficulties.

(iv) Furthermore, it is noted that, although the intake into the
services was limited to a total of 5,000 per month, the actual
figures for the five months ending February were much short of
this figure.

(v) One of the reasons for War Cabinet's decision of 1st October
[3] relative to Naval overseas commitments was to meet one of the
contingencies now mentioned by you of enabling crews to be
transferred to new ships which could be done without prejudice to
the ranks of the members or the corporate nature of the ships'
companies.

(vi) I have pressed the Prime Minister for the reply to our cable.

[4] In the meantime I have no objection to increasing the Navy
intake by reducing the Army and Air intakes by 130 and 70
respectively as indicated in paragraph 9 of your No. 40, but I
presume that the residual quotas for the Army and Air Force will
meet their essential needs.

(vii) I shall advise you on the wider question later on, but I
cannot fail to comment on the comparison between the tardy manner
in which War Cabinet's decision of 1st October on Naval overseas
commitments has been handled in certain quarters and the urgency
with which additional commitments have been pressed.

CURTIN