Your telegram 7908. 
In as much as on the facts stated the Americans have not actually
in their power the Japanese whom they propose to exchange, this
proposal can only be put into effect if the Japanese Government
admit the hopeless position of their troops concerned, which is
not likely in view of their general attitude to surrender and
admission of defeat.
There are bodies of Japanese, for example, at Rabaul, Solomons,
Wewak and elsewhere in the South-West Pacific theatre which are
equally cut off and in point of time before the Japanese in the
areas mentioned in 7908 and to whose encirclement Australian
forces made a very substantial contribution. Moreover, there are
Australian Prisoners of War in the Netherlands East Indies,
Singapore and Siam, who have been in captivity longer than the
American troops whom it is proposed to recover and whose
conditions of captivity according to various reports official and
otherwise have been as bad as or worse than the United States
troops, most of whom remained in the Philippines.
Therefore, if any proposal is made to the Japanese Government we
feel strongly it should be an Allied approach covering Australian
Prisoners of War on a pro rata basis to the number of Allied
prisoners in captivity.
Further if an exclusively American exchange were negotiated,
undesirable reactions here and large scale public agitation for
similar action on our part would be inevitable.
We are of opinion that the proposal should only be proceeded with
if Australians are included and if it is considered that there is
a reasonable chance of the negotiations being successful: of this
latter, however, we ourselves are very doubtful. If they are
proceeded with merely as a form of psychological warfare and if
the fact that they were proceeding became known without the reason
for them, the effect on the public here would be equally bad.