Our 205 of 27th July. [2] Council of Foreign Ministers.

More recent information on the Potsdam meeting indicates that the
Council of Foreign Ministers will be, in effect, a semi-permanent
body whose conclusions or recommendations are intended broadly to
settle in advance all basic issues affecting the general peace
settlement. Nonparticipation in its discussions would, therefore,
exclude us in effect from the decisive processes of the peace-
making, a situation quite at variance with our definite
understandings with you.

2. The suggestion, still to be elaborated, that lesser States will
take part on invitation in the Council's discussions does not
measure up to our conception of effective participation as a
principal in the Council's work. Such an ad hoc arrangement would
neither recognise our right to participate as a principal in all
decisive stages of peace deliberations, nor assure us the
opportunity of stating our views at the time and in the manner
most appropriate for our purposes.

3. We have never questioned the leading role of the three Great
Powers on such matters as will come before the Council. However,
the inclusion among the Council's members of France and, most
significantly, China (in respect of European affairs) justifies
the inclusion of Australia as a member. Measured in terms of
relative war effort and overall contribution to victory, Australia
can fairly stand alongside either of these powers, and in terms of
European war commitments and post-war interests in Europe, has a
more than equal right to effective participation than China.

4. These general considerations have been strongly reinforced by
our examination on the information available of specific matters
which have been under discussion at the Berlin Conference. We make
particular mention of.-
(a) Italy. On this we hold emphatically that no preparations for
the peace treaty should be proceeded with without our full
participation at all stages, mere communication of views by
telegram is quite inadequate.

(b) Former Enemy Territories. You will recollect that in April
last the Australian Government expressed views regarding the
disposition of the Italian Colonies and the general question
including the future of former Japanese possessions is of the
closest concern to us, particularly in view of the leading part
taken by Australia in the trusteeship discussions at London and
San Francisco.

(c) Polish Provisional Government. Our concern here is also
direct, and we refer to our earlier representation of Polish
interests in the Soviet Union.

(d) Turko-Soviet Relations. Australia took a prominent part in the
Montreux Conference and is closely interested in the future of the
Straits area by reason of its political and strategic importance
to the Near East and Mediterranean.

(e) German Merchant Marine. In our telegram No. 161 of 21st June
[3], we reserved full right to lodge a claim for reparations from
Germany. We consider we are entitled to an independent share of
the allocation of the German Merchant Marine and armed vessels.

Our losses in this respect have been relatively heavy.

(f)Allied Policy in Germany. We have a deep interest in the
revival of a genuine democracy in Germany and in the promoting of
conditions which will safeguard against any resurgence of German
Fascism. A number of specially qualified Australians have been
nominated for service with the British Control Commissions in
Germany and Austria and we consider that a further essential step
would be the attachment of an Australian Military Mission to the
Control Council for Germany.

5. For the above reasons, we hold strongly that the Council's
present membership should not be regarded as rigid and that in
view of its decisive peace-making and other functions the
inclusion of Australia by appropriate arrangement as a principal
to its discussions is essential as a minimum recognition of our
part in the war.

6. In regard to the future of Japan, we have given preliminary
consideration to your telegrams D.1243, 1244 and 1245 [4] and will
shortly be communicating fully.

Our general attitude is as follows-.-
(1) Full Australian participation as a principal in decisions on
policy and in control arrangements.

(2) A stern policy.

(3) The Emperor as head of the State and Commander-in-Chief of the
Armed Forces to be given no immunity for Japan's acts of
aggression and war crimes, which in evidence before us are shown
to have been of a most barbarous character.

(4) Full occupation until such time as a democratic and genuinely
popular regime is fully established.

(5) Economic disarmament covering all industries, not merely those
of a war character. We fear combination of monopoly, interest and
imperial prestige as basis for resurgence of aggressive Fascism.

(6) Complete surrender of merchant navy to Allied Nations.