PMM(46) 1st Meeting LONDON, 23 April 1946, 11 a.m.

TOP SECRET

opening of Meeting
1. MR. ATTLEE welcomed Mr. Chifley and Dr. Evatt representing
Australia, and Mr. Nash, representing New Zealand. He expressed
his regret that it had not proved possible for all the Dominion
Governments to be represented at the opening meeting but he looked
forward to the arrival later of the Prime Ministers of Canada and
South Africa.

MR. CHIFLEY thanked Mr. Attlee for his welcome and expressed his
pleasure at being able to come to London.

MR. NASH also thanked Mr. Attlee. He expressed the regret of the
Prime Minister of New Zealand at his inability to be present.

Review of Foreign Policy
2. MR. ATTLEE invited Mr. Bevin to give a general review of
foreign policy.

MR. BEVIN said that the policy which His Majesty's Government in
the United Kingdom were following in discussion of the peace
settlements was founded on the United Nations Organisation, with
regard also to the need for safeguarding the defence of the
British Commonwealth. Foreign policy was so closely linked with
strategic needs that he feared he would be obliged to encroach in
his review on questions of defence and British Commonwealth
communications.

Mr. Bevin referred to the difficulties that had arisen between the
Allies in the post-war settlement. He was trying to work with both
the United States and Soviet Governments, but difficulties had
been experienced with each, and especially with the latter. He had
eventually found it necessary to take a firm line with the Soviet
Government at the First Assembly of the United Nations
Organisation and he hoped that they would be more reasonable in
their attitude at the forthcoming meeting of Foreign Ministers in
Paris.

As regards the Mediterranean, the Soviet Government had staked out
claims which would establish them in a position threatening
British Commonwealth communications. He had so far resisted the
Soviet claims, a course which was in accordance with the views
expressed strongly by the South African Government.

The United Kingdom Government for their part aimed at the
establishment of a security zone from the Iberian Peninsula to
Aden to protect the lines of communication to the Indian Ocean and
the Pacific and the vital oil resources in the Middle East. Our
primary difficulty was that there was no territory in the Middle
East on which we could with security build up our base. It
remained to be seen whether we could secure reliable facilities in
Egypt as the result of the negotiations now going on there. In
case that proved impossible, consideration had recently been given
to the possibility of establishing the main base for the Middle
East in Kenya.

Despite its distance, a base there would have advantages, since it
would also face towards the Indian Ocean and would provide a
natural meeting-ground for South Africa, India and the United
Kingdom.

Mr. Bevin also stressed the importance of our supporting social
development in the Middle East. We could not afford to be
represented as defending the Pashas while the Communists obtained
the support of the common people. He had established a Middle East
Office to endeavour to stimulate social progress. It would be able
to call on pools of experts in health, irrigation and other
matters to advise and assist Arab Governments.

A difficult problem was awaiting settlement in the Straits. The
Soviet Government claimed a special position there. The United
Kingdom Government took the view that the Straits should be an
international waterway and had expressed their readiness to revise
the Montreux Convention. Much depended on the settlement reached
in this case since it would affect the Soviet view as to the
settlement in the Dodecanese and it would also affect the
political situation in Greece.

In Eastern Europe generally, it was difficult to penetrate behind
the iron curtain let down by the Russians. His policy was to
concentrate for the moment on trade agreements which might lead on
later to a solution of political difficulties. He hoped that he
was about to conclude a reasonably satisfactory trade agreement
with Yugoslavia and negotiations were proceeding with Poland.

In Western Europe, the political future of France was very
uncertain, and the United Kingdom Government's relations with her
had been complicated by the difference of view over the future of
the Ruhr and Rhineland. He had, however, worked out tentative
proposals with a view to exploratory discussions with the French,
Belgian and Netherlands Governments; and the United States
Government had communicated proposals for a treaty to provide for
the disarmament of Germany, which would, he thought, serve as a
useful basis of discussion. In Northern Europe the political
position of Norway was difficult. As to Spain, while he disliked
the Franco regime, a breach with Spain would involve the loss of
valuable supplies of pyrites, ore and resin.

The general aim of the United Kingdom Government in Europe was to
support the principle of social democracy, which was not
acceptable to the Soviet Government. The United Kingdom Government
were handicapped by their temporary inability to offer either
credits or supplies, and the ultimate success of this policy must
for a time remain in doubt.

MR. CHIFLEY said that the main question which the Australian
Ministers wished to discuss with their colleagues from other parts
of the British Commonwealth was that of future arrangements for
defence in the Pacific. Australia had been in a very difficult
position in 942-43. They had recognised then that the British
Commonwealth must use the greater part of its resources to
preserve the United Kingdom-if that had been overrun, the rest of
the Commonwealth could scarcely have survived-and that in those
circumstances they could not expect that much material assistance
could be given towards the defence of Australia and New Zealand.

They wished, however, to do their best to ensure that such a
situation should not arise again in the future. It was possible
that Japan might again become capable of aggression in the
Pacific; and the security of Australia and New Zealand might be
threatened from other quarters. They were anxious, therefore, that
properly coordinated arrangements should be made in advance for
defence against aggression in the Pacific, so that the future
security of Australia and New Zealand could be assured.

DR. EVATT added that it was the desire of the Australian Ministers
to see that the United States was associated with arrangements for
defence in the Pacific. Thus, while they were willing in principle
to give the United States Government facilities for military bases
in the South-West Pacific, they would wish to be assured that
these bases would be used in accordance with a common defence
policy for the area.

Dr. Evatt said that he had been greatly interested in Mr. Bevin's
suggestions for building up a line of communication from the
United Kingdom through Africa to the Pacific.

As regards the Peace Conference, the Australian Government
recognised that United Kingdom Ministers had special interests in
and special knowledge of Europe's problems; but Australia was
anxious to play its part in the negotiation of the peace
settlements with European Powers, and felt that it was entitled to
do so in view of the contribution which it had made as a
belligerent in Europe in both the great wars of the twentieth
century. At the meeting of the Council of Foreign Ministers in
London Australia and other Dominions had made their views known.

They had requested the calling of a conference of active
belligerents in the European war, which would review all
recommendations of the Council of Foreign Ministers. Subsequently,
at the Moscow Conference it had been agreed that the draft Peace
Treaties should be considered at the wider Peace Conference, at
which Australia would be represented. He hoped that at this wider
Conference there would be real consultation with the Powers not
represented on the Council of Foreign Ministers. He requested
that, if there were problems which could not be solved at the
forthcoming meeting of Foreign Ministers in Paris, the wider
Conference would be given a practical opportunity to solve them.

Dr. Evatt agreed that relations with the Soviet Government
constituted the greatest current problem of foreign policy. This
problem could best be considered in relation to specific issues,
as they arose in the course of the conferences. He hoped, however,
that none of the Governments of the British Commonwealth would
wish to proceed on the postulate that conflict with Russia was
inevitable. Such a postulate would result in the problems of the
peace settlement and of territorial adjustments being solved, not
in accordance with principles of justice, but solely in accordance
with military and strategic planning with Russia as the designated
enemy. Such a possibility was disastrous and utterly inconsistent
with the principles of the United Nations Organisation.

MR. NASH said that during the last war the United Kingdom had
saved civilisation, in the sense that the great contributions made
by the British Dominions and the United States of America would
have been of no avail if the United Kingdom had not stood firm in
1940. Now, however, the United Kingdom was confronted with a
situation more difficult than any which she had faced before, and
he did not see how she could maintain her influence unless all
parts of the Commonwealth came closely together in peace, as they
had done in war. The time had gone when the United Kingdom alone
could tell other countries what to do. if the British Commonwealth
could be regarded as a unit in foreign policy there would now be
three world Powers of roughly equal influence-the British
Commonwealth, the United States and the Soviet Union. Each had a
different outlook and philosophy in world affairs; and it seemed
that the policies of only two out of the three were reconcilable.

Throughout South-East Asia and the Far East there was a rising
tide of nationalism. Public attention was now focussed on the
problem of famine in these areas; but we should realise that these
peoples had never in the past had enough to cat. As they became
better educated they realised the extent to which the Western
peoples had drawn from them resources with which they might have
improved their own standards of life, and they were ready to set
higher standards for themselves. They were no longer prepared to
accept domination by the Western Powers. The peoples of the
British Commonwealth were now prepared to assist them to develop
their economy and to raise their standard of living. We could no
longer defend policies which maintained half the world in plenty
at the cost of leaving the other half in conditions of starvation.

The result of raising the standard of life of the peoples of the
East would be to increase their power; and, unless we were to make
them more dangerous to ourselves, we must at the same time find
positive means to convince them of the advantages of a peaceful
way of life. We must seek a positive policy in which we could
persuade the United States Government to join us; but we should be
handicapped in making progress in this direction so long as we
were uncertain of the policy of the Soviet Union. It would be
tragic if that uncertainty forced us to abandon progressive
policies and concentrate on measures of self-defence; and the
consequences for the world's future over the next 100 years would
be disastrous. He hoped that it might be possible to find some
means to avoid this policy of despair.

Mr. Nash said that his primary object in attending the present
conference was to see how New Zealand could best contribute
towards a common scheme for the defence of the Pacific area. The
defence of this area could be assured only by the co-operation of
the Governments of Canada, Australia, New Zealand, South Africa
and the United Kingdom; and he agreed that there would be great
advantages if the United States could also be induced to play a
part in such a common plan. If a common scheme of defence could be
arranged, New Zealand would be ready to play her part, both
financially and otherwise.

The following points were made in discussion:(a) The future
development of Japan must, for the time, remain uncertain. A
country of this size could not be held down indefinitely; and, if
the victorious Powers attempted to follow that course, by military
occupation or control, they would bleed themselves white in the
process. Our policy must be to seek to transform Japan into a
useful and reliable member of the comity of nations. We should, in
particular, avoid the type of treatment which had left Germany
eager for, and capable of, further aggression within twenty years
after 1918.

We could not exclude the possibility that China and Japan might
draw more closely together. China might become interested in such
a rapprochement. There were already Chinamen who felt that there
were no great divergencies of interest between China and Japan.

And advantage might be taken of conflicts of interest in China
between the Great Powers. There were already signs of conflict
between Soviet policy in Manchuria and United States policy in
North China. The Japanese population in China might also increase.

It seemed likely that members of the Japanese armies in China
would remain there in substantial numbers. And the payment of
reparations by Japan might have the same effect if China's claim
to reparations (which was larger than that of any of the other
Powers) could be satisfied only through the importation into China
of large numbers of Japanese technicians. Such a movement might
have the effect of creating a considerable war potential in China.

Finally, it should not be overlooked that the Chinese bitterly
resented the secret treaty between the United States Government
and the Soviet Government about the disposal of Port Arthur; and
this might become a further rallying point between China and
Japan.

(b) MR. CHIFLEY stressed the importance of securing facilities for
British Commonwealth bases in the Netherlands East Indies. This
was a point which should be kept in mind in discussion of any
political settlement between the Netherlands Government and the
Indonesian leaders. If an independent Indonesian republic were
created, it would become even more important that we should secure
appropriate military facilities in such places as Batavia,
Sourabaya and Koepang. This was in the outer ring of any defence
scheme for the South-West Pacific and was almost as important for
that purpose as New Guinea.

(C) MR. HALL said that he would like to put it on record that-
except in North Borneo, which was still under military
administration-civil government had been re-established in all the
British Colonial territories in South-East Asia and the Far East.

(d) Reference had been made in the discussion to the growth of
nationalist feeling in various countries throughout the world. It
would be mistaken to suppose that these movements were always
inspired by Communists acting on the instructions of the Soviet
Government. In addition, there had been a widespread swing-over of
political opinion towards the Left. MR. CHIFLEY said, in
particular, that Admiral Mountbatten was convinced that the
nationalist movement in Indonesia had not been inspired by
Communists.

MR. ATTLEE emphasised that in the circumstances created by the
development of new weapons, the United Kingdom had become very
vulnerable to attack. The Empire had many of her eggs in a small
basket in an uncomfortably exposed position. It was, therefore, of
first importance for the United Kingdom to stimulate the
independence of neighbouring European States.

As regards the route through the Mediterranean, this must
necessarily remain of great interest to the British Commonwealth.

Our difficulty there was that we had no secure foothold of
territory in the Middle East west of the southern end of the Red
Sea. Mr. Bevin had already explained the difficulties in Egypt;

and Palestine would not provide a satisfactory alternative.

Mention had been made of the problem of India. There was one
aspect of that problem not always realised. Thanks to the peace
and security which we had maintained throughout India, her
population was increasing at the rate of 5 million a year without
a corresponding increase in her food resources.

LORD ADDISON said that two points in particular seemed to him to
have emerged from the discussion; first, a general recognition of
the need for more effective machinery for co-operation between the
different parts of the Commonwealth; secondly, a general
recognition that co-operation with the United States in many
spheres of policy would also be necessary.

He wished to suggest that the possibility of closer economic
cooperation should be explored. For instance, Australia was the
producing area geographically marked out as the natural one to
supply food to India, and he would like to suggest that there were
here possibilities of building up trade on a very large scale. He
hoped that the future Government in India would be willing to
build up large stocks of grain as a reserve against recurring
famine.

Reference had been made to the growth all over the world of the
spirit of nationalism and the demand for better standards of life.

It would be a mistake for the Commonwealth to regard this as
necessarily a menace to its well-being. That would depend on our
method of approach to these movements. They might well be turned
to our advantage.

The immediate question, as epitomised by Mr. Nash, seemed to him
to be that the Meetings should think out machinery for making co-
operation between the different parts of the Commonwealth more
effective, particularly in the great area between New Zealand,
Australia and South Africa. It seemed to him that there were great
possibilities of building up a more coherent system than that
which existed at present. It had been shown in the war that the
different parts of the Commonwealth could co-operate closely to
their mutual advantage. The same should be possible in peace.

Regional Organisation in South-East Asia and South-West Pacific
3. MR. BEVIN, during the course of his review of foreign policy,
referred to the organisation which had recently been established
in South-East Asia under Lord Killearn as Special Commissioner for
the area. It seemed to him that this was an organisation which had
great possibilities. There was great need for economic development
in all the countries of South-East Asia, where there were great
resources and the general standards of living were still low. It
would be to the common advantage if these standards could be
raised. There was here a vast potential market at present largely
untapped. The area was one in which many countries were concerned.

Thus it was pre-eminently an area in which co-ordination of effort
would be to the common advantage. He saw Singapore as the focal
point in this co-ordination. Lord Killearn's headquarters would be
there. He hoped that it would be the focus round which the United
Kingdom, Australia, New Zealand and India could build up the
development of the whole area. The British Commonwealth and Empire
was somewhat strung out in this part of the world; he looked to
the new organisation at Singapore to provide a meeting ground for
certain practical purposes, and he hoped that it could be built up
to provide a binding link between the different parts of the
Empire. While we should need and value the co-operation of foreign
countries immediately interested in the area, such as France, Siam
and the Netherlands East Indies, he did not see that a forward
policy in this area need bring us into conflict with any of the
other Great Powers.

Lord Killearn's organisation was starting in a modest way. At the
moment it was primarily concerned with the urgent problem of
organising and coordinating food supplies for the area. Lord
Killearn had just held a useful Conference on this subject, at
which the heads of the administration of all the territories had
been present and also a representative from Australia. Mr. Bevin
saw further useful work to be done in the field of nutrition, a
subject on which Australia and New Zealand had already contributed
much. There seemed to him also room for the development of
broadcasting and other publicity services and for the coordination
of shipping facilities. The organisation would be able to draw on
the experience gained by the South-East Asia Command which had
covered the whole area. He suggested that the opportunity should
be taken of the meetings of Prime Ministers to discuss fully the
possibilities of developing the new organisation.

DR. EVATT said that he had been much interested in Mr. Bevin's
statement. He welcomed his emphasis on the need for improved
economic standards in the area. That was important from the point
of view of both security and welfare. He recalled that Australia
and New Zealand had themselves proposed a year or two ago the
establishment of a regional commission for the South-West Pacific.

The area which it was to cover did not extend so far to the West
as Singapore. He believed that there were great possibilities in
the idea of closer association for regional purposes. He suggested
that in studying the subject as suggested by Mr. Bevin, the
earlier proposals made by Australia and New Zealand should be
included. Mr. Bevin agreed to this suggestion.