Thank you for your letter of 3rd December, 1947 [1], a reply to
which has been deferred pending consideration of a basis on which
strategic planning can be commenced by the Australian Defence
Machinery in consultation with the United Kingdom and New Zealand
Joint Service Representatives, in accordance with the principles
and procedure outlined in the Australian Government's Memorandum
of 23rd May, 1947. [2] I refer to this aspect later on.

2. I am glad that we have reached such close agreement on the
machinery and methods for consultation between us in British
Commonwealth Defence. The directives which you propose to issue to
the Head of the United Kingdom Liaison Staff in Australia and to
the Service Liaison Staff have been examined. I would refer to
sub-paragraph 5 (c) of the directive to the Service Liaison Staff
which reads:

'You will communicate, jointly with the other Service Liaison
Officers, direct with the United Kingdom Chiefs of Staff Committee
on all matters-
... (c) Which are referred either directly to you or through the
head of the Service Liaison Staff by the Australian Defence
Department or Chiefs of Staff machinery for submission to the
United Kingdom Chiefs of Staff.'

You will recall the following from sub-paragraph 12 (ii) of the
Australian Government Memorandum of 23rd May, 1947:

'The Governments of the United Kingdom and New Zealand are invited
to maintain in Australia a Joint Service Representative and Staff
who will be accredited to the Defence Department.'

In paragraph 5 of your reply of 17th August [3], it was stated:

'What we should like to propose, and it accords with your
suggestions, can be briefly put as follows. There should be a
single Head of the British Military Liaison Staff-probably of Rear
Admiral rank or equivalent-who will be served by a small inter-
Service staff. The Head of the Liaison Staff will normally be the
British representative to the Australian Governmental Committees
you mention, and he will normally be the authority through and
from whom will be conducted British Military Liaison business of a
Joint Service nature.'

3. In accordance with the principle of a single Accredited
Representative, it would be appreciated if, in order to harmonize
with our Departmental procedure in Australia, he alone could be
the channel of communication on matters connected with the
Department of Defence and the Joint Service Machinery which is
part of it.

The established channel of communication is with the Secretary as
Permanent Head of the Department. Accordingly, all communications
to or from the Accredited Representative should be through this
channel. This is essential in order to determine the course of
action within the Department-whether it is a matter requiring
reference to the Defence Committee, or to the Chiefs of Staff
Committee, or to some other part of the Joint Service Machinery,
or is one that should be dealt with in the course of ordinary
administrative procedure. I would add that the prescribed channel
for communication with the Australian Accredited Representative in
London is between him and the Secretary to the Department. I might
mention that, owing to the important implications of Government
Policy and commitments that may be involved, I have directed that
the development of strategic planning in connection with co-
operation in British Commonwealth Defence is to be under the
general direction and supervision of the Defence Committee, as the
advisory body on Defence Policy.

4. The foregoing has been discussed on the official level with
Rear-Admiral Pizey, Head of the United Kingdom Liaison Staff, who
has stated that approval has been given by the United Kingdom
Authorities to the amendment of the directive to the Service
Liaison Staff to meet the points mentioned.

5. I am grateful for the arrangement under which you will invite
the Australian High Commissioner, accompanied if necessary by our
Defence Representative, to meetings of your Defence Committee when
matters of concern to Australia are under consideration, and that
you will also invite the Australian Defence Representative to
attend meetings of the United Kingdom Chiefs of Staff Committee
under similar circumstances. I note the remarks in paragraph 5
with regard to the occasions on which you think it would be
advisable for our representatives to attend meetings. I hope,
however, that our interest in such matters as overall strategic
policy will always be borne in mind, and that you will continue to
keep us informed and consult us as appropriate on the broader
issues which are outside the more limited sphere of Pacific
defence to which you refer in paragraph 5 of your letter.

6. I note also your reference in the same paragraph to the
Australian Government taking the initiative in considering the
defence of the Pacific. You will recall the following in sub-
paragraph 5 (iii) of the Australian Government's Memorandum of
23rd May, 1947:

'The Australian Government is willing that its machinery should
undertake the development of the defence aspect of matters
relating to Regional Security in the Pacific, in accordance with
the principles and procedure outlined in Part 11 for the
functioning of the Australian Higher Defence Machinery in this
respect. The precise scope of the area to which this would apply
will be ultimately determined by the area of any regional
arrangement that may be reached.'
I am now enclosing, for your information, a copy of the following
documents:

(i) Council of Defence Agendum No. 1/1948 [4] and Supplement No. 1
[5]-The Strategic Position of Australia-Review by the Chiefs of
Staff Committee.

(ii) Council of Defence observations and conclusions on the above
Agenda. [6]

It will be noted that a basis has now been established for the
machinery for Cooperation in British Commonwealth Defence to
operate on the official level, and the defence of vital sea
communications mentioned in paragraph 7 of your letter has also
been referred to the Defence Committee for examination in
consultation with the United Kingdom and New Zealand
Representatives.

7. I wish to emphasise:

(i) That the strategic planning authorised is to proceed strictly
on the official level.

(ii) That it does not involve any committee in regard to
Government Policy, except where approval is specifically sought
and obtained.

(iii) That the development of the planning is subject to the
considerations mentioned in sub-paragraph 3 (iii) of the
conclusions of the Council of Defence.

I would also again refer to the remarks in my letter of 16th
September 1947 7 on the extent to which the Australian Government
has undertaken additional Defence commitments in the current Five
Years' Programme for 250-millions, and the fundamental importance
of the principle that the acceptance of responsibilities must be
realistically related to the ability and capacity to meet them.

8. I note your view with regard to the importance of liaison on
the official level with the Defence Co-ordination Committee, Far
East. It is suggested, if you agree, that consultation required in
connection with the examination of mutually related strategic
problems might be arranged with the Service Authorities in Malaya
through your Chief Service Liaison Officer in Melbourne, in view
of the final responsibility reposed in the Australian and United
Kingdom Higher Defence Machinery.