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MR. CHURCHILL concurred in the views expressed by Sir William Nicholson. He thought it desirable that Australia should possess a large military force on a militia basis, and suggested that we should impress upon them that the existence of a considerable military fores was necessary as a guarantee of their security.

LORD CREWE agreed with Sir William Nicholson, and pointed out that if the Japanese Alliance were determined, it would be very imprudent to assume, as was stated in the Memorandum, that even if we were at war with Japan no attack more formidable than a raid by a small landing force need be anticipated.

SIR ARTHUR WILSON stated that the situation would not be seriously changed if the Anglo-Japanese Alliance were determined, as we should so strengthen our fleet in the Far East as to render it impossible for the Japanese to undertake oversea operations on a large scale. The two "Dreadnoughts" laid down for Australia and New Zealand would themselves strengthen our naval force in the Far East very materially.

SIR EDWARD GREY agreed with the views expressed by Sir William Nicholson. He doubted the expediency of stating in a Memorandum of this nature opinions as to the situation which might arise if the Anglo-Japanese Alliance were determined. These paragraphs might convey the impression that such was our intention, which was not the case. He suggested that the paragraphs of the Memorandum in which the hypothetical situation created by a determination of the alliance was discussed be omitted, and that the conclusion of the Committee as regards the scale of attack should be confined to the present situation, a paragraph being added to the effect that this comparative immunity of Australia from the danger of oversea attack was based upon the existence of the Anglo-Japanese Alliance, and that, should this alliance be determined, a new strategic situation in the Pacific would arise which would profoundly modify the circumstances of Australia, and involve a reconsideration of the scale of attack to which she might become liable.

THE PRIME MINISTER concurred, and pointed out that the specific question asked by the Governor-General of the Commonwealth was whether any modification of the scale of probable attack on Australia as laid down by the Committee of Imperial Defence in 1906 has become necessary owing to alterations during the last three years in the balance of naval power and recent naval developments, and that, if the Memorandum were amended as suggested by Sir Edward Grey, this question would be completely answered.

(Conclusion.)

(a.) The Memorandum should be redrafted, omitting all reference to the situation that might arise if the Anglo-Japanese Alliance were determined.

(b.) The Committee concur in the view that, so long as the Anglo-Japanese Alliance continues, it is not reasonably probable that any military attack on Australia more formidable than a raid by a small landing force will be undertaken.

(c.) A paragraph should be added to the effect that this view is based upon the assumption that the Anglo-Japanese Alliance is in existence.

Should the Anglo-Japanese Alliance be determined, a new strategic situation would be created in the Pacific which would necessitate a reconsideration of the scale of oversea attack upon Australia.

4. CANADA: SCALE OF ATTACK ON THE PACIFIC COAST. (C.I.D. Paper 65-C.)

THE PRIME MINISTER observed that the remarks on the part of the Australian Memorandum which dealt with the situation which would arise if the Anglo-Japanese Alliance were determined similarly applied to the Memorandum on the Scale of Attack on Canada. He thought also that in these circumstances it would be better to confine the Memorandum to a reply to the specific question asked, namely, the Scale of Attack to which Prince Rupert could be considered liable.

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