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65-3_34 - 1949-04-20

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DEPARTMENT OF STATE Memorandum of Conversation

Date: April 20, 1949

Subject: Sir Frederick Shedden's Appointment with The Secretary

Participants: The Secretary Sir Frederick Shedden, Australian Permanent Secretary Of Defense J. Harold Shullaw, BC

Copies to: The Secretary Two copies to R - Mr. Armstrong EUR - Mr. Hickerson American Embassy, Canberra

Sir Frederick Shedden, Australian Permanent Secretary of Defense, called on me at his request today. He was accompanied by Owen Davis, First Secretary of the Australian Embassy, who withdrew after introductions had been performed. Sir Frederick presented letters of introduction from Prime Minister Chifley, Mr. Robert Menzies, Leader of the Opposition, and Mr. Richard Casey. He remarked that these letters demonstrated his non-party status.

Sir Frederick said that in 1946 Prime Minister Chifley had decided that Australia should assume a larger share of defense responsibilities for the British Commonwealth in the Pacific area. He mentioned that Australia's defense expenditures were very large for a country of only 8 million people. He also referred to Australian participation in the joint U.K.- Australian rocket range project in central Australia through a contribution of money and the provision of facilities. Sir Frederick said that it is planned to eventually transfer laboratory work now being done in the United Kingdom to Australia, and toward this end Australian scientists have been receiving training in Britain. This training project, he said had run into a road block because of the ban on classified information now in effect. He pointed out that the assistance which Australia was able to give through such projects as the rocket range aided Great Britain and also enabled her to increase the effectiveness of her contribution to the Atlantic Pact.

Sir Frederick remarked that in addition to the difficulties in connection with the rocket range project, defense planning in the Pacific was being hampered by the lack of exchange of information. He said that Australia was not asking for help in this connection but only for information which would enable her to shape her plans for Australia's role in Pacific defense. He referred in this connection to the Australian contribution in manpower and reverse lend lease in the last war.

Sir Frederick stated that as Secretary for Defense and Chairman of the Defense Committee, he could say that there were no leaks of information in the defense organization. In his conversations with Mr. Gordon Gray, the Assistant Secretary of the Army, he had outlined the steps which had been taken by his Government to set up a security organization modeled on the British MI-5. He pointed out that this new organization is headed by Mr. Justice Reed of the South Australia Supreme Court, a man without party affiliations who enjoys popular confidence. Sir Frederick said that in organizing this security department, the Australian Government had had the assistance of Sir Percy Sillitoe. He added that the British MI-5 people had stated that when the new security organization was in operation, the Australian security safeguards would be equal to those of Great Britain.

Sir Frederick said that Ambassador Cowen had told him of a letter written by Prime Minister Attlee to the President and of a letter from Mr. A. V. Alexander to the Secretary of Defense concerning the Australian security situation. He said that he knew nothing of either letter; and since Prime Minister Chifley had not mentioned the letters to him before his departure, their existence must not have been known to his Government. He concluded his statement by saying that he had been trying in the course of his visit to describe the steps taken by his Government to improve security and added that he was willing to return to the United States from the United Kingdom, if necessary, to give any additional information required by the United States Defense authorities.

I asked Sir Frederick when he thought the new security organization would be functioning. Sir Frederick replied that the Director General, Mr. Justice Reed, had already been appointed and had begun to select his staff at the time of his departure from Australia on April 2. He added, however, that he had not wished to come to the United States at the present time but had originally intended going to the United Kingdom by sea in May, spending several months there and then returning to Australia by way of the United States. His presentation of the steps taken by his Government to improve security would thus have been given later in the year. He said that his plans had been over-ruled by Prime Minister Chifley who felt that for political reasons it was necessary that he visit the United States at this time.

In reply to a further remark which I made concerning the time which could elapse between the appointment of a Director General and the actual functioning of the organization, Sir Frederick pointed out that the new security organization was not starting from scratch. He said that considerable work in the protection of documents, investigation of persons and compilation of dossiers had already been done by Military Intelligence and by the Commonwealth Investigation Service.

I said that I felt it was important that we work out this problem and I added that the interview which Sir Frederick had had with our Defense people last week had been helpful.

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