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The Prime Minister of New Zealand to the Hon. W, Nash (London)

Parliament yesterday accepted the Government's proposals which were based on the recommendations of the United Kingdom and United States Chiefs of Staff as communicated by you, and followed negotiations with COMSOPAC's representatives and General Barrowclough.

In accordance with priority categories arranged with the New Zealand manpower authorities, the plan provides for the release of 11,000 men from the 3rd Division by October and is based on the assumption that the 3rd Division will not go out of existence, but that a nucleus will be retained capable of re-expansion if the recon-stitution of the Pacific division later becomes possible.

To enable the situation in Europe to become clearer and to permit of reconsideration of withdrawal of the 2nd Division after the fall of Rome, or at some other appropriate time, the proposals have been adopted as an interim policy.

The scheme allows of the present assignment in Green Island and the Treasury Group being completed; it provides for the ultimate concentration of unit cadres in New Caledonia; it ensures continuity of association with the American Command; it keeps the cadre force acclimatised; it saves shipping back to New Zealand equipment which might later be shipped forward again if the Division is reformed; it enables us to use the good camp, recreational, hospital, and training conditions of New Caledonia. In any case, the 3rd Division would, in June, have been in the forward area nine months and relief would normally be expected in June or thereabouts.¹

This is merely an interim policy, and the question of whether the 3rd Division is to continue or to be completely liquidated cannot be decided until the problem of the withdrawal of the 2nd Division from Europe has been finally considered. I hope to discuss this matter when I am in London and when I see Freyberg.²

Will you please advise Mr. Churchill and the Combined Chiefs of Staff.

No publicity whatever is being given to the withdrawal, which will be referred to wherever possible as a controlled diversion of manpower from the Pacific to food production and allied occupations. Plans for utilising the services of the men released have been worked page 345 out and also plans for increased farm production. The outstanding question remains that of the price for butterfat and progress is being made in the negotiations.