AUSTRALIA, an island continent of about three million /- square miles, inhabited by eleven million people of pre ** dominantly West European descent, lies on the southern perimeter of Southeast Asia, which is heavily populated by peo ples of diverse racial origins with traditions, cultures and political and economic outlooks differing radically both among themselves and from Australia's. Until halfway through the Second World War, Australia's de fense policy was very much a product of its early history. Al though from 1862 Australia contributed financially to the mainte nance of its own internal security and external defense forces, its defense thinking was nurtured within the overall pattern of Brit ish strategic defense. As a natural corollary, and because of its deep concern over developments in Europe, it supported the United Kingdom in two world wars. Although in 1914 there was no immediate threat to Australia, 330,000 volunteers were sent overseas from a population of 5,000,000; and 60,000 of them died in the war. In 1939, with the British declaration of war on Ger many, the Australian Government immediately declared war also and began to build up forces as a contribution to the Allied effort. At their peak, Australian forces totaled 640,000 and in addition we made considerable supplies and services available to Allied forces. Support for the Allied effort in both these wars was based on traditional and emotional ties with the United Kingdom as well as logic. The unhappy events following the entry of Japan into World War II shattered the old concept that strategic defense could be left to the Royal Navy (augmented by Australian ships and using the Singapore Naval Base) while Australia concentrated mainly on local defense. The impregnable naval base was easily breached and taken. Two battleships, the Prince of Wales and the Repulse, were sunk within minutes of each other, a Japanese in vasion fleet penetrated as far south as the Coral Sea and Japanese soldiers were able to take over most of the settled part of New Guinea. Thus Australia's primary reliance on a protective power was destroyed. Australian and United States forces were able to