For Prime Minister. Personal and confidential. United Kingdom Cabinet having heard Prime Minister  report have sat all today  considering question of acceptance or rejection of German memorandum (see Dominions Office Telegram No. 266).  All shades of opinion recognise that rejection means Germans march into Czechoslovakia, that announcement of United Kingdom and French support Czechoslovakia in such event would not deter them. Issue therefore is whether German memorandum is so unreasonable as to justify war in preference to its acceptance. Those who argue that it should be accepted maintain that it only deals with method of giving effect decision already arrived at namely the transference of Sudeten areas to Germany that is decision was great one for which it might have been justifiable to go to war and that having accepted principle it is unthinkable to make method of giving effect to it the cause of a war.
With regard to specific proposals in memorandum they say:(1) Areas designated are approximately those which it is contemplated would go Germany even if these areas are slightly greater than would be rectified by plebiscite. Action would therefore be anticipating what would happen in six weeks or two months time. (2) Even if not handed over until after new delineation destruction was not contemplated and while certain removals would have been made provided that reasonable compensation paid where assets result of Czech expenditure this not unreasonable. (3) As soon as this would have happened on transference of territory and would only be anticipating date. (4) Same as (3). (5) An international commission preferably for alterations to frontier. Limitation of voters provided some arrangement made with regard to places where heavy Czech settlement has taken place since October 1918 not unreasonable.
Those in favour of acceptance feel the Prime Minister will be supported by public opinion in United Kingdom if he gives a bold lead for acceptance proposals in German memorandum.