With reference to your letter of the 27th January (E.41/1) , regarding the question of the possible denunciation of the General Act for the Pacific Settlement of International Disputes, I am directed by the High Commissioner to inform you that he has received a telegram from his Government stating that it is possible that when this question comes before the Committee of Imperial Defence on the 9th February, the Committee may be unwilling to adopt the course recommended by the Sub-Committee as described in the telegram from the Secretary of State for Dominion Affairs of the 24th December.  It has been suggested that in that event a possible alternative would be for H.M. Government in the United Kingdom, availing themselves of the provisions in Article 45(4) of the General Act, to make a declaration that while they will continue to be bound by the General Act they reserve the right to terminate their acceptance of the Act by giving notice of, say, one or three months, and that their continued acceptance of the Act is subject to this reservation.
This declaration could be accompanied by a statement to the effect that H.M. Government in the United Kingdom have no present intention of making use of the right so reserved but that they are impressed with the inconvenience of the system under which an opportunity to reconsider their position in regard to the General Act occurs only once in five years. It is possible that it might be held that such action was not in accordance with Article 39 of the Act since it does not fall within the reservations 'exhaustively enumerated' in the Article, and that it is not open to one party by a unilateral reservation to modify the system prescribed for withdrawal from the Act. It should, however, be observed that some of the reservations which British Commonwealth Governments made at the time of the original accession might be held to be equally outside the scope of Article 39 and no objection has been taken to them. It can also be argued that since H.M. Government in the United Kingdom are entitled at the moment to withdraw their acceptance of the Act, they must a fortiori be entitled to make their continued acceptance subject to a new condition. The action suggested would not involve any immediate withdrawal and would place the United Kingdom Government in a similar position as regards the General Act to that when the Optional Clause was accepted in 1929.
The High Commissioner has been requested by his Government to inform the Commonwealth Government that the above alternative is under consideration in order that, if the Committee of Imperial Defence were to decide in favour of this course, the Commonwealth Government might be able to consider whether they would wish to take similar action. It will be appreciated that, for the reasons given in paragraph (4) of the Secretary of State's telegram of the 24th December, any such declaration would have to reach Geneva by the 15th February, and accordingly that, if any action is to be taken by H.M. Government in the United Kingdom, the decision must be reached at tomorrow's meeting.
R. R. SEDGWICK