Dominions Office cables  will have advised you of the terms of the German communication to the United Kingdom reply. Latter couched deliberately fairly stiffly but steps have been taken to prevent its having too repellent an effect on Hitler. 
Assuming direct negotiations, position arises requiring very clear thinking. Poland, corresponding to Roosevelt  accepting direct negotiations for conciliation, has admitted that there is a problem requiring settlement. Settlement by negotiation presupposes reasonableness. To date Poland has shown little indication of being prepared to show it. Should she be intransigent in negotiations a most difficult situation would arise. Any attempt by the United Kingdom Government to force her would almost certainly destroy the present equilibrium and invalidate unity of political and public opinion and possibly destroy the Government on the cry of another Munich. On the other hand the Polish unreasonableness may land us all in war. I have been urging the United Kingdom Government to do everything in their power, short of creating risks indicated in the previous sentence, to induce the Poles to make reasonable concessions. The assistance of Roosevelt in this direction would be invaluable if obtainable. The suggestion is also under consideration that thought should be given to the possibility, if negotiations look like failing, of the Prime Minister  making a proposal for the immediate consideration of wider problems suggested by Hitler, colonies, disarmament, plus United Kingdom suggestion of additional items (United Kingdom reply, see Dominions Office telegram 2935), the German-Polish question to be merged in such wider discussions and made part of a general settlement.
Pending these discussions the two sides to agree to maintain the status quo. All the above governed by whether Hitler desires a settlement or not. Considerable evidence that he does, having now realised that the United Kingdom's participation in war is certain and having learned, for the first time, in the last two weeks a number of disconcerting facts from the military, economic and financial advisers.
As considerations arise in the above, if you have any views, suggest that you send them to me and I shall pass on such as you wish, if any, to the United Kingdom Government.