Had long conversation yesterday with Sumner Welles.  His contacts in various countries visited have clearly convinced him that:-
(1) If no means can be found for a settlement before really serious hostilities commence issue will have to be fought to a finish.
(2) Allies would not agree to any settlement (a) that left to Germany the fruits of her aggression (b) that did not provide for security in physical sense against repetition of aggression in future as opposed to any undertakings given by Germany.
He is clearly so impressed with the devastating effects of a long war upon all countries including United States that he is searching to find some basis for proposals to meet (a) and (b) which might be put forward by the President of the United States  and, my impression is, conceivably in conjunction with Mussolini.
He cross-examined me as to the attitude of the Dominions on (1) the war in general, (2) the possibility of a settlement before serious hostilities commenced and (3) progressive disarmament being the basis of such a settlement.
Making clear that I could only speak for Australia, but that I imagined that the views of other Dominions would be similar, I indicated as to (1) that we were wholeheartedly in the war and more resolute if possible than in 1914 because we considered that everything we believed in was at stake.
As to (2) that we would not entertain the idea of a settlement (a) that left to Germany the fruits of her aggression and (b) that did not provide for security against any repetition.
In reply to specific questions by Sumner Welles I said that while we hated Nazism and all it stood for and felt that the German people were responsible for the power that Nazism had obtained and should be punished for acquiescence in Nazi crimes, these views would not worry us if a settlement that provided for (a) and (b) could be obtained.
With regard to (3) I said I felt that security based on agreement as to limitation or reduction of armaments presented such grave difficulties including that of time as to be impracticable.
I told him that, as I saw the position, the only possibility of stopping the impending catastrophe might be by revolutionary proposals for what would amount to a new world order, both politically and economically. I told him that I doubted if any man was big enough to put such proposals forward, but if there was such a man it was President Roosevelt.
We then discussed various points out of my letter to you of 2nd January  and memorandum enclosed in my letter to you of 6th February.  Throughout our conversation Sumner Welles was most cordial and I gained the very clear impression that he regards with such horror the full scale of development of the war that he is endeavouring to formulate proposals on the basis of which on his return to the United States he could urge the President to take some definite action. Such proposals might be embarrassing to the Allies but that possibility is safeguarded by undertakings which Mr. Welles has given, and which the President has also given in a private letter to the Prime Minister here , that the United Kingdom Government will be consulted.