248 Mr R. G. Casey, Minister to the United States, to Department of External Affairs

Cablegram 85 WASHINGTON, 15 May 1940, 11.50 p.m.

MOST SECRET IMMEDIATE

I saw Welles [1] this afternoon and found him much concerned by the news of the campaign in Belgium and France and from Italy. He obviously fears Italian intervention shortly though not in the next few days. His concern regarding Italy is tempered by the fact that Italy has revived proposals for trade treaty with the United States and the sailing yesterday of large Italian liner from Italian port for the United States. The President [2] telephoned Mussolini last night with a view to calming the situation. Welles sees no indications that Japan contemplates any immediate action in the Netherlands East Indies but regards intervention there as far from impossible later. Meanwhile the United States fleet remains based on Hawaii.

The United States Consul-General [3] reports as untrue Japanese allegations of anti-Japanese demonstrations in the Netherlands East Indies. The State Department believes [anti-] [4] Japanese demonstration at Lima was entirely from German source and that Germany is encouraging the Japanese in any action calculated to keep the United States preoccupied with the situation in the Pacific and South America.

I understand the President will appear personally before Congress on 16th May and request large defence appropriations. [5]

1 U.S. Under-Secretary of State.

2 Franklin D. Roosevelt.

3 Erle R. Dickover.

4 This word has been inserted from the Washington file copy on AA:

A3300, 13.

5 This cablegram was repeated as no. 18 to S. M. Bruce, High Commissioner in London.

[FA: A3195, 1.3300]