He  had fully understood and appreciated your message  and views outlined in No. 98. 
He has up to date appreciation of European situation and fully realises grave possibilities that it holds.
As regards supply of aircraft from here he will do everything in his power although he told me that this did not amount to very much because since war started he has foregone taking supplies of new aircraft in order that Allies could get maximum supply.
Figures which were quoted to me show that numbers of existing aircraft here of any value for fighting or bombing are small.
He went on to envisage situation that might emerge if worst were by evil chance to come about and British resistance by land and air be broken. He believes it possible that in this event Hitler will probably make some proposal to the general effect that he will stay his hand and leave Britain an autonomous state provided the fleet and the oversea, fleet bases are handed over. He emphasised strongly that at all costs the British fleet and the fleet bases if possible should be kept in being. While the fleet existed the position might well be retrieved. It was far from impossible that some incident directly affecting interests or honour of this country might occur at any time and that this country might come in with us.
He repeated several times that no alternative was worse in the end than the surrender or destruction of the British fleet.