Germany so soon as the operation in Belgium and Northern France is completed will either attempt a lightning drive on Paris or an intensive attack on the United Kingdom.
It is unlikely that the two would be combined as her Air Force would need to be employed to the maximum extent in either operation and after the recent losses it has sustained even with the numerical superiority it possesses, it is improbable that Germany is in a position simultaneously to undertake the dual task.
The possibility cannot however be ignored that a dual attack might be undertaken the object being to draw off part of our air strength to prevent the French being overwhelmed and thus to weaken our defence against an all-in attack on the United Kingdom.
In my view a thrust on Paris is the more likely move.
In face of the rapid and overwhelming success of the German drive to the coast it is foolish not to recognise the possibility of this thrust achieving its objective.
If it did, we cannot exclude the possibility that in face of two such shattering blows French morale might go and they might capitulate. On the other hand the French may prove staunch and re- establish their line south of Paris.
In either event Hitler's course would probably be the same-namely to broadcast to the world as soon as he was in Paris, that the Allies are now beaten, that to continue the struggle only means the shedding of unnecessary blood and, probably in conjunction with Mussolini, that he is prepared for a just peace with a proviso that if the offer is not accepted the war will be ruthlessly continued with Italy in on the German side until the Allies, or the British Empire if France has collapsed, are destroyed.
In this broadcast he may indicate the outlines of the peace he contemplates and the more moderate he is the more difficult will our position be.
Hitler's most moderate terms would inevitably be such as we could not agree to but even if on their face value they were not wholly unacceptable there would be no guarantee that Hitler would carry them out.
We are therefore faced with the position that either with or without the French we have to fight on even if the appreciation by the General Staff showed that sooner or later we must be defeated as annihilation would be preferable to German domination.
We however do not desire to be annihilated nor do we want to fight on with incalculable loss of life and suffering merely in the end to achieve a peace of compromise in which we retain something but Nazism is left powerful in the world. Our task is to defeat the enemy vindicate the great ideals we are fighting for and establish a decent world.
Our job is to determine how we can set about this task.
The fundamentals are:-
(1) to save France from collapse;
(2) to obtain the maximum and earliest assistance from the U.S.A.;
(3) to detach progressively the U.S.S.R. from Germany;
(4) to create gradually a position in which Italy will be enabled to shake off her German shackles;
(5) to bring home to Japan, as the position develops, that her best interests will be in the defeat of Germany.
The most important of these fundamentals is the immediate attitude and action of the U.S.A. A prompt declaration by the U.S.A. that she is not prepared to allow the Allies to be defeated with the consequence of a completely dominant Germany in Europe threatening the American continent and the ideals upon which the U.S.A. and every democracy in the world is founded might well save France from collapse and change the whole position. How could this be brought about? Only (1) by bringing home to the President  how real and imminent is the danger to the U.S.A.; (2) by suggesting to him a course which he could pursue which would ensure to him the support of the overwhelming majority of the people of the U.S.A. in the action he took.
With regard to (1) the seriousness of the position has been put to the President but I venture to think not with the stark reality of all its possibilities set out with brutal frankness. This I believe should with the utmost urgency now be done.
The possibility would have to be put to him of a French collapse not on the basis of their laying down their arms and continuing the struggle in the colonies and by the French Navy with the Government functioning somewhere out of France, but of their having come to terms, handed over the French Navy and all the French ports being available to the enemy.
The effect of this French collapse with the possession by the Germans of the French Navy, coupled with the entry of Italy into the war, would have to be shown covering the position in the Mediterranean and the Near and Middle East and the isolation of Turkey.
The situation of the United Kingdom in these circumstances would have to be ruthlessly driven home even up to the point of visualising the possibility of our eventual defeat and of our having to surrender the British Fleet in order to obtain not too intolerable terms.
The exact case to be presented to the President would need careful thought in the light of appreciations by the General Staff and the Ministry of Economic Warfare.
Even on the most optimistic view it would be a desperate one. If in fact it showed the possibility of the British French and Italian Fleets eventually coming under the domination of the Germans it would be one to galvanise the President into any action necessary to prevent such an eventuality.
As to (2) if the President can be convinced of the necessity of immediate action by the U.S.A. I suggest the form of such action should be somewhat down the following lines:-
(1) An immediate declaration that the U.S.A. cannot allow the domination of Europe by an aggressive power whose ideas include world domination since such domination constitutes a threat to the American continent and everything American civilisation stands for;
(2) That the ruthless aggression of Germany and her military successes are now threatening such a domination;
(3) That the time has come when either the nations must meet in conference to formulate a peace settlement which, taking into account the present position and the necessity for profound readjustments, such as will ensure to all nations justice, equality of opportunity and freedom from aggression, or that the U.S.A. must throw the whole of her support and assistance behind the Allies to prevent the domination of Germany ;
(4) That the further shedding of blood and the continuance of hideous suffering is unnecessary;
and finishing with an appeal to the belligerents to cease the struggle and to all non-belligerents to support his efforts for peace.
Repeated to Australian Minister Washington.