1. In spite of the deterrent effect of the Japanese military commitments in China, the possible hostility of U.S.A. and Russia and our military and economic strength, there are indications that Japan may be contemplating a move to improve her strategic and economic position. While it is not thought that war with Japan is necessarily imminent, the Chiefs of Staff are reviewing the Far Eastern strategy. Their views are briefly as follows:-
2. The security of our imperial interests in the Far East lies ultimately in our ability to control sea communications in the South Western Pacific for which purpose adequate fleet must be based at Singapore. Since our previous assurances in this respect however, the whole strategic situation has been radically altered by the French defeat. The result of this has been to alter the whole of the balance of naval strength in home waters. Formerly we were prepared to abandon the Eastern Mediterranean and despatch a fleet to the Far East relying on the French Fleet in the Western Mediterranean to contain the Italian Fleet. Now if we move the Mediterranean Fleet to the Far East there is nothing to contain the Italian Fleet which will be free to operate in the Atlantic or reinforce the German Fleet in home waters using bases in North West France. We must therefore retain in European waters sufficient naval forces to watch both the German and Italian Fleets and we cannot do this and send a fleet to the Far East.
3. In the meantime the strategic importance to us of the Far East, both for Empire security and to enable us to defeat the enemy by control of essential commodities at the source, has increased.
4. The Japanese advance in China and Hainan has increased the threat to Malaya and any further advance into French Indo-China, Dutch possessions or Thailand would endanger still more our position at Singapore which is the key point in the Far East.
Owing to the increased range of aircraft and the development of aerodromes, particularly in Thailand, we can no longer concentrate on the defence of Singapore Island entirely but must consider the defence of Malaya as a whole, particularly the security of up country landing grounds. For this reason and because we cannot spare a fleet for the Far East at present, it is all the more important that we should do what we can to improve our land and air defences in Malaya.
5. In your telegram 290 of 13th June  you mentioned the possibility of supplying further land forces. The Chiefs of Staff consider that the urgent movement of one division and two squadrons of aircraft to Malaya is desirable as an added immediate deterrent. They ask particularly whether the equivalent of a division equipped as fully as possible could be made available, drawing if necessary on your Militia pool of equipment. They realize that you could not equip these troops up to full Western standards nor would this be necessary in view of the unlikelihood of the Japanese being able to bring mechanized troops with the latest form of equipment to attack them. They consider that the employment in Malaya would, for the time being at any rate, be in the best interests of the Empire.
6. If owing to equipment or other difficulties you cannot make a whole division immediately available, the Chiefs of Staff recommend the movement by brigade groups as they become necessary.