3 Lord Caldecote, U.K. Secretary of State for Dominion Affairs, to Commonwealth Government

Cablegram 234 LONDON, 2 July 1940, 5 a.m.

IMMEDIATE MOST SECRET

War Cabinet this morning considered the Far Eastern situation and

had before it your telegram 27th June No. 330 [1] for which we are

much obliged.

After full consideration the War Cabinet came to the conclusion

that it would be desirable to reply as follows to the Japanese

demands.

(a) To agree to the withdrawal of the Shanghai garrison provided

that Italy also withdraws and on the assumption that British lives

and property will be protected and that Japanese Government will

not seek to alter the status of the concession except in

consultation with the parties concerned.

(b) To make enquiry as to the precise grounds for the complaint at

Hong Kong, and,

(c) With regard to the Burmese Road he [2] is to point out that

the passage of arms and ammunition does not offer any very

material contribution to the armed strength of China; that war

material from the United Kingdom has been insignificant in recent

months and that owing to their own war effort His Majesty's

Government in the United Kingdom are in fact unable to supply

China with munitions of war. As to the stoppage of fuel, fuel oil

and petrol, trucks and railway material, His Majesty's Government

in the United Kingdom would state that in making this request the

Japanese Government was asking them to take action inconsistent

with their obligation to India and Burma, for whom the Burmese

Road constitutes a legitimate trade route. [Relations] [3] with

the United States would also be affected in as much as the route

is largely used for United States products. It is proposed to [add

that] in strict neutrality a request to cut off these materials

from China should involve a similar stoppage of supplies to Japan

though of course this is in no way the intention.

Finally, it is proposed to say that far from prolonging

hostilities, His Majesty's Government in the United Kingdom have

deplored them and have on various occasions expressed their

readiness, should both parties so desire, to use their endeavours

to bring the conflict to a dose.

In arriving at the above conclusion, His Majesty's Government in

the United Kingdom have been influenced by the fact that, while it

is obviously desirable to avoid trouble with Japan at this moment,

it is doubtful whether the concessions from [weakness] on points

of principle, apart from other considerations, would bring any

lasting improvement in the Anglo-Japanese relations. Furthermore,

in any attempt to find a way of accommodation with Japan, care

must be taken not to destroy confidence in the United States and

China in the British policy.

As the Commonwealth Government are aware, the United States have

indicated that they are prepared neither to increase pressure

which might involve them in war nor to take the initiative in a

policy of conciliation. On our part we are quite prepared to adopt

the latter policy if it is capable of producing any results. But

the United States Government appear to hold the view, which we are

inclined to share, that the Japanese nation is in no mood to be

weaned from a policy of aggression, and in these circumstances it

seems more than likely that any concessions which we may show

ourselves ready to make will fail to deter Japan from her

objectives.

We are inclined to agree with Sir Robert Craigie that a refusal to

close the Burmese Road will not directly lead to war, and that the

Japanese will in the first place have recourse to less violent

measures. Unless Great Britain were to be defeated in the European

conflict it seems to us doubtful whether Japan would have recourse

to total war. Japan's resources are not inexhaustible and should

she ultimately resort to hostilities it seems much more probable

that they would be limited and local and that, provided we

ourselves did not declare a state of war, she would terminate them

whenever it became apparent that a further advance would tax her

resources beyond their capacity. If Japan is bent on a policy of

this kind, it is unlikely that anything can be done at this stage

to deflect her. Nevertheless, Sir Robert Craigie has been

authorized to explore the possibilities and if these exist, His

Majesty's Government in the United Kingdom will naturally do what

they can in consultation with the Dominion Governments to exploit

them.

In the light of the above and in view of the very bad effect which

the closing of the Burmese Road would have upon India, Burma and

Malaya, which would be directly affected, we feel that we should

not close the Burmese Road.

We fully appreciate the considerations advanced by the

Commonwealth Government from the point of view of Australia. It

will be understood that it is necessary for us to take into

account all the relevant factors, and we hope that in the light of

the wider considerations mentioned above, the Commonwealth

Government will feel able to concur in the terms of the reply

which it is proposed to [send] to Japan. We should be grateful for

a very early reply. [4]

We are repeating your telegram and this reply to His Majesty's

Governments in Canada, New Zealand and the Union of South Africa,

with a request for any observations so far as they are concerned.

1 Documents on Australian Foreign Policy 1937-49, vol. III,

Document 452.

2 Sir Robert Craigie, U.K. Ambassador to Japan.

3 Words in square brackets have been inserted from the Dominions

Office copy in PRO: DO 114/113.

4 The Commonwealth Govt advised of its concurrence in the terms of

the proposed reply to Japan on 2 July. See cablegram 344 on file

AA: A981, Far East 31, ii.

[AA: A981, FAR EAST 31, ii]