4 Mr P. Fraser, N.Z. Prime Minister, 4 to Commonwealth Government

Cablegram unnumbered WELLINGTON, 3 July 1940, 3.30 a.m.

MOST SECRET

I thank you for your telegram of 28th June with reference to the

Far Eastern situation. [1] We entirely agree with you on the

following points-

(a) The delicacy and danger of the situation.

(b) The desirability of obtaining a clear indication of the United

States policy in the Far East.

(c) The desirability, if circumstances allow, of retaining the

United States fleet in the Pacific.

(d) The extreme undesirability of any act or omission on our part

which might have the effect of unnecessarily precipitating trouble

with Japan in our present situation.

(e) The undesirability of any attempt to haggle with Japan.

(f) The undesirability in the best interests of the British

Commonwealth of involvement of United States in a war in the Far

East.

(g) The probable futility of the suggestion that in the present

circumstances Japan might be induced on the lines proposed to

offer the restoration of territorial integrity and independence of

China.

On the other hand we are most sceptical as to whether Japan would

in the existing situation be persuaded to make a satisfactory

tripartite declaration as to status quo in the Pacific or whether

such a declaration if made would have any value at all unless

accompanied by a full United States guarantee, which would seem

unlikely at the moment.

Again we cannot bring ourselves to believe that the offer of

mediation that you propose, in the absence of United States

collaboration, offers any substantial promise of successful

results. Nor are we convinced that a simple acceptance of the

present Japanese demands would be morally right or even

politically expedient. Indeed we are inclined to feel that an

acceptance of the Japanese demands or an offer of mediation

between Japan and China might well be interpreted by the Japanese

as a plain indication of the weakness of our position and of our

readiness on that account to sacrifice the Chinese and the

principle of resisting aggression for the purpose of endeavouring

to protect our own interests. We are at present inclined to feel

that an appearance of continued confidence is more likely to be

effective with the Japanese than any step which might be

interpreted as a display of weakness. On the whole, however, we

are inclined to defer formation of any definite judgment on this

most difficult problem until it has been possible to ascertain the

result of the approach which has already been made by His

Majesty's Government in the United Kingdom to the United States

Government.

A copy of this telegram has today been despatched to the Secretary

of State for Dominion Affairs. [2]

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

Document 452

2 Lord Caldecote.

[AA: A1608, A41/1/1, xi]