100 Lord Caldecote, U.K. Secretary of State for Dominion Affairs, to Mr R. G. Menzies, Prime Minister

Circular cablegram M58 LONDON, 5 September 1940, 12.30 a.m.

IMPORTANT MOST SECRET

Following for the Prime Minister- BURMA ROAD.

Less than two months remain before the Burma Road Agreement is due to expire, and we have been considering what steps should be taken to meet the situation which will arise at the end of that period.

2. Nothing has happened to suggest that the Japanese Government are seriously prepared to fulfil their part of the bargain. Public opinion here would make it difficult to justify the extension of the Agreement. The American public is out of sympathy with us on this subject, while the Chinese can be relied upon to stimulate interest should it show signs of flagging.

3. United States Government have indicated their willingness to discuss with us what measures of support the United States would give. Nevertheless we do not feel it possible to depend on any promises of support from United States in advance of the decision which we shall have to take regarding the opening of the Road, though we shall naturally do everything to pave the way for any support from the United States. We regard the prospect of support from U.S.S.R. as negligible in the existing circumstances.

4. Our decision will obviously have to depend on our war position at the end of the intervening period. Any set back would still further prejudice our position in the Far East, and it may well be that in any case the situation will not have cleared sufficiently to permit us to disregard considerations that led us to accept present compromise.

5. On the other hand, failure of Germany either to make full scale attack on Great Britain or to succeed in one if made, would presumably have powerful influence on the Far Eastern situation and might render it easier for us to re-open the Burma Road.

6. To do so without due preparation however would doubtless be the signal for fresh anti-British agitation in Japan, which might compel the Japanese Government to take some kind of face-saving action against us.

7. Preparation for action must- (1) avoid allowing Japan to make it appear that if we do not keep the Burma Road closed to military supplies we shall ourselves be breaking our undertakings towards Japan;

(2) Keep the responsibility of proposing the lines of a general settlement in the hands of the Japanese; continued lack of any indication that the Japanese Government are prepared even to consider with us the question of a general settlement would provide further justification for our re-opening the Burma Road;

(3) Enable us to maintain a position where we can demonstrate, if necessary, that certain Japanese authorities have met our concession by instigating strong anti-British agitation in Japan.

8. With these considerations in mind, His Majesty's Ambassador at Tokyo [1] has been instructed, unless he sees objection, to develop the lines foreshadowed in circular telegram D. 450. [2] If the Japanese Minister for Foreign Affairs [3] attempt[s] to place upon us the responsibility of making concrete suggestions for a general settlement, Sir Robert Craigie has been instructed to take the line that before we could make any approach to the Chinese or decide on a contribution to a general settlement which would be appropriate on our side, we should of course have to know on what precise basis Japan was prepared to deal with China. Meanwhile we are considering whether we can devise any plan for a general settlement which could be kept in reserve for production should the appropriate moment arise.

9. We should be grateful of [sic] your views.

1 Sir Robert Craigie.

2 Dispatched 3 September. See file AA:A981, Far East 31, ii. It was suggested that Craigie should ask what steps the Japanese were taking to reach a settlement in the Far East and that he should argue that (a) the spirit of the Agreement was to forbid the transit of certain articles, but not to hinder traffic, in non- prohibited goods; (b) as the Agreement was temporary there was no justification for prohibiting the accumulation of goods in Burma;

(c) the Japanese were attempting to expand the Agreement in various ways incompatible with its general spirit.

3 Yosuke Matsuoka.

[AA:A981, FAR EAST 31, ii]