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

Circular cablegram D319 LONDON, 7 July 1940, 9.40 p.m.

MOST SECRET

My Circular D.318 of today. [1]

Following is the text of the replies regarding Hong Kong and the Burma Road.

2. Stoppage of supplies through Hong Kong The transit of munitions over the frontier of Hong Kong has in fact been prohibited since January 1939 and no war materials of any kind are at present crossing the frontier. In these circumstances it would seem that the Japanese requirements have already been met.

3. Stoppage of supplies through Burma His Majesty's Government have taken note of the views of the Japanese Government with regard to the transport of arms, ammunition and supplies via Burma to the National Government of China.

4. It is true that passage of certain arms and munitions to the National Government of China does take place via Burma, but the total figures for 1939 and those for the first five months of 1940 lend no support to the view that this traffic affords any very material contributions to the armed strength [of] [2] the Chinese National Government. For some time past the specific war material from the United Kingdom which was carried over the Burmese route to China has been insignificant and it is likely to remain so. His Majesty's Government therefore would find themselves unable to accept the view that the supply of war materials by Great Britain to the National Government of China is a direct cause of the prolongation of hostilities.

5. It is however noted that the Japanese Government in the communications refer not only to arms and ammunition but also to fuel oil and petrol, trucks and railway materials. His Majesty's Government find difficulty in appreciating the basis on which the request is made to stop passage of these materials, certain of which are products of Burma itself. In so far as this route is a legitimate trade route which contributes to the welfare of the people of Burma and India, His Majesty's Government feel that in making this request the Japanese Government are asking them to take action which is inconsistent with their obligations to these two countries. Moreover the goods which pass over this route to China emanate from third powers and if serious dislocation is not to be caused to the trade of those powers it would seem necessary that any stoppage of supplies should be made at the source.

Compliance with the Japanese Government's request would in effect involve His Majesty's Government in a departure from neutrality and would amount to discrimination against China. In strict neutrality, a request to cut off the materials in question from China should involve a similar stoppage of supplies to Japan, but this of course is in no way the intention of His Majesty's Government.

6. In connection with the Japanese Government's request that the Burmese route should be closed to traffic to China, it is not irrelevant to recall that His Majesty's Government have lately been endeavouring to secure the Japanese Government's assent to the stoppage of certain materials to Germany with whom the United Kingdom are explicitly at war. While the Japanese Government have indicated their willingness, under certain conditions, to arrange not to re-export to Germany goods which they have purchased from the British Empire, they have declined to give any assurances in respect of other Japanese imports and have been unwilling even to discuss limitation of exports via Siberia of goods produced in Japan and Manchukuo.

7. For all of these reasons, it will be evident to the Japanese Government that, were they to press their request, they would place His Majesty's Government in a position of great embarrassment. This could not but cause a serious crisis in Anglo- Japanese relations, and His Majesty's Government are unwilling to believe that this is in fact the desire [of] the Japanese Government. His Majesty's Government fully appreciate the anxiety of the Japanese Government to bring to an end hostilities which His Majesty's Government have themselves from the outset deplored, but the closing of the Burma road could at the best furnish only a partial solution of the problem which the Japanese Government have set themselves. His Majesty's Government venture to express the view that only by a just and equitable peace, acceptable to both parties, will the present unfortunate dispute be terminated and thus pave the way to a general and constructive settlement which will bring lasting peace and prosperity to the Far East. His Majesty's Government for their part are ready and willing to afford their cc-operation and to enter upon discussions to achieve this end.

1 Document 17.

2 Words in square brackets have been inserted from the Dominions Office copy in PRO: DO 114/113.

[AA: A981, FAR EAST 31,ii]