I saw Sumner Welles  yesterday in company with the British Ambassador. 
I submitted the possibility of any Japanese attack falling on British or Dutch rather than on American territories and emphasized the importance that Australia attached in such event to American support. I referred to Sumner Welles' recent public statement  as indicating America's vital interest and said that, if an attack developed on any of us, the United States would most probably be involved in due course. This appeared to the Australian Government to indicate the advantage to be derived from a clear statement by the United States Government to Japan on the consequences of further Japanese expansion.
I referred to the potential statement by American and British Ambassadors at Tokyo, see my telegram No. 584. 
Sumner Welles said on July 31st that he had on behalf of the President  proposed to Japanese Ambassador  that Thailand be demilitarized by common agreement. He had asked for a very early reply which he would insist on getting. If such a reply were to be unsatisfactory he would consider what I had proposed.
Sumner Welles said that in connection with the Japanese apology for the recent bombing of American gun-boat at Chungking Japanese Government had given confidential undertaking that they would not bomb Chungking city area any more.