FAR EAST Questions of the highest policy have now to be determined and I send you the following thoughts. Problem as I see it is as follows:
There would be general agreement that Japan having under her agreement with Vichy obtained and occupied bases in Indo-China [the]  United States, United Kingdom and Dutch Governments should now warn the Japanese Government that any extension of its southward movement into Thailand (Siam) will be resisted. The difficulty with regard to this course is the doubt whether the United States would be prepared to join in any such warning and we have to consider what our course should be in the event of this proving to be the case. The alternatives would appear to be:
(1) Do nothing and take no action unless we are attacked.
(2) Issue the warning without United States being associated with it.
(3) Issue no warning but seize KRA Peninsula immediately upon any infringement of Thai territory by the Japanese.
(4) The seizure of KRA Peninsula immediately without waiting for any further action by Japanese.
In considering these four alternatives our objectives must be kept clearly in mind:
(a) To avoid war with Japan.
(b) To ensure United States will support us if we do become involved in war.
With regard to (1) I doubt if this is the most likely method of avoiding war. Indications are that Japan may follow up what she has got away with in Indo-China by testing out how far she can go in Thailand. If she does and is allowed to do so without any interference she will probably go so far [as] to imperil our vital interests to such an extent as to make war inevitable.
In considering this alternative the effect of our adopting it in United States, Russia and China has to be weighed. United States:
Although we would consider that the negative attitude of United States was the reason for our doing so I believe that we would harm our cause in United States by sitting down under Japanese pressure and weaken the prospects of United States co-operation.
U.S.S.R.: Letting Japanese strengthen their position in the Far East leaving them free to attack the Russians would not strengthen our position vis-a-vis U.S.S.R. China: What applies to Russia applies with double force to China and the Chinese will to resist might be seriously reduced.
With regard to (2)-this possibly offers the best prospect of avoiding war.
If Japanese do not want war but are only testing how far they can go without precipitating it, the warning will halt them. If they are bent on war it will make no difference and will at least prevent our landing into war after Japan has seized further bases making our defence of Malaya more difficult. To my mind this course offers the best prospect of early United States intervention. Warning would be given with knowledge of United States-obviously we could not take this course if the United States had protested against it-and if, as a result of it,we became involved in war I believe that the United States would soon be in with the support of public opinion.
With regard to (3) this course has a certain attraction but has the danger that the first infringement of Thai territory by Japan might be the seizure of KRA Peninsula and we might find ourselves forestalled.
With regard to (4) this is probably the wisest course from the military point of view but probably makes war inevitable, and if it did our seizure of Thai territory gives Japanese an excuse for similar action. The effect on American public opinion might also be dangerous.
After carefully weighing all the alternatives I believe (2) is the right one. There are so many factors to be weighed in considering the above four alternatives that I hesitate to express a view. I will, however, risk doing so.