My following telegram Circular Z.214 [1] contains a full summary
of appreciation by Chiefs of Staff of the situation in the Far
East.

2. I should be grateful if you would communicate it immediately to
the Prime Minister [2] for his most secret and personal
information. In doing so you should explain that appreciation is
based on the following important assumptions:-

(1) that the military situation in other theatres (i.e. in Europe
and in the Middle East) will not change in our favour to any
marked degree in the immediate future. For the present therefore
we shall have to retain a fleet in Eastern Mediterranean;

(2) that the attitude of the United States remains as at present
i.e. that we can rely upon a measure of economic and material
support but cannot anticipate active United States co-operation;

(3) that we should go to war with Japan if she attacks the
Netherlands East Indies and provided the Dutch resisted.

3. The third assumption above is arbitrary and in fact the
question whether we should or should not go to war with Japan in
the event of Japanese aggression against the Netherlands East
Indies is now receiving further consideration by the Chiefs of
Staff. As assumption (3) has far reaching effect on the whole
appreciation passages to which it particularly applies are
prefaced by the words '(Assumption (3) begins)' and end with the
words '(Assumption (3) ends)'.

4. We fully appreciate strategic disadvantages of a failure to
take up Japanese challenge in such circumstances and the main
point for further examination is whether our limited resources in
the Far East in combination with Dutch resources available in the
Netherlands East Indies would justify our taking action in the
event of a Japanese attack on the Netherlands East Indies which
would lead us into war with Japan. If our joint resources would
justify such action it would clearly be to our advantage to accept
the consequences of war with Japan in attempt to dispute a
Japanese occupation of the Netherlands East Indies. If not it
remains to be considered what would be the consequences of an
endeavour to avoid war with Japan on this issue. The assumption
adopted on this question in the appreciation viz. that we should
go to war on this issue should not of course be regarded as in any
way prejudging the political decision. Please inform the Prime
Minister that we should be glad to receive any views which he may
wish to express on this question.

5. In the light of the third assumption above it would be logical
that the appreciation should recommend immediate staff
conversations with the Dutch in the Far East in order to concert a
combined defence plan. As the Prime Minister will see from the
appreciation the Chiefs of Staff have had this in mind but
consider it would be inadvisable to initiate such conversations
until we have strengthened our position in Malaya and are able to
offer effective military assistance to the Dutch. Here again we
should welcome any views which the Prime Minister may wish to put
forward. If it is decided that such staff conversations should be
held with the Dutch it would be of the greatest assistance if the
Commonwealth Government would agree to send service
representatives to take part in them when the time arrives. I
should be glad if you would invite the Prime Minister to consider
this suggestion which is also being made to the Prime Minister of
New Zealand. [3]

6. It will be seen from paragraph 34 of the appreciation that an
attempt has been made to assess on the basis of such information
as is at the Chiefs of Staff's disposal the scale of a possible
Japanese attack on Australia and New Zealand. No suggestion on the
other hand has been included in the appreciation as to defensive
arrangements which would be required locally to meet such an
attack. His Majesty's Governments in the Commonwealth of Australia
and in New Zealand will however wish to consider the matter in
detail in the light of Chiefs of Staff estimated scale of attack
if they find themselves in agreement with the appreciation
generally.

7. In paragraph 50 of the appreciation certain conclusions are
drawn as to garrison required in Malaya in addition to troops
already there. I should be glad if you would inform the Prime
Minister that in the present circumstances it is impossible for us
to provide even one division from the United Kingdom or the Middle
East and that in view of existing commitments India cannot assist
in this respect. In my telegram No. 228 of 28th June [4] the
Commonwealth Government were asked to consider the immediate
despatch of a division to Malaya but as you will recall in their
telegrams of 3rd, 24th and 31st July Nos. 346 [5], 384 [6] and 400
[7] they indicated that they felt unable to reach a definite
conclusion on the matter until they have been fully informed of
the Far Eastern situation as a whole. Please therefore inform the
Prime Minister that we earnestly hope that in view of the
importance and urgency of the problem the Commonwealth Government
will now again consider the possibility of early despatch of such
a force to Singapore with equipment provided so far as possible
from Australian sources.

8. You should mention that in connection with paragraph 34 of the
appreciation His Majesty's Government in New Zealand had already
decided to send at once a brigade group to Fiji the present
garrison of which consists of the equivalent of one company and
one battery for coast defence found by the Fijian defence force
(mixed European and Fijian).