LONDON, 11 August 1940, 7.45 p.m.

Received 12 August 1940

MOST SECRET AND PERSONAL

Following is summary referred to in my telegram of 11th August,
No. 1800, to High Commissioner, Ottawa; No. 263 to High
Commissioner, Canberra [1]; No. 245 to High Commissioner,
Wellington and No. 402 to High Commissioner, Pretoria, for most
secret and personal information of the Prime Minister. [2]

BEGINS-
1. Far East situation was considered in 1937 on the assumptions
that:-

(a) Any threat to our interests would be sea-borne;

and
(b) We could send to the Far East within three months fleet of
sufficient strength to protect the Dominions and India and give
cover to our communications in the Indian Ocean.

2. Japanese advance into Southern China and Hainan, development of
communications and aerodromes in Thailand, situation in Indo-China
resulting from French collapse, and increased range of aircraft,
would now enable Japan to develop an overland threat to Malaya,
against which even the arrival of the fleet would only partially
guard. At the same time, collapse of France, development of direct
threat to the United Kingdom and necessity for retaining in
European waters fleet of sufficient strength to match both German
and Italian fleets have made it temporarily impossible for us to
despatch fleet to the Far East. Neither of the two above mentioned
assumptions is therefore now tenable and defence problem has been
reviewed in this light.

GENERAL CONSIDERATIONS
3. Japan's ultimate aims are the exclusion of western influence
from the Far East and control of raw materials in that area. These
could not be secured without the capture of Singapore, which will
always be potential threat to her southward expansion so long as
the British Fleet remains in being in any part of the world.

Japan's immediate aim is likely to be the exclusion of British
influence from China and Hong Kong.

4. We are advised that Japan is determined to bring the China war
to an end. There have been reports of indirect peace discussions
but there is no reason to suppose that they have produced any
result. Even if they did, the termination of the war would bring
no early economic relief to Japan. On the other hand with the
dosing of one after another arms routes into China, the capacity
of China to resist is hampered. The war in China cannot therefore
be relied on to provide a serious deterrent to Japanese activity
elsewhere, though the value of Chinese resistance as a deterrent
would be increased if the Burma road were to be reopened for
military supplies.

5. Fear of Russian action will compel Japan to retain certain
forces at home and in Manchuria, despite present Russian
preoccupation in Europe. She knows that if she were in
difficulties, Russia would take advantage of the situation.

6. Attempt on formidable Singapore defences would involve combined
operation of first magnitude, and Japan must also reckon on the
possibility of collaboration with us of substantial Dutch forces
in the Netherlands East Indies against any southward threat.

On the other hand, forces in Malaya are still far short of
requirements, particularly aircraft; and Japan must know that in
present circumstances, we could not send adequate fleet to the Far
East.

7. Japan may gamble on the United States not resorting to armed
opposition, provided no direct action is taken against United
States citizens or possessions and on the probability that the
United States fleet would be kept in the Atlantic if our position
in Europe should deteriorate. Though the defended base of Manila
is not comparable with Singapore and United States sea
communications with the Philippines are more vulnerable than ours
with Singapore, nevertheless Manila lies on the line of Japanese
advance to the south and the Japanese cannot be certain that the
United States would not intervene and send fleet to the
Philippines.

8. Knowledge that further aggression might lead to rupture of
trade relations with the United States and the United Kingdom must
have considerable influence and the United States has already made
clear her interest in the status quo in the Netherlands East
Indies.

On long term view, Japan cannot stand the strain of break with the
British Empire and the Americas upon whom she depends for markets
and control of raw materials. Only if she could rapidly gain
complete control of raw materials especially oil, rubber and tin
of Malaya and the Netherlands East Indies would she have a chance
of withstanding British and American economic pressure. The recent
restrictions placed by the United States Government on export of
petroleum products and in particular the embargo on aviation
spirit may influence Japan in the direction of seizing alternative
sources of supply in the Netherlands East Indies.

9. Japan may argue that any main advance on her part should be
postponed until the outcome of affairs in Europe is clearer and
that if Germany succeeded she could achieve her aims quickly and
without risk. Although direct attack upon Singapore cannot be
ruled out, it would appear more likely that Japanese steps in the
near future will be limited to local military action without
resort to formal declaration of war in the hope of evading far
reaching effects of war with the British Empire and possibly the
United States. This would enable Japan to limit her action and
'save face' if local results or wider reactions were unfavourable.

10. To sum up, it appears that until the issue in Europe becomes
clearer, Japan will probably confine her attempts to eliminate
British influence from China and Hong Kong to the greatest
possible extent without incurring rupture with the United States
and the British Empire.

11. Our own commitments in Europe are so great that our policy
must be directed towards avoiding an open clash with Japan. It is
doubtful whether piecemeal concessions will have more than a
temporarily alleviating effect to be followed after an interval by
further demands.

It is most desirable that a wide settlement in the Far East-
including economic concessions to Japan-should be concluded as
early as possible. Immediate possibility of such settlement is
doubtful, but every effort should be made to this end.

12. Failing general settlement on satisfactory terms we should
play for time, cede nothing until we must, and build up our
defences as soon as we can. (Assumption 3 begins). One aim of our
policy should be ultimately to secure full military co-operation
with the Dutch. This is dealt with further in telegrams which
follow. [3] (Assumption 3 ends.)

DEFENCE PROBLEMS
13. Our Far Eastern interests are the security of:-

(a) Australia and New Zealand.

(b) Malaya and the Netherlands East Indies. Both contain essential
raw materials, control of which at the source is now extremely
important. Enemy occupation of either would directly threaten the
security of Singapore.

(c) Burma, which is also of importance on account of oil resources
and in connection with sea and air communications with Singapore.

(d) Trade routes in Indian Ocean south of the China Sea and the
Western Pacific (north of Australia) and also in seas east and
south of Australia including trans-Pacific routes.

(e) China trade. Considerable British capital is in China trade
but this trade represents only two per cent of total British trade
and its cessation would not affect our ability to continue the
war.

(f) Hong Kong, which is all important commercial harbour and naval
base and focus of British interests in China although its value
has already been considerably curtailed by Japanese action in
China.

(g) Shanghai, which is important mainly in connection with China
trade. Retention of British garrison is largely a question of
prestige.

14. Territorial integrity of Australia and New Zealand depends
primarily on control of sea communications leading to them.

Similar consideration governs the security of British colonies in
the Far East. Foundation of our strategy in the Far East is
therefore still to base on Singapore a fleet strong enough to
provide cover for our communications in the Indian Ocean and
South-Western Pacific to frustrate any large expeditions which the
Japanese may attempt against Australia, New Zealand or our Far
Eastern possessions. Until however we have defeated Germany and
Italy or have drastically reduced their naval strength we should
be forced in the event of Japanese aggression to attempt to defend
our Far Eastern interests without an adequate fleet.

15. In the absence of the fleet we could not in such circumstances
prevent some damage to our interests in the Far East. Our object
would therefore have to be to limit the extent of the damage and
in the last resort to retain a footing from which we could
eventually retrieve position when stronger forces became
available.

16. Japan could make the following forces available for new
adventures:-

(a) Naval-ten battleships, three to seven aircraft carriers with
necessary cruiser and destroyer forces.

(b) Military-six to ten divisions. Japan could make this force and
the shipping required for its transport and maintenance available
without having to carry out any serious withdrawal from her
position in China.

(c) Air-up to 75 fighters and 206 bombers carrier borne. Once
Japan had established herself ashore she could dispose the
following shore-based aircraft. Between eight and ten squadrons of
fighters, similar number of light bombers and of heavy bombers and
four to six squadrons of reconnaissance aircraft giving total of
28 to 36 squadrons or 336 to 432 aircraft. These forces are
clearly large enough to give Japan very wide choice of objectives.

17. First course open to the Japanese would be direct attack on
British possessions. In this event her main effort would probably
be directed ultimately towards the capture of Singapore which
would be necessary to secure her position permanently. In view of
traditional Japanese method of step by step advance it is thought
her first action would be attack on our garrisons in China
including attack on or at least blockade of the coast of Hong
Kong, all without declaration of war. Tempo and extent of her
subsequent action would be conditioned by the ease and success of
these operations and their wider reactions; it is even possible
that if reactions were unfavourable no further adventures would
take place.

18. Assuming however the worst case in which Japan proceeded with
the object of dominating the whole of the Far East. She would have
ample naval strength beyond that required for attack on Malaya to
attack British trade. Our China trade except for little that might
be carried in neutral ships would cease on outbreak of war, and
our trade through the Indian Ocean with Australia and New Zealand
and across the Pacific would be exposed to threat of Japanese
action.

19. Apart from attacks on trade no serious threat to Australia or
New Zealand would be likely until Japan had consolidated her
position at Singapore. Even then it is unlikely the Japanese would
attempt to invade Australia or New Zealand at least until they had
consolidated their position in China and the Far East which would
take very considerable time. This argument is expanded later.

20. The strain on Japan of war with the British Empire would be
very great even in the absence of British Fleet and probably Japan
would hesitate to undertake this unless she felt certain the
United Kingdom was so heavily committed in Europe as to be unable
to resist her aggression or until she had liquidated the China
campaign. It is however highly important to be prepared for an
assault against Singapore and by increasing our defences to deter
Japanese aggression.

21. Second course open to the Japanese would be to penetrate Indo-
China or Thailand which would provide bases for attack on Malaya
and secure substantial rice supplies. Attack on Indo-China would
not be formidable undertaking as Japanese action need only extend
to seizing bases and aerodromes and controlling focal points in
these countries. It might be effected without United States
breaking off economic relations. We could not effectively assist
in the defence of Indo-China or Thailand and it is most unlikely
the Thai Government would oppose the Japanese by force while
French forces in Indo-China could not prevent Japanese occupation
of ports and railways. If Indo-China became hostile to us it is
conceivable that Japan might be granted bases in that country.

22. Japanese penetration of Thailand would enable them to
establish shore bases for aircraft within range of Singapore,
Penang, Malacca Straits and Rangoon oil refineries, organise base
for land advance against Malaya from the north, interfere with air
reinforcement route between India and Malaya and possibly
establish advance base for submarines and light craft at the
northern entrance to the Malacca Straits.

23. Above action would therefore threaten Singapore and make the
defence of Burma and Malaya far more difficult. Nevertheless it
would not seriously endanger our vital sea communications and
there fore under present conditions we should not be justified in
going to war. For similar reasons we should not under present
conditions go to war in the event of Japanese attack on Indo-
China. Nevertheless, taking into account the probable reluctance
of Japan to make open breach with the British Empire and the
United States, this does not preclude in both the above cases
(penetration of Indo-China and Thailand respectively) unobtrusive
measures of an economic character designed to retard Japanese
advance by playing on their uneasiness. It is important to try as
far as we can to prevent Japan from gaining unhampered one
position after another which would increasingly threaten the
security of Malaya and our communications with Australia and New
Zealand.

24. The third possible course would be attack on the Netherlands
East Indies which would be a more formidable undertaking for Japan
than advance into Indo-China or Thailand. Nevertheless it would
probably not involve excessive military effort especially if
undertaken by stages, and the occupation would not only provide
Japan with advanced base for subsequent attack on Singapore but
would secure oil and other urgently required raw materials. The
possibility of the Japanese seizing Portuguese Timor as the first
step to the above action is considered later. The security of the
Netherlands East Indies would be considerably improved if the
Dutch could be persuaded to agree to reorganising their defences
in co-operation with us.

25. The above course is in different category from the first and
second courses considered above since if Japan established herself
in the Netherlands East Indies our whole defence system would be
most gravely compromised, our vital sea communications and base at
Singapore would be endangered and air route Singapore to the
Commonwealth would be threatened. The security of the Netherlands
East Indies is therefore an essential British interest second only
to the integrity of Australia, New Zealand and Singapore, and
their defence is an important part of our Far Eastern defence
plans. Establishment of Japanese foothold in these islands would
be so serious that under normal conditions the question of war
with Japan to prevent it would arise. In present conditions,
however, we could not prevent it by force even with the full
collaboration of the Dutch. Combination of British and Dutch
opposition would, however, be a considerable problem for Japan.

(Assumption 3 begins). Every effort should therefore be made to
induce the Dutch to resist any territorial demands and we should
offer them all possible support including both military and
economic action against Japan. This should be done without formal
declaration of war since (corrupt group) presentation of a bold
combined front to Japanese demands might cause Japan to draw back
(Assumption 3 ends).

26. Fourth Japanese course would be the seizure of the
Philippines. This would remove the threat to Japanese sea
communications to the south which the United States fleet base at
Manila provides. It would also afford Japan suitable advanced
bases for naval forces and a useful air route from Formosa to
Borneo. As however this course would involve Japan in war with the
United States and the Philippines would not be of great economic
importance to Japan, its adoption is unlikely.

27. It would appear that unless Japan is driven to extreme
measures by her extremists or tempted by our apparent weakness,
she will try to avoid war with the British Empire and the United
States and endeavour to achieve her aims by stages which she might
hope would not involve her openly in war. Of these, the move
against the Netherlands East Indies would afford greater economic
and strategic advantages than advance into Indo-China or Thailand
but in Japanese eyes these might be offset by the prospect of
antagonising the United States even if the consequences were
confined to the economic sphere. Moreover, should United States
hostility develop, Japan's lines of communication to the
Netherlands East Indies would be threatened from the Philippines.

Since the Dutch are our allies, Japan must also assume that attack
on the Netherlands East Indies might well involve her in war with
us.

Therefore, while we must be prepared for sudden attack on the
Netherlands East Indies or Singapore, most probable Japanese first
move would be into Indo-China or Thailand possibly followed later
by attack on the Dutch East Indies, if conditions at the time were
judged favourable for such action, rather than attack on Singapore
itself
28. Our untenable position in North China in the event of war with
Japan has already been recognised by the decision to withdraw our
garrisons at Peking, Tien-Tsin and Shanghai.

29. Our position at Hong Kong is different, as this is a British
colony. On the one hand, Hong Kong is not vital and garrison could
not long withstand Japanese attack. Moreover, even with strong
fleet in the Far East Hong Kong could probably not be held with
its present defences, now that the Japanese are established on the
mainland, and could certainly not be used as advanced naval base.

If therefore general settlement could be negotiated in the Far
East, demilitarization of Hong Kong, with best obtainable quid pro
quo, would be in our military interest. Without such a settlement,
however, demilitarization is impossible on account of loss of
prestige, which such a course would involve. In the event of war
therefore Hong Kong must be regarded as outpost and held as long
as possible but we should be unable to reinforce or relieve it,
and militarily our position in the Far East would be stronger
without this unsatisfactory commitment.

30. Strategy in the event of war in the Far East in the absence of
the Fleet Sea communications most likely to be threatened are:-

(a) Indian Ocean (including West Coast of Australia)
(b) South China Sea and the Western Pacific (North Australia)
(c) Seas east and south of Australia including trans-Pacific
routes.

31. As regards (a) the main routes from the United Kingdom to the
Middle East, India, the East Indies, Australia, and New Zealand
pass through the Indian Ocean, which would therefore be most
important area for Japanese action. Although Malacca Straits might
be denied to Japanese naval forces, these forces might use many
other passages through the Netherlands East Indies for operations
against our Indian Ocean trade and our lines of communication to
the Middle East through the Red Sea. Although distances from Japan
are great there are several potential fuelling bases in the Indian
Ocean. Force of enemy cruisers, particularly supported by one or
more heavy ships, would provide most serious threat to our trade
since we could not spare adequate naval forces either for
operations in focal areas or, as would more probably be necessary,
for escort of convoys. Our communications with Malaya would be
precarious but not necessarily completely severed. (Assumption 3
begins). Our ability to use Dutch Islands and to establish bases
[4] there would act as deterrent but would not prohibit Japanese
access to the Indian Ocean. Such action would assist maintenance
of our communications with the Commonwealth of Australia and New
Zealand. Dutch co-operation would be essential (Assumption 3
ends).

32. As regards (b) we could not maintain our sea communications to
northward of Malayan Archipelago. (Assumption 3 begins). But could
maintain local traffic within the Archipelago to limited extent
given Dutch co-operation (Assumption 3 ends).

33. As regards (c) the trans-Pacific trade routes are important in
connection with supplies from America to Australia, New Zealand
and the Far East, as well as providing alternative communications
with the United Kingdom which would increase in importance if
difficulties on the Cape route became acute. These routes are also
essential to the economic life of the Commonwealth and New
Zealand. Although distances from Japan are considerable Japanese
(if not deterred by the fear of United States action) could
establish advanced fuelling bases in the South Sea Islands to
facilitate operations in the South-West Pacific. Wide scope for
evasive routing would provide high degree of security for trans-
Pacific trade except in neighbourhood of western terminals.

Evasive routing, practicable to some extent and use of in-shore
routes, would also provide some degree of protection for
Australian and New Zealand trade. Danger of attack would be
greatest in approaches to ports for which local air and naval
protection would be required.

34. As regards defence of Australia, New Zealand and the South
Pacific Islands. As previously stated, no serious threat to
territorial integrity of Australia or New Zealand would be likely
to arise at least until Japan had consolidated her position in
China and the Far East which would take a considerable period. A
Japanese major expedition to Australia or New Zealand would be an
extremely hazardous operation so long as Singapore remained
available to us as a base for the Fleet in being on the flank of
their long lines of communication. Moreover, protection of lines
of communication of expedition of any considerable size having
regard to distance involved would impose a very heavy drain on
Japanese naval forces, as every important convoy would have to be
protected against maximum scale of attack which we could bring to
bear at our own selected moment and would probably therefore
require escort by heavy ships. Scale of attack on Australia or New
Zealand would be likely therefore to be limited to cruiser raids
possibly combined with light scale of seaborne air attack against
ports. Japanese might decide to establish advanced fuel bases in
South-West Pacific Islands, to facilitate such operations. There
are innumerable potential bases in these Islands which could not
all be defended against Japanese attack but their most likely
objective would be the capture of the harbour with base facilities
particularly Suva. Suva is also a useful potential advanced base
for our forces.

35. As regards defence of Malaya. Following are factors affecting
this problem in the absence of the Fleet:-

(a) Necessity of preventing establishment of shore-based aircraft
within close range of Singapore base.

(b) Even if Japanese had not previously established themselves in
Thailand they would be more likely to attempt landing up-country
in Malaya and then operate southwards, under cover of shore-based
aircraft, than to risk direct assault on Singapore Islands.

(c) Rice-growing country on which native population partly
depends, and most government storage centres are in the North.

(d) Necessity of establishing maximum possible food reserves for
garrison and for civil population. Though our sea communications
with Malaya might be precarious, it would be extremely difficult
for the Japanese to blockade the Malayan Peninsula completely, and
we should expect to get supplies (corrupt group) to our
headquarters, though not necessarily through the port of
Singapore.

Above factors emphasise the necessity for holding the whole of
Malaya rather than concentrating on defence of Singapore Islands.

This clearly involves larger land and air forces than when the
problem was merely the defence of Singapore Islands.

[matter omitted]

37. (Assumption 3 begins). Defence of the Netherlands East Indies
is important for denial to the Japanese of the use of naval and
air bases. Control over channels through the Netherlands Islands
could be exercised by air and light naval forces based on one of
the following alternative lines:-

(a) Northern line of islands from Singapore to New Guinea, or
(b) Southern line from Sumatra-Java to Port Darwin.

We could do little to dispute passage of these channels with
forces available at present. Co-operation of the Dutch would
improve the position, but measure of control would still be very
limited. Which line of defence to adopt could only be decided by
the local Commander. To deny bases, invasion must be prevented,
which would entail attacking expedition during its approach, as
Dutch military forces are limited and mainly concentrated in Java.

With our naval numerical inferiority, best form of defence would
be shore-based air forces in conjunction with submarines, light
naval forces and mines. (Assumption 3 ends). Establishment of
British air base in North Borneo to give our air forces greater
mobility is our long term aim, but this will take time, and
resources which we do not at present possess. Desirable for such
action to be part of a general settlement with the Japanese.

(Assumption 3 begins). Meanwhile there would be no alternative to
relying consistently for defence of this area on operation of air
forces from Dutch bases of which there are several already
established on both lines of defence. (Assumption 3 ends).

Japanese might seize Portuguese half of Timor as first step, but
owing to absence of air or naval bases in this part of the Island
and risk that it might lead to war with us accompanied by [sic]
such action appears unlikely.

38. (Assumption 3 begins). Whole defence problem in the Far East
would be greatly facilitated if we were certain of Dutch co-
operation and could concert a plan with them. Our aim should be
scheme of defence ensuring full mutual support, pooling of
resources, and arrangements for rapid movement of troops to
threatened points. Dutch would probably agree to prepare secret
plans for defence of the Netherlands East Indies, though they
might hesitate to assist us in the event of Japanese attack on
British territory alone. With our present limited resources in the
Far East we could not offer the Dutch any effective military
support against Japanese aggression. It is not therefore
recommended that staff conversations should be held with the Dutch
immediately. It is most important however that plans should be
concerted with the Dutch as soon as we have improved our own
position in Malaya.

Meanwhile our Officers Commanding R.A.F. in the Far East should
consider the problem of combined Anglo-Dutch defence plans so that
conversations may take place immediately the opportunity arises
(Assumption 3 ends).

39. If the Japanese attack Malaya without attacking the
Netherlands East Indies, it is conceivable that Dutch co-operation
would be withheld. We should then be faced with gap in our
defensive system and our sea communications in the Indian Ocean
would be more seriously threatened. It should, however, still be
possible even without Dutch collaboration to get some supplies
into Malaya intermittently but in such circumstances our
difficulties in the Far East would be greatly increased.

CONCLUSIONS
40. In the absence of capital ships of the Fleet we could not
fully secure our vital interests in the Far East. Problem is
therefore to make best dispositions possible to secure the most
important of these interests without cover which capital ships of
the Fleet would provide. If in addition to defending Malaya we
could deny to the Japanese establishment of bases in the
Netherlands East Indies, and if the movement of their naval forces
through the line of these islands could be impeded, security of
our interests would be considerably improved. Our ultimate aim
therefore should be to secure full military co-operation of the
Dutch. In the absence of full Dutch co-operation we should
concentrate on defence of Malaya.

[matter omitted]

50. Minimum garrison required in Malaya to hold the whole country
and to safeguard aerodromes required for operations of our Air
Force is equivalent of 6 brigades with ancillary troops, provided
Air Forces mentioned in paragraph 4 are made available. Apart from
coast defence and A.A. [5] troops, present garrison of Malaya
comprises 9 battalions and (corrupt groups? 'ancillary') troops.

Until additional Air Forces referred to in paragraph 43 can be
stationed in the Far East, reconnaissance and striking forces
available to deal with invasion or sea-borne attack are seriously
inadequate. Absence of these Air Forces will involve increase in
existing land forces by amount which the General Officer
Commanding has estimated as equivalent to 3 divisions and attached
troops. This figure could be progressively reduced as air
reinforcements are increased. Since General Officer Commanding's
estimate was made, Air Forces in Malaya have already been
increased by one squadron, and it is hoped to provide 4 additional
squadrons by the end of 1940. Apart from the possibility of
Australian division going to Singapore (which is under separate
consideration) it may be possible to make further forces available
to reinforce Malaya from some other source, at a later date.

Preparations are therefore being made in Malaya to receive
ultimately two reinforcing divisions. [6]