1 September 1938

1. It is stated in the Dominions Office telegram of 30th August,
1938 [1], that the British Government has been forced to the
conclusion that a critical point in the situation has been
reached. The view of the British Government is that Herr Hitler
wants a solution of the Sudeten problem this autumn; that he will
use force if necessary; that the army is unable to restrain him,
and that if, as is probable, action is taken by Germany it will be
taken during the second half of September.

2. The crisis will, of course, have passed if the Sudeten question
is peacefully solved in the immediate future, but it seems
necessary that the Commonwealth Government should now consider all
the relevant factors in the situation, for otherwise a decision
involving the vital interests of Australia might have to be taken
at a moment's notice.

3. In his speech of 24th March, 1938, Mr Chamberlain [2] declined
to give an assurance to France that, in the event of her being
called upon by reason of German aggression on Czechoslovakia to
implement her obligations under the Franco-Czechoslovak Treaty,
Great Britain would immediately come to her assistance. He also
stated that the British Government was not prepared to commit
herself in advance to take military action in resistance to any
forcible interference with the independence and integrity of
Czechoslovakia. He added, however, that where peace and war were
concerned, legal obligations were not alone involved, and if war
broke out, it would be unlikely to be confined to those who had
assumed such obligations. It would be quite impossible to say
where it might end and what Governments might become involved. The
inexorable pressure of facts might well prove more powerful than
formal pronouncements, and in that event it would be well within
the bounds of probability that other countries, besides those
which were parties to the original dispute, would almost
immediately be involved. This was especially true in case of two
countries like Great Britain and France, with long associations of
friendship, with interests closely interwoven, devoted to the same
ideals of democratic liberty, and determined to uphold them. Sir
John Simon [3] in his speech at Lanark on 27th August, observed
that the British attitude in this respect remained unchanged.

4. The Secretary of State for Foreign Affairs [4] in the course of
a conversation with the French Charge d'Affaires in London [5] on
25th August, reminded him of the position of the British
Government as defined by the Prime Minister on 24th March, and
said that any attempt to accept on behalf of Great Britain any
more specific commitments would lead to violent opposition which
would have an effect exactly contrary to that which a stronger
statement might hope to achieve. The policy for both the British
and French Governments was therefore to do everything in their
power to keep Germany guessing and to prevent her from thinking
that the danger of the expansion of hostilities as a result of the
use of force by her against Czechoslovakia was negligible.

5. The Secretary of State also drew the attention of the Charge
d'Affaires to the communication of the British Government to the
French Government of 22nd May, 1938. (In this communication the
French Government was warned that any assumption that Great
Britain would at once take joint military action with France to
preserve Czechoslovakia against German aggression was unwarranted.

The British Government also intimated that in its view the
military position was such that France and England, even with such
assistance as might be expected from Russia, would not be in a
position to prevent Germany from over-running Czechoslovakia. The
British Government hoped that it might be given an opportunity of
expressing its views before any action was taken by the French
Government which might demoralise the position more acutely or
have the result of exposing France to German attacks. In its reply
to this communication the French Government undertook that it
would take no such action without ample consultation with the
British Government.)
6. In the event of a German attack on Czechoslovakia, the attitude
of the French Government would necessarily largely depend on that
of Great Britain. The attitude of Great Britain during the last
few months as outlined above, strongly indicates that Great
Britain would, in present circumstances, do her utmost to restrain
France from intervention, and accept the over-running of
Czechoslovakia by Germany rather than become involved in a
European war on account of Czechoslovakia. It does not follow
should Great Britain decide for the time being to stand aside,
that France would refuse to implement her treaty obligations,
though it is quite possible that she would do so, for, if the
Czechs were to put up a fight as seems certain, public opinion
might force the French Government to intervene on behalf of
Czechoslovakia. If this were to occur Great Britain might find it
impossible to keep out of war, however reluctant she might be to
become involved, since she could not view with indifference a
possible defeat of France by Germany.

7. A German attack on Czechoslovakia also raises the question
whether Soviet Russia would come to Czechoslovakia's assistance.

Reliable reports have been received to the effect that the Soviet
Government recently warned the German Government that it would
fulfil its treaty obligations to the letter, but, however this may
be, it is exceedingly unlikely that Soviet Russia would intervene
on Czechoslovakia's side unless she were at least assured of
French support.

8. It now becomes necessary to consider the policy which should,
in these circumstances, be pursued by the Commonwealth Government.

There seem to be two main possibilities:-

(a) The Commonwealth Government might consider that if Herr Hitler
were categorically informed that an attack on Czechoslovakia by
Germany would lead to the intervention of France, Great Britain
and Soviet Russia on the side of Czechoslovakia this might cause
him to hold his hand provided that he was convinced that these
three Powers were not bluffing. It could be argued in support of
this view that the time has now come when a definite stand must be
made against the use of force to settle international differences.

It is true that there is a grave risk that this course of action
might lead to the British Commonwealth becoming involved in war
but, if Germany is to be permitted to continue her present career
of violence unchecked, the day of reckoning will only be deferred
and Great Britain might in the future have to face a far more
powerful Germany without those allies on whose support she can now
count. If this view were taken, the Commonwealth Government might
envisage making representations in this sense to the British
Government.

(b) On the other hand, there is the point of view that it would
not be in the best interests of Australia to pursue a policy which
might very possibly involve the British Commonwealth in war in the
immediate future to maintain the territorial status quo in a part
of the world where vital British interests are not involved. At
the present stage it is doubtful whether such a policy has the
support of public opinion in Australia. But apart from this aspect
of the situation there are other factors which must be considered.

If the British Commonwealth were to intervene on behalf of
Czechoslovakia it would, in all probability, with France and
Soviet Russia as allies, have to face a hostile combination
consisting of Germany, Italy and Japan. In this event, the
strategic position would be exceedingly unfavourable. London would
be open to an attack by the German air fleet, which might well
paralyse this vital nerve centre of the Empire; the British Navy
would necessarily be concentrated in the North Sea and the
Mediterranean and this means that no adequate naval forces would
be available for the defence of Australia. It may therefore be in
the best interests of Australia to urge on Great Britain that in
no circumstances should the risk be run of involving the British
Commonwealth of Nations in war on account of Czechoslovakia.

This second course of action is also attended by great risk, for
the neutralisation or disintegration of Czechoslovakia as a result
of violent German action would remove the last obstacle to the
complete military and economic domination of Central and South-
Eastern Europe by Germany, and would place Germany in a far more
favourable position to attain ultimate world domination. As
against this it may be argued that Germany genuinely desires an
understanding with Great Britain, that Great Britain cannot
effectively, and should not legitimately, block what Germany
regards as a natural process of evolution in Europe and that as
soon as this fact is recognised it should be possible for both
countries to lead their own lives without plunging European
civilisation into a disastrous war. 9. The Commonwealth Government
might feel that it would not be desirable, at this stage, to
communicate any conclusions which it has reached to the British
Government. In this event, it is suggested that the Commonwealth
Government might consider the issue of a public statement
generally outlining the present position and intimating that the
Commonwealth Government is entirely in accord with the steps taken
by the British Government to obtain a peaceful and equitable
solution of the Sudeten problem. It might also be indicated in the
statement that the Commonwealth Government fully associates itself
with the declaration of Mr Chamberlain on 24th March, 1938, and
that of Sir John Simon on 27th August, 1938, in regard to the
consequences which might result from any attempt to solve the
Sudeten question by force. Such a statement might serve a useful
purpose in informing public opinion in Australia as to the present
position and would at the same time be in accord with the present
policy of the British Government of keeping Germany guessing as to
British intentions. [6]