Extract [LONDON], 31 July 1940

SECRET

11 FAR EAST
Lord Halifax then discussed the position which had arisen in the
Far East. His view was that the Japanese were definitely out to
make trouble, but although they were likely to pursue a policy of
pinpricks it was considered unlikely that they were ready to
embark on a total war with us. He explained that, subject to the
approval of the authorities concerned, he was in favour of our
arresting a dozen prominent Japanese in this country; he had asked
his Department to keep in touch with the Dominions Office about
this, but Mr. Bruce expressed the personal opinion that if the
matter were urgent it was not essential to consult the
Commonwealth Government before action was taken.

Mr. Bruce explained his views as regards a general settlement in
the Far East which it would be in Japan's interest to keep. Lord
Halifax said that this point had been fully in the minds of the
War Cabinet and he thought that it had been specifically covered
in a recent telegram to Washington. He was, however, sceptical of
the prospects of reaching a general settlement. As regards Japan
the army appeared to have taken the bit between their teeth and
were unlikely to listen to reason: as regards the United States
their attitude could be summed up in the phrase 'The American
Fleet is in the Pacific, but their mind is in the Atlantic'. In
fact, one of the most remarkable developments recently had been
the change in American interest from the East to the West and this
had not altogether been to our disadvantage.

Lord Halifax explained that there were two alternatives which we
could adopt:-

(1) a policy of' appeasement';

(2) a policy of standing up to Japan while she was still heavily
engaged in China.

Mr. Bruce agreed that while the Commonwealth Government had
previously largely been in favour of (1) it was probable that in
view of recent developments they would support (2).

Lord Halifax also intimated that in his view it would be desirable
that the British garrisons at present in China should now be
withdrawn; this would involve some loss of prestige to us, but
would be preferable to their being forced to surrender in the
event of hostilities with Japan. [1]