MELBOURNE, 6 August 1941

Extracts

FAR EASTERN SITUATION
In referring to the Far Eastern situation, the Prime Minister [1]
said that the following steps had been taken in connection with
economic sanctions:-

(i) Import and export control to be established by licensing (this
was already in existence in Australia);

(ii) Notice had been given of the denunciation of the commercial
treaty with Japan. [2]

The urgent need for uniformity in the principles of the licensing
systems was apparent, and there were a few signs of weakening on
the part of the U.S.A. which might give encouragement to Japan to
go into Thailand. Pressure was being exerted on the U.S.A.

Government to define its position and to co-operate in a joint
statement to Japan regarding the consequences of going into
Thailand. No clear statement had been evolved so far.

2. The Prime Minister said that he could not describe the
situation as satisfactory, as the U.S.A. Government would not make
any statement in advance as to its course of action, for
constitutional and local political reasons. However, though the
U.S.A. would not make any statement before the Japanese entry into
Indo-China, they had nevertheless taken drastic action. it was
important to keep in line with the U.S.A.

3. Mr. Curtin [3] referred to the position between the United
Kingdom and Australia as regards Japan. Japan's action in Indo-
China had been based on pressure by Hitler to give some token of
her adherence to the Axis. He did not necessarily consider that
Japan was involved with the Axis to the extent that might appear
to be so. Japan was still susceptible to a face-saving
arrangement, and Government should talk to Government in a frank
manner to ascertain if a solution was possible. Hitler was aiming
at involving Japan, the British Empire and the United States in a
naval war in the Pacific, and if this happened he would turn
south, towards Suez. The effect of such a war on the battle of the
Atlantic was not hard to see. It was alleged against us that we
went into Syria, yet we would not allow another Power to combine
with Japan for the defence of Indo-China. It was to our interest
to appear weak to Japan in order to concentrate our massed
strength against Germany, particularly now that Russia had entered
the war. Mr. Curtin suggested that the Australian Government might
suggest to the United Kingdom Government the wisdom of British
Ministerial consultations, with or without the U.S.A., with the
Japanese Government, in an attempt to delimit by agreement the
expansionist policy of Japan.

4. The Attorney-General [4] said that attempts to arrive at an
understanding had been made. Japan's policy was only limited by
her power to give effect to it, and she knew that the United
Kingdom and the U.S.A. were the barrier that stood in the way of
the achievement of her ends.

5. Mr. Curtin said that diplomatic discussions were not adequate.

There was a division of opinion in Japan, which was representative
of influential sections of the community. The Japanese believed
that their action in Indo-China was legitimate, because it was
carried out by agreement with the Vichy Government. If an
agreement were possible with Japan, it would preclude demands
being made on our already overtaxed naval power. Support by the
U.S.A. would not be as great as the extent of Japanese opposition.

There also remained the possibility of the use of the Vichy fleet,
if an arrangement were made with the Germans.

6. The Prime Minister stated that our inability to give Thailand
material help and the unwillingness of the United States
threatened to throw the Thais into the arms of Japan. Thailand had
accepted Japanese mediation in the Indo-China dispute, and Japan
would no doubt tell Thailand what she wanted, and Thailand would
agree, though unwillingly.

7. Dr. Evatt [5] stated that cablegrams received on the Far
Eastern situation had not been circulated to members of the War
Council, nor read to them at the meeting. In consequence, a lack
of information prevented the non-Government members from giving
advice on this subject. He enquired whether the occupation of
Thailand by Japan was to be considered grounds for war.

8. Mr. Curtin stated that if war with Japan was considered to be
inevitable, we should bring pressure to bear on U.S.A. to knock
Japan out now. If not, we should not be pushed into war when it is
to our great prejudice in other theatres. He urged the importance
of frank discussion with a view to drawing a chalk line to mark
the limit of Japan's southern advance. To draw the line in advance
would be to prejudice the possibility of a satisfactory
discussion. The Attorney-General doubted whether any arrangement
with the Japanese could be taken seriously, in view of the demands
made by them on China in the last war. Mr. Curtin did not agree
with these views, and cited the Anglo-Japanese treaty' as an
indication of the trustworthiness of the Japanese word. He also
said that the treaty with the Axis [7] had been honoured in the
same manner.

9. The Prime Minister stated that the Japanese Minister to
Australia [8] had suggested to him that he should go to Tokyo in
an endeavour to check the drift of the situation. He recalled,
however, Mr. Chamberlain's [9] visit to Munich and the consequent
criticism that he ultimately incurred for appeasement. The Prime
Minister observed that the present discussions were parallel to
those he had had in London with the Foreign Office when he had
strongly disagreed with the negativeness of a policy which
believed in the inevitability of war, and had suggested:-

(i) The vital importance of a discussion with Japan on the
situation in the Pacific;

(ii) The need for agreement with the U.S.A. Government as to what
the British Empire and the U.S.A. agreed were their vital
interests which must be defended in this region.

[matter omitted]

(Upon the resumption of the discussion on the Far Eastern
situation, the Minister for External Affairs [10] and Sir Frederic
Eggleston, Australian Minister to China, were present.)

11. The Minister for the Army [11] enquired of the Minister for
External Affairs whether he had had any discussions with Mr.

Kawai, the Japanese Minister, in recent times. Sir Frederick
Stewart stated that he had not. The Prime Minister added that he
was seeing Mr. Kawai at 5.30 p.m. that day.

12. Reverting to the question of whether special discussions
between the United Kingdom and Japan would serve a useful purpose,
the Prime Minister said that he did not see why it should not be
said:-

(i) We are not engaged in appeasing you, but we are prepared to
take action in the event of Japan taking steps A, B, and C, which
would be specifically defined;

(ii) With this being understood, if there are points in our policy
that mystify you, there are similarly aspects of your policy which
we would like clarified, but we do not abate our right to do what
we think we should do to safeguard our interests.

Mr. Curtin agreed with the statement of the Prime Minister.

13. The Minister for External Affairs did not consider that this
proposal could be explored without the concurrence of the U.S.A.

14. The Prime Minister said that it was unlikely that either the
United Kingdom or the U.S.A. would agree. He recalled the
discussions at the time of the re-opening of the Burma Road when
the U.S.A. Government would not agree to intervene, though it was
entirely American trade that was being transported along this
road. The High Commissioner, London [12], had sought to get the
United Kingdom Government to seek a basis of settlement with Japan
without success. The Prime Minister referred to his own
discussions in London. The important point made to him was that an
International Conference should not be called on a matter of vital
importance unless it was likely to succeed. If it proved to be
abortive, the effect was worse than if no conference had been
held.

15. Mr. Curtin enquired whether it could not be conveyed to Japan
that if she were to call a conference the United Kingdom
Government would agree to it. He pointed out that the Japanese
were in a cleft stick. If we could separate Japan from the Axis it
would be all to the good. He certainly distrusted the British
outlook on Far Eastern policy and referred to the influence that
had been exerted on Australia on the trade diversion policy to the
detriment of Australian interests. In regard to Russia, it would
be to her advantage if some relief could be afforded her from a
potential threat against Siberia. He considered the reasons for
Japanese activity to be firstly that something must be done for
the Axis in view of her treaty obligations and, secondly, she
desired to present the victorious powers with a fait accompli for
subsequent bargaining purposes. If Japan were to come into the
war, the U.S. naval forces made available might not be sufficient
to preserve the lines of communication between Australia and the
Middle East and to safeguard our shores. If the Prime Minister
spoke for Australia, the United Kingdom Government must take
notice of his representations, as Australian interests in the Far
Eastern situation were very great.

16. Mr. Curtin added that he was not confident of fighting power
in the U.S.A. and was of the view that American strategy was
founded on the protection of jumping-off places which were an
advantage to them in their own defence and which it was essential
to deny to an enemy. If necessary, the United Kingdom and
Australia should take up the matter alone with Japan.

17. The Minister for the-Army referred to the danger in acting
alone without the U.S.A.

18. Mr. Beasley [13] said that he was impressed with the statement
that the U.S.A. will take strong measures in regard to Japanese
aggression against the Netherlands East Indies. He enquired
whether the consultations between the U.S.A. and N.E.I. had been
closer than with the United Kingdom and U.S.A., in view of the
N.E.I. decisions regarding sanctions. The Dutch Foreign Minister
[14] when in Australia stated that he did not consider that Japan
could be alienated from the Axis.

19. The Minister for the Army reiterated his fear of the danger in
moving without the U.S.A. and N.E.I.

20. Dr. Evatt referred to the telegram from the British Minister
in Bangkok regarding the appeal of Thailand for assistance in the
event of aggression by Japan. [15] He desired to know whether
Thailand was to be the point of resistance against further
Japanese advances, and if the U.S.A. will not resist Japan in such
event, did the United Kingdom Government propose to do so.

21. The Minister for the Army observed that the United Kingdom
Government could not give a guarantee without the co-operation of
the U.S.A.

22. Dr. Evatt was in agreement that an understanding between the
United Kingdom and the U.S.A. was necessary for discussions with
Japan. Subject to this, he concurred in Mr. Curtin's views and
observed that, on the statements of the Prime Minister from the
cablegrams [16], there was not even agreement between the United
Kingdom and U.S.A. Governments on sanctions.

23. Mr. Forde [17] was of the opinion that the British Empire
should not act independently.

24. Dr. Evatt did not think that Japan would move into Thailand,
Burma, or the Netherlands East Indies.

25. Mr. Curtin suggested that a question should be addressed to
the U.S.A. Government as to what is being done about sanctions and
what reassurances can be obtained from the U.S.A. in the event of
the sanctions leading to aggression by Japan. Unless Australia had
definite guarantees on this point we were in danger of becoming
another Syria. If the views expressed by the Attorney-General were
right, the A.I.F. should return to Australia from the Middle East.

26. The Minister for External Affairs, referring to the degree of
trust to be reposed in Japan in any agreement that might be
reached from discussions, referred to evidence that had been
received by spying by Japan and the propaganda to retard the
despatch of A.I.F. forces to Malaya.

27. Mr. Curtin referred to the A.I.F. position in the Middle East
and to the large supplies which we are sending overseas to the
Central Provision Office, New Delhi, yet we were faced with the
prospective entry into the war of Japan which will be active in
areas in which we are vitally interested. He did not think that
the U.S.A. would move until the Netherlands East Indies was
attacked by Japan. He thought the Japanese blow would fall on
Siberia and that Japan's threat to the south was an attempt to
immobilise Australia's co-operation with the other parts of the
British Empire in the war against Germany and Italy. Though the
U.S.A. might ultimately come in, enormous damage would have been
done by Japanese raids. The A.I.F. would be away from the country
and a state of affairs would arise which would be politically
unmanageable. It was just as easy for the United Kingdom
Government to make an agreement with Japan at this stage as it was
for Japan to make one with Russia. Furthermore, once the
impression was formed in the U.S.A. that we were easing up on
Japan, it would be fatal to American co-operation. The Minister
for External Affairs observed that for this reason it was
important that any overtures should come from Japan.

28. Messrs. Forde, Makin [18] and Beasley agreed that it would be
a sign of weakness to make any separate overtures to Japan.

29. The Attorney-General said the situation was exactly the same
as in the last war when the U.S.A. for constitutional reasons kept
on saying that she would not become a belligerent, but ultimately
she did.