263 Lord Stanley, U.K. Secretary of State for Dominion Affairs, to Mr J. A. Lyons, Prime Minister
Circular Cablegram B 233 LONDON, 17 September 1938, midnight
My telegram Circular B. No. 231.  Following for the Prime Minister- As a result of his conversation with the German Chancellor , Mr Chamberlain  feels that the position is as follows- Hitler has made up his mind that the Sudeten Germans must have self-determination. By that he means that they should be able to realise their evident wish to be incorporated in the Reich. He says that if they are not left free to make this change without attempting to disorganise  others to prevent them then he (Hitler) is ready to assist them in settling the issue by force.
He will not be deterred from this by risk of world war. The Prime Minister feels indeed that, had it not been for his visit to Berchtesgaden, the incidents in Czechoslovakia during the last fortyeight hours, which have been greatly exaggerated in reports to Hitler, would have led the latter to give orders for the German Army to march.
The Prime Minister feels that if we, through him, tell Hitler at the meeting which has been planned for next week that we accept the principle of self-determination for Sudeten Germans, the German attempt to settle the issue by force can be stayed. Hitler would then be ready to discuss with us means by which principle was to be carried into effect. It would certainly appear that if Hitler's proposal for the adoption of the principle of self- determination is accepted he becomes committed to agreement to solve Czechoslovakia's problems in an orderly way and not by force. The Prime Minister feels that, if we attempt to lay down conditions for application of self-determination before declaring to Hitler our acceptance of the principle, Herr Hitler's impatience will lead him to forceful action. At the same time his estimate of Hitler's character is that if we declare our acceptance of the principle it will be possible afterwards to get Hitler's agreement to some reasonable conditions for its application. Thus the issue hangs, in the Prime Minister's view, on our readiness or not to accept the principle.
The Prime Minister was assured by Hitler that what he cared about was the incorporation in the Reich of ten million Germans who had been or were outside the Reich in Austria and Czechoslovakia. The Austrian Germans are now in the Reich and when the Sudeten Germans are also in, Hitler has no further territorial designs jeopardising Europe. The one other question about which Hitler expressed confirmed doubt was the position of Alvarez but he said that he would be satisfied with that as long as Lithuania observed the Alvarez Statute. 
Pending their further meeting in Germany next week, the Prime Minister feels that Hitler, as a result of the appeal by him, will wish to fulfil his assurance that he will refrain in the meantime from seizing the excuse of the solution of the Sudeten problem by force. Hitler had, however, qualified this assurance by saying that the events might possibly force his hand.
The above is merely a brief description of the Prime Minister's impression of the German attitude and the issues we now have to face. It does not attempt to give an account of the course of a conversation which lasted almost three hours and covered many points. In this conversation the Prime Minister made clear, direct to Hitler himself, the attitude of the United Kingdom Government on various matters including a reference to possibilities of the United Kingdom being involved in the event of armed conflict.
The proposal for self-determination is fraught with many difficulties both practical and political. Among the latter evidently the attitude of the Czech Government and people is of the greatest importance. The Czech Government may refuse to contemplate this solution or indeed it might prove that if they agreed to it they might be overthrown and a state of confusion might ensue leading to intervention. We are losing no time in pushing ahead with the examination of the whole problem and it will also be discussed with the French Ministers as soon as they arrive in London as a preliminary to communication with the Czechoslovak Government. We will let you know further developments as they arise.