Extracts 5 July 1939, 10 a.m.
[After introductory remarks by the Chairman (the Prime Minister, R.G. Menzies), the Minister for External Affairs, Sir Henry Gullett, discussed Agendum 6/1939, giving a review of the international situation based on reports received from London.]
THE MINISTER FOR EXTERNAL AFFAIRS again expressed the view that the next six weeks would be extremely critical and that it was more likely we would become involved in war in the next six weeks than that peace would be maintained.
THE SECOND NAVAL MEMBER  put the following question to the Minister for External Affairs:-
'Assuming that Great Britain and France were at war with Germany, and Italy remained neutral except that she was supplying warlike materials to Germany, was it likely that Japan would join in with Germany when, by waiting three or four years until Europe was exhausted, and having dominated China in the meantime, she would become the outstanding nation in the Far East.' The fact that she was building up a big Navy, which would not be completed until three to four years' time, gave emphasis, in the opinion of the Second Naval Member, to this point of view.
THE PRIME MINISTER felt that there was great force in that viewpoint, and he doubted himself if Japan would join in a European war, but would rather wait until she was satisfied. as to the probability of the outcome. He felt, however, that if she came to the conclusion that it would go against Great Britain and France, she might then come in, otherwise she would delay her action for months or even years to allow Europe to destroy itself THE MINISTER FOR EXTERNAL AFFAIRS stated that there was much to support this in the position between the United States and Japan.
Japan's greatest problem at the present time is to sum up the attitude of the United States in emergency. Personally, he was of opinion that if we were in trouble, there was no certainty that United States would come to our aid, but, on the other hand, Japan must consider the possibility from the reverse point of view that United States may join in with Great Britain in any trouble in the Far East.
THE PRIME MINISTER stated that he would mention this when the basis of policy was under consideration. He felt that all we could do was to anticipate as well as we can the problems from our own point of view, and that those would be dealt with in a later agendum. Japan, from our point of view, had us in an exposed position with no Naval Force in the East to cope with the Japanese Navy or a Japanese Expeditionary Force, and therefore, Singapore was a matter of great importance to us. We generally consider the Japanese forward movement without consideration of the action that would be taken to reinforce Singapore. On the other hand, Japan, in looking at us, must first look at Singapore, and the possibility of action from that direction. We certainly could not be confident that the United States would come in with us against Japan and cannot take that into consideration in our plans. On the other hand, Japan cannot be confident that the United States would stay out, and must take that into consideration in their plans.
These vital points were important considerations in the question of strategy. In this connection, THE PRIME MINISTER referred to a discussion which had taken place between himself and the President of the United States of America , from which he had gathered the impression that, while America would be reluctant to be drawn into any war which did not affect her own territory and would not become involved as a result of sporadic raids on our shipping or the cutting off of our trade, it was doubtful whether the American public would hesitate very long if the Japanese threatened to invade Australia or an invasion actually took place. The American feeling towards Australia could be regarded as friendly and this was particularly true in regard to the Californian Coast area, which had a strong antipathy towards the Japanese, and the combined effect of these two factors would shock the American public into action if it were thought that there was any possibility of the Japanese invading Australia. This all had a bearing on two things, namely:-
(1) The time factor in relation to the nature of an immediate attack against us; and (2) The nature of the Japanese intensity of attack on us, i.e.
whether she confined herself to attack by sporadic raids and cutting off our trade or by an invasion of our territory.
His own views were that Japan would sit back in the first instance and see what was doing in Europe; then if, as the result of her summing up of the situation, she desired to enter into warlike operations with the British Empire, she would attack Australia by operations from the outlying islands against our shipping and trade and would endeavour to effect a complete or partial blockade by cutting off our trade and destroying our economic structure.
Having accomplished this, she would make her own terms which would largely be directed towards a revision of the tariff in favour of Japan and the abolition of the present 'White Australia' policy, and the institution of migration laws in favour of Japan.
Such a development would, of course, result in disaster to us and to our nation, and it could only arise if Singapore was first defeated.
4. DECISION OF THE COUNCIL:
Council notes the review of the International situation and directs that the situation be kept constantly under review in its relation to the defence position.
[The following discussion is taken from discussion of Agendum 9/1939, Australian Defence Policy-Review by the Chiefs of Staff.]
THE MINISTER FOR EXTERNAL AFFAIRS referred to the international position of today and compared the position of Australia. He stated that the situation at the present time gave rise to the hope that Russia, France and Great Britain would join, and he thought the next two or three months would be the critical time we had to face-before the Winter set in in Europe. If in that period war should come, we would be in a very unsatisfactory position.
Singapore was devoid of assistance from an effective Navy and would remain so until the position was cleared up in the North Sea by the British and French Navies. Within that period of three to six months anything might happen. Japan would, in his opinion, undoubtedly come south and have the capacity to entirely destroy the small Australian Navy, some portion of which, unfortunately, at the present time, was in the unhappy position of undergoing modernisation. Our Air Force had not a single frontline aircraft in Australia, although of course, it soon would have.
He said that the outline conveyed by the Chief of the General Staff as to the ineffectiveness of our coastal defences was most depressing and, in addition, many of our 6" guns appeared to be not fully effective. He particularly stressed the fact that he did not wish to reflect on anyone in authority for he stated that, when the present position was surveyed in the light of the situation three or four years ago, our position now was undoubtedly good, but nevertheless was not good enough. To his mind the Army was of first importance in view of the relative ineffectiveness of the Navy without the support of a squadron at Singapore and the deficiencies in the Air Force, but when he considered the Army strength it appeared that we had at present no military force outside of the Fixed Defences.