384 Mr R.G. Casey, Minister for Supply and Development, to Mr R.G. Menzies, Prime Minister
Cablegram C38 LONDON, 23 November 1939, 11.55 p.m.
FOR PRIME MINISTER MOST SECRET
In continuation of my C.4 of 5th November  and reference first paragraph of your Secret and Personal of 21st November. 
The latest appreciation by French and British General Staff now anticipates that the Germans will be able to put a total of 160- 170 Divisions fully equipped into the field in all theatres by the Spring.
Total Allied forces likely to be available on Western Front in France by next Spring-French 70-85 Divisions, depending upon Italian situation, and British 10.
Apart from any Dominion contributions, do not expect to be able to train and equip more than the abovementioned 10 Divisions by Spring.
The French Government and General Gamelin  are constantly pressing the British Government and War Office to accelerate their programme both in regard to additional troops and production of munitions. Have seen number of letters from both Daladier  and Gamelin to British Government in which this is being most strongly urged.
They represent that one Frenchman in every eight has been mobilised in Services and, in consequence of the drain on their man power, industrial and munitions output is falling and that this can only be rectified by withdrawing older men and tradesmen from the Army. This they dare not do for fear of jeopardising the security of France in the Spring, when it is anticipated that German attacks on a grand scale are likely to be launched. They point out that British have only one in 40 called up. This latter figure is an understatement, but it is near enough for purposes of argument although it ignores the vast aircraft and munitions effort in Britain.
The French Government are also anxious about the effect of continued German propaganda which is concentrated upon driving a wedge between the Allies. There is a continuous stream of broadcasts now being aimed at the French people and dropping of propaganda pamphlets. These depict Britain leaving France in the lurch and being half-hearted about conducting the war. Recent German broadcasts have repeatedly stated that the Australian Government is mostly concerned with possible Japanese activities and also with selling their wool and wheat and that Australian troops will not be sent overseas. This constantly repeated propaganda is not without its effect and the French are beginning to be concerned. The British and French Governments feel that the most effective reply will be to see the British forces in France increasing and Dominions forces arriving from overseas.
The summaries comprising My C.25 and 26  are summaries of British Government documents which have been approved by War Cabinet. At my request naval appreciation (see C.26) has been reconsidered in relation to Netherlands East Indies and following is text of additional relevant paragraph approved by War Cabinet.
(Begins) Hitherto this Note has dealt only with the gravest issues of a major attack upon Singapore or a serious invasion of Australia or New Zealand. However, the question has been raised of an encroachment by Japan upon Dutch colonies in East Indies, probably arising out of a German invasion of the Netherlands, in which event it might be assumed that we should be involved in a state of war with Japan. It seems very unlikely that U.S.A. would impassively watch the acquisition by Japan of naval bases in the west and south-west of the Philippines. Such an act of Japanese aggression would seriously compromise the whole American position in the Pacific; and it cannot be doubted that Japan would weigh this consideration with the utmost care before committing herself, having regard especially to the fact that she is already deeply entangled in China. The contingency must, therefore, be regarded as highly improbable, unless of course Great Britain and France are getting the worst of it, when many evils will descend upon us all.
However, should Japanese encroachment begin, or should Great Britain pass into a state of war with Japan, the Admiralty would make such dispositions as would enable them to offer timely resistance either to a serious attack upon Singapore or to the invasion of Australia and New Zealand. These dispositions would not necessarily take the form of stationing a fleet at Singapore but would be of a character to enable the necessary concentrations to be made eastward in ample time to prevent a disaster. With our present limited forces we cannot afford to have any important portion of His Majesty's Fleet idle. All ships must play their part from day to day, and there are always the hazards of war to be faced, but the Admiralty can be trusted to make appropriate dispositions to meet events as they emerge from imagination into reality. (Ends.) 
My own summing up of position in the light of what I have said in C.4 and in this telegram and based on many discussions is as follows: I believe the greatest menace to Australia is the possibility of Britain being beaten in Europe. As long as Britain and France are not getting the worst of it in Europe, the British Government do not think there is any appreciable danger of Japan adventuring against British or (French)  possessions in the East. I think the British Government's statements regarding ensuring safety of Australia and of Singapore are satisfactory.
Weighing all the factors it appears to me that the wisest conclusion in our own and general British interests is to send special division abroad at the earliest.