400 Commonwealth Government to Lord Caldecote, 400 U.K. Secretary of State for Dominion Affairs

Cablegram 303 18 June 1940,

MOST IMMEDIATE MOST SECRET

His Majesty's Government in the Commonwealth of Australia has under consideration the terms that might be imposed on France and the possibility, as reported in the Press, that the French possessions in the Pacific, particularly the New Hebrides and New Caledonia, might be allotted to Japan.

We are naturally greatly concerned at such a prospect and would be glad of urgent advice on this matter.

The main alternatives appear to be- (1) That U.S.A. might exercise the same deterrent effect as in the case of the Netherlands East Indies;

(2) That we might take action to forestall Japan by occupation with our forces.

However, this might furnish a precedent to Japan for action in the Netherlands East Indies. We also realise that Japanese sea power could render impossible the maintenance of such Forces.

On the other hand, it is necessary to weigh whether Japan would risk war with the Empire and U.S.A. over these islands.

The earliest possible advice would be appreciated.

[FA: A3196, 0.3900]