406 Lord Caldecote, U.K. Secretary of State for Dominion Affairs, to Sir Geoffrey Whiskard, U.K. High Commissioner in Australia

Circular cablegram Z127 LONDON, 19 June 1940, 6.47 p.m.

IMMEDIATE MOST SECRET AND PERSONAL

Please give the following message to the Prime Minister [1] for his most secret and personal information immediately.

Following is text of memorandum which has been telegraphed to H.M.

Ambassador at Washington [2] for his guidance in his conversations with the United States authorities. BEGINS.

In the event of a complete capitulation by France we intend to continue the struggle. The military situation which would confront us would be as follows:

General situation 2. All French European and Northern African territory and resources would become available to the enemy in due course though the elements of the Fleet and certain forces in the French Empire might be denied to the enemy. It is by no means improbable however that the French might be forced to hand over their Fleet and our enemies would thereby gain a considerable accession of naval strength. All existing European neutrals with the possible exception of Turkey would eventually fall under German or Italian military or economic domination and our position in the Mediterranean and the Middle East might be ultimately reduced to denying the Suez Canal to the enemy. The attitude of India might be doubtful but with the possible exception of Eire the whole of the Empire would increase their efforts in our support. Japan might attempt a more actively opportunist policy in the Far East.

Russia would probably become alarmed at Germany's success and cease to assist her.

Ability to defeat Germany 3. We consider that in these circumstances the defeat of Germany could still be achieved (but) [3] by (a) combined economic pressure, air attack on economic objectives in Germany, (and) with its resultant effect on German morale, and the creation of widespread revolt in conquered territories.

4. It would be essential to secure the British Isles as main base for the operation of naval and air forces since we could not maintain our air offensive against Germany from the American continent nor employ our Fleet effectively unsupported by the naval resources of this country.

The final issue will therefore hang at first on our ability to withstand the great effort which the enemy is likely to make against Great Britain in the immediate future. If we can withstand very large scale air attacks against our industry, our ports and centres of population by denying to the enemy air superiority over this country and its approaches and so long as we maintain command of the sea, we hope to resist invasion successfully. In this connection the direct danger is the extreme vulnerability of our aircraft industry.

At the same time, we shall have to withstand intensified naval and air attacks against our sea-borne trade to meet which there is an acute shortage of destroyers and flying boats.

5. We should be in a good position to control the economic resources of the Allied overseas Empires, and we could exercise naval control of the wider oceans and focal points leading to the blockaded areas. This pressure would not of itself bring about the defeat of our enemies. To achieve this full pan-American economic co-operation is essential so that the raw materials of die world may be controlled at the sources.

In effect, our ability to defeat Germany would ultimately depend on a complete blockade of Europe which must include the cutting off of supplies via Russia. Any relief to populations in territory occupied by the enemy would only serve to prolong the struggle.

6. Without the full economic and financial co-operation of the whole of the American Continent the task might in the event prove too great for the British Empire single handed. Nevertheless, even if hope of victory in these circumstances appeared remote, we should continue to fight so long as it was humanly possible to do so.

7. It has been suggested that in the event of the United Kingdom being overrun by the enemy the struggle could be continued by the British Fleet from the American Continent. In resisting invasion however the whole of our naval resources in home waters would be thrown into defence and a successful invasion would automatically imply the loss of a large proportion of our Fleet. The remaining forces operating from America would be faced with considerable problems of maintenance of supply and manning of it and combined German and Italian Fleets possibly strengthened by captured units of the French Navy might extend their activities well beyond the confines of Europe. Without our air weapon and with our ability to exert economic pressure through sea power considerably reduced, our chances of victory would be virtually at an end, even with full military and economic assistance of the American Continent.

Far East 8. The collapse of France would provide Japan with the temptation to take action against the French, British or Dutch interests in the Far East. We see no hope of being able to despatch a fleet to Singapore. It will therefore be vital that the United States of America should publicly declare her intention to regard any alteration of the status quo in the Far East and the Pacific as a casus belli.

West Indies and South America 9. We regard the maintenance of the status quo in the West Indies as of military importance but we believe this to be assured by United States administration's approval of resolutions recently submitted to Congress re-affirming the Monroe Doctrine, in which it was stated that the United States could not recognise transfer or acquiesce in an attempt to transfer any region of the Western Hemisphere from one non-American power to another.

Assistance we would require from the Americans 10. Our full requirements from the American Continent are clearly a matter for detailed examination but in broad terms they would be as follows:-

(a) the immediate and vital requirement would be the provision at once of first line aircraft (including flying-boats), destroyers, light naval craft, military equipment and supply necessary to maintain our defence forces in being while our own production is being disorganised by the enemy offensive and our reserves expended. Personnel possibly on a voluntary basis to assist in mantling ships and aircraft are also needed.

(b) for further prosecution of the war we should require arrangements to ensure:-

(1) the stoppage at the source of all supplies to enemy countries and territories in enemy occupation and full co-operation in our contraband control against the remaining European neutrals including Asiatic Russia.

(2) the supplies of food, munitions and raw materials, if necessary on a credit basis.

(3) the provision of merchant shipping to ply between the Americas and the United Kingdom.

(c) the Government of the U.S.A. should add to their declaration regarding the West Indies a further declaration to the effect that any alteration to the status quo in the Far East and the Pacific would be regarded by them as a casus belli. ENDS.

1 R. G. Menzies.

2 Lord Lothian.

3 The three sets of brackets in this paragraph were added in pencil to this copy of the cablegram.

[AA: A981, WAR 45, iv]