My telegram No. 761. 
Halifax  raised the question in the War Cabinet today indicating that half period of agreement expired and necessity to consider policy. He expressed the view that United Kingdom and United States public opinion would react strongly against continuance of closure of the Burma Road but grave danger of crisis with Japan if road reopened, that either a settlement had to be arrived at or we must face necessity of meeting forceful action by Japan, that if settlement it must safeguard China's position but must be sufficiently attractive to keep Japan virtuous.
The Prime Minister's  comment was that policy must be either carrots or sticks. The Prime Minister emphasised that we would be in no better position to face Japan in war on 17th October than we were when Burma road Agreement made although we might be two or three months later as two battleships of 'Royal Sovereign' class should then be in commission and that essential to avoid Japan entering hostilities. The result of what I gathered was confused discussion was that the matter should be reconsidered early next week and in the meantime proposals for general settlement should be put on paper for consideration by War Cabinet.
Dominions office M.58 , which I consider confused and unhelpful, was I understand drafted before War Cabinet discussion.