105 Lord Caldecote, U.K. Secretary of State for Dominion Affairs, to Mr R. G. Menzies, Prime Minister
Cablegram 326 LONDON, 6 September 1940, 3.02 p.m.
Your telegrams 465 and 468.  Your telegram 130 to Commonwealth High Commissioner in London.  High Commissioner for Western Pacific's telegrams touring Nos. 3  and unnumbered of 3rd  and 4th September  from Vila.
It is known here on reliable authority that the recent instructions from Vichy to Colonel Denis  include designation:
(1) To restore the Pro-Vichy attitude of the population now under the influence of neighbouring countries. Press censorship and proclamation of a state of siege may be used for this purpose.
(2)  Not at the moment to proceed against the autonomist leaders who are known to have an important following.
(3) As regards relations with the neighbouring countries on which New Caledonia is closely dependent, you act , particularly in economic field, but for the moment to allow all interchanges to proceed.
2. Further information is that New Caledonia has reported to Vichy that a contract is now about to be signed in Sydney by the Director of New Caledonian Nickel Co.  and that stoppage of Nickel factory would cause considerable local unemployment, and as a result serious trouble, which might prove the pretext for British intervention. Report further refers to local opinion being excited and demanding local autonomy and accession to de Gaulle.
3. This may throw fight on the attitude of Colonel Denis as reported in fourth paragraph of your Telegram to Dominions Office No. 465. It may be that he is merely trying to tide over a time of crisis without accepting any substantial commitment towards real co-operation with us.
4. We appreciate the considerations put forward in telegram touring No. 3 from High Commissioner for Western Pacific, but we doubt whether any advantage would be gained by deferring final decision on statement. We therefore suggest the continuance of the plan for sending H.M.A.S. 'Adelaide' to New Caledonia with Sautot  as Governor appointed by de Gaulle, and, if you agree, formal appointment of Sautot by de Gaulle will be cabled through the British resident Commissioner of New Hebrides.  Terms of the proposed appointment are given in my immediately following telegram  which has not been repeated to resident Commissioner of the New Hebrides. If the French resident Commissioner's yacht is available for transport of Sautot to Noumea, we feel that it would be preferable for him to arrive there by this means, supported by H.M.A.S. 'Adelaide'. If this course is adopted terms of the appointment could be modified accordingly. Please telegraph your views as soon as possible, action on the issue of Sautot's appointment will of course be deferred meanwhile.
5. Apart from the encouraging effect of the arrival of the 'Adelaide' at Noumea on de Gaulle sympathizers (statement by High Commissioner for Western Pacific that between one-third and one- half of 'Dumont D'Urville' crew are pro de Gaulle is relevant in this connection) it would appear that the likelihood of adherence of New Caledonia to de Gaulle would be enhanced by economic pressure which might be put on the present Governor, and economic offers which can be made to de Gaulle's party on the lines of the Prime Minister's  letter of 27th August quoted in Dominions Office telegram No. 316 to Commonwealth Government  and in Colonial Office telegram to High Commissioner for the Western Pacific No. 142.  If Commonwealth decide to take such economic action, this might also be concerted with High Commissioner for Western Pacific as far as trade between New Caledonia and Western Pacific is concerned.