Repeated to New Zealand, 11. 
His Majesty's Government in the Commonwealth of Australia have carefully considered your cablegram M. 58  relative to the Burma Road Agreement and the difficult position with which the British Empire will be confronted at the expiration of the three months' period.
There appear to us to be three alternatives:-
(i) To temporize in negotiations with Japan in the hope of something turning up in the constantly changing situation, the ultimate major considerations in which are the results of the offensive against the United Kingdom and the Presidential election in the U. S. A.
(ii) To do nothing and chance the position in which we will find ourselves at the expiration of the agreement, when we will be called upon to make a decision to reopen the road, keep it closed, or seek some middle course.
(iii) To formulate our views on the terms of a general settlement in regard to China and the Pacific and at some stage put them to Japan.
A decision on the course to be followed hinges on an estimation of the danger of Japan's intervention and we feel that the United Kingdom Government is in a position to judge this best.
Nevertheless, as we view the position here from the information before us it is evident that, should Germany attempt her invasion of the British Isles and be defeated, or be deterred from action this Autumn by failure to gain air superiority, the Empire will be in a much stronger position to pursue a firmer policy with Japan.
The U.S.A. Government after the Presidential election may also probably feel better able to collaborate along these lines.
Finally, when the various steps have been taken to strengthen our defences in the Far East, as outlined in the appreciation in your cablegram Z.214 , we should be in a stronger military position in this area and thus offer a greater deterrent to Japanese aggression.
The conclusion of these observations is therefore one of temporizing negotiations in the belief that time is on our side, and that the outcome of events in the near future promises to strengthen our position.