14 Mr S. M. Bruce, High Commissioner in London, to Mr R. G. Menzies, Prime Minister

Cablegram 520 LONDON, 6 July 1940, 2.52 a.m.

MOST IMMEDIATE FOR THE PRIME MINISTER PERSONAL MOST SECRET

JAPAN. Chiefs of Staff appreciation strongly stressing

impossibility of facing war with Japan was before the War Cabinet

when reply further considered this afternoon. Discussion

apparently inconclusive but understood that majority view

necessary to give way on Burma road. As I believe a positive

policy such as I have always advocated is best course, I made a

last attempt even at this eleventh hour by putting in a memorandum

which I made clear expressed solely my personal views down the

following lines:

(i) If we do not give way there is danger of war.

(2) If we do give way probably not the end of Japanese demands.

(3) Give Craigie [1] instructions to put the position with

absolute frankness down the following lines:

(a) We desire good relations and broad settlement.

(b) Cannot merely agree to Japanese demands because of the

reactions of our own people to acquiescence in dictation and the

effect on the United States.

While anxious for good relations with Japan we cannot purchase

them at the price of losing American goodwill which is vital to us

in our desperate struggle in Europe.

(c) If we did agree by no means certain would lead to the

accomplishment of Japan's major objective, i.e., liquidation of

China position.

(d) If we do not agree and war resulted Japanese position

difficult because-

(a) though heavily engaged elsewhere the British Empire could

still be troublesome.

(b) Danger of United States declaring war. While United States

[public] [2] opinion bitter[ly opposed] to war in Europe large

section regard Japan as danger in the Pacific Ocean and at any

moment might swing in favour of hostilities.

(c) Damage financial and economic embargo of [sic] United States

and British Empire would inflict.

(d) If we defeat Germany we would be strong enough to enforce

retribution for any blackmail imposed on us now.

(e) If Germany defeated us and the Far Eastern position had not

been stabilized Germany would certainly come into the Pacific

Ocean.

(4) Having put reasons why trouble now would not suit Japan or us

Craigie should be authorized to suggest a broad settlement down

the following lines:

(1) United Kingdom prepared to use best endeavours to bring about

a settlement in China provided that Japan prepared to agree to

reasonable terms which safeguarded China's independence.

(2) If Japan prepared to agree to such terms and a settlement with

China can be effected the United Kingdom Prepared-

(a) To afford financial assistance by way of loan up to an agreed

amount on favourable terms if requested to do so.

(b) To co-operate in the rehabilitation and development of China

and to agree to preferential opportunity for Japan in respect to

supply of consumption goods to China.

(c) To endeavour to obtain co-operation of the United States in

respect to (a) and (b).

(d) To discuss with Japan the stabilization of territorial

position in the Far East and to endeavour to obtain the co-

operation of the United States, the Netherlands and France in a

settlement.

(e) To assist in ensuring to Japan vital necessities in raw

materials.

(f) To agree to the open door in non-selfgoverning territories and

to discuss with Governments concerned increased opportunities for

Japan in self-governing parts of the Empire.

(d) might involve handing over some islands to Japan and (f) the

giving up of advantages British manufacturers have enjoyed in the

colonial Empire. If the war is lost these are immaterial. If war

is won the world will be constituted on so changed a basis that

the former will probably be immaterial and the latter is almost

certain to be the agreed settlement of the colonial problem.

Repeated to Washington No. 32.

BRUCE

1 U.K. Ambassador to Japan.

2 Words in square brackets have been inserted from Bruce's copy on

file AA: M100, July 1940.

[AA: A981, FAR EAST 31, ii]