Agendum 162/1940 9 July 1940
1. I wish to draw attention to certain facts which emerge from the exchange of cables regarding the three Japanese demands made upon the United Kingdom.
2. I feel that the Japanese cannot read the text of the reply which His Majesty's Ambassador' is instructed to convey in respect to the Burma Road issue as other than a refusal by the United Kingdom Government to concede this request. (Circular D.319) 
3. The principal operative paragraph, which says:-
'For some time past the specific war material from the United Kingdom which was carried over the Burmese route to China has been insignificant and it is likely to remain so. His Majesty's Government, therefore, would find themselves unable to accept the view that the supply of war materials by Great Britain to the National Government of China is a direct cause of the prolongation of hostilities,' can convey no other interest [sic] than that the United Kingdom intends to continue to permit the use of this road for the sending of war materials to Chiang Kai Shek. 
4. Many recent cables deal explicitly with the risk of Japan going to war with us. Upon consultation the United States Government has not asked the United Kingdom to refuse the three demands made but, on the contrary, it has been suggested the United Kingdom should submit to these demands in face of force majeure.
5. (I draw attention to one point of questionable diplomacy in the text of the United Kingdom reply to Japan which places refusal to dose route partly on basis that such action would be inconsistent with United Kingdom's obligations to India and Burma. If subsequently United Kingdom is forced to concede demand, she will automatically have to confess acting at behest Japan in manner inconsistent with her obligations to Dominion [sic] of India and Colony of Burma.) 6. We have before us, while the text of the reply is under consideration, Cable No. 520 , which commences:-
'Chiefs of Staff appreciation strongly stressing impossibility of facing war with Japan was before the War Cabinet when reply further considered this morning.' 7. The Australian Government's attitude towards this matter has been variable.
8. We first expressed opinion that the three demands should be conceded dated 27th June, 1940:-
'We consider the present three Japanese demands do not in themselves vitally affect future or present security of Empire ...
and we can only arrive at the conclusion that if the United States is not prepared to give the most complete support, these demands should be conceded. The alternative is a grave risk of war, against Japan, which cannot be contemplated in our present position.
'Generally, we agree with view that it would be contrary to successful prosecution of war for the U.S.A. to become involved in war in the Pacific, and policy therefore must be based on realities of situation and common sense that we should not at moment take such action or by omission of reasonable action as will cause Japan to become involved in this war.' 
Later, when opinion sought of proposed United Kingdom reply , the text of which intended to make no concession but to propose general discussion with Japan, the Australian Government indicated unqualified concurrence in this suggested reply-Cable 2nd July:-
'We concur in terms of proposed reply to Japan.' 
9. On 5th July, Hard cabled , inter alia:-
'If an unfavourable proposal is submitted regarding the Burmese Road, direct action will result, particularly in view of the publicity given to the American announcement of inability to prevent Japanese aggression in the Pacific. The Ambassador suggests that I submit that Australia's influence on Home Government would be appreciated to enable conciliation measures for the removal of this pretext for aggression.' 10. Further cables of 5th and 9th to Bruce , read in conjunction with earlier cables, must convey that Australian Government is in state of doubt and indecision.
11. We have cable dated 6th July, No. 521 , stating:-
'United Kingdom supplies passing over Burma Road negligible, supplies affected would be mainly American.' 12. I suggest that we might get a proper perspective of the Australian Government's attitude on this critical issue by considering what would be disclosed by an examination of our records should the present attitude of the United Kingdom Government lead to the Japanese embarking on hostilities against us in the process of closing the Burma Road and Hong Kong frontier.
13. The principal facts would be clear:-
(i) Statement that no fleet of British capital ships could be sent to Singapore;
(ii) Every indication that the United States would not come into war with us in the event of hostilities; (iii) The clear statement of the British Chiefs of Staff-'Strongly stressing impossibility of facing war with Japan.' Series of cables from:-
(iv) Bruce pointing out that in his opinion United Kingdom Government not adopting sufficiently positive attitude on this grave and urgent issue.
(v) Accumulating evidence of ascendancy of Military Party and Interventionists in Japan.
(vi) Cable from Hard on 5th July in which he informs Australian Government that United Kingdom Ambassador at Tokyo suggests that he submit that the Australian Government's influence on the Home Government would be appreciated to enable conciliation measures for the removal of this pretext for aggression.
14. In all these circumstances there has been no explicit intimation by the Australian Government to the United Kingdom Government that in our opinion these non-vital concessions should be made rather than risk the possibility of war with Japan.
15. Perhaps the principal argument that has been used in justifying the United Kingdom refraining from making these concessions is that the British Empire would suffer great loss of face. I would point out that if the Japanese take hostile action against us to close these frontiers they would probably do so without declaring war and would probably, at least for the time being, confine themselves to this limited hostile action.
16. The British Empire would then be faced with alternative to [sic] suffering this, or formally declaring war on Japan and thus explicitly involving Australia and New Zealand in hostilities with Japan.
17. In the first alternative, by refraining from declaring war, the British Empire would lose face out of all proportion to that lost in making the concessions.
18. On the other hand, if we are forced to make the formal declaration of war against Japan on acts arising out of such a remote interest to us as these three demands, I feel that the Australian public would hold this Government blameworthy for allowing matters to drift to such a pass without taking a definite stand with the United Kingdom Government.
19. I therefore recommend that we should now without delay clear up our previous uncertain attitude by saying in clear terms to the United Kingdom Government that we would desire that these concessions should be made rather than incur any real risk whatever of becoming engaged in hostilities with Japan