66 Lord Caldecote, U.K. Secretary of State for Dominion Affairs, to Sir Geoffrey Whiskard, U.K. High Commissioner in Australia
Circular cablegram Z214 (extracts),
LONDON, 11 August 1940, 7.45 p.m.
Received 12 August 1940
MOST SECRET AND PERSONAL
Following is summary referred to in my telegram of 11th August, No. 1800, to High Commissioner, Ottawa; No. 263 to High Commissioner, Canberra ; No. 245 to High Commissioner, Wellington and No. 402 to High Commissioner, Pretoria, for most secret and personal information of the Prime Minister. 
BEGINS- 1. Far East situation was considered in 1937 on the assumptions that:-
(a) Any threat to our interests would be sea-borne;
and (b) We could send to the Far East within three months fleet of sufficient strength to protect the Dominions and India and give cover to our communications in the Indian Ocean.
2. Japanese advance into Southern China and Hainan, development of communications and aerodromes in Thailand, situation in Indo-China resulting from French collapse, and increased range of aircraft, would now enable Japan to develop an overland threat to Malaya, against which even the arrival of the fleet would only partially guard. At the same time, collapse of France, development of direct threat to the United Kingdom and necessity for retaining in European waters fleet of sufficient strength to match both German and Italian fleets have made it temporarily impossible for us to despatch fleet to the Far East. Neither of the two above mentioned assumptions is therefore now tenable and defence problem has been reviewed in this light.
GENERAL CONSIDERATIONS 3. Japan's ultimate aims are the exclusion of western influence from the Far East and control of raw materials in that area. These could not be secured without the capture of Singapore, which will always be potential threat to her southward expansion so long as the British Fleet remains in being in any part of the world.
Japan's immediate aim is likely to be the exclusion of British influence from China and Hong Kong.
4. We are advised that Japan is determined to bring the China war to an end. There have been reports of indirect peace discussions but there is no reason to suppose that they have produced any result. Even if they did, the termination of the war would bring no early economic relief to Japan. On the other hand with the dosing of one after another arms routes into China, the capacity of China to resist is hampered. The war in China cannot therefore be relied on to provide a serious deterrent to Japanese activity elsewhere, though the value of Chinese resistance as a deterrent would be increased if the Burma road were to be reopened for military supplies.
5. Fear of Russian action will compel Japan to retain certain forces at home and in Manchuria, despite present Russian preoccupation in Europe. She knows that if she were in difficulties, Russia would take advantage of the situation.
6. Attempt on formidable Singapore defences would involve combined operation of first magnitude, and Japan must also reckon on the possibility of collaboration with us of substantial Dutch forces in the Netherlands East Indies against any southward threat.
On the other hand, forces in Malaya are still far short of requirements, particularly aircraft; and Japan must know that in present circumstances, we could not send adequate fleet to the Far East.
7. Japan may gamble on the United States not resorting to armed opposition, provided no direct action is taken against United States citizens or possessions and on the probability that the United States fleet would be kept in the Atlantic if our position in Europe should deteriorate. Though the defended base of Manila is not comparable with Singapore and United States sea communications with the Philippines are more vulnerable than ours with Singapore, nevertheless Manila lies on the line of Japanese advance to the south and the Japanese cannot be certain that the United States would not intervene and send fleet to the Philippines.
8. Knowledge that further aggression might lead to rupture of trade relations with the United States and the United Kingdom must have considerable influence and the United States has already made clear her interest in the status quo in the Netherlands East Indies.
On long term view, Japan cannot stand the strain of break with the British Empire and the Americas upon whom she depends for markets and control of raw materials. Only if she could rapidly gain complete control of raw materials especially oil, rubber and tin of Malaya and the Netherlands East Indies would she have a chance of withstanding British and American economic pressure. The recent restrictions placed by the United States Government on export of petroleum products and in particular the embargo on aviation spirit may influence Japan in the direction of seizing alternative sources of supply in the Netherlands East Indies.
9. Japan may argue that any main advance on her part should be postponed until the outcome of affairs in Europe is clearer and that if Germany succeeded she could achieve her aims quickly and without risk. Although direct attack upon Singapore cannot be ruled out, it would appear more likely that Japanese steps in the near future will be limited to local military action without resort to formal declaration of war in the hope of evading far reaching effects of war with the British Empire and possibly the United States. This would enable Japan to limit her action and 'save face' if local results or wider reactions were unfavourable.
10. To sum up, it appears that until the issue in Europe becomes clearer, Japan will probably confine her attempts to eliminate British influence from China and Hong Kong to the greatest possible extent without incurring rupture with the United States and the British Empire.
11. Our own commitments in Europe are so great that our policy must be directed towards avoiding an open clash with Japan. It is doubtful whether piecemeal concessions will have more than a temporarily alleviating effect to be followed after an interval by further demands.
It is most desirable that a wide settlement in the Far East- including economic concessions to Japan-should be concluded as early as possible. Immediate possibility of such settlement is doubtful, but every effort should be made to this end.
12. Failing general settlement on satisfactory terms we should play for time, cede nothing until we must, and build up our defences as soon as we can. (Assumption 3 begins). One aim of our policy should be ultimately to secure full military co-operation with the Dutch. This is dealt with further in telegrams which follow.  (Assumption 3 ends.)
DEFENCE PROBLEMS 13. Our Far Eastern interests are the security of:-
(a) Australia and New Zealand.
(b) Malaya and the Netherlands East Indies. Both contain essential raw materials, control of which at the source is now extremely important. Enemy occupation of either would directly threaten the security of Singapore.
(c) Burma, which is also of importance on account of oil resources and in connection with sea and air communications with Singapore.
(d) Trade routes in Indian Ocean south of the China Sea and the Western Pacific (north of Australia) and also in seas east and south of Australia including trans-Pacific routes.
(e) China trade. Considerable British capital is in China trade but this trade represents only two per cent of total British trade and its cessation would not affect our ability to continue the war.
(f) Hong Kong, which is all important commercial harbour and naval base and focus of British interests in China although its value has already been considerably curtailed by Japanese action in China.
(g) Shanghai, which is important mainly in connection with China trade. Retention of British garrison is largely a question of prestige.
14. Territorial integrity of Australia and New Zealand depends primarily on control of sea communications leading to them.
Similar consideration governs the security of British colonies in the Far East. Foundation of our strategy in the Far East is therefore still to base on Singapore a fleet strong enough to provide cover for our communications in the Indian Ocean and South-Western Pacific to frustrate any large expeditions which the Japanese may attempt against Australia, New Zealand or our Far Eastern possessions. Until however we have defeated Germany and Italy or have drastically reduced their naval strength we should be forced in the event of Japanese aggression to attempt to defend our Far Eastern interests without an adequate fleet.
15. In the absence of the fleet we could not in such circumstances prevent some damage to our interests in the Far East. Our object would therefore have to be to limit the extent of the damage and in the last resort to retain a footing from which we could eventually retrieve position when stronger forces became available.
16. Japan could make the following forces available for new adventures:-
(a) Naval-ten battleships, three to seven aircraft carriers with necessary cruiser and destroyer forces.
(b) Military-six to ten divisions. Japan could make this force and the shipping required for its transport and maintenance available without having to carry out any serious withdrawal from her position in China.
(c) Air-up to 75 fighters and 206 bombers carrier borne. Once Japan had established herself ashore she could dispose the following shore-based aircraft. Between eight and ten squadrons of fighters, similar number of light bombers and of heavy bombers and four to six squadrons of reconnaissance aircraft giving total of 28 to 36 squadrons or 336 to 432 aircraft. These forces are clearly large enough to give Japan very wide choice of objectives.
17. First course open to the Japanese would be direct attack on British possessions. In this event her main effort would probably be directed ultimately towards the capture of Singapore which would be necessary to secure her position permanently. In view of traditional Japanese method of step by step advance it is thought her first action would be attack on our garrisons in China including attack on or at least blockade of the coast of Hong Kong, all without declaration of war. Tempo and extent of her subsequent action would be conditioned by the ease and success of these operations and their wider reactions; it is even possible that if reactions were unfavourable no further adventures would take place.
18. Assuming however the worst case in which Japan proceeded with the object of dominating the whole of the Far East. She would have ample naval strength beyond that required for attack on Malaya to attack British trade. Our China trade except for little that might be carried in neutral ships would cease on outbreak of war, and our trade through the Indian Ocean with Australia and New Zealand and across the Pacific would be exposed to threat of Japanese action.
19. Apart from attacks on trade no serious threat to Australia or New Zealand would be likely until Japan had consolidated her position at Singapore. Even then it is unlikely the Japanese would attempt to invade Australia or New Zealand at least until they had consolidated their position in China and the Far East which would take very considerable time. This argument is expanded later.
20. The strain on Japan of war with the British Empire would be very great even in the absence of British Fleet and probably Japan would hesitate to undertake this unless she felt certain the United Kingdom was so heavily committed in Europe as to be unable to resist her aggression or until she had liquidated the China campaign. It is however highly important to be prepared for an assault against Singapore and by increasing our defences to deter Japanese aggression.
21. Second course open to the Japanese would be to penetrate Indo- China or Thailand which would provide bases for attack on Malaya and secure substantial rice supplies. Attack on Indo-China would not be formidable undertaking as Japanese action need only extend to seizing bases and aerodromes and controlling focal points in these countries. It might be effected without United States breaking off economic relations. We could not effectively assist in the defence of Indo-China or Thailand and it is most unlikely the Thai Government would oppose the Japanese by force while French forces in Indo-China could not prevent Japanese occupation of ports and railways. If Indo-China became hostile to us it is conceivable that Japan might be granted bases in that country.
22. Japanese penetration of Thailand would enable them to establish shore bases for aircraft within range of Singapore, Penang, Malacca Straits and Rangoon oil refineries, organise base for land advance against Malaya from the north, interfere with air reinforcement route between India and Malaya and possibly establish advance base for submarines and light craft at the northern entrance to the Malacca Straits.
23. Above action would therefore threaten Singapore and make the defence of Burma and Malaya far more difficult. Nevertheless it would not seriously endanger our vital sea communications and there fore under present conditions we should not be justified in going to war. For similar reasons we should not under present conditions go to war in the event of Japanese attack on Indo- China. Nevertheless, taking into account the probable reluctance of Japan to make open breach with the British Empire and the United States, this does not preclude in both the above cases (penetration of Indo-China and Thailand respectively) unobtrusive measures of an economic character designed to retard Japanese advance by playing on their uneasiness. It is important to try as far as we can to prevent Japan from gaining unhampered one position after another which would increasingly threaten the security of Malaya and our communications with Australia and New Zealand.
24. The third possible course would be attack on the Netherlands East Indies which would be a more formidable undertaking for Japan than advance into Indo-China or Thailand. Nevertheless it would probably not involve excessive military effort especially if undertaken by stages, and the occupation would not only provide Japan with advanced base for subsequent attack on Singapore but would secure oil and other urgently required raw materials. The possibility of the Japanese seizing Portuguese Timor as the first step to the above action is considered later. The security of the Netherlands East Indies would be considerably improved if the Dutch could be persuaded to agree to reorganising their defences in co-operation with us.
25. The above course is in different category from the first and second courses considered above since if Japan established herself in the Netherlands East Indies our whole defence system would be most gravely compromised, our vital sea communications and base at Singapore would be endangered and air route Singapore to the Commonwealth would be threatened. The security of the Netherlands East Indies is therefore an essential British interest second only to the integrity of Australia, New Zealand and Singapore, and their defence is an important part of our Far Eastern defence plans. Establishment of Japanese foothold in these islands would be so serious that under normal conditions the question of war with Japan to prevent it would arise. In present conditions, however, we could not prevent it by force even with the full collaboration of the Dutch. Combination of British and Dutch opposition would, however, be a considerable problem for Japan.
(Assumption 3 begins). Every effort should therefore be made to induce the Dutch to resist any territorial demands and we should offer them all possible support including both military and economic action against Japan. This should be done without formal declaration of war since (corrupt group) presentation of a bold combined front to Japanese demands might cause Japan to draw back (Assumption 3 ends).
26. Fourth Japanese course would be the seizure of the Philippines. This would remove the threat to Japanese sea communications to the south which the United States fleet base at Manila provides. It would also afford Japan suitable advanced bases for naval forces and a useful air route from Formosa to Borneo. As however this course would involve Japan in war with the United States and the Philippines would not be of great economic importance to Japan, its adoption is unlikely.
27. It would appear that unless Japan is driven to extreme measures by her extremists or tempted by our apparent weakness, she will try to avoid war with the British Empire and the United States and endeavour to achieve her aims by stages which she might hope would not involve her openly in war. Of these, the move against the Netherlands East Indies would afford greater economic and strategic advantages than advance into Indo-China or Thailand but in Japanese eyes these might be offset by the prospect of antagonising the United States even if the consequences were confined to the economic sphere. Moreover, should United States hostility develop, Japan's lines of communication to the Netherlands East Indies would be threatened from the Philippines.
Since the Dutch are our allies, Japan must also assume that attack on the Netherlands East Indies might well involve her in war with us.
Therefore, while we must be prepared for sudden attack on the Netherlands East Indies or Singapore, most probable Japanese first move would be into Indo-China or Thailand possibly followed later by attack on the Dutch East Indies, if conditions at the time were judged favourable for such action, rather than attack on Singapore itself 28. Our untenable position in North China in the event of war with Japan has already been recognised by the decision to withdraw our garrisons at Peking, Tien-Tsin and Shanghai.
29. Our position at Hong Kong is different, as this is a British colony. On the one hand, Hong Kong is not vital and garrison could not long withstand Japanese attack. Moreover, even with strong fleet in the Far East Hong Kong could probably not be held with its present defences, now that the Japanese are established on the mainland, and could certainly not be used as advanced naval base.
If therefore general settlement could be negotiated in the Far East, demilitarization of Hong Kong, with best obtainable quid pro quo, would be in our military interest. Without such a settlement, however, demilitarization is impossible on account of loss of prestige, which such a course would involve. In the event of war therefore Hong Kong must be regarded as outpost and held as long as possible but we should be unable to reinforce or relieve it, and militarily our position in the Far East would be stronger without this unsatisfactory commitment.
30. Strategy in the event of war in the Far East in the absence of the Fleet Sea communications most likely to be threatened are:-
(a) Indian Ocean (including West Coast of Australia) (b) South China Sea and the Western Pacific (North Australia) (c) Seas east and south of Australia including trans-Pacific routes.
31. As regards (a) the main routes from the United Kingdom to the Middle East, India, the East Indies, Australia, and New Zealand pass through the Indian Ocean, which would therefore be most important area for Japanese action. Although Malacca Straits might be denied to Japanese naval forces, these forces might use many other passages through the Netherlands East Indies for operations against our Indian Ocean trade and our lines of communication to the Middle East through the Red Sea. Although distances from Japan are great there are several potential fuelling bases in the Indian Ocean. Force of enemy cruisers, particularly supported by one or more heavy ships, would provide most serious threat to our trade since we could not spare adequate naval forces either for operations in focal areas or, as would more probably be necessary, for escort of convoys. Our communications with Malaya would be precarious but not necessarily completely severed. (Assumption 3 begins). Our ability to use Dutch Islands and to establish bases  there would act as deterrent but would not prohibit Japanese access to the Indian Ocean. Such action would assist maintenance of our communications with the Commonwealth of Australia and New Zealand. Dutch co-operation would be essential (Assumption 3 ends).
32. As regards (b) we could not maintain our sea communications to northward of Malayan Archipelago. (Assumption 3 begins). But could maintain local traffic within the Archipelago to limited extent given Dutch co-operation (Assumption 3 ends).
33. As regards (c) the trans-Pacific trade routes are important in connection with supplies from America to Australia, New Zealand and the Far East, as well as providing alternative communications with the United Kingdom which would increase in importance if difficulties on the Cape route became acute. These routes are also essential to the economic life of the Commonwealth and New Zealand. Although distances from Japan are considerable Japanese (if not deterred by the fear of United States action) could establish advanced fuelling bases in the South Sea Islands to facilitate operations in the South-West Pacific. Wide scope for evasive routing would provide high degree of security for trans- Pacific trade except in neighbourhood of western terminals.
Evasive routing, practicable to some extent and use of in-shore routes, would also provide some degree of protection for Australian and New Zealand trade. Danger of attack would be greatest in approaches to ports for which local air and naval protection would be required.
34. As regards defence of Australia, New Zealand and the South Pacific Islands. As previously stated, no serious threat to territorial integrity of Australia or New Zealand would be likely to arise at least until Japan had consolidated her position in China and the Far East which would take a considerable period. A Japanese major expedition to Australia or New Zealand would be an extremely hazardous operation so long as Singapore remained available to us as a base for the Fleet in being on the flank of their long lines of communication. Moreover, protection of lines of communication of expedition of any considerable size having regard to distance involved would impose a very heavy drain on Japanese naval forces, as every important convoy would have to be protected against maximum scale of attack which we could bring to bear at our own selected moment and would probably therefore require escort by heavy ships. Scale of attack on Australia or New Zealand would be likely therefore to be limited to cruiser raids possibly combined with light scale of seaborne air attack against ports. Japanese might decide to establish advanced fuel bases in South-West Pacific Islands, to facilitate such operations. There are innumerable potential bases in these Islands which could not all be defended against Japanese attack but their most likely objective would be the capture of the harbour with base facilities particularly Suva. Suva is also a useful potential advanced base for our forces.
35. As regards defence of Malaya. Following are factors affecting this problem in the absence of the Fleet:-
(a) Necessity of preventing establishment of shore-based aircraft within close range of Singapore base.
(b) Even if Japanese had not previously established themselves in Thailand they would be more likely to attempt landing up-country in Malaya and then operate southwards, under cover of shore-based aircraft, than to risk direct assault on Singapore Islands.
(c) Rice-growing country on which native population partly depends, and most government storage centres are in the North.
(d) Necessity of establishing maximum possible food reserves for garrison and for civil population. Though our sea communications with Malaya might be precarious, it would be extremely difficult for the Japanese to blockade the Malayan Peninsula completely, and we should expect to get supplies (corrupt group) to our headquarters, though not necessarily through the port of Singapore.
Above factors emphasise the necessity for holding the whole of Malaya rather than concentrating on defence of Singapore Islands.
This clearly involves larger land and air forces than when the problem was merely the defence of Singapore Islands.
37. (Assumption 3 begins). Defence of the Netherlands East Indies is important for denial to the Japanese of the use of naval and air bases. Control over channels through the Netherlands Islands could be exercised by air and light naval forces based on one of the following alternative lines:-
(a) Northern line of islands from Singapore to New Guinea, or (b) Southern line from Sumatra-Java to Port Darwin.
We could do little to dispute passage of these channels with forces available at present. Co-operation of the Dutch would improve the position, but measure of control would still be very limited. Which line of defence to adopt could only be decided by the local Commander. To deny bases, invasion must be prevented, which would entail attacking expedition during its approach, as Dutch military forces are limited and mainly concentrated in Java.
With our naval numerical inferiority, best form of defence would be shore-based air forces in conjunction with submarines, light naval forces and mines. (Assumption 3 ends). Establishment of British air base in North Borneo to give our air forces greater mobility is our long term aim, but this will take time, and resources which we do not at present possess. Desirable for such action to be part of a general settlement with the Japanese.
(Assumption 3 begins). Meanwhile there would be no alternative to relying consistently for defence of this area on operation of air forces from Dutch bases of which there are several already established on both lines of defence. (Assumption 3 ends).
Japanese might seize Portuguese half of Timor as first step, but owing to absence of air or naval bases in this part of the Island and risk that it might lead to war with us accompanied by [sic] such action appears unlikely.
38. (Assumption 3 begins). Whole defence problem in the Far East would be greatly facilitated if we were certain of Dutch co- operation and could concert a plan with them. Our aim should be scheme of defence ensuring full mutual support, pooling of resources, and arrangements for rapid movement of troops to threatened points. Dutch would probably agree to prepare secret plans for defence of the Netherlands East Indies, though they might hesitate to assist us in the event of Japanese attack on British territory alone. With our present limited resources in the Far East we could not offer the Dutch any effective military support against Japanese aggression. It is not therefore recommended that staff conversations should be held with the Dutch immediately. It is most important however that plans should be concerted with the Dutch as soon as we have improved our own position in Malaya.
Meanwhile our Officers Commanding R.A.F. in the Far East should consider the problem of combined Anglo-Dutch defence plans so that conversations may take place immediately the opportunity arises (Assumption 3 ends).
39. If the Japanese attack Malaya without attacking the Netherlands East Indies, it is conceivable that Dutch co-operation would be withheld. We should then be faced with gap in our defensive system and our sea communications in the Indian Ocean would be more seriously threatened. It should, however, still be possible even without Dutch collaboration to get some supplies into Malaya intermittently but in such circumstances our difficulties in the Far East would be greatly increased.
CONCLUSIONS 40. In the absence of capital ships of the Fleet we could not fully secure our vital interests in the Far East. Problem is therefore to make best dispositions possible to secure the most important of these interests without cover which capital ships of the Fleet would provide. If in addition to defending Malaya we could deny to the Japanese establishment of bases in the Netherlands East Indies, and if the movement of their naval forces through the line of these islands could be impeded, security of our interests would be considerably improved. Our ultimate aim therefore should be to secure full military co-operation of the Dutch. In the absence of full Dutch co-operation we should concentrate on defence of Malaya.
50. Minimum garrison required in Malaya to hold the whole country and to safeguard aerodromes required for operations of our Air Force is equivalent of 6 brigades with ancillary troops, provided Air Forces mentioned in paragraph 4 are made available. Apart from coast defence and A.A.  troops, present garrison of Malaya comprises 9 battalions and (corrupt groups? 'ancillary') troops.
Until additional Air Forces referred to in paragraph 43 can be stationed in the Far East, reconnaissance and striking forces available to deal with invasion or sea-borne attack are seriously inadequate. Absence of these Air Forces will involve increase in existing land forces by amount which the General Officer Commanding has estimated as equivalent to 3 divisions and attached troops. This figure could be progressively reduced as air reinforcements are increased. Since General Officer Commanding's estimate was made, Air Forces in Malaya have already been increased by one squadron, and it is hoped to provide 4 additional squadrons by the end of 1940. Apart from the possibility of Australian division going to Singapore (which is under separate consideration) it may be possible to make further forces available to reinforce Malaya from some other source, at a later date.
Preparations are therefore being made in Malaya to receive ultimately two reinforcing divisions.