2 Mr R. G. Casey, Minister to the United States, to Mr R. G. Menzies, Prime Minister, and to Sir Frederick Stewart, Minister for External Affairs
Cablegram 507  WASHINGTON, 9 July 1941, 1.10 p.m.
Following for the Prime Minister and Minister for External
My telegram No. 502.  I saw Sumner Welles  today. He
believes that the secret information available and the known
concentration of Japanese naval forces make it evident that the
Japanese have decided on a southward expedition probably in the
next fortnight. He believes the Japanese are pressing Germany to
press Vichy to agree to the Japanese occupation of air and naval
bases in Southern Indo-China. Sumner Welles says that Germany has
not yet agreed so to press Vichy probably because of the effect
that this would have on Weygand  in North Africa and on the
French public opinion in France. Japan naturally wants to get
Indo-China by agreement with Vichy and without fighting if
possible but Sumner Welles believes that Japan will take Indo-
China by force if necessary.
Sumner Welles believes that Japan would be content for the present
with Indo-China and some infiltration into Thailand, e.g., go no
further for the present.
If Japan gets Indo-China by agreement with Vichy and without
fighting, Sumner Welles was not prepared to say what the United
States would do. However, if Japan used force he told me that the
United States would place immediate and complete economic and
financial embargo on Japan.
Sumner Welles believes that they and/or we should avoid, as long
as possible, becoming involved in war in the Far East as well as
in Europe, although he clearly has little faith in our being able
to do so for long. He believes that their economic and financial
embargo would provoke Japan to war with them before long.
Sumner Welles is convinced of the uselessness of [their] warning
Japan further. He said that they have made such representations to
Tokyo that it is certain that Tokyo knows 'that United States
Sumner Welles admits the possibility that the German hold-up in
Russia and American occupation of Iceland may deter Japan but he
is not hopeful.