386 U.K. Dominions Office to Sir Ronald Cross, U.K. High Commissioner in Australia
Circular cablegram Z31 LONDON, 2 March 1942, 11 p.m.
Following, which is of Utmost secrecy, for Prime Minister.  Begins.
The following is an appreciation of the situation in the Far East which has been submitted by our Military Advisers. Appreciation begins.
Japanese Intentions 1. Japan is pressing her offensive with the greatest vigour in order to take full advantage of the general superiority she has established. Her immediate objects appear to be to complete her conquest of the Philippines, Sumatra and Java, and to exploit her invasion of Burma, which would threaten Chinese ability to continue fighting. She may also assault Port Darwin and Ceylon.
2. Japan must realise that the defeat of Germany would very seriously prejudice her chances of ultimate victory. Her strategy, therefore, is likely to be biased towards helping Germany in so far as that is compatible with her own requirements.
3. Once Japan has effectively breached the Malayan barrier, she has a clear run into the Indian Ocean, where we are dangerously weak in all respects. By attacks on Ceylon and India, Japan might raise serious internal security problems in India and induce instability in Indian forces in other theatres of war. By the occupation of Ceylon, Japan would prevent us from reinforcing Burma by sea and achieve a position suitable for building up a serious threat to our Indian Ocean communications. This would go far towards meeting Japanese requirements, would help her offensive against Burma and provide relief to Germany by threatening India and the Middle East.
4. To the east, New Caledonia and Fiji are stepping-stones to Australia and New Zealand. The conquest of these islands would gravely compromise United States ability to build up forces in those Dominions and to seize advanced bases for naval action in the South-West Pacific.
5. To sum up, in the near future we may expect to see:-
In the A.B.D.A. Area (a) Java attacked by superior forces (b) Port Darwin attacked (c) Seizure of advanced bases in the Andamans and Nicobars.
In the Indian theatre (d) An extension of the attack on Burma and the probable loss of Rangoon (e) Naval attack on our sea communications (f) Serious threat to Ceylon (g) Threat of raids on the east coast of India.
In the Pacific (h) An increased threat to Fiji and New Caledonia.
Object 6. Our immediate object is to stabilise the situation so as to ensure the security of bases and points vital to our prosecution of the war in the Middle and Far East and to our eventual return to the offensive against Japan.
Broad Strategy 7. The basis of our general strategy lies in the safety of our sea communications, for which secure naval and air bases are essential.
We must therefore make certain of our main bases, i.e. India, Ceylon, Australia and New Zealand. We must do everything to hold as much of Burma as possible. We must fight it out in Java.
Assistance from Russia 8. Offensive submarine and air activity from Siberia in the immediate future would be of great assistance. In present circumstances, we have not pressed Russia for this, lest it should reduce her ability to resist Germany's spring offensive in the west.
Naval Situation 9. There is no naval base available from which a single combined fleet could cover both the Pacific and Indian Ocean. Thus the strategy in these two oceans must be dealt with separately.
For the defence of Indian Ocean sea communications, we are building up our Eastern Fleet. At present, there is no secure base in the Indian Ocean. Thus we must:-
(a) Secure Ceylon (b) Develop Addu Atoll (c) Develop additional bases for reconnaissance and striking forces.
10. In the Pacific, it is essential to build up a superior United States Fleet. The Allied naval forces in the Pacific may approach parity with the Japanese by mid-April. Ultimately, a base further westward than Hawaii is needed to exert a real threat to Japanese communications.
In the meantime, an energetic raiding policy against Japanese communications would influence Japanese operations in the present theatre of war.
Our opinion is that an extension of this policy to include raids against Japan itself would have a far-reaching diversionary effect. This would have to be a United States responsibility but they do not consider that it is a practical proposition at present. The United States are however considering the desirability of a naval base in New Zealand with a view to advancing northward while still holding Hawaii.
The Malayan Barrier 11. With the enemy in Sumatra and the islands to the cast and west of Java, it is very difficult to get shipping to either Batavia or Sourabaya. These are the only good ports in Java. We have therefore been unable to reinforce the island on such a scale that we could expect to hold it for long. Nor could we provide adequate reinforcements in time. If we attempted to reinforce Java, our forces would be destroyed piecemeal leaving us without resources to provide for the minimum security of our essential main bases.
Thus, our sound policy strategically is to withhold major reinforcements from Java and to concentrate on Burma, Ceylon, India, Australia and New Zealand.
12. It is of the utmost importance that the enemy should not acquire gains cheaply.
The East Indies should be defended with the utmost resolution by all forces at present in the area. Every day gained is of importance.
Burma 13. Burma is the eastern outpost of the defence of India, the only supply line to China, whose resistance we must maintain, and a base for future offensive operations.
In view of the imminent threat to Rangoon, our policy must be to reinforce Burma strongly as long as we can do so. If Rangoon and Lower Burma fall, every effort must be made to continue resistance in Upper Burma to the limit of administrative capacity, whilst pressing on with the development of overland lines of communication from Assam into Burma and China.
Ceylon 14. The loss of Ceylon would imperil the whole British war effort in the Middle and Far East, owing to its position in relation to our sea communications.
Immediate measures are being taken to provide the island with adequate defences, particularly air forces, anti-aircraft guns and increased R.D.F. 
India 15. The maintenance of India's war effort depends both on security against external attack and on the preservation of internal security and morale.
For both reasons, additional land and air forces must be sent to India as soon as possible.
Australia 16. Port Darwin is principally of value while we retain any hold on the Malayan Barrier, but is not strategically essential for the eventual offensive. The remainder of Australia, in particular the cast and southwest, will be one of the main bases from which the offensive against Japan will eventually be launched. Australia is insecure at present but, as we have not the forces available, United States must be largely responsible for reinforcing this area.
New Zealand, Fiji and New Caledonia 17. Before invading New Zealand, Japan would be likely to seize Fiji and New Caledonia, two points essential to the United States reinforcement route and which the United States are assisting to defend.
The threat to New Zealand is not immediate, but steps must be taken to improve her defences in view of the possible loss of Fiji and New Caledonia, and her importance as a channel of communications to the U.S.A. and as a base for future action.
Reinforcement of Far East 18. It is clear from the foregoing that considerable reinforcements will be essential if we are to stabilise the Far East theatre. Shortage of shipping and the time factor compel us to find them at the expense of the Middle East.
We must accept great risks in the Middle East, for the security of which we must largely depend on the successful resistance of Russia in the Ukraine and upon a favourable situation in Turkey.
Shipping Situation 19. The shipping situation is very grave, and, unless ways and means of increasing our shipping resources and of using these resources to the greater advantage of our war effort can be discovered, we shall be unable to move the forces overseas demanded by our strategic requirements. In fact, our strategy must be governed in 1942 and probably in 1943 largely by shipping.
To move overseas from England the land and air forces necessary to replace the formations in the Middle East and give additional strength in the Far East we must exploit our shipping resources to the utmost and, if necessary, incur a temporary reduction in our import programme.
Policy 20. Thus our policy in the near future must be:-
(a) to provide for the safety of our sea communications by building up our Eastern Fleet and by safeguarding the bases necessary to its use;
(b) to withhold major reinforcements from Java but defend the island with the available forces with the utmost resolution;
(c) to provide reinforcements as quickly as possible to safeguard the essential points vital to the continuance of the struggle against Japan, namely Ceylon, Australia, India and, if possible, Burma;
(d) to accept risks in the Middle East to stabilise the Far East;
(e) to exploit our shipping resources to the utmost in the interests of our strategy.
21. The United States should undertake:-
(f) offensive operations against Japanese sea communications;
(g) the protection of the essential air and naval bases in the air reinforcement route across the Pacific;
(h) the concentration of air and land forces in Australia;
(i) the building up of a strong Pacific Fleet;
(j) the reinforcement of the garrisons of Fiji and New Caledonia, and the improvement of New Zealand's defences in view of the possible loss of Fiji and New Caledonia, and her importance as a channel of communications to the United States and as a base for future action.
Appreciation and message ends.