My telegram Circular B. No. 231. [1] Following for the Prime
Minister-
As a result of his conversation with the German Chancellor [2], Mr
Chamberlain [3] feels that the position is as follows-
Hitler has made up his mind that the Sudeten Germans must have
self-determination. By that he means that they should be able to
realise their evident wish to be incorporated in the Reich. He
says that if they are not left free to make this change without
attempting to disorganise [4] others to prevent them then he
(Hitler) is ready to assist them in settling the issue by force.

He will not be deterred from this by risk of world war. The Prime
Minister feels indeed that, had it not been for his visit to
Berchtesgaden, the incidents in Czechoslovakia during the last
fortyeight hours, which have been greatly exaggerated in reports
to Hitler, would have led the latter to give orders for the German
Army to march.

The Prime Minister feels that if we, through him, tell Hitler at
the meeting which has been planned for next week that we accept
the principle of self-determination for Sudeten Germans, the
German attempt to settle the issue by force can be stayed. Hitler
would then be ready to discuss with us means by which principle
was to be carried into effect. It would certainly appear that if
Hitler's proposal for the adoption of the principle of self-
determination is accepted he becomes committed to agreement to
solve Czechoslovakia's problems in an orderly way and not by
force. The Prime Minister feels that, if we attempt to lay down
conditions for application of self-determination before declaring
to Hitler our acceptance of the principle, Herr Hitler's
impatience will lead him to forceful action. At the same time his
estimate of Hitler's character is that if we declare our
acceptance of the principle it will be possible afterwards to get
Hitler's agreement to some reasonable conditions for its
application. Thus the issue hangs, in the Prime Minister's view,
on our readiness or not to accept the principle.

The Prime Minister was assured by Hitler that what he cared about
was the incorporation in the Reich of ten million Germans who had
been or were outside the Reich in Austria and Czechoslovakia. The
Austrian Germans are now in the Reich and when the Sudeten Germans
are also in, Hitler has no further territorial designs
jeopardising Europe. The one other question about which Hitler
expressed confirmed doubt was the position of Alvarez but he said
that he would be satisfied with that as long as Lithuania observed
the Alvarez Statute. [5]

Pending their further meeting in Germany next week, the Prime
Minister feels that Hitler, as a result of the appeal by him, will
wish to fulfil his assurance that he will refrain in the meantime
from seizing the excuse of the solution of the Sudeten problem by
force. Hitler had, however, qualified this assurance by saying
that the events might possibly force his hand.

The above is merely a brief description of the Prime Minister's
impression of the German attitude and the issues we now have to
face. It does not attempt to give an account of the course of a
conversation which lasted almost three hours and covered many
points. In this conversation the Prime Minister made clear, direct
to Hitler himself, the attitude of the United Kingdom Government
on various matters including a reference to possibilities of the
United Kingdom being involved in the event of armed conflict.

The proposal for self-determination is fraught with many
difficulties both practical and political. Among the latter
evidently the attitude of the Czech Government and people is of
the greatest importance. The Czech Government may refuse to
contemplate this solution or indeed it might prove that if they
agreed to it they might be overthrown and a state of confusion
might ensue leading to intervention. We are losing no time in
pushing ahead with the examination of the whole problem and it
will also be discussed with the French Ministers as soon as they
arrive in London as a preliminary to communication with the
Czechoslovak Government. We will let you know further developments
as they arise.