He [1] had fully understood and appreciated your message [2] and
views outlined in No. 98. [3]

He has up to date appreciation of European situation and fully
realises grave possibilities that it holds.

As regards supply of aircraft from here he will do everything in
his power although he told me that this did not amount to very
much because since war started he has foregone taking supplies of
new aircraft in order that Allies could get maximum supply.

Figures which were quoted to me show that numbers of existing
aircraft here of any value for fighting or bombing are small.

He went on to envisage situation that might emerge if worst were
by evil chance to come about and British resistance by land and
air be broken. He believes it possible that in this event Hitler
will probably make some proposal to the general effect that he
will stay his hand and leave Britain an autonomous state provided
the fleet and the oversea, fleet bases are handed over. He
emphasised strongly that at all costs the British fleet and the
fleet bases if possible should be kept in being. While the fleet
existed the position might well be retrieved. It was far from
impossible that some incident directly affecting interests or
honour of this country might occur at any time and that this
country might come in with us.

He repeated several times that no alternative was worse in the end
than the surrender or destruction of the British fleet. [4]