His Majesty's Government in the Commonwealth of Australia has
under consideration the terms that might be imposed on France and
the possibility, as reported in the Press, that the French
possessions in the Pacific, particularly the New Hebrides and New
Caledonia, might be allotted to Japan.

We are naturally greatly concerned at such a prospect and would be
glad of urgent advice on this matter.

The main alternatives appear to be-
(1) That U.S.A. might exercise the same deterrent effect as in the
case of the Netherlands East Indies;

(2) That we might take action to forestall Japan by occupation
with our forces.

However, this might furnish a precedent to Japan for action in the
Netherlands East Indies. We also realise that Japanese sea power
could render impossible the maintenance of such Forces.

On the other hand, it is necessary to weigh whether Japan would
risk war with the Empire and U.S.A. over these islands.

The earliest possible advice would be appreciated.