My No. 234 of 1st July. [1]

His Majesty's Ambassador at Tokyo [2] has expressed the view that
a reply to Japan regarding the closing of the Burma Road on the
lines suggested would be regarded by the Japanese Government and
the Japanese people as tantamount to a refusal of their demands
and that in view of the importance attached in Japan to the
stoppage of traffic by this road, and the present anti-British
tempo in Japan, there would be serious risk that a reply on these
lines would lead to a state of war with Japan. He has been
informed by friendly Japanese sources that a refusal to close the
Burma Road would at once lead to a state of war between Japan and
the British Empire, which while not necessarily involving
immediate fighting would almost certainly involve attacks on our
trade.

The War Cabinet have considered the matter further in the light of
these communications. We feel that in the present circumstances it
is most desirable to avoid any course likely to lead to war with
Japan. At the same time, it is necessary to consider the effect
which acceptance of the Japanese demands would have upon the
attitude of the United States, and also that of Russia at a time
when there seems to be a possibility of our relations with that
country improving. In this connection it will be recollected that
the President of the United States [3] had indicated that he would
dislike an agreement with Japan based on the idea of appeasement
and would prefer a yielding under protest to force majeure. In the
circumstances, Sir Robert Craigie is being instructed to return to
the Japanese Government a reply as regards Hong Kong and the Burma
Road as described in my immediately following telegram. Since this
is now so drafted as to leave open the way for future discussion,
it is not proposed that he should return any reply as regards the
withdrawal of the garrisons from China except at his discretion to
point out that arrangements have been made by the local commanders
to avoid incidents.

Sir Robert Craigie is being instructed to point out that our reply
is friendly and leaves the way open for examination of the whole
question and any counter suggestion from the Japanese. He is being
informed that we feel obliged at this stage to seek every means
both of avoiding the final issue being raised and of testing out
its reality but that we rely on him to prevent the issue moving to
forcible action by Japan without an opportunity being afforded us
to make a further reply.

His Majesty's Ambassador has also been authorized to say, if he
thinks fit, that our reluctance to comply with the Japanese
request does not mean that we are not willing to meet the Japanese
on questions which in our view are far more vital to their
welfare. It must have been apparent to the Japanese Government,
that, during the course of recent discussions between His
Majesty's Government in the United Kingdom and the Japanese
Government on economic questions, there has been evidence on the
part of His Majesty's Government of a desire to understand Japan's
economic problems and to make, as far as possible, provision for
them. His Majesty's Government are both willing and anxious to
assure to Japan supplies of raw materials which Japan needs and
which the British Empire can supply, and they would urge that the
pace of negotiations now in progress should be accelerated in
order that our trade relations may be placed on a more
satisfactory footing.