[On 12 July the U.K. Govt dispatched to the Commonwealth Govt
cablegram D340 which outlined arguments that might be used in the
public rejection of any peace conference proposed by Hitler. Bruce
complained the same day (cablegram 548) that the arguments
suggested were quite inadequate and urged that a more convincing
way must be found of demonstrating that the economic and social
well-being of all countries depended on an Allied victory. On 18
July Bruce repeated to Menzies (cablegram 573) a message from Lt
Gen J. C. Smuts, South African Prime Minister, expressing the fear
that Europe might accept a peace based on a German-dominated
continental economic system. Smuts believed that such a peace
would be a moral and political disaster and suggested immediate
Anglo-American co-operation in the preparation of countermoves. On
the same day Bruce requested an expression of Menzies's views
(cablegram 575) and on 21 July he sent a further cablegram (583)
which read: 'As War Cabinet probably considering points raised in
Smuts' cable tomorrow I have stressed to Halifax [U.K. Foreign
Secretary] that I believe you share Smuts' view as to the
necessity of countering Hitler's economic propaganda, that I
anticipate receiving a cable from you in the immediate future and
that I am confident that your view will be that it is essential
that the United Kingdom should formulate a positive and
constructive policy. 'All cablegrams are on file AA: A1608,
A41/1/1, xi.]

Referring to your recent telegrams you may inform Halifax that I
share the views expressed by Smuts in his cable. Any proposals put
forward by Hitler will need prompt and clear analysis in order to
show that what he aims at is economic domination of Europe to
prejudice of British Empire and America. Feel strongly also that
analysis not enough and that we must be prepared, preferably in
collaboration with U.S.A., to state in broad terms the nature of
the world social and economic order which we want to see
established after the war. Undoubtedly issues raised in your
communications to me early this year must be faced. I should also
add that these considerations strengthen belief which is rapidly
growing in Australia that whole conduct of die war by British
Empire requires early consideration by appropriate Empire body so
that we may make our plans, intelligently and not merely day by
day.

MENZIES