There is one thing that makes me rather anxious and that is
whether London, in collaboration with Canberra, is thinking out
our future policy with regard to this country. It is, of course,
generally agreed that under present conditions, with a more or
less hostile Ministry and an alliance with our enemies, it is out
of the question to do business, but lately there have been
indications that things might change, and it would be very
essential that, if this did happen, we should be ready to talk
very promptly. A good many people agree that what the Japanese
want above all is to bring the war in China to some sort of more
or less satisfactory end, and it seems to me that we cannot afford
to be too idealistic, and that if we could win the Japanese from a
hostile to a friendly attitude it would be worth bringing pressure
to bear on China to come to a satisfactory agreement. Japan must
have some room to trade and develop, and the natural area is
surely China. China, on the other hand, must have assistance in
developing itself, and we probably must accept the fact that such
assistance might primarily be Japanese. Thinking the matter out
very roughly, it seems to me that what we should insist on is a
recognition of the independence of China less no doubt Manchuria,
which for good or evil is, I assume, established as a vassal state
of Japan. Once the independence of China is recognised, I think we
should recognise that Japan has special rights and interests
there, and that the Chinese should look to Japan for help and
assistance. Japan, of course, should give undertakings that this
will be fairly given, and that the present policy of ill-treatment
of the Chinese and elimination of all other foreign interests
should cease. What I think we must resist are the views of the
idealists that Japan is altogether evil and China is altogether
good, and that the former must be punished and the latter must be
given all the good things possible.

So much for our possible dealings with a friendly Government here,
but I have my anxieties about our immediate policy with an
unfriendly Government. I sense a feeling in certain quarters of
irritation with the Japanese leading to a policy of pin pricks and
of checking them at every point. Such people might like to see us
making protests and feeble attempts at resistance in French Indo-
China. I have the gravest doubts about the wisdom of this. Thanks
to their ineptitude and weakness, the French for the time being
have lost Indo-China to the Japanese, and we have to accept this
until such time as we have dealt with Germany and our hands are
strong and free to deal with Japan. In these circumstances, it is
no use making protests which we cannot back up and which only
serve to aggravate the Japanese. Our policy must be one of pure
opportunism, and if the gradual economic absorption of French
Indo-China may occupy Japan for some months that may be the best
thing which could happen from our point of view. No doubt it
brings the threat to Singapore nearer but, as we are not strong
enough to prevent it, we just have to suffer it. Of course, if the
Americans were prepared to take a strong attitude about Indo-
China, the situation might be different, but all the information I
can obtain is to the effect that the Americans are not prepared to
do so, though they would react fiercely to an attack on Singapore
and probably the Netherlands East Indies.

The above is all rather vague, but I would like to have your
reactions to it and to hear what Mr. Bruce [1] thinks about it.

What I feel we must resist in the future is that spirit of
idealism in certain quarters in the Foreign Office which has
existed in the past and been responsible for a certain amount of
the trouble we are in to-day.

Our main complaint here is lack of news from Australia. The
Department's attitude seems to be to cast us out into the unknown
and to leave us to carry on as best we can.

K. O[FFICER]