Your telegram 8th December 778. [2]

We fully understand your wish to have a general review of the new
war situation which has now developed, but things are moving so
fast that a telegram drafted in the morning is often out of date
by the evening. We are hard at work examining the position and
considering what redisposition of our naval forces should now be
made and what and how reinforcements can be sent to the Far East.

2. We are of course in for an anxious time in the Pacific. Sir
Earle Page, who attended a meeting of the War Cabinet yesterday
evening [3], will no doubt tell you how we view the general
situation confronting us. We must not forget that Germany, who is
still the main enemy, is in serious and increasing difficulties
both in Russia and in Libya.

3. It is not considered that there is any immediate large scale
threat to territory of Australia, and much less of New Zealand,
and the possibility of raids by enemy cruisers accompanied by
seaborne aircraft remains generally under conditions similar to
those set out in paragraph 34 of Far East appreciation contained
in my telegram August 12th 1940 Z.214 to the United Kingdom High
Commissioner. [4]

4. The potential threat to our sea routes in the Far East Area has
of course greatly increased and the situation is largely that set
out in paragraphs 30 to 38 of telegram Z.214 already referred to.

Admiralty instructions with regard to conveying and routeing are
contained in Admiralty telegram 1915/10 to A.C.N.B. and N.Z.N.B.

[5]

5. As regards local Australian Defence until we know more of
Japanese intentions we do not recommend any changes of those
dispositions decided on as a result of consideration given to the
subject at the time of Mr. Menzies' visit (see paragraphs 23 to 26
of our reply of April 18th). [6]

6. A further telegram will be sent to you as soon as the new
situation has been fully examined.