Further to my telegram 18 of December 11th. [1]

1. Siamese talks were resumed at 1,000 hours on December 11th.

Delegations were informed that I did not wish to address them at
the commencement of the meeting but at a later stage in the talks
I would deal with the form and details of the agreement on the
basis of which the Australian government would be prepared to
terminate the state of war. As explained in paragraph five of my
telegram 18 I took this action to avoid embarrassment in case any
likelihood of variation of your instructions as a result of
Dominions Office telegram of December 8th. [2]

Prince Viwat, head of the delegation, stated that his government
welcomed participation by Australia with whom they would be glad
to restore the former friendly relationship.

In my opinion the Siamese credentials do not make clear that the
delegation is empowered to negotiate with Australia. Have
furnished suggested amendments to the Prince who will now seek
wider powers.

2. Dening opened the session with recital of Siamese misdeeds and
shortcomings and reminded the delegation that the draft terms were
the minimum on which Britain was prepared to terminate the state
of war. He also repeated the substance of his letter of December
3rd of which MacMahon Ball has a copy for you. [3] He reiterated
that no bargaining on matters of substance would be permitted
though he was prepared to listen to requests for elucidation of
wording.

3. The Prince stated that Siam was anxious to come to an agreement
as soon as possible but the internal political situation and the
fact that draft heads were likely to be the prototype for
agreements with other countries presented difficulties. Therefore
he requested sympathy and help in the 'elucidation' of certain
clauses.

4. The Prince stated that Siam was prepared to negotiate with
France [4] but was unable to produce convincing reasons for
failure to do so up to the present.

Dening reserved the right to include appropriate provisions in the
British heads if no Franco-Siamese agreement was reached before
exchange of letters.

5. The Prince said Siam was prepared to offer one and a half
million tons of rice but requested sympathetic consideration of
certain difficulties. He stressed dislocation of agricultural
labour, lack of implements, loss of cattle, shortage of transport
and alleged that British demand exceeded average annual export
figures and that this year's crop would be well below average.

Considers cost of gift would be three times the annual national
revenue and that this added to heavy cost of occupation forces and
compensation would produce grave financial problems. He requested
indulgence in respect of rate of delivery and substitution of
broken for sound white rice when latter not available.

Dening replied that these modalities in respect of Siam might make
representations to Britain as necessary during the performance of
the agreement but could not be accepted as amendments of text.

6. The Prince also requested 'elucidation' of the following
clauses of the draft heads:

B1(C) B1(E) B3 C3 D1 D2 D3 D4 E2(B) and annex clauses 3, 4, 8, 11
and 14. [5] Some suggestions appeared to me reasonable requests
for enlightenment but others involved amendments of substance.

Dening gave them little satisfaction on the former and none on the
latter. None of the Siamese suggestions are relevant to Australian
terms proposed in your telegram 7. [6]

7. In conclusion Dening reminded the delegation that they must
accept or reject the terms as they stand and warned them of the
probable consequences of rejection or procrastination. He offered
an aeroplane to convey members to Bangkok for further instructions
from the Government. Offer accepted by the Prince who departs to-
day and will probably return on 14th December.

8. Despite previous propaganda and semi official protests, the
attitude of the delegation was mild and placatory and the majority
of the suggested 'elucidations' were insubstantial. I formed the
tentative impression that the delegation desired to conclude an
agreement but were flying kites in the hope of getting some scraps
of amendments which would enable the Government to give to the
assembly and people the idea, real or false, that its diplomacy
had obtained alleviation of the terms. However, the proof of the
pudding will be in the eating when the Prince returns on 14th
December but I am more optimistic than previously as to the
outcome.

9. The British are meeting to-day or to-morrow to consider
relaxation of rice terms. Dening naturally did not inform the
delegation as it was considered that this would be taken as
evidence of weakness and raise hopes of further concessions.

10. If the British terms are accepted there should be little
difficulty in securing an undertaking on Australian terms. To
avoid hitch, vital that I receive a reply to my telegram 18 not
later than 14th December.

11. The Prince told me unofficially that
he was most anxious that formal agreement should follow quickly on
the heels of the exchange of letters.