We have received your telegram of 5th December [1] Please convey
following views to Secretary of State for Dominion Affairs [2]-
I have read with great interest the joint appreciation of the Far
Eastern position by the British, French and Polish Ambassadors in
Tokio, and also the summary of Lothian's report from America. [3]

I feel no doubt that it is most desirable that every effort should
be made to offer Japan some way out of her Chinese position
because any temporary collapse in Japan might have extremely
dangerous results, and in any event joint action or even a
complete understanding between Russia and Japan would be most
serious.

Australian opinion is of course very sympathetic to China and we
would not desire to put unfair or unreasonable pressure on Chiang
Kai Shek [4], but at the same time we feel strongly that with a
definite possibility of active co-operation between Germany and
Russia, any Russo-Japanese Agreement would be full of actual
menace to Australia and to British interests in both the Pacific
and Indian Oceans.

I feel some difficulty in understanding Lothian's optimism about
the Japanese restoring full sovereignty to China with face-saving
arrangements for Japan, because this would involve a great
humiliation-to avoid which I would have thought that Japan would
move almost willingly into an arrangement with Russia in the
belief that she could avoid subsequent Communist influences and
Russian aggression.

Under these circumstances I attach the greatest importance to
cooperation between Britain and America in order to persuade Japan
to terminate the Chinese affair and win her away from Russia.

It is unnecessary to point out the difficulties of this because
America may suspect our motives and American public opinion may
prove an obstacle. But at the same time the realist view is
undoubtedly to save Japan from a Russian alliance, and anything
that can be done to make this clear to the United States and to
make them feel that they and Great Britain have common motives and
a common interest, and should therefore pursue a common policy,
should in my opinion be done.

Rightly or wrongly, I have formed the impression that discussions
with America have been rather too much on minor questions and too
little upon the broad and positive policy to be pursued if the
present complications are to be turned to our advantage and
contribute to real peace in the Pacific.

If Great Britain and America could at once examine the Sino-
Japanese problem with a view to formulating the interests which
they held in common and which were being menaced, I feel sure that
the basis for co-operation would at once appear.

Though I have stated these general views as plainly as possible I
know that I do not need to emphasise the importance of avoiding in
the approach to America any suggestion that she is being used to
get the British out of trouble or that she is being asked to
involve herself in foreign affairs to an extent which would be
badly received by her people.

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