BRITISH EMBASSY, H In Your Lordship's despatch Ho. 76 (P 13894/71/88) of January 19th you wore so good as to transmit to me a copy of air R. Craigie's despatch No* 981 of December 2nd last and of your telegram to His Excellency No. 81 of Jamary 18th and to ask for ay observations thereon* 2. Z note that In paragraph 3 of his despatch Sir R* Craigie holds that "the only course likely to ensure really satisfactory results to ourselves during the Slno-Japsnese conflict would bo the adoption, In association with the United State's0 of a strong line In defence of our respective interests* leading* If necessary*, to reprisals and other forcible action against Japan*. The United States Government have throughout the conflict taken their stand on the, Nine* Power Treaty and there has been no sign of wavering from the strictest Interpretation of the Stlasoa doctrine of non-reeogni tion of Mancfru&tso• which applies a fortiori to any other puppet governments which Japan may set up In China* It is on this Issue of the sanctity of treaties which guarantee equality of opportunity that emphasis is consistently laid rather than upon the actual damage to American commercial interests la the Far Bast. At the same time the United States/ The Right Honourable v^T-A The Viscount Halifax. BZ.G., etc., etc.• etc. FRHM:VA£M:DH INDE ¦ States Government has not denied that treaties may be revised to meet changing condition a provided that alterations oan rightfully be made only by orderly processes of negotiation and agreement among the parties to those treaties. This attitude is elearly laid down In the note addressed to the Japanese Government by the Halted Statee Ambassador on December Slat last and la summarized ss follows In its last 3 paragraphs "The United states has In Its International relations rights and obligations which derive from International law and rights and obligations which rest upon treaty provisions* Of those which reat on treaty provisions, its rights and obligations in and with regard to China rest In part upon previsions in treaties between the United States and China, and In part upon provisions in treaties between the United States and several ether powers* including both China and Japan. These treaties were concluded in good faith for the purpose of safeguarding and promoting the interests not of one only but of all of their signatories. The people and the Government of the United States cannot assent to the abrogation of any of this country*s rights or obligations by the arbitrary action of agents or authorities of any other country* "The Government of the united States has* however, always been prepared* and is now* to give due and ample consideration to any proposals based on justice and reason which envisage the resolving of problems In a manner duly considerate of the rights and obligations of all parties directly concerned by processes of free negotiation end new commitment by and/ n -a- end among all of the parties So concerned. There has been snd there continues to be opportunity for the Japanese Government to put forward such proposals. This Government has been and It continues to be willing to discuss such proposals, If and when put forward, with representatives of the other powers* Including Japan snd China, whose rights and Interests ere involved, at whatever tins and in whatever place may be commonly agreed upon* "Meanwhile, this Government reserves all rights of the United states as they exist and does not give assent to any impairment of any of those rights." 3* Whether the United states Ooverament Is likely in the near future to proceed to any stronger measures In order to defend its interests depends chiefly upon how far public opinion would support a lead given by the Administration. As I had the honour to report In my telegram No. 69 of February 3rd the United States Government have decided that at present a policy of assistance to China by means of export credits snd silver purchases is preferable to one of taking any direct measure of retaliation against Japan. They have carefully weighed the arguments adduced in air R. 2 £* Oralgle's telegram go* 84 of January 27th to Tour Lordship but they evidently feel that public opinion is not ripe for a policy of direst pressure on Japan by embargo on her export trade , entailing as it must the less of a considerable American export trade as well as seme risk of ultimate hostilities. Whether under the force of circumstances the United states government may eventually advance from this attitude depends upon many incalculables. The conclusion of a definite/ i definite alliance between Japan, Germany and Italy would no doubt help to Influence public opinion In favour of a Stronger attitude towarda JupariV in view of the intense dislike which now exists of the aggressive pollclev of the totalitarian states. On the other hand the isolationists who hold that the Philippines should bo abandoned to their fate, that Guam should bo left unfortified and that the United States should remain safely behind the maritime defences of Hawaii and the Aleutian Islands, would hotly argue that America has no business to play at power politics. 4* I note that la Tour Lordship's opinion as expressed la your telegram No. 81 of January 18th to Tokyo, you consider that our aim must be aetive Angle- American cooperation wherever possible and that we must bo careful to do nothing that might jeopardise the movement in the United States for collaboration with like minded Governments In Europe, which has already gone beyond what appeared likely a few months ago. Bearing in Hind this paramount consideration I fool strongly that we ought to do all that is possible to demonstrate our sympathy with the present American policy of assisting China. Whether this is to bo done by a currency loan, by export credits or by other methods will not be a matter of much concern to the United States Government, provided that our assistance to China can be represented as substantial and not lagging behind the American contributions already made. Any feeling la Government circles, or say suggestion in the American press that we were not cooperating on parallel lines would expose us to considerable/ I considerable criticism, en the other hand any suspicion that eur two Ooverauente Wt acting eeeretlir In collusion against Japan night vel'i arouse even greater criticism while Congress is In Its present mood of Intense suspicion of the President* 8. Looking back over the last eighteen months one cannot help being Impressed by the greatly increased public interest In foreign affairs and consequent change In opinion throughout the country* several visit ore to this country have remarked on this to ate recently* The cause of this change* however# Ilea not in the Far Bast but in Europe* and the fact that the change has been comparatively rapid and largely a development of the last six months seems duo almost entirely to the increasing fear that Germany and Italy are not only threatening Prance and the British Empire but through them also the United tates. Although the change seems rapid it could I believe be arrested* though perhaps only temporarily* by any ill-advised step on our part* This country is atlll isolationist. It desires and intends to keep out of Europe and her troubles although the doubt is increasing whether she can keep out* The country is beginning to Interest Itself In these troubles only because it is beginning to realise that the dangers extend far beyond Europe and even beyond Asis to this hemisphere • Any suggestion that the democracies in Surope are ready to "sell out* to the dictators* aa is already being suggested as regards Spain* would go far to arrest the growth of sympathy for them. The increasing belief here recently that the democracies are preparing to stand up to the dictatorships and are ¦siting/ 7 gsgj making themselves strong enough to do ao, he a done something to restore tfie Inevitable 1ms of sympathy resulting from the Uunl'oh agreement. In recent weeks there ha a been Very little Interest noticeable In Par Eastern questions. Interest has been centred en 5uropev especially the affairs of Spain and the quarrel between France and Italy, this does not however mean that interest may not again swing back to the Par Sast at short notice* A suspicion that we Mrs considering some arrangement with Japan behind America*s back and inconaiatent with our obligations under the Nine-Power Treaty would* in my opinion, arouse auch s stem of erltlclam as to eoat ue the sympathy of this country at leaat for several months. 6. Sly conclusion, therefore, is that we should continue to keep in the sloeest touch with the United Statea Government on Far Aaatern Questions and be moat careful to avoid gains; behind their basks in any way. It is clear that the United States Government are averse from entering upon an adventurous course in their dealings with Japan, and this in itself should not close the door to our taking advantage of such opportunities as may offer of helping to restore friendly relations with that country, provided that we keep the State Department folly Informed of our intentions* On the other hand if a crisis were to arise in which a genuine threat to Singapore by the Japanese Navy were to develop, X believe that such a suggestion when it became public night sail forth a reaction in this country of sufficient strength to make it clear to the Japanese that the United States, could not stand idly by. She enclosed article by Mr* Walter/ I -7- Yfalter Lippmami published la his column on February 7 th seems to me to express the views of 5 great many people In this country, that la a real oris the United States Government would find iiseif foread to procsed beyond protests and remonstrances. "As long aa the Japanese think there la better than an even chance of the United states taking part in a world warfl they are not likely to risk it, and if the Japanese will not risk it, there is a very good chance that Some and Berlin will not risk it either*" ]tor this reason, among ethers, I venture to share Tour Lordship's doubts whether it would he worth paying a substantial price te dissuade Japan from entering into a formal alliance with Germany and Italy* Japan, it seems to me, may he expected to take full advantage of our embarrassments in Europe, alliance or no alliance, but a knowledge that there la close harmony between the United States and ourselves should be a stronger deterrent te adventure than any offer that we could at present afford to make to the Japanese Government. Z have the honour to be, with the highest respect. My Lord, Tour Lordship's most obedient, humble servant, (302>) V* A- L. UAUXT H.M. Charge d*Affaires.