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These 2 telegrams w05k and U055)
really raise 2 questions:- **¦
(a) It has become increasingly
urgent to discuss with the U.S. authorities
the economic measures which "both they and
we propose to put into force in the event
of Japan making a move into southern Indo-
china and for us to ascertain from the
S.D. just exactly what their proposals
amount to.    Mr. Hall has already had one
conversation on this subject with Dr.
Hornbeck this morning - though I gather it
was mainly inconclusive - and is to have
another one with him tomorrow.   Perhaps at
this second interview something may transpire
which will enable us to send a fairly
definite reply to the questions the P.O.
ask about these economic pressure Questions.
In the meantime, I think Mr. Hall is
drafting a telegram describing his talk
with Dr. Hombeck this morning.
(b) Whether, apart from these economic
pressure measures which are to be taken if
and when Japan actually moves into Indo-
china, any steps can be taken in the meantime
to deter Japan from making such a move. It
is suggested that,while London for their
part should try to discourage the Japanese
by starting certain rumours in the Press,
the United States Government might instruct
their Ambassador in Vichy to make
enquiries on the subject of the French
Government with the idea that if the French
Government reply that the Japanese are in
fact making these demands, publicity should
be given to this information - if possible
in the form of some statement by the U.S.G.
indicating their disapproval of the Japanese
intentions.    The President in his talk v/ith
the Ambassador this morning suggested that
the possibility of inducing the Vichy
Government to stall should be explored, and
also suggested that this question should be
taken up by this iinbassy v/ith f;*r. Welles.
The President's suggestion fits in pretty
v/ell with the one which has now been made
by the P.O., and perhaps therefore Mr. 3utler
could try to see Mr. Welles on the subject
as soon as possible.    This question is
really a separate one from the economic
pressure one and I do not imagine that it
would complicate matters if Mr. Butler could
see Mr. Welles on this point while Mr. Hall
was talking to Dr. Hombeck on the other.
July 15th, 19U1.
FRHM:IIK