Au.jist 2nd, 1941
% dear Welles,
Ae I told you at our conversation
t :is morning 1!is   'ajo8ty,e Government have
observed a large number of signs recently that
Japan may attempt to extend h>r present policy
to Thailand, and tuat this development is
Imminent,   The Japanese ranis tor for Foreign
Affairs and the Japanese Press are both be-
ginning to advance reasons for action in Thai-
land; for Instance the Minister for Foreign
Affairs, In conversation with Sir R« Craigie,
Justified Japan's action in Indo-China by
references to the increase in British strength
In   alaya, and a l*>:nei message from Bangkok
hns reported an extraordinary meeting of the
Thai Government to consider counter messages
against British and African encirclement and
the aggressive tendencies of Chungking. Further-
more it is clear that the no\t air bases in Indo-
China have been si tec3 with an eye to Thailand
and/
ne Honourable
Suranor Welles,
Acting Secretary of State of the United States,
Washington, D.C.
MRBBJM
V
7
and r.niaya.
The Thai Prime Minister told
Sir J« Crosby on July 29th that ho feared
Increasing pressure from Japan In order to
extract from '•Jjailand economic concessions
similar to those which she had obtained in
Indo-China.   Prom a secret source wo have
learnt that in the third week of July the
Ja anese Minister presented five demands
to the Tbai Government:
1. Thailand to sign no Treaty
with any third party which might possibly
harm the "East Asiatic prosperity sphere"#
2# Recognition of :!anchokuo.
3« Cessation of relations with
Rue la.
4« Military cooperation Including
an exchange of specialists and the for-
mation of a joint military advisory or-
ganisation*
5« Recognition of French Indo-Chira
as part of the "safety area of the pros-
perity spheren# to be as such protected
by Thais and Japanese troops. The
sea port of Annan and Cambodia to
be under Japanese protection*
In return Japan would ensure that
certain parts of French Indo-China should cone
under Thai "protection" (it appears that this
will be tho province of Laos, and Angkor but
not the rest of Cambodia), and would also
assist Thailand with supplies and technical
nelp.
The Thai Deputy Minister for
Foreign Affairs has denied that any such pro*
posals have aeon made, but they may have been
communicated direct to the Prime Minister who,
so I understand, has a habit of loo oping such
proposals from his colleagues on occasions*
His   ajesty's Government feel that
the information summarised above points to
the imminence of a Japanese attempt to bring
Thailand within her orbit in the same way as
Indo-China, and they feel that this makes it
necessary to cieouss with the QtaMed States
at once the possibility of issuing some warn-
ing to Japan.   The key to the situation is.
- 4 -
they jud&e, Japan11 fear of the United
States, and nothing is likely to deter the
Japanese or encourage the Thais so nuch as
a warning from that quarter.   His Majesty's
Government fully appreciate the difficulties
which may preclude United States Government
from inakin^ any specific threat or committing
themselves to unj particular form of action*
If however the United States were prepared
to issue a warning, either publi :ly or through
the diplomatic channel, going as far as possible
to indicate that any further Japanese penetra-
tion Into Thailand or elsewhere would lead to
counter action on the part of United States,
His Majesty^ Government in the United Kingdom
would be prepared to take parallel action; and
vAiile they cannot speak for the Dominion Go verm-
raents or the Netherlands Government they have no
doubt that tfte attitude of those Governments
would be the sane.
His Majesty's Government suggested
that the United States Government might wish to
consider action on the lines of the Presidents
proposal to the Japanese Ambassador in regard

to Indo-China, and you told me this morning
that the President was already taking action
on these lines.
(SOD) HALIFAX
P.S.   I enclose a copy of a telegram
from Bangkok which has been received
since the above was written.