His return, expected in mid-week, will coincide with a diplomatic crisis that may force a showdown in the relations of the United States with Japan and the Vichy government.
Officials anxiously awaited a decision of Marshal Henri Philippe Pétain and his council of ministers on reported German demands for military collaboration and bases at Dakar and Casablanca, West Africa.
British sources intimated there has been Anglo-American collaboration on methods of convincing Japan she must not undertake further aggression, particularly against Thailand.
The emergency meeting of the Australian cabinet in Melbourne today recalled that Australian Minister Richard G. Casey and British Ambassador Lord Halifax conferred last week with Secretary of State Cordell Hull. They were believed to have discussed parallel action in the Far East.
Federal Security Administrator Paul V. McNutt said in a radio debate last night that Japan should be warned that any further aggression would be met by the “united force” of the United States, Great Britain and the Netherlands East Indies.
Rep. Hamilton Fish (R-NY), ranking minority member of the House Foreign Affairs Committee, speaking on the same program, said Japanese expansion into French Indochina and her threat to Thailand:
War with Japan would be “the height of human folly,” he said.
740.0011 European War 1939/140078/5
Memorandum of Conversation, by the Under Secretary of State
At sea, August 11, 1941.
The President received Mr. Churchill this morning on the Augusta at 11:00 a.m. There were present at the meeting Sir Alexander Cadogan, Harry Hopkins and myself.
The conference commenced with the subject of Portugal. The President read to Mr. Churchill the letter addressed to the former by the Prime Minister of Portugal. It was agreed by both that the contents of the letter were highly satisfactory and made possible without any difficulty the carrying out of arrangements for the occupation of the Azores as a means of assurance that the islands would not be occupied by Germany.
Mr. Churchill stated that a highly secret operation had been decided upon by the British Government, namely, the occupation of the Canary Islands during the days immediately after the September full moon. This date, as Mr. Churchill remembered it, would be about the 15th of September. The British Government were undertaking this operation with full knowledge that the islands had been recently heavily fortified and that a very large number of German officers were engaged there in the training and preparation of the Spanish troops. It was undertaken with the further realization that this step would almost inevitably involve a Spanish attack either in conjunction with or upon the instigation of German military forces and that such attack would render untenable by the British Navy the harbor of Gibraltar. The British Government, however, had decided upon the step in view of its belief that the situation in Spain from the British standpoint was going from bad to worse and that Hitler almost inevitably would undertake the occupation of Spain and Portugal with the subsequent penetration of North Africa if any collapse took place on the part of the Russian Army or even if a winter stalemate resulted. In that event Mr. Churchill stated Gibraltar would be isolated anyway and the occupation of Great Britain of the Canary Islands was of the utmost importance in guarding a southern Atlantic convoy route into the British Isles.
In view of this operation, the British Government would not be in a position conveniently to carry out the commitment they had made to the Portuguese Government to assist in the defense of the Azores.
In view of the contents of Dr. Salazar’s letter to the President, it was therefore agreed that the British Government immediately upon the return of Mr. Churchill to London would notify Dr. Salazar that the British Government could not conveniently undertake to assist in the defense of the Azores and would further inform Dr. Salazar that they therefore desired him to request the United States for such assistance. It was agreed on the part of the President that immediately upon the receipt of such notification from Dr. Salazar the United States would send the necessary forces of occupation to the Azores and that the Brazilian Government would be simultaneously requested to send at least a token force to take part in the expedition.
The President stated to Mr. Churchill that in view of our present military situation if the United States undertook to occupy the Azores it would not be in a position in the near future at least to undertake the protection of the Cape Verde Islands. Mr. Churchill stated that the British Government would be in a position to occupy the Cape Verde Islands with the understanding that it would later turn over the protection of those islands to the United States at such time as the United States was in a position to take those measures. Mr. Churchill further stated that during the time that the United States was landing the necessary forces in the Azores, the British Navy would maintain a large force between the Azores and the mainland of Portugal in order to render impossible the sending of any German expeditionary forces should Portugal at that time be already occupied by Germany.
The Prime Minister then said that he desired to discuss the situation in the Far East. He had with him a copy of a draft memorandum, of which he had already given the President a copy and which suggested that the United States, British and Dutch Governments simultaneously warn Japan that further military expansion by Japan in the South Pacific would lead to the taking of countermeasures by the countries named even though such counter measures might result in hostilities between them and Japan, and, second, provided that the United States declare to Japan that should Great Britain go to the assistance of the Netherlands East Indies as a result of aggression against the latter on the part of Japan the President would request from the Congress of the United States authority to assist the British and Dutch Governments in their defense against Japanese aggression.
The President gave Mr. Churchill to read copies of the two statements handed to Secretary Hull by the Japanese Ambassador on August 6.
The Prime Minister read them carefully and then remarked that the implication was that Japan, having already occupied Indochina, said that she would move no further provided the United States would abandon their economic and financial sanctions and take no further military or naval defensive measures and further agree to concessions to Japan, including the opportunity for Japan to strangle the Chinese Government, all of which were particularly unacceptable.
The President replied that that was about the picture as he saw it, that he felt very strongly that every effort should be made to prevent the outbreak of war with Japan. He stated that what he intended to do was to request Secretary Hull by radio to inform the Japanese Ambassador that the President would return to Washington next Saturday or Sunday and desired to see the Ambassador immediately upon his return. The President stated that in that interview he would inform the Japanese Ambassador that provided the Japanese Government would give the commitment contained in the first paragraph of the proposal of the Japanese Government of August 6, namely, that the Japanese Government “will not further station its troops in the Southwestern Pacific areas, except French Indochina, and that the Japanese troops now stationed in French Indochina will be withdrawn”, specifically and not contingently, the United States Government, while making it clear that the other conditions set forth by the Japanese Government were in general unacceptable, the United States would, nevertheless, in a friendly spirit seek to explore the possibilities inherent in the various proposals made by Japan for the reaching of a friendly understanding between the two Governments. The President would further state that should Japan refuse to consider this procedure and undertake further steps in the nature of military expansions, the President desired the Japanese Government to know that in such event in his belief various steps would have to be taken by the United States notwithstanding the President’s realization that the taking of such further measures might result in war between the United States and Japan.
Mr. Churchill immediately declared that the procedure suggested appeared to him to cover the situation very well. He said it had in it an element of “face-saving” for the Japanese and yet at the same time would constitute a flat United States warning to Japan of the consequences involved in a continuation by Japan of her present course.
There was then discussed the desirability of informing Russia of the steps which would be taken as above set forth and of possibly including in the warning to Japan a statement which would cover any aggressive steps by Japan against the Soviet Union.
I stated that in my judgment the real issue which was involved was the continuation by Japan of its present policy of conquest by force in the entire Pacific region and regardless whether such policy was directed against China, against the Soviet Union or against the British Dominions or British colonies, or the colonies of the Netherlands in the Southern Pacific area. I said it seemed to me that the statement which the President intended to make to the Japanese Government might more advantageously be based on the question of broad policy rather than be premised solely upon Japanese moves in the Southwestern Pacific area.
The President and Mr. Churchill both agreed to this and it was decided that the step to be taken by the President would be taken in that sense.
The question then arose as to the desirability of the President’s making reference in his proposed statement to the Japanese Ambassador to British policy in the southern Pacific region and specifically with regard to Thailand. The President said that he thought it would be advantageous for him to be in a position at that time to state that he had been informed by the British Government that Great Britain had no aggressive intentions whatever upon Thailand. Mr. Churchill said that in this he heartily concurred.
I asked whether it would not be better for the President to be in a position to state not only that Great Britain had no intentions of an aggressive character with regard to Thailand, but also that the British Government had informed the United States Government that it supported wholeheartedly the President’s proposal for the neutralization of Indochina and of Thailand.
Mr. Churchill stated that he agreed that it would be well to make an all-inclusive statement of that character with respect to British policy, that he trusted that the President would, therefore, inform the Japanese Ambassador that he had consulted the British Government, and that the British Government was in complete accord with the neutralization proposal, and that it had likewise informed the President that it would in no event undertake any initiative in the occupation of Thailand.
It was agreed that Sir Alexander Cadogan, after further consultation with Mr. Churchill, would give me in writing a statement which the British Government was prepared to make with regard to this issue.
The President expressed the belief that by adopting this course any further move of aggression on the part of Japan which might result in war could be held off for at least thirty days. Mr. Churchill felt that if negotiations or conversations actually took place between the United States and Japan on the basis which had been formulated, there was a reasonable chance that Japanese policy might be modified and that a war in the Pacific might be averted.
Mr. Churchill then said that he desired to bring up for discussion the proposed joint declaration by the President and himself.
The President said that he believed the best solution of this problem was for an identic statement to be made in London and in the United States, probably on Thursday, August 14, to the effect that the Prime Minister and the President had met at sea, accompanied by the various members of their respective staffs; that these members of the two Governments had discussed the question of aid under the terms of the Lease-Lend Act to nations resisting aggression, and that these military and naval conversations had in no way involved any future commitments between the two Governments, except as authorized under the terms of the Lease-Lend Act; that the Prime Minister and the President had between them discussed certain principles relating to a better future for the world and had agreed upon a joint declaration which would then be quoted verbatim.
Mr. Churchill dissented very strongly from the form in which the President had desired to make it clear that no future commitments had been entered into. The President stated that that portion of the proposed statement was of extreme importance from his standpoint inasmuch as a statement of that character would make it impossible for extreme isolationist leaders in the United States to allege that every kind of secret agreement had been entered into during the course of these conversations.
Mr. Churchill said that he understood that side of the question, but that he believed that any categorical statement of that character would prove deeply discouraging to the populations of the occupied countries and would have a very serious effect upon their morale. He likewise made it clear that a similar effect would be created by British public opinion. He asked if the statement could not be worded in such a way as to make it positive rather than negative, namely, that the members of the staffs of the Prime Minister and of the President had solely discussed questions relative to the furnishing of aid to the countries resisting aggression under the terms of the Lease-Lend Act. The President replied that he believed that the statement could be drawn up in that way and that if he then were queried in the United States he need merely reply that nothing had been discussed or agreed upon other than that which had already been indicated in his public statement.
I then gave the President, Mr. Churchill and Sir Alexander Cadogan copies of a redraft which I had made this morning of the proposed joint declaration before Mr. Churchill had arrived and had had an opportunity of going over it with the President, and the latter had approved it. Mr. Churchill then commenced to read it. He suggested that there be inserted in the text of the third point before the word “self-government” the words “sovereign rights and.” This was agreed upon.
Mr. Churchill then read the fourth point which read as follows:
Fourth, they will endeavor to further the enjoyment by all peoples of access, without discrimination and on equal terms, to the markets and to the raw materials of the world which are needed for their economic prosperity.
He immediately inquired whether this was meant to apply to the terms of the Ottawa agreements. I replied that, of course, it did, since the policy which the United States Government had been pursuing for the better part of nine years had been addressed primarily towards the removal of all of those artificial restrictions and controls upon international trade which had created such tragic havoc to world economy during the past generation. I said I understood fully the immediate difficulties which this occasioned him, but I pointed out that the phraseology was “they will endeavor to further” and that this naturally did not imply a formal and immediate contractual obligation on the part of his Government. The President stated that he believed the point was of very great importance as a measure of assurance to the German and Italian peoples that the British and the United States Governments desired to offer them, after the war, fair and equal opportunity of an economic character.
The Prime Minister said that, of course, he was without any power himself to agree upon this point. He set forth in considerable detail the position of the United Kingdom vis-à-vis the Dominions and emphasized his inability, without the agreement of the Dominions, to enter into the proposed declaration insofar as this point was concerned. He said that insofar as he himself was concerned the issue was one with which his own personal life history was connected. He referred to the days at the outset of the century when Joseph Chamberlain first brought up the proposal for Empire preferences and the predominant part which this issue had played in the political history of Great Britain during the past forty years. He said that he felt the proposal as now phrased would have the enthusiastic support of all the liberals everywhere. He said that he himself was heartily in accord with the proposal and that he himself had always been, as was well known, emphatically opposed to the Ottawa agreements. He said, however, that it would be at least a week before he could hope to obtain by telegraph the opinion of the Dominions with regard to this question.
Harry Hopkins then suggested that Sir Alexander Cadogan and I be requested to draft new phraseology which would take care of these difficulties and prevent the delay of which Mr. Churchill spoke. He said it was inconceivable that the issuance of the joint declaration should be held up by a matter of this kind.
I said that in my own judgment further modification of that article would destroy completely any value in that portion of the proposed declaration. I said that it was not a question of phraseology, that it was a question of a vital principle which was involved. I said that if the British and the United States Governments could not agree to do everything within their power to further, after the termination of the present war, a restoration of free and liberal trade policies, they might as well throw in the sponge and realize that one of the greatest factors in creating the present tragic situation in the world was going to be permitted to continue unchecked in the post-war world. I said that the trade policies of the British Empire during the latter portion of the 19th century had, I felt, contributed enormously to the same and prosperous condition of the world at that time, and that, of course, I realized that the tariff policies pursued by the United States and many other countries during that period had played an important part in the creation of the evils which had sprung up after the last war. I said, however, that it seemed to be imperative that we try to agree now upon the policy of constructive sanity in world economics as a fundamental factor in the creation of a new and better world and that except through an agreement upon such a policy by our two governments there would be no hindrance whatever to a continuation later to the present German practices of utilizing their trade and financial policies in order to achieve political ends.
Mr. Churchill agreed very emphatically to this policy. He and Sir Alexander Cadogan both agreed that it was not a question of phraseology, but that they were up against a material obstacle which Mr. Churchill had already indicated. The Dominions would have to be consulted. It might well be that an agreement could not be had from the Dominions and that consequently the proposed joint declaration could only be issued some time after news of the meeting between the President and the Prime Minister had been given out. Mr. Churchill suggested that the inclusion before the phrase “they will endeavor to further” of the phrase which would read “with due regard for our present obligations” might ease the situation.
The President suggested, and Mr. Churchill agreed, that the latter would try and draft some phraseology which would make that situation easier, and it was arranged that I would call later in the afternoon upon the Prime Minister and Sir Alexander Cadogan to go over with them such redraft as they might have in mind.
Mr. Churchill was in entire accord with points five and six.
He then read point seven and after discussion at the meeting of this point it was agreed that the phrase “to use force” be replaced by the word “aggression” in the second sentence of the seventh point.
Mr. Churchill said that, of course, he was heartily and enthusiastically in favor of this point seven, which had been initiated by the President. He inquired, however, whether the President would not agree to support some kind of “effective international organization” as suggested by the Prime Minister in his original draft of the proposed joint declaration.
The President replied that he did not feel that he could agree to this because of the suspicions and opposition that such a statement on his part would create in the United States. He said that he himself would not be in favor of the creation of a new Assembly of the League of Nations, at least until after a period of time had transpired and during which an international police force composed of the United States and Great Britain had had an opportunity of functioning. Mr. Churchill said that he did not feel that he would be candid if he did not express to the President his feeling that point seven would create a great deal of opposition from the extreme internationalists. The President replied that he realized that, but that he felt that the time had come to be realistic and that in his judgment the main factor in the seventh point was complete realism. Mr. Churchill then remarked that of course he was wholeheartedly in favor of it and shared the President’s view.
The meeting then broke up and I arranged with the President that I would drop by to see him after my conference later in the afternoon with the Prime Minister. The latter stated that he would not be able to leave until at least 5:00 p.m., tomorrow, August 12, and that as he felt it of importance to reach a complete meeting of minds with the President upon all of the issues involved, that he would be willing to spend an additional 24 hours should that be necessary.