The British Embassy to the Department of State

Aide-Mémoire “A”

Japan’s mediation in the dispute between Thailand and Indo-China makes it necessary to take stock once more of the situation in South-East Asia.

The settlement is more unfavourable to Indo-China than would have been the case if it had been negotiated direct at an earlier stage. The Thais on the other hand, while not achieving their fullest ambitions, have with Japan’s help gained much, and it is clear that the Thai Government are highly satisfied with the results. Ostensibly Japan has not yet exacted any definite price for her mediation, and she is inclined to claim credit in this respect. Actually she has succeeded [Page 121] in bringing Thailand much more under her influence and has accordingly obtained a most favourable position for exacting her price as and when opportunity offers. The situation is therefore full of dangerous possibilities.
Japan’s general position as mediator and guarantor gives her ample opportunities for keeping naval forces in Indo-China and Thai waters and even military forces in South Indo-China (Japanese naval forces appear to be using Camranh Bay and Sattahib as bases without any specific agreement to that effect). In return for her guarantee Japan receives an undertaking from both sides that they will not “enter any agreement or undertaking envisaging direct or indirect political, economic or military cooperation against Japan”, while the communiqué issued when the settlement was announced referred to agreements to be subsequently made with respect to the maintenance of peace in greater East Asia and the promotion of specially close relations between Japan and Thailand and Japan and France. All this marks an important stage in the extension of Japanese influence and opens the way for gradual absorption both of Indo-China and of Thailand.
Strong pressure will doubtless be exerted now on the French to conclude the commercial negotiations which have been proceeding for three months and are designed to give Japan very extensive economic advantages in Indo-China, from which Germany will indirectly profit.
In Thailand the immediate danger is that Japan will first exact her economic price in tin and rubber, of which a proportion will go to Germany. There are political dangers also. Japan may instigate Thailand to make territorial claims against Great Britain. The French are dissatisfied with the Tokyo award and disorders might break out again. Either of these eventualities would provide a pretext for further Japanese intervention, offers of assistance and requests for military facilities in Thailand.
In Indo-China there is little chance of effective action at present. It is in Thailand that the main question of policy arises. Although brought to the brink, it seems that the Thais do not yet appreciate the full extent of the potential danger and certainly do not regard themselves as having gone over to Japan. There is thus some scope for action, and action is necessary both for economic and strategic reasons;
Economic: To prevent loss to ourselves and gain to the Axis of an important source of supply of rubber and tin; and
Strategic: To prevent the Japanese from working around our flank in Malaya. The presence of Japanese forces in the Gulf of Siam and in particular in the Kra Isthmus would substantially increase our difficulties in defending Singapore.
[Page 122]

Suggestions as to the form the action might take are contained in Aide-Mémoire “B”.55

  1. Infra.