(c) crown copyright
Catalogue Reference:CAB/65/5/23
Image Reference:0001
THIS DOCUMENT IS T H E PROPERTY OF H I S BRITANNIC MAJESTY'S GOVERNMENT
Printed
for the War Cabinet.
January
1940.
SECRET.
Copy N o .
W . M . (40)
2 3 r d Conclusions.
TO
B E
K E P T
U N D E R
LOCK
A N DK E Y .
It is requested that special care may be taken to
ensure t h e secrecy of this document.
WAR
CABINET
23 (40).
CONCLUSIONS
of a Meeting of the War Cabinet held at 1 0 Downing
S.W. 1 , on Thursday, January 2 5 , 1 9 4 0 , at 1 1 - 3 0 A.M.
Street,
Present:
T h e R i g h t H o n . N E V I L L E C H A M B E R L A I N , M . P . , P r i m e M i n i s t e r (in the Chair).
The R i g h t Hon. Sir JOHN SIMON, K . C . , The Right H o n . VISCOUNT HALIFAX,
S e c r e t a r y of S t a t e for F o r e i g n
M . P . , Chancellor of t h e E x c h e q u e r .
Affairs.
T h e R i g h t H o n . S i r S A M U E L H O A R E , A d m i r a l of t h e Fleet t h e R i g h t H o n .
L O R D C H A T F I E L D , M i n i s t e r for Co­
Bt., M . P . , L o r d P r i v y Seal.
o r d i n a t i o n of Defence.
Hon. WINSTON
S. T h e R i g h t H o n . O L I V E R S T A N L E Y ,
The
Right
M . P . , S e c r e t a r y of S t a t e for W a r .
C H U R C H I L L , M . P . , F i r s t L o r d of t h e
Admiralty.
Right
Hon. LORD
HANKEY,
The Right Hon. Sir KINGSLEY WOOD, The
Minister without Portfolio.
M . P . , S e c r e t a r y of S t a t e for A i r .
T h e following were also p r e s e n t :
The R i g h t H o n . S i r J O H N ANDERSON, The R i g h t Hon. ANTHONY EDEN, M . P . ,
S e c r e t a r y of S t a t e for D o m i n i o n
M . P . , S e c r e t a r y of S t a t e f o r t h e
Affairs.
H o m e D e p a r t m e n t a n d M i n i s t e r of
H o m e Security.
T h e R i g h t H o n . M A L C O L M M A C D O N A L D , T h e R i g h t H o n . W . S. M O R R I S O N , K . C . ,
M . P . , M i n i s t e r of Food (Items
1
M . P . , S e c r e t a r y of S t a t e for t h e
and 2 ) .
Colonies (Item 3 ) .
T h e R i g h t H o n . S i r A N D R E W DUNCAN, T h e R i g h t H o n . W A L T E R ELLIOT, M . P . ,
P r e s i d e n t of t h e B o a r d of T r a d e
M i n i s t e r of H e a l t h (Items 1 and 2 ) .
(Items 1 and 2 ) .
Sir HORACE J. WILSON,
Permanent
Sir
THOMAS
PHILLIPS,
Secretary,
Secretary to the Treasury.
M i n i s t r y of L a b o u r (Iterns'1 and 2 ) .
L i e u t e n a n t - G e n e r a l H . R . S. M A S S Y ,
D e p u t y Chief of t h e I m p e r i a l General
Staff (Item 3 ) .
Secretariat.
Sir EDWARD BRIDGES.
Captain A . D. NICHOLL, R . N .
Mr. F. HEMMING.
Mr. W . D. WILKINSON.
M r . A. BEVIR.
[20722]
WAR
CABINET
23
(40).
CONTENTS.
Minute
No.
Subject.
Page
1
Wages and Prices
...
...
...
...
...
...
The possibility of stabilising t h e prices of staple commodities.
169
2
Norwegian Route
Analysis of cargoes.
173
3
Colonial E m p i r e
Utilisation of man-power resources.
4
The Far East
Relations with J a p a n : t h e case of the S.S. Asama
...
...
...
...
...
...
...
174
...
...
175
Maru.
5
Assistance to F i n l a n d ...
Supply of aircraft.
Assistance from Italy.
...
...
177
6
The Air Situation
177
7
The Naval Situation
177
8
The Military Situation
Western Front.
Finland.
177
Wages and
Prices.
The possibility
of stabilising
the prices of
staple
commodities.
(Previous
Reference:
W.M. (40) 21st
Conclusions,
Minute 2.)
1. T h e W a r Cabinet h a d before t h e m a R e p o r t by t h e
M i n i s t e r i a l C o m m i t t e e on Economic P o l i c y d e a l i n g w i t h the possi­
b i l i t y of s t a b i l i s i n g t h e prices of s t a p l e commodities as p a r t of t h e
G o v e r n m e n t s policy in r e l a t i o n to w a g e s a n d prices ( W . P . ( G )
(40)18).
'
The Chancellor of the Exchequer s a i d t h a t t h e question for
decision w a s w h e t h e r the G o v e r n m e n t should employ public funds,
a n d , if so, to w h a t extent, in o r d e r to keep down t h e r e t a i l prices
of t h e most essential commodities e n t e r i n g i n t o t h e cost of living.
I n r e a c h i n g a decision r e g a r d m u s t be p a i d t o the following :—
(i) T h e e x p e n d i t u r e of public f u n d s on k e e p i n g d o w n the cost
of l i v i n g w a s bound to effect o u r financial position in
view of t h e large sums involved. T h i s m i g h t be very
serious, since it w o u l d be difficult to cover by t a x a t i o n
a n d b o r r o w i n g even' the e x i s t i n g d e m a n d s on the b u d g e t
i n t h e n e x t financial year. A n y g a p w h i c h could not be
covered would i n t r o d u c e a n element of inflation,
(ii) T h e possibility of k e e p i n g down t h e cost of living w a s
i n t i m a t e l y connected w i t h the d e m a n d s m a d e by labour
for w a g e s advances. A t t h e p r e s e n t t i m e labour, when
asked to assist in p r e v e n t i n g w a g e s increases, w e r e
i n c l i n e d t o reply by s a y i n g t h a t t h e G o v e r n m e n t should
themselves t a k e s t e p s t o keep d o w n prices.
The Government had already incurred substantial expenditure
( a m o u n t i n g a p p r o x i m a t e l y to £1,000,000 a week) on k e e p i n g down
t h e cost of c e r t a i n essential foodstuffs. H i t h e r t o t h i s h a d not been
m a d e public, b u t i t could not, and indeed should not, be concealed
m u c h longer.
T h a t figure w a s , however, in no sense a m e a s u r e of the t o t a l
cost to t h e E x c h e q u e r of c o n t i n u i n g a policy of t h i s c h a r a c t e r
( p a r a g r a p h 5 of the C o m m i t t e e ' s R e p o r t ) .
I t w o u l d be very
d a n g e r o u s for t h e G o v e r n m e n t to m a k e a p u b l i c d e c l a r a t i o n of t h e i r
i n t e n t i o n of m a i n t a i n i n g t h e cost of l i v i n g a t its p r e s e n t figure for
a n indefinite p e r i o d . I n so f a r as the M i n i s t r y of Food h a d m a d e
definite c o n t r a c t s for p u r c h a s e s for a s u b s t a n t i a l p e r i o d ahead, i t
w a s possible t o form some j u d g m e n t of f u t u r e t r e n d s . A r r a n g e ­
m e n t s of t h i s k i n d h a d been m a d e i n r e g a r d to a n u m b e r of essential
foodstuffs, b u t n o t i n t h e case of cereals, w h i c h c o n s t i t u t e d the m a i n
risk. Since l a s t September t h e rise i n t h e wholesale p r i c e s of cereals
h a d been double t h a t of other commodities. H e (the Chancellor of
t h e E x c h e q u e r ) h a d been pressed by M r . C r e r a r to m a k e a definite
b a r g a i n for C a n a d i a n wheat, b u t h a d refused to do so on the t e r m s
then suggested ( $ 1 a bushel for t w o years).
The Minister
of Food said t h a t i n t h e n e g o t i a t i o n s w i t h
M r . C r e r a r w e h a d offered 85 cents, a n d he in t h e end h a d come down
as f a r as 93 cents, a s c o m p a r e d w i t h h i s o r i g i n a l d e m a n d of 115 t o
120 cents.
N o t w i t h s t a n d i n g the f a i l u r e of these negotiations,
s u b s t a n t i a l p u r c h a s e s h a d recently been m a d e on t h e m a r k e t a t
86 cents.
The Chancellor of the Exchequer d r e w a t t e n t i o n to p a r a g r a p h 9
of t h e R e p o r t , w h i c h set o u t the p r i n c i p a l elements i n the cost-of­
l i v i n g index. T h e basis of t h a t i n d e x r e q u i r e d revision, b u t i t w a s
sacrosanct in t h e eyes of L a b o u r a n d could not be modified in t i m e
of w a r . T h e C o m m i t t e e h a d , however, a r r a n g e d for the establish­
m e n t of a p a r a l l e l i n d e x g i v i n g t h e w a r cost of living, which would
p a y r e g a r d t o c h a n g e s both i n q u a n t i t y a n d q u a l i t y r e s u l t i n g from
the w a r . R e n t , i n c l u d i n g r a t e s , w a s a l r e a d y controlled (16 per
cent.), and, if food (60 p e r cent.) w e r e k e p t s u b s t a n t i a l l y a t i t s
p r e s e n t p r i c e level, we should have gone a long w a y t o w a r d s keeping
the cost-of-living i n d e x steady. T h i s w o u l d be still f u r t h e r assured
if c l o t h i n g (12 p e r cent.) could also be prevented from r i s i n g i n cost.
T h i s l a t t e r question, which r a i s e d the problem of s t a n d a r d clothing,
B 2
[20722] w a s a t p r e s e n t being e x a m i n e d by the I n t e r d e p a r t m e n t a l C o m m i t t e e
on E c o n o m i c Policy. I t w o u l d be seen, therefore, t h a t , o t h e r t h i n g s
b e i n g equal, it would be possible for t h e G o v e r n m e n t , a t t h e cost of
the E x c h e q u e r , to secure for a t i m e a f a i r l y close a p p r o a c h to
s t a b i l i s a t i o n of the cost of l i v i n g as reflected in t h e cost-of-living
index.
I t h a d been p o i n t e d o u t i n the discussions in the C o m m i t t e e
t h a t w e w e r e g e t t i n g n o a d v a n t a g e , in the f o r m of a definite b a r g a i n
w i t h L a b o u r , from the s u b s t a n t i a l e x p e n d i t u r e now b e i n g i n c u r r e d
on subsidies, t h o u g h no d o u b t i n d i r e c t a d v a n t a g e s w e r e secured as
a r e s u l t of t h e s i t u a t i o n c r e a t e d by a steady cost of l i v i n g . H e w a s
a d v i s e d — a n d h e fully c o n c u r r e d — t h a t i t w a s n o t possible to e n t e r
i n t o a n y definite bargain, w i t h L a b o u r t h a t w a g e s s h o u l d not g o u p
if t h e cost of l i v i n g w e r e k e p t steady. T r a d e U n i o n leaders w e r e
n o t in a p o s i t i o n t o bind t h e i r members on a q u e s t i o n of t h i s k i n d ;
moreover, t h e r e w e r e o t h e r reasons, a p a r t from t h e cost of living,
w h y i n w a r t i m e some w a g e s m i g h t rise, e.g., o w i n g to scarcity of
skilled labour i n (for example) the m u n i t i o n s i n d u s t r i e s . T h e fact
t h a t n o b a r g a i n w i t h labour w a s p r a c t i c a b l e w a s , however, no reason
w h y t h e G o v e r n m e n t should n o t t r y to s t a b i l i s e the cost of living.
T h e R e p o r t of t h e C o m m i t t e e p o i n t e d o u t ( p a r a g r a p h 14) t h a t t h e r e
w e r e t h r e e courses open t o t h e G o v e r n m e n t : ­
(i) T h e G o v e r n m e n t m i g h t a b a n d o n t h e p r e s e n t policy a n d
a r r a n g e for food p r i c e s t o be r a i s e d by s t a g e s u n t i l t h e
whole or t h e m a i n p a r t of t h e E x c h e q u e r loss w a s
cancelled. T h e C o m m i t t e e w e r e definitely opposed to
a d o p t i n g such a course, a n d he (the Chancellor of t h e
E x c h e q u e r ) w a s w i l l i n g to c o n t i n u e t h e subsidies
a t t h e i r p r e s e n t r a t e for a f u r t h e r period.
There
was, he felt, a g r e a t a d v a n t a g e t o t h e Govern­
m e n t in so doing, since, in view of t h e very l a r g e
p a r t p l a y e d by w a g e s in d e t e r m i n i n g t h e cost of t h e
immense c o n t r a c t s of all k i n d s w h i c h t h e G o v e r n m e n t
w a s p l a c i n g i n t h i s country, e.g., if w a g e s w e r e allowed
t o rise too far, t h e cost of those c o n t r a c t s w o u l d be more
t h a n p r o p o r t i o n a t e l y increased,
(ii) T h e G o v e r n m e n t m i g h t for a t i m e a t least c o n t i n u e t h e i r
p r e s e n t policy a n d even e x t e n d it, e.g., i n t o the field
of clothing, b u t w i t h o u t a t t e m p t i n g to secure a n y u n d e r ­
s t a n d i n g from o r g a n i s e d L a b o u r i n r e t u r n . T h i s w a s
t h e course w h i c h h e a n d t h e o t h e r m e m b e r s of t h e
C o m m i t t e e w e r e disposed to favour,
(iii) F i n a l l y , t h e G o v e r n m e n t m i g h t c o n t i n u e a n d e x t e n d t h e i r
policy in r e t u r n for a g e n e r a l u n d e r s t a n d i n g w i t h
o r g a n i s e d L a b o u r t h a t they, as a movement, while n o t
s t a n d i n g in t h e w a y of a p p l i c a t i o n s for w a g e increases
of a reasonable c h a r a c t e r from i n d u s t r i e s w h i c h h a d not
yet received a d v a n c e s d u r i n g the recent w a g e cycle, would
d i s c o u n t e n a n c e or discourage a n y f u r t h e r p r e s s u r e for
w a g e increases beyond t h a t p o i n t .
This alternative
offered c e r t a i n a t t r a c t i o n s but, as he h a d a l r e a d y
e x p l a i n e d , h e d i d n o t believe t h a t a n y such u n d e r s t a n d i n g
w i t h L a b o u r could be reached. I f a p r o p o s a l on these
lines were p u t to L a b o u r a n d r e j e c t e d b y them, the
effect would be f a r worse t h a n if the G o v e r n m e n t were
to have m a d e no a t t e m p t to secure such a n agreement.
I t should be r e m e m b e r e d also t h a t , even if such a n
a g r e e m e n t w e r e reached for a fixed period, the cost of
b u y i n g s u p p l i e s from a b r o a d m i g h t , i n t h e m e a n w h i l e ,
rise so seriously t h a t t h e a r r a n g e m e n t could n o t be
continued. I n t h a t event, the j u m p i n t h e cost of l i v i n g
m i g h t be so" considerable, even if t h e full shock w e r e
removed by t h e c o n t i n u a n c e of subsidies a t v a r y i n g levels
for a f u r t h e r period, as t o f u r n i s h by itself a most p o t e n t
cause for i n c r e a s e d w a g e d e m a n d s .
T h e g e n e r a l conclusion r e a c h e d by t h e C o m m i t t e e w a s t h a t a policy
of s u b s i d i s i n g t h e cost of l i v i n g should be c o n t i n u e d , a n d , if
necessary, e x t e n d e d to c l o t h i n g ; a n d t h a t t h e fact t h a t these subsidies
w e r e b e i n g p a i d should be a n n o u n c e d . I t should be m a d e p l a i n ,
however, t h a t t h e G o v e r n m e n t could not u n d e r t a k e to s u p p o r t a n y
p a r t i c u l a r level of prices for necessities indefinitely, w i t h o u t r e g a r d
to c h a n g e s in costs a b r o a d or w a g e s a t home. A t t h e same t i m e t h e
G o v e r n m e n t , w h i l e a v o i d i n g a n y s u g g e s t i o n of a f o r m a l l i n k i n g
between w a g e s a n d prices, should m a k e i t clear t h a t t h e y expected
t h a t , t o t h e e x t e n t t h a t t h e policy of p r i c e s t a b i l i s a t i o n in r e g a r d
to t h e necessities of life w a s c o n t i n u e d , claims for increased w a g e s
on a c c o u n t of t h e cost of l i v i n g w o u l d n o t be justified.
The First Lord' of the A dmiralty said t h a t , if a policy of price
s t a b i l i s a t i o n , s u c h a s t h a t suggested, were practicable, t h e Govern­
m e n t would t h e r e b y d e p r i v e d e m a n d s for w a g e increases of t h e i r
m o r a l s u p p o r t , a t least in so f a r a s they w e r e based u p o n the cost
of living. T h e G o v e r n m e n t would, t h e r e f o r e , be able to t a k e a much
s t r o n g e r line t o p r e v e n t w a g e increases. T h e G o v e r n m e n t could
t h e n say t h a t t h e y h a d decided themselves to bear the b r u n t of the
i n c r e a s e i n t h e cost of t h e necessities of life a n d could w i t h confidence
resist, as u n p a t r i o t i c , d e m a n d s for increases in wages.
The
G o v e r n m e n t should face t h e likelihood t h a t a t some stage t h e r e
w o u l d be s t r i k e s even in t h e m u n i t i o n s i n d u s t r i e s . These could
be f a r more r e a d i l y overcome if t h e cost of living w e r e k e p t s t e a d y .
P r o m t h i s p o i n t of view i t w a s desirable to i n c l u d e i n the scheme
as w i d e a r a n g e a s possible of t h e commodities e n t e r i n g t h e cost
of l i v i n g i n d e x . T h e scheme w a s in h i s view sound.
The President
of the Board of Trade t h o u g h t t h a t the Govern­
m e n t would be well advised n o t to move too quickly in t h e d i r e c t i o n
of i m p o s i n g a complete control o n the u p w a r d movement of the
cost of living. I t w a s a l w a y s easier for the T r a d e U n i o n leaders
t o g u i d e t h e i r m e m b e r s t h a n t o control t h e m ; a n d , if i t were m a d e
impossible t o j u s t i f y a n y d e m a n d for w a g e s increases based on
t h e cost of l i v i n g , d e m a n d s would be p u t f o r w a r d on o t h e r g r o u n d s
w h i c h t h e T r a d e U n i o n leaders would find i t much more difficult
to oppose. A small g r a d u a l i n c r e a s e i n t h e cost of l i v i n g w o u l d
c r e a t e a sense of c o n t e n t m e n t in t h e m i n d s of the w o r k e r s a n d would
do n o h a r m . I t w a s s u r p r i s i n g indeed how relatively small were
t h e increases i n w a g e s since t h e w a r ; these h a d been mostly settled
w i t h reference t o t h e cost of l i v i n g a n d h a d given s a t i s f a c t i o n to
t h e w o r k e r s concerned. I t w a s , i n h i s opinion, easy to over-estimate
b o t h the e x t e n t to w h i c h e a r n i n g s h a d been increased by o v e r t i m e
a n d the e x t e n t to w h i c h t h e e a r n i n g s of working-class households
h a d , a s such, been increased. W h i l e he w a s i n favour of s t a b i l i s i n g
t h e cost of foodstuffs, he w a s more doubtful r e g a r d i n g the a p p l i c a ­
t i o n of t h a t policy t o c l o t h i n g a n d fuel. A s r e g a r d s the l a t t e r , i t
w o u l d i n a n y case be w i s e r t o w a i t u n t i l more definite i n f o r m a t i o n
w a s available a s to t h e cost involved.
One g r e a t a d v a n t a g e of s t a b i l i s i n g the cost of l i v i n g w a s t h a t
i t w o u l d give relief, n o t only to w a g e e a r n e r s , b u t also to all those
d e p e n d e n t on fixed incomes who, if t h e cost of l i v i n g were t o rise,
w o u l d be u n a b l e t o o b t a i n relief t h r o u g h w a g e increases. S p e a k i n g
personally, h e w o u l d not himself be u n d u l y a l a r m e d a t a p r o s p e c t of
l i n k i n g w a g e s t o t h e cost of l i v i n g for a l i m i t e d period, a n d of
r e s t o r i n g t h e I n d u s t r i a l C o u r t a s the o r g a n for m e a s u r i n g t h e w a g e
a d v a n c e s to be given.
The Prime Minister s a i d t h a t he would be opposed t o a d i r e c t
l i n k i n g of t h i s k i n d , a l t h o u g h , of course, the cost of l i v i n g d i d affect
w a g e s . I f t h e G o v e r n m e n t were to subsidise t h e cost of living, they
should m a k e t h e fullest possible use in public of t h e i r decision.
Sir Thomas Phillips said t h a t t h e M i n i s t e r of L a b o u r w a s in
f a v o u r of w h a t m i g h t be called a n elastic s t a b i l i s a t i o n of t h e cost
of living. O n t h e question of t h e best method t o be a d o p t e d t o
secure for t h e G o v e r n m e n t the full a d v a n t a g e for t h i s policy, i t w a s
i m p o r t a n t t o recall t h a t the local T r a d e U n i o n E x e c u t i v e s w e r e
being pressed by t h e i r m e m b e r s h i p to secure increases in wages, a n d
t h a t , if they took t h e opposite view, t h e result would be t h a t
a u t h o r i t y would p a s s from t h e m to t h e u n c o n s t i t u t i o n a l elements in
t h e labour movement. I t w a s for t h i s reason t h a t t h e c o n s t i t u t i o n a l
l e a d e r s should not be pressed too f a r . I t would n o t be possible to
o b t a i n from t h e T r a d e s U n i o n Congress a pledge on the subject of
wages, a n d it would n o t in h i s view be desirable to seek such a
pledge a t t h e p r e s e n t time, even if i t w e r e possible to o b t a i n one.
I f t h e cost of living w a s e l i m i n a t e d as a g r o u n d for d e m a n d i n g
w a g e increases, d e m a n d s would be p u t f o r w a r d on o t h e r a n d m o r e
d a n g e r o u s g r o u n d s . H e favoured, therefore, a n a r r a n g e m e n t by
which, on t h e one h a n d , the cost of l i v i n g would be k e p t
s u b s t a n t i a l l y stable, a n d , on the o t h e r h a n d , would be allowed t o
rise from t i m e to t i m e to a l i m i t e d extent, thereby p r o v i d i n g t h e
local T r a d e U n i o n E x e c u t i v e s w i t h a n o p p o r t u n i t y for s e c u r i n g
small a d v a n t a g e s for t h e i r members. T h e q u e s t i o n of t h e t e x t of
t h e s t a t e m e n t to be m a d e a n d t h e method of m a k i n g i t w o u l d
r e q u i r e careful consideration.
The Minister of Health said t h a t h e w a s i n favour of a n elastic
a d j u s t m e n t r a t h e r t h a n a r i g i d one. A s r e g a r d s t h e a p p r o a c h t o
L a b o u r , t h e experience of the Old A g e P e n s i o n s Scheme s u g g e s t e d
t h a t i t w a s m u c h b e t t e r for t h e G o v e r n m e n t to t a k e L a b o u r i n t o
t h e i r confidence r a t h e r t h a n to seek to c o m m i t t h e m to t h e m e r i t s
of a n y p a r t i c u l a r policy.
The Minister
of Food s a i d t h a t , on t h e g e n e r a l q u e s t i o n of
policy to be a d o p t e d , h e w a s i n a g r e e m e n t w i t h t h e views expressed
by t h e P r e s i d e n t of t h e B o a r d of T r a d e a n d by S i r T h o m a s P h i l l i p s
on behalf of t h e M i n i s t e r of L a b o u r .
The Chancellor
of the Exchequer
s a i d t h a t , as r e g a r d s the
a p p r o a c h t o L a b o u r , i t h a d been suggested t h a t he m i g h t g o t o
t h e m e e t i n g of t h e N a t i o n a l J o i n t A d v i s o r y Council t o be h e l d on t h e
31st J a n u a r y . O n t h e following d a y (the 1st F e b r u a r y ) a g e n e r a l
D e b a t e on economic o r g a n i s a t i o n w o u l d t a k e place in t h e H o u s e of
Commons, a n d t h i s would p r o v i d e a n a d m i r a b l e o p p o r t u n i t y for a
g e n e r a l s t a t e m e n t of policy t o be m a d e o n behalf of t h e G o v e r n m e n t .
The Prime Minister a g r e e d t h a t a s t a t e m e n t should be m a d e in
t h e H o u s e of Commons on t h e 1st F e b r u a r y .
As regards the
question w h e t h e r , a n d , if so, how, a s t a t e m e n t should be c o m m u n i ­
cated previously t o t h e L a b o u r Movement, h e suggested t h a t t h e
final a r r a n g e m e n t s should be left to t h e Chancellor of t h e E x c h e q u e r
a n d t h e M i n i s t e r of L a b o u r .
The W a r
Cabinet­
(1). G a v e g e n e r a l a p p r o v a l to t h e r e c o m m e n d a t i o n s of t h e
M i n i s t e r i a l C o m m i t t e e on Economic Policy in r e g a r d t o
s t a b i l i s i n g t h e price of c e r t a i n s t a p l e foodstuffs w h i c h
e n t e r i n t o t h e cost-of-living i n d e x ( W . P . (G.) (40) 18),
and in particular agreed—
(a) t h a t t h e policy to be a i m e d a t should be t h e g e n e r a l
stabilisation, for a p e r i o d of six m o n t h s , a t
a p p r o x i m a t e l y t h e p r e s e n t figures, of t h e cost of
c e r t a i n staple foodstuffs, b u t t h a t t h i s stabilisa­
tioh need not be r i g i d :
(6) t h a t consideration should be given t o the q u e s t i o n of
p r e v e n t i n g rises i n fuel costs; a n d of t h e i n s t i t u ­
t i o n of s t a n d a r d clothing, w i t h a view to
p r e v e n t i n g rises i n t h i s item in t h e cost-of-living
i n d e x figure.
(2) A g r e e d t h a t i t w a s desirable t h a t the G o v e r n m e n t ' s policy
i n t h i s m a t t e r should be m a d e widely k n o w n , a n d t h a t
t h e S t a t e m e n t i n w h i c h i t w a s a n n o u n c e d should be so
d r a f t e d a s t o secure the w i d e s t m e a s u r e of s u p p o r t for
t h e p r i n c i p l e s involved.
(3) A g r e e d t h a t t h i s S t a t e m e n t of P o l i c y should be a n n o u n c e d
i n t h e D e b a t e on Economic O r g a n i s a t i o n t o be h e l d i n
t h e H o u s e of Commons o n the 1st F e b r u a r y , 1940.
(4) A u t h o r i s e d t h e Chancellor of the E x c h e q u e r , in c o n j u n c t i o n
w i t h t h e M i n i s t e r of L a b o u r , to decide w h e t h e r , a n d , if
so, i n w h a t form, a n y p r e v i o u s c o m m u n i c a t i o n on t h i s
subject should be m a d e on behalf of t h e G o v e r n m e n t to
t h e L a b o u r Movement.
(5) Took n o t e t h a t a r r a n g e m e n t s h a d been m a d e by t h e M i n i s t e r
of L a b o u r , i n conjunction w i t h t h e T r e a s u r y a n d the
M i n i s t r y of Food, a n d o t h e r D e p a r t m e n t s concerned, t o ,
p r e p a r e a scheme for the i n t r o d u c t i o n of a w a r cost-of­
l i v i n g index, w h i c h w o u l d be m a i n t a i n e d i n a d d i t i o n to
the e x i s t i n g cost-of-living i n d e x figure.
Norwegian
Route.
Analysis of
cargoes.
(Previous
Reference:
W.M. (40) 22nd
Conclusions,
Minute 2.)
2. The First Lord of the Admiralty
s a i d t h a t as a r r a n g e d
a t t h e m e e t i n g of t h e W a r Cabinet, noted in t h e m a r g i n , h e h a d
m a d e a n a n a l y s i s of t h e cargoes c a r r i e d by s h i p s in B r i t i s h convoy
on t h e N o r w e g i a n r o u t e since t h e 23rd December, 1939. O u t of a
t o t a l of 107 cargoes the p r i n c i p a l items were as follows :—
P u l p (31) a n d P a p e r (5*-)
General cargo
Ballast
O r e ...
Timber
Ships.
361
29
24
6
5*
These figures w e r e very s t r i k i n g a n d s u g g e s t e d t h a t t h e q u e s t i o n
deserved f u r t h e r e x a m i n a t i o n , in o r d e r t o e n s u r e t h a t the cargoes
b r o u g h t by s h i p s from S c a n d i n a v i a c o n t r i b u t e d ' fully to o u r w a r
effort. I n p a r t i c u l a r , a r e d u c t i o n should, if possible, be m a d e i n t h e
n u m b e r of s h i p s a r r i v i n g in ballast. T h e g r e a t bulk of the s h i p s i n
q u e s t i o n w e r e u n d e r n e u t r a l flags.
I n discussion, reference w a s m a d e t o t h e difficulty of compelling
n e u t r a l s h i p s , c o m i n g to t h i s c o u n t r y for cargo, themselves to c a r r y
c a r g o i n s t e a d of a r r i v i n g in b a l l a s t ; t o the p o s s i b i l i t y t h a t i n t h e
p e r i o d u n d e r review t h e i m p o r t s of p u l p a n d paper- m i g h t h a v e been
e x c e p t i o n a l l y h i g h o w i n g to seasonal or o t h e r c a u s e s ; a n d to o t h e r
f a c t o r s b e a r i n g on t h e n a t u r e of the cargoes c a r r i e d on t h e
Norwegian route.
The W a r Cabinet agreed—
(a) T o i n v i t e t h e P r e s i d e n t of the B o a r d of T r a d e , in conjunc­
t i o n w i t h the M i n i s t e r of S u p p l y , t h e M i n i s t e r of
S h i p p i n g a n d o t h e r M i n i s t e r s concerned, to p r e p a r e a
report—
( i ) s e t t i n g o u t the n a t u r e of t h e cargoes n o r m a l l y
c a r r i e d by n e u t r a l a n d B r i t i s h s h i p s t r a d i n g t o
t h i s c o u n t r y from N o r w e g i a n p o r t s ;
(ii) m a k i n g r e c o m m e n d a t i o n s
for
improving
the
situation.
(Previous
Reference:
W.M. (89) 122nd
Conclusions,
Minute 2.)
(&) T h a t t h e P r e s i d e n t of t h e B o a r d of T r a d e should consult
w i t h t h e L o r d P r i v y Seal w i t h a view t o the inclusion
of t h e r e p o r t r e f e r r e d to in (a) i n t h e g e n e r a l r e p o r t o n
s h i p p i n g w h i c h t h e l a t t e r h a d been asked to u n d e r t a k e
a t t h e M e e t i n g of the W a r C a b i n e t n o t e d i n t h e m a r g i n .
Colonial
Empire.
Utilisation of
Man-Power
Resources.
(Previous
Reference:
W.M. (39) 53rd
Conclusions,
Minute 3.)
3. T h e W a r , C a b i n e t h a d before t h e m a M e m o r a n d u m by the
S e c r e t a r y of S t a t e for t h e Colonies ( W . P . (G.) (40) 15) on the
U t i l i s a t i o n of t h e M a n - P o w e r Resources of t h e Colonial E m p i r e .
The Secretary of State for the Colonies e x p l a i n e d t h a t t h e first
call for Colonial m a n power should be for local defence (or use
in t h e M i d d l e E a s t ) a n d for the m a i n t e n a n c e of t h e i r civil services
a n d t h e i r essential i n d u s t r i e s . T h e n e x t call should be for pioneer
u n i t s , a n d i t w a s t h e i n t e n t i o n to employ these u n i t s , o t h e r t h a n
A f r i c a n , in F r a n c e . H e h a d consulted the Governors of t h e W e s t
I n d i a n Colonies, as h e h a d been in some doubt w h e t h e r t h e p r o p o s a l
w a s desirable for climatic reasons. T h e view expressed by the
Governors, on t h e advice of the local medical a u t h o r i t i e s , h a d been
t h a t , p r o v i d e d t h a t t h e r e w e r e a sufficient complement of doctors
a n d a d e q u a t e medical services, t h e r e would be no objection to the
p r o p o s a l . T h e chief trouble w a s likely to be l u n g disease. I t w a s ,
however, recommended t h a t these u n i t s should n o t be sent to F r a n c e
u n t i l the S p r i n g w a s well advanced.
The Prime Minister said h e w a s doubtful of t h e a d v a n t a g e s
of t h e p r o p o s a l to r e c r u i t these pioneer u n i t s .
The Secretary of State for War said t h a t he also w a s d o u b t f u l as
to t h e u t i l i t y of t h e proposals a t the p r e s e n t time. A t a l a t e r stage
in t h e w a r they m i g h t be t r i e d out. On the o t h e r h a n d , t h e r e
would be a d v a n t a g e s in t r y i n g to get labour from C h i n a , a n d he
w o u l d like the a u t h o r i t y of t h e W a r C a b i n e t to send to H o n g K o n g
two officers who h a d been e n g a g e d in r e c r u i t i n g Chinese labour
. in t h e l a s t w a r , w i t h the object of t r y i n g to secure s u p p l i e s of
-Chinese labour f r o m N o r t h e r n C h i n a for use i n F r a n c e .
The First Lord of the Admiraltyexpressed
t h e view t h a t t h i s
p r o p o s a l w a s politically d a n g e r o u s a t a t i m e w h e n over a million
people w e r e unemployed in t h i s c o u n t r y . A d m i t t e d l y i t h a d been
done in 1918, b u t - b y t h a t t i m e we h a d t h e n lost a million men
in t h e w a r .
The Secretary of State for War said t h a t , in o r d e r to o b t a i n
the labour r e q u i r e d from t h i s country, it would be necessary to
use:-compulsory p o w e r s .
-The Secretary
of State for Foreign
the r e c r u i t m e n t of Chinese labour w o u l d
j u n c t u r e . "He t h o u g h t the F r e n c h m i g h t
p o s i t i o n - i n N o r t h e r n C h i n a would m a k e
Affairs d o u b t e d w h e t h e r
be found possible a t t h i s
object, a n d t h e J a p a n e s e
i t extremely difficult.
-The Prime Minister p o i n t e d o u t t h a t c a p i t a l m i g h t be m a d e
o u t : o f t h i s m e a s u r e in enemy p r o p a g a n d a .
I n "discussion, it w a s e x p l a i n e d t h a t i t w a s i n t e n d e d t h a t the
two officers r e f e r r e d to should m a k e confidential e n q u i r i e s a s to
t h e position, s o t h a t p l a n s m i g h t be r e a d y for a c t i o n if i t w a s
eventually f o u n d - t h a t the necessary labour could n o t be o b t a i n e d
from resources i n this country. I t w a s p o i n t e d o u t t h a t it w a s
h a r d l y possible to m a k e e n q u i r i e s of t h i s n a t u r e w i t h o u t i n c u r r i n g
publicity, as p u b l i c i t y w a s the essence of a r e c r u i t i n g c a m p a i g n .
P u b l i c i t y m i g h t have "the most u n d e s i r a b l e r e a c t i o n s a n d provoke
foreign p r o p a g a n d a .
The First Lord of the Admiralty
e n q u i r e d w h e t h e r i t would
be possible to proceed more r a p i d l y w i t h t h e extension of t h e M a l a y
R e g i m e n t , wdiich w a s r e f e r r e d to in p a r a g r a p h 17 of t h e Memo­
r a n d u m ( W . P . (G.) (40) 15), fand w h e t h e r i t w a s possible to use
thenv to h e l p g a r r i s o n i n g S i n g a p o r e , w h e r e they m i g h t relieve
E u r o p e a n s a n d would m a k e a balance w i t h t h e I n d i a n element in
the garrison.
The Secretary of State for the "Colonies a g r e e d t h a t t h i s source
m i g h t be t a p p e d w i t h success a t a l a t e r stage. T h e reasons a g a i n s t
p r e s s i n g m a t t e r s a t t h i s p o i n t were, first, t h a t it h a d been decided
on t h e g r o u n d s of s e c u r i t y t h a t i t w o u l d be necessary t o k e e p
E u r o p e a n t r o o p s i n a n y case in S i n g a p o r e , a n d secondly, t h a t
f u r t h e r M a l a y forces, if r a i s e d , could be e q u i p p e d only a t t h e
expense of E u r o p e a n troops.
The Secretary of State for Air i n f o r m e d t h e W a r C a b i n e t t h a t
all Colonial G o v e r n m e n t s a b r o a d h a d been advised t h a t t h e R o y a l
A i r F o r c e w e r e w i l l i n g t o accept fully qualified t r a d e s m e n .
The
A i r M i n i s t r y did n o t c o n t e m p l a t e a n y c a m p a i g n for large-scale
r e c r u i t m e n t of Colonials of m i x e d or coloured blood, a n d h e felt t h a t
these would be b e t t e r employed in local pioneer u n i t s . T h e R o y a l
A i r Force, however, r e q u i r e d a n u m b e r of C y p r i o t s or P a l e s t i n i a n s
for R o y a l A i r F o r c e a n c i l l a r y services in t h e M i d d l e E a s t , a n d
a u t h o r i s a t i o n h a d a l r e a d y been given for e n l i s t m e n t i n local services.
H e felt i t i n a d v i s a b l e to d i s p e r s e resources for flying t r a i n i n g
t h r o u g h o u t t h e Colonial E m p i r e , a n d t h a t i t w a s w i s e r to c o n c e n t r a t e
on schemes for t r a i n i n g in t h e D o m i n i o n s , M i d d l e E a s t , S o u t h e r n
R h o d e s i a a n d I n d i a . I t w o u l d be p r e m a t u r e t o e n c o u r a g e a p p l i c a ­
tions from p r o s p e c t i v e c a n d i d a t e s for flying d u t i e s u n t i l t h e Oversea
T r a i n i n g Schemes w e r e i n a more a d v a n c e d stage, w h e n t h e Colonial
Office w o u l d be i n f o r m e d of t h e necessary a c t i o n t o be t a k e n .
T h e p r o p o s a l t o r a i s e a b a t t a l i o n i n C y p r u s w a s t h e n discussed.
T h e W a r C a b i n e t w e r e i n f o r m e d t h a t t h e a r r a n g e m e n t s h a d been
a g r e e d between t h e W a r Office a n d the Colonial Office.
I n r e p l y t o a question, the Secretary of State for the Colonies
s a i d t h a t h e t h o u g h t t h a t t h e desire t o serve w a s for t h e p r e s e n t
b e i n g m e t by t h e p r o p o s a l s a t p r e s e n t i n view, a n d h e d i d n o t
a n t i c i p a t e a n y difficulty if no f u r t h e r steps w e r e a u t h o r i s e d beyond
those a l r e a d y t a k e n t o afford o p p o r t u n i t y of service to personnel in
t h e Colonies.
H e also d r e w a t t e n t i o n t o t h e f a c t t h a t p a r a g r a p h 45 of h i s
M e m o r a n d u m should h a v e included a reference to the a d d i t i o n of
a second rifle b a t t a l i o n t o t h e N o r t h e r n R h o d e s i a R e g i m e n t , a n d
should, a l l o w i n g for t h i s , h a v e described t h e n u m b e r of A f r i c a n s
s e r v i n g w i t h the local forces i n E a s t A f r i c a a s a whole a s h a v i n g
increased from a p p r o x i m a t e l y 5,500 to 15,000.
The W a r Cabinet agreed—
(i) T o a p p r o v e
generally
the proposals
set o u t
in
W . P . (G.) (40) 15, for t h e u t i l i s a t i o n of t h e m a n - p o w e r
resources of t h e Colonial E m p i r e , i n p a r t i c u l a r t h a t t h e
first call on t h e m a n - p o w e r should be for local defence
a n d for t h e m a i n t e n a n c e of civil services a n d essential
industries.
(ii) T h a t it w a s u n d e s i r a b l e a t t h e p r e s e n t t i m e to proceed
w i t h t h e p r o p o s a l s s u m m a r i s e d i n p a r a g r a p h 58 (b) for
t h e r e c r u i t m e n t of pioneer u n i t s .
(iii) T h a t it w a s u n d e s i r a b l e to proceed a t t h e p r e s e n t j u n c t u r e
w i t h t h e p r o p o s a l for s e n d i n g t w o officers t o H o n g K o n g
to i n v e s t i g a t e t h e possibilities of r e c r u i t m e n t of labour,
in p a r t i c u l a r i n N o r t h e r n C h i n a , for use i n F r a n c e .
The Far East.
Relations with
Japan: the case
of the S.S.
Asama Maru.
(Previous
Reference:
W.M. (40) 22nd
Conclusions,
4. The Secretary of State for Foreign Affairs r e f e r r e d t o t h e
discussion on t h i s m a t t e r a t t h e previous M e e t i n g of t h e W a r
Cabinet, a n d said t h a t h e proposed to send t w o t e l e g r a m s t o H i s
M a j e s t y ' s A m b a s s a d o r a t Tokyo. T h e first would consist of a n
e x p o s i t i o n of o u r case i n i n t e r n a t i o n a l law. T h e second w o u l d
i n s t r u c t S i r R o b e r t C r a i g i e to p u t before the J a p a n e s e F o r e i g n
M i n i s t e r (a) c e r t a i n p r o p o s a l s for d e a l i n g i n t h e f u t u r e w i t h t h e
t r a n s p o r t of G e r m a n personnel in J a p a n e s e ships, t o g e t h e r w i t h
(&) c e r t a i n suggestions w i t h a view to r e a c h i n g a settlement of t h e
Minute 9.)
[20722]
c
present incident.
T h e s e suggestions, placed in o r d e r of t h e i r
a c c e p t a b i l i t y t o ourselves, w e r e a s follows :—
(i) I t m i g h t p r o v e o n i n v e s t i g a t i o n t h a t some of t h e G e r m a n s
t a k e n f r o m t h e Asama Maru d i d not fall w i t h i n t h e
c a t e g o r y of those specially useful for t h e G e r m a n w a r
effort, a n d could p e r h a p s be h a n d e d over to t h e J a p a n e s e
G o v e r n m e n t , t h e r e s t c o n t i n u i n g t o be d e t a i n e d ,
(ii) A l t e r n a t i v e l y , w e m i g h t be willing, as a g e s t u r e , t o h a n d
over t h e whole p a r t y t o t h e J a p a n e s e Government, if t h e
l a t t e r w o u l d u n d e r t a k e t o i n t e r n t h e m for t h e d u r a t i o n
of the w a r .
(iii) Or, a g a i n , w e m i g h t be w i l l i n g t o h a n d t h e m over on
c o n d i t i o n t h a t they should give a n u n d e r t a k i n g , e i t h e r
t o the J a p a n e s e G o v e r n m e n t o r to ourselves, n o t t o
e n g a g e i n a n y w a r l i k e service a g a i n s t t h e A l l i e s d u r i n g
the war.
S i r R o b e r t C r a i g i e w o u l d not, of course, offer these s u g g e s t i o n s
i n succession, o r allow M. A r i t a a n i m m e d i a t e choice between t h e m .
I n discussion i t w a s a g r e e d t h a t t h e t h i r d solution should n o t be
p u t f o r w a r d , for t h e p r e s e n t a t a n y r a t e .
A s r e g a r d s t h e m a i n issue, the view w a s expressed t h a t it
w o u l d be a g r e a t a d v a n t a g e if w e could r i d ourselves p e r m a n e n t l y
of t h e a n n o y a n c e of h a v i n g t o search J a p a n e s e vessels for G e r m a n s
of m i l i t a r y a g e s e e k i n g t o r e t u r n to G e r m a n y . T h e r e a l q u e s t i o n
w a s w h e t h e r i t w a s possible to a r r i v e a t a n agreed s e t t l e m e n t for
t h e f u t u r e w i t h o u t loss of p r e s t i g e to the J a p a n e s e G o v e r n m e n t .
W e also, however, h a d p r e s t i g e to m a i n t a i n .
T h e first step,
therefore, w a s to get t h e J a p a n e s e G o v e r n m e n t t o a c c e p t t h e
p r o p o s i t i o n t h a t t h e p a s s a g e of G e r m a n s of m i l i t a r y v a l u e i n t h e i r
s h i p s across the Pacific m u s t be s t o p p e d . I t m i g h t be useful, in t h i s
connection, to p o i n t o u t t h a t , j u s t as t h e U n i t e d S t a t e s m a i l s h a d
become the vehicle of a n o r g a n i s e d traffic i n c o n t r a b a n d , so t h e r e
w a s a d a n g e r t h a t J a p a n e s e s h i p p i n g m i g h t become t h e vehicle for
a n o r g a n i s e d traffic i n G e r m a n personnel.
T h e n e x t s t a g e w o u l d be t o r e a c h a g r e e m e n t a s to h o w t h i s
traffic w a s t o be s t o p p e d ; a n d t h e final s t e p would be to a p p l y t h e
a g r e e m e n t so r e a c h e d to t h e Asama Maru incident. P r o v i d e d t h e
J a p a n e s e G o v e r n m e n t d i s p l a y e d a desire to o b t a i n a solution of t h e
g e n e r a l issue, H i s M a j e s t y ' s G o v e r n m e n t could afford to g o a long­
w a y to meet t h e J a p a n e s e G o v e r n m e n t as r e g a r d s t h i s p a r t i c u l a r
incident. B u t a s e t t l e m e n t of t h e g e n e r a l issue w a s a n i n d i s p e n s a b l e
condition to a compromise i n t h i s p a r t i c u l a r case.
I t w a s p o i n t e d o u t t h a t t h e J a p a n e s e m i g h t well a d o p t t h e
a t t i t u d e t h a t a s e t t l e m e n t for t h e f u t u r e should t a k e the f o r m of a
" g e n t l e m a n ' s a g r e e m e n t , " w h i c h w o u l d n o t be m a d e public. T h i s
course would n o t m e e t o u r p o i n t of view. F u r t h e r , a n y a g r e e m e n t
on t h i s m a t t e r w a s b o u n d to o b t a i n publicity.
I n f u r t h e r discussion, the First Lord of the Admiralty
said
t h a t t h e N a v y h a d " failed to find " t h e f u r t h e r J a p a n e s e s h i p s
now en route, r e g a r d i n g which t h e J a p a n e s e A m b a s s a d o r i n L o n d o n
h a d spoken t o t h e F o r e i g n S e c r e t a r y ( F o r e i g n Office t e l e g r a m t o
Tokyo, No. 49, d a t e d the 2 5 t h J a n u a r y ) .
The Foreign Secretary s a i d t h a t he h a d received no message of
i m p o r t a n c e from S i r R o b e r t C r a i g i e since t h e l a t t e r ' s t e l e g r a m of
the p r e v i o u s day, i n w h i c h he h a d expressed the o p i n i o n t h a t J a p a n
h a d not a single leader w h o w o u l d d a r e t o face such a s t o r m as t h e
present, a n d t o tell the people t h e t r u t h (Tokyo t e l e g r a m N o . 120).
The W a r Cabinet—
I n v i t e d t h e S e c r e t a r y of S t a t e for F o r e i g n Affairs to
redraft
the p r o p o s e d
despatch
to H i s
Majesty's
A m b a s s a d o r a t Tokyo, in c o n s u l t a t i o n w i t h t h e F i r s t L o r d
of t h e A d m i r a l t y , i n t h e l i g h t of t h e discussion w h i c h h a d
taken place.
Assistance to
Finland.
Supply of
aircraft.
(Previous
5. I n reply to a question, the Secretary of State for Air s a i d
t h a t he p r o p o s e d to see t h e F i n n i s h M i n i s t e r t h a t afternoon
r e g a r d i n g t h e decision which, h a d been a p p r o v e d by t h e W a r Cabinet
on the p r e v i o u s day to release 20 S k u a a n d 13 Roc a i r c r a f t for
Finland.
Reference:
W.M. (40) 2 2 n d
Conclusions,
Minute 5.)
Assistance from
Italy. (Previous Reference: W.M. (40) 14th
Conclusions,.
Minute 9.)
The Secretary of State for Foreign Affairs d r e w a t t e n t i o n to
Rome t e l e g r a m No. 75 of the 2 4 t h J a n u a r y . T h i s t e l e g r a m c o n t a i n e d
c e r t a i n i n f o r m a t i o n received from a secret source, w h i c h i n d i c a t e d
that the Italian intentions towards Finland in this matter were
satisfactory.
The Air
Situation.
(Previous
Reference:
6 . The Secretary
of State for Air s a i d t h a t there h a d been
little a i r a c t i v i t y in t h e previous 24 h o u r s . O n e enemy a i r c r a f t h a d
m a d e a t i p - a n d - r u n r a i d t o the S h e t l a n d s , i n t h e course of w h i c h
four bombs h a d been d r o p p e d on w a s t e l a n d a n d unsuccessful
a t t a c k s h a d been m a d e on a m o t o r vessel a n d a t r a w l e r in t h e
neighbourhood of t h e S h e t l a n d s .
W.M. (40) 2 2 n d
Conclusions,
Minute 1.)
The Naval
Situation.
(Previous
Reference:
W.M. (40) 2 2 n d
Conclusions,
Minute 2 . )
The Military
Situation.
Western Front
and Finland.
(Previous
Reference:
W.M. (40) 2 2 n d
Conclusions,
Minute 3.)
T h e W a r C a b i n e t : ­
(i) Took note of the above s t a t e m e n t s .
(ii) I n v i t e d the F o r e i g n S e c r e t a r y to i n f o r m S i r P e r c y L o r a i n e
of the latest m e a s u r e of B r i t i s h a s s i s t a n c e to F i n l a n d .
r
pj
i e
W a r C a b i n e t took n o t e of t h i s s t a t e m e n t .
7. The First Lord of the Admiralty
said that a report had
been received t h a t a n u n k n o w n vessel h a d been s u n k off t h e T a g u s .
D e s t r o y e r s h a d o b t a i n e d a very good c o n t a c t n o t f a r from w h e r e
H . M . S . Exmouth h a d been sunk, a n d very hopeful a t t a c k s h a d been
c a r r i e d out.
T h e W a r C a b i n e t took note of t h i s s t a t e m e n t .
8. The Secretary of State for War s a i d t h a t t h e r e w a s n o t h i n g
to r e p o r t from the W e s t e r n F r o n t .
I n F i n l a n d , t h e F i n n s h a d c a p t u r e d 300 p r i s o n e r s n e a r K e i t a l e ,
but t h e r e w a s no c h a n g e in t h e g e n e r a l s i t u a t i o n .
The Finns
a p p e a r e d to be h o l d i n g t h e i r own a g a i n s t t h e R u s s i a n a t t a c k s .
T h e W a r C a b i n e t took note of t h e above s t a t e m e n t .
S.W.1,
Richmond Terrace,
January 25, 1940.