Dear Minister,
I went to see Gordon Walker in his Office at the House of Commons yesterday evening. I wanted to ask him whether there had been any developments about the coal position or the G.N.R. proposal and I made this the pretext of my visit. But I also used the occasion to discuss Attlee's visit and the position in Korea.

What he told me about Attlee's visit fully confirmed what is said in the official report I sent yesterday¹ with one exception. He told me that, in view of the despatches received within the previous twelve hours, the Military people had reached the conclusion that any possibility of establishing a safe defensive position in Korea had finally gone. Mr. Attlee had been informed to this effect. The British could not see how the American Military people could reach any other conclusion though they might conceivably argue that wholesale bombing of the Chinese communications, supply dumps, and bases north of the Yalu River might make a difference and that this should be tried before all hope of redressing the situation was abandoned.

This was only a forlorn hope, however. The fact was that the United Nations Forces on the ground were completely overwhelmed. The position might be retrieved if there were large scale reinforcements which could be got to the spot with reasonable expedition. The sad reality was, however, that there were no trained troops available, either here or in the United States for that purpose.

This position left them with only two alternatives - negotiation or evacuation. A negotiation on the basis of the present military situation was most unlikely to yield any agreement to which the British Government could easily put its name. Everything pointed, therefore, to the likelihood and the necessity for an early evacuation of the Korean Peninsula.

The consequences of this from the military point of view would be bad. Positively Korea had no value in the framework of Far Eastern strategy. It was too small to serve as a base for major operations on the Asian Continent. But negatively it would be bad because with Korea in the hands of the Communists, vital communications in the Far Eastern theatre would be endangered.

There would be no dissension among Commonwealth Governments about the evacuation of Korea. Contrary to what we might think, Australia and New Zealand had been opposed to the Korean adventure from the beginning. There had been full exchanges with the Commonwealth Governments after the Debate and Mr. Attlee had gone to Washington with helpful messages from all the Commonwealth Governments - even South Africa and Ceylon - in his pocket.

Apart from the military aspect, loss of Korea would have serious repercussions on the Anti-Communist struggle in Asia. The pressure on Hong Kong, Indo-China, and Malaya would certainly be increased. Nehru took a serious view of the Chinese infiltration in Tibet. There was no serious anxiety about Persia at the moment, however.

Next year was going to be grim. Nobody believed that Soviet Russia intended to launch a general war. What was worrying everybody was the apparent tendency of the Kremlin to rely on the civil war technique used in Korea, Malaya, Indo-China, Greece, and so on. The big fear was that Soviet Russia would inspire the use of this technique by Eastern Germany. These fears were increased by the growing demand of the East German Government for the restoration of German unity.

The realisation that this was the Kremlin's game was strengthening the position of people here and in the United States who favoured the idea of a preventive war against Russia. British public opinion was, of course, dead set against any such idea but, if the anticipation of the spread of Soviet inspired civil wars proved correct, the time might come when there would be something to be said for it.

Gordon Walker confirmed that economic matters would loom largely in the Prime Minister's conversations in Washington but he added this 'mise au point': more important to Britain than the establishment of a system of allocating scarce raw materials internationally, was that the United States should agree to suspend at once her stockpiling of certain raw materials - principally sulphur, zinc, and wool - of which British supplies were so short that certain important industrial concerns in this country were threatened with an early shut down.

I am sending a separate minute dealing with what Gordon Walker said on the subject of the coal position.² You will probably wish to see this minute. He gave me a very pessimistic forecast of British coal exports next year.

As regards the G.N.R., he said he had spoken to Chuter Ede³ and had been expecting to hear from him. He rang Chuter Ede's room while I was there but got no reply. He promised to get hold of him and then get in touch with me.