JULY 17, 1941
Memorandum for the Chief of Staff:
Subject: Japanese Movement Into French Indo-China. 

1. As was made known to the Chief of Staff July 16,1941, the Japanese Government on July 12, 1941, delivered what amounts to an ultimatum to the Vichy Government, the terms of which, among other items, provided for the occupation by Japanese armed forces of eight air bases and two naval bases in Southern Indo-China (see attached map).

2. It is the considered opinion of this Division that this Japanese movement as planned, while opportunistic in conception, was also strategically defensive in character and designed primarily to prevent British and American influence from shutting off supplies of rubber, tin and rice from Thailand and Indo China which are badly needed by Japan.

3. The French were given until July 20th in which to comply with Japan's demands. Military preparations were initiated by the Japanese, but no military pressure had been put on Indo-China up to midnight July 15-16.

4. On July 16th the Japanese Cabinet resigned en masse. It is too early to attempt a detailed explanation of this act. For the present, it must be taken as further proof of the fact, known for some time, that there was an element of violent discord in the inner government circles of Japan.

5. Until the personnel of the new Cabinet is announced it would be futile to attempt a prediction as to Japan's possible change of policies. One fact seems evident, however, and that is that Vichy will be given a breathing spell and the expedition to Indo-China may be deferred or even abandoned.

 
  SHERMAN MILES
 Brigadier General U. S. Army
 Acting Assistant Chief of Staff, G-2.
 
Enclosure 1.
cc: A. C. of S., WPD 
 

(EXHIBITS OF THE JOINT COMMITTEE, PHA, PT. 14, EXHIBIT NO. 33 MILITARY INTELLIGENCE ESTIMATES PREPARED BY G-2, WAR DEPARTMENT)