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40 On balance Germany's economic difficulties seem likely on a long term view, to have been increased by her recent conquests, and she will be faced with a serious internal security problem in conquered territories. Moreover, Italy is likely in the long run to prove an economical liability to Germany.

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We consider that the defeat of Germany can still be achieved, but only after a combination of economic pressure, air attack on economic objectives in Germany and Italy, with consequent effect on their morale, and the creation of wide- spread revolt in the conquered territories. Our ability to defeat Germany therefore depends on the application of economic pressure to a degree which will fatally weaken her, and the creation of an air weapon with which we can effectively attack her. Although our strategy will be exercised mainly through the medium of naval and air power, powerful land forces will still be required for the defence of the United Kingdom and our Imperial possessions and interests. Land forces will also be required, to harass the enemy and exploit any successes so gained, Finally, land forces will be required for the ultimate occupation of enemy territory to enforce terms of peace.

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There are three ways in which Germany might break down the resistance of the United Kingdom unrestricted air attack aimed at breaking public morale and crippling our war machine, starvation of the country by attack on shipping and ports, and occupation by invasion. Hence our ability to avoid defeat depends on three factors the power of withstanding air bombardment, the importation of the absolute essential minimum of commodities necessary to sustain life and maintain our war industries, and our capacity to resist invasion,

ALLIED STRATEGY.

。

Our military policy for the conduct of the war is as

follows:-

(a) To ensure the security of the United Kingdom and of

our Imperial possessions and interests.

(b) To intensify economic pressure against Germany and

Italy, by naval action and control of commodities at source,

(e) To maintain our control of sea communications in

the Oceans, and to retain control in the Eastern Mediterranean as long as possible, In particular, this will entail maintaining our position in the Middle East and controlling the focal areas of the Northern Patrol, Eastern Atlantic and Singapore.

(a)

To maintain and intensify our air offensive.

(e) To build up our armed forces for the purposes

indicated in paragraph 5.

ASSISTANCE FROM THE UNITED STATES.

8.

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In the following paragraphs we set out on broad lines the forms which U.S.A, assistance might take in implementing the above policy. The detailed arrangements for co-operation within this framework will be worked out by the Departments concerned,

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