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ANNEX.

Foreign Office views on the Effect of the Allies taking action which involves them in war with the Soviet Union.

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Memorandum by the Foreign Office.

The Chiefs of Staff have asked for views of the Secretary of State on the repercussions in various neutral countries, such as the Scandinavian countries, Italy, Turkey, Japan and the United States of America, of the Allies taking action which would involve the... in war with the Soviet Union; and these views will be found in the memorandum in N 1204*

That paper, however, does not deal with another aspect of the same question, hich is perhaps of almost equal importance, viz. the effect of such a development on the relations between the Soviet Union and Germany.

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2. If we may judge from the "inspired" statements of German officials etc., the German Government would welcome a state of war between the Allies and the Soviet Union in the hope that it would lead to a closer soviet-German alliance, which would give them, as the procominent partner, greater control of Soviet policy and Sovict resources. regards Soviet policy, the question whether or not this would be so is hardly relevant to the present discussion, since the basic assumption on which that discussion has proceeded is that the Allies will only take the measures now contemplated because it is already clear, from evidence that Germany is giving or is about to give active help to the Russian attack on Finland, that Soviet and German policy has been definitely co-ordinated. resources, however, it is conceivable that the Soviet Government, finding themselves at war with two first-class Powers as well as with Finland, would feel obliged to allow their resources to be organised by their efficient ally, for their own immediate benefit as well ..s for hers, and that this would ultimately result in a consider.ble accession of economic strength to Germany.

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As regards

On the other hand, past experience suggests that the Soviet Government would be very reluctant to llow the servants of a foreign Power, whose ultim..teams they must always distrust, to obtain the more or less complete control of essential branches of the Soviet economy which alone could, in all probability, bring about real change in present conditions, and that they would resist this development until their state became really desperate, when it might be too late from the German point of view. Even if they did allow it, moreover, the chances are that it would take the German technicians a long time to produce effective results in face of the local obstruction and incompetence which they would encounter; and consider- able political friction would be likely to be generated in the process. The prospects of Germen-soviet military and, still more, naval and aerial collaboration might be brighter; but that is a matter for the Service Departments to estimate.

Also Paper No. 0.0.S.(40) 224.

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