Memorandum from Second Secretary to Under-Secretary of State for External Affairs, Ottawa, June 24, 1941

[Ottawa,] June 24, 1941

It would be wise for the Canadian Government to be giving consideration now to the problem which would face the allies if Germany succeeds in the next month or so in occupying the Ukraine and the Caucasus. Presumably Germany would then attempt to have a Vichy Government established in the rest of Russia. The formation of such a Government would enable Germany to control and organize the whole of Russia. It would remove any possibility of our forcing Germany to fight on two fronts.

The reason why a Vichy regime is likely in Russia if Russia loses the Ukraine and the Caucasus is that Russia, that is unoccupied Russia, would then be threatened with starvation having lost the grain of the Ukraine and the oil which is necessary for its mechanized agriculture . The Soviet Union would be almost bound to give in to Germany unless the allies could supply it with oil and wheat.

Our access to Russia would be via Vladivostok; this would be safe only if we had persuaded Japan to throw her lot in with the allies or if we had knocked Japan out.

Japan might be amenable to persuasion on the ground that a German-controlled Russia would be an immediate and direct threat to Japan. It would eventually mean a German-controlled China and German control of the Netherlands Indies. Japan would be at Germany’s mercy.

If Japan is not open to persuasion perhaps the only thing for the allies to do is to gamble on a quick knockout blow to Japan by the combined forces in the Far East of the United States, Great Britain, China and the USSR

The United States must take the lead in this. Today the chances of success of an allied offensive in the Far East are better than for years since four of the five great powers in the Far East are now united against Japan.

If we can keep Russia in the war and even if Russia loses the Ukraine and the Caucasus the war will be long but not hopeless. If we cannot keep Russia in the war the war becomes almost hopeless. Germany will be virtually self-sufficient and thus immune from the blockade. It can transfer much of its armaments’ industry beyond the reach of effective bombing attack.

It can settle down to resist a siege of which the most favorable outcome?barring a miracle?can be little more than the liberation of France and perhaps the Low Countries. If Russia can be kept in the war we can make Germany’s eastern front a constant drain on her men and resources. In a year or two we could launch an offensive against Germany from Russia using Russia’s vast armies equipped with the armaments of the United States.

E. R[eid]

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