From Chapter 16. Sunday May 26,1940
Nonetheless, the animosity that Chamberlain felt toward Churchill, as well as the negativity that Churchill felt about Chamberlain’s past actions, had dissipated well before May 26, 1940. Indeed, the two had a “new relationship.” The process by which the two men would wind up being respectful and incredibly loyal to each other started upon Chamberlain’s appointing Mr. Churchill First Lord of the Admiralty and a member of the War Cabinet on September 2, 1939. Although Chamberlain’s motive in appointing Churchill was practical, not conciliatory —Chamberlain needed to augment his War Cabinet with Britain’s fiercest advocate for rearmament and wanted to keep his “enemy” close at hand — the appointment put Churchill back in the Government for the first time in 10 years. To someone like Churchill, being readmitted to the circle of power was something for which he could not help but be extremely appreciative.

Ever the gadfly, as a member of the Chamberlain administration, Churchill could occasionally still be annoying. Churchill and the P.M. did not agree on everything. However, during Churchill’s time in the Chamberlain administration, a bond was building between the two men. In fact, Chamberlain’s records in 1939-40 abound with admiration for Churchill. Their word had been given to each other, that they would stand or fall together in the storm. As Chamberlain had written Churchill “your attitude to me is as loyal as mine is to you and I can’t say more.” He also said that “Winston has behaved with the most unimpeachable loyalty.”

…Churchill had been a loyal member of Chamberlain’s Cabinet and he was genuinely magnanimous upon becoming Prime Minister. Churchill had made Chamberlain Lord President of the Council *and he depended on him. Lukacs writes that Chamberlain was not only unaccustomed to the magnanimity that Churchill had shown him but appreciated and responded to it. As a result of what truly were acts of friendship and respect, Churchill did not have to deal with any opposition from Chamberlain during the greatest crisis Britain had faced in centuries. “What [Churchill and Chamberlain] had come to agree on was that Hitler could not be trusted; indeed, that he must be rejected;…that was enough.”

From Chapter 15. Saturday  May 25, 1940
Believing that this was the time to negotiate peace with Hitler, Halifax could no longer stay silent. Ever more sure of his position, he told the War Cabinet in no uncertain terms that “we had to face the fact that it was not so much now a question of imposing a complete defeat upon Germany but of safeguarding the independence of our own Empire and if possible that of France.” McCarten writes that “continu[ing] with Churchill’s crusade of ‘victory at all costs” now seemed ludicrous.” Indeed, “[t]o millions, resistance seemed futile, even suicidal.”

In this regard, Halifax informed the War Cabinet about his meeting the previous evening with Italian Ambassador Bastianini. The Ambassador “had clearly made soundings as to the prospect of our agreeing to a conference.” Bastianini also said that “Mussolini’s principle wish was to secure peace in Europe.” Halifax had replied that this was Britain’s objective as well and that “[Britain]should naturally be prepared to consider any proposals which might lead to this, provided our liberty and independence were assured’ Halifax went on to say that the Ambassador had informed the French of this approach and had asked for a further interview that morning saying that “he might have fresh proposals to put forward.”

Churchill replied that “[P]eace and security might be achieved [but] under a German domination of Europe. That we could never accept. We must ensure our complete liberty and independence. [I am] opposed to any negotiations which might lead to a derogation of our rights and power.”

Halifax asserted that if the French were planning to negotiate for peace, (and, assuming that Hitler really wanted peace,) they had a strong card to play—France should, however, make it clear to Hitler that they are treaty-bound not to make any such peace without Britain. “They might use this as a powerful lever to obtain favorable terms….” Without explanation, he then asserted that “this may be of great value to us, if it was Hitler’s intent to break up the alliance.”

At that point, the May 25th Report prepared by the Chiefs of Staff about Britain’s ability to carry on the war single handedly was distributed to the War Cabinet. The Cabinet ministers did not, however, have time to digest the document in any detail. Halifax quickly said that as he had read the Report, its conclusion was that Britain’s ability to carry on the war single-handedly against Germany depended in the main on its ability to establish and maintain air superiority. Archie Sinclair, the Secretary for Air, interjected that air superiority per se was not the question; Britain had to prevent the Germans from achieving a level of air superiority that would allow them to invade the country.

Accepting this view, Halifax went on and pointed out that if France collapsed, the Germans would no longer need large land forces and could shift their efforts to aircraft production. He added that, after the Norway debacle, “Germany would [also] not now be hampered by lack of iron,” Sinclair, responded that Germany’s ability to continue an air war would depend ultimately on its ability to maintain an adequate oil supply.

At that point, the Chief of the Air Staff, Cyril Newall indicated that the Report did not cover such things. Its purpose was merely to provide arguments to deter the French from capitulating and to strengthen their will to continue fighting. Halifax then suggested that as a ’last resort we should ask the French to put their [aircraft] factories out of gear’ To which Chamberlain responded, “whatever undertakings of this character we might extract from the French would be worthless, the terms of peace which the Germans would propose would inevitably prevent their fulfillment.” Churchill agreed adding that “the Germans [will] make the terms of any peace offer as attractive as possible to the French, and lay emphasis on the fact that their quarrel was not with France but with England.”

At the end of the morning meeting, the War Cabinet approved: the instructions given to General Gort to prepare for the evacuation of the BEF from the continent through Dunkirk;