Dispatches - Austria, February 26, 1937-April 22, 1941

Dispatches: Anotria CONTENTS Communications from Austria Despatch No. 1067, February 26, 1937, (762.63/344) Despatch No. 5, September 20, 1937, (762.65/353) Telegram No. 20, February 15, 1938, (762.63/428) Telegram No. 25, February 16, 1938, (762.63/440) Despatch No. 129, February 19, 1938, (762.63/484) Telegram No. 31, February 19, 1938, (762.63/461) Telegram No. 144, March 25, 1938, (860F.00/462) Telegram No. 271, July 22, 1938, (760F.62/503) Despatch No. 345, July 26, 1938, (760f.62/577) Despatch No. 378, August 18, 1938, (760F.62/671) Despatch No. 397, August 24, 1938, (760f.62/672) Despatch No. 33, April 22, 1941, (761.62/942) LEGATION OF THE UNITED STATES OF AMERICA I Vienna, February 26, 1937. NE No, 1067 SUBJECT: VISIT OF THE GERMAN MINISTER FOR FOREIGN AFFAIRS IN VIENNA, Copy in We files 16 r may 63 Got Fill $ & 762.63/344 SECRETARY OF STATE MAR 16 1937 NOTED STRICTLY The Honorable The Secretary of State, 02 Washington, MBG. 3ir: I have the honor to inform the Department that Mr. von Neurath, the German Minister for Foreign Affairs, made an official visit in Vienna on February 22. and 23, FP In view of the ttitude of the Austrian Government, as I know it, I was able in my despatches announcing the visit to state - 2 - to state that I did not believe that the visit would have any positive results. The recent speech of the Chancellor before the Patriotic Front in which he outlined the Austrian internal and external policy in considerable detail, gave further reason to believe that, as no change in Austrian pol- ioy was contemplated, the visit of von Neurath could have no concrete results. While the visit, because of the personality of Mr. von Neurath, passed pleasantly, serious differences of opin- ion and policy became apparent. I here is reason to believe that every subject of interest to the two Governments was discussed during the course of the conversations between Mr. von Neurath and Chanceller Schuschnigg and Dr. Schmidt, but aside from the creation of a Committee for the promotion of cultural arrangements there appears to have been no concrete decision, On all the principal points which were raised by Mr. von Neurath the Austrian Government maintained its well known stand which is definitely one for the maintenance of Austrian independence and non-interference in her internal affairs. Mr. von Neurath obviously left Vienna dissatis- fied with the results of his visit and it has left an un- pleasant impression in the Austrian Government, The fact that the visit has not resulted in any change in Austrian policy internally or externally is con- sidered by most diplomatic observers here as a distinct gain for Austria and for the cause of peace in Europeo While I an inclined to share in this opinion, I cannot conour 3 - eonour in the opinion held by a number of observers here that the visit has been without results. The visit has had as a distinct result the coming to the fore in a most definite way the fact that theideologies prevailing in Ger- many and Austria are entirely different, fundamentally open posed, and that the Austrian Government has no intention of submitting to German pressure in accepting the German ideology. Since the accord of July 11, 1936 was signed to bring about better political, commercial, and cultural relations between the two countries, there has been what may be termed an armed truce between the two countries. In both countries in official circles and in the press de- clarations of good faith and effectiveness of the accord were constant and recurrent, In faot, however, it was the definite opinion in Government circlesin Vienna that the accord had been entered into by Germany merely under the pressure of major conditions in Europe and that for Germany the recognition of Austrian sovereignty and independence represented more a change of tactics than of basic policy. The constant efforts from Germany to undersine the present Government in Austria, if less openly carried on than before the signature of the accord, were nevertheless the facts in which the Austrian Government had to read the real intentions of Germany with respect to Austrian sovereignty. In Austria those who had been in favor of the accord of July 11, because they believed it would help the position of the 4 of the Catholic Church in Germany, or because they believed it would improve the economic situation of Austria, have been bitterly disappointed, for the position of the Church in Germany has at no time been more precarious than today, and the negotiations for a commercial accord between Austria and Germany, which lasted over six months, have proven al- most completely futile and sterile, In spite of this sit- uation, however, it was deemed advisable in both Austria and Germany to render a certain lip service to the accord and to cover the real relationships between the two countries under a mask, Although the visit of Mr. von Neurath has had no concrete result so far as a change in Austrian policy is concerned, it has resulted in the lifting of this mask and the real status of the rela tionships between the two countries is more apparent, What effeet, this lifting of the mask will have in Germany and in Austria and on develop= ments in Europe it is too early to foresee. As Austro-German relationships have such distinct bearing on developments in Central and Southeastern Europe and in Europe in general, and such a distinct influence on the maintenance of peace, I believe it is advisable for the information and background of the Department to report on the visit of Mr. von Neurath in greater detail than I would ordinarily consider necessary for the information of our Government. I shall therefore in this despatch set forth those facts which I believe are of interest in connection with a visit which may eventually assume an importance not originally intended it should have. It is - 5 - It is of interest first of all why this visit took place for I believe in the future it may prove to have been a regrettable incident in the relationship between the two countries, Already before the accord of July 11, 1936, was signed the Department will recall that I reported that Chancellor Hitler used a good deal of pressure, through the German Minister here, to persuade Chancellor Schusehnigg to make a visit to Germany. Such a visit would have helped Berlin in making it appear that the accord of July 11 had been signed on the insistence of the Austrian Government. In despatches at that time I pointed out that Chancellor Schuschnigg would not make such a visit as it was in many respects immaterial to him whether the a coord was signed or not for the reasons at that time set forth and which develop= ments since have already shown to have been correct. After the signature of the accord Mr. von Papen used considerable efforts to persuade the Chancellor to pay a visit to Berlin, The Chancellor did not wish to make such a visit not because he had any fundamental objections thereto, but because he felt that in any conversations which he might have with Chan- cellor Hitler the fundamental differences of policy and opine ion would come to the fore and would only interfere with the development of friendly relations between the two countries. When Mr. von Papen found that it was not possible to convince Chancellor Schuschnigg that he should make such a. visit, he suceeded in getting the agreement of the Secretary of state 6 of State for Foreign Affairs, Dr. Schmidt, to go. It was difficult for the Chanoellor to oppose such a visit by Dr. Schmidt, the more 80 as it seemed a natural development under the accord of July 11, Dr. Schmidt therefore made a visit to Berlin about the middle of November, was very well received, and the visit was followed by reports that Dr. Schmidt had entered into engagements with Germany, which de- velopments showed were utterly unfounded, Dr. Schmidt's visit to Berlinwas one of pure courtesy and it was then determined, and shortly after announced, that Mr. von Neurath would return the visit in Vienna on the eonclusion of the pending negotiations between Austria and Germany for a trade agreement. This agreement was concluded on January 28, 1937, and immediately thereafter it was announced that Mr. von Neu- rath would come to Vienna on February 22 and 23, The Austrion Government was inclined to look upon the visit of Mr. von Neurath, not with anticipation, but certainly not with displeasure. He is known as a well bal- anoed diplomat of long experience, who is not a National Socialist and who has only had membership in that Party recently thrust upon hime He is looked upon in official and in Austrian circles generally as representative of the best there is in Germany, and as such a visit from Berlin was inevitable under the accord of July 11, there may be said to have been a certain pleasure here that it would be rade by hime It was to be foreseen therefore that he would be given a courteous and cordial reception The Austrian - 7 - The Austrian Government, however, realized that the Austrian National Socialists, or at least a part of them, would not fail to use this visit as an excuse for demon- strations. As the present Minister for Public Security, Mr. NeustEdter-Stürmer, has shown poerly concealed National Socialist sympathies, the preparation for the visit of Mr. von Neurath was put into the hande of the Police President of Vienna, Dr. Skubl, and the Burgermaster of Vienna, Dr. Schmitz. Mr. von Neurath arrived in Vienna at 9,20 on the morning of February 22, and was met at the station by the Chancellor, the Secretary of State for Foreign Affairs, and other high ranking officers of the Government, and the party drove to the Hotel Imperial in automobiles, Outside of the station, along the Mariahilferstrasse, and along the Ring some 6000 to 7000 persons had collected, The crowd was made up about 75% of young people under 22 years of age, and the remainder of women and middle aged men, These men rep= resented some of the worst types tha t the observers of this Legation have ever seen on the streets of Vienna, There were some ories of "Heil", others of "Heil Hitler", and several abortive attempts to sing the Horst Wessel Lied and Deutschlend Ueber Alles. The police handled the crowd good humoredly and it was on the whole a comparatively une demonstrative crowd. Within an hour after the arrival of the distinguished guest the streets were free. Towards the late afternoon a. orowd gathered in front of the Hotel Imperial and - 8 - and there was some confliet between them and members of the Patriotic Front, but no serious incidents developed. On the afternoon of February 23, some 40,000 members of the Patriotic Front marched quietly through the streets as a counter demonstration, The reports in a good part of the foreign press greatly exaggerated the numbers which took part in the Nat- ional Socialist demonstrations, as well as the importance thereof. The significance of the demonstrations lay in the fact that they were so small and the difficulties which the Austrian Government had contemplated in handling a much larger demonstration were not realized. The demonstration was not an expression of the strength of National Socialist sentiment in Austria and it was perhaps the very thorough measures taken by the Police to control the demonstrations which prevented the appearance of large numbers on the street, I venture the opinion that the insignificance of the demon- strations and their relative unimportance are signs of the discouragement of the National Socialist elements in the country. The official entertainment consisted of a luncheon on Monday offered by the Secretary of State for Foreign Affairs, and a dinner in the evening in the Belvedere Palace, followed by a reception to which the Chiefs of Mission in Vienna were invited. On Tuesday there was another luncheen, a reception by the by the German Minister in the German Legation for the German colony, and a dinner in the German Legation fellowed by a reception to which again the Chiefe of Mission were invited. In addition to the German guests and to members of the Aus- trien Government, the only persons invited to these luncheens and dinners were the German Italian, and Hungarian Ministers. It is remarked as significant that when the Italian Minister for Foreign Affairs and the Hungarian Regent visited Vienna recently the Austrian Government gave large dinners in the Schönbrunn Palace to which all the Chiefs of Mission in Vienna were invited. No such dinner was given during the visit of Mr. von Neurath and it is believed to have been a thoughtful recognition by the Austrian Government of the circumstance that it would obviate the necessity for the Chiefs of Mission to drink to certain toasts which would necessarily be proposed, Aside from the calls on the President and this of- ficial entertainment, the time of Mr. von Neurath and his suite was taken up with conversations with Chancellor Solmsoh- nigg and the Secretary of State for Foreign Affairs. The official communique which was issued at the close of the visit is transmitted herewith and is in the main indicative of the barren results of the visite Although practically every subject of importance to the two Governments was discussed, and this is freely admitted by official spokesmen of the Austrian 10 - Austrian Government, the communiqué is confined to a re- affirmation of both countries of the already good effects of the accord of July 11, of the desire under it to increase the political and cultural relations between the two German states, and to the organization of a Cultural Committee which is to study questions of oloser cultural cooperation between the two countries. The statement in the communiqué with respect to the common political aims and policy of the two countries must be taken with much reserve in view of com siderations which will be set forth farther on in this des- patchs I shall first refer to the one concrete result of the visit which is the organization of this Cultural Committee which is to be composed on the German side of five members and on the Austrian side of five members, This joint o om- mittee is to meet from time to time to discuss ways and means of promoting the cultural relations between the two countries. It remains, however, without powers of its own and its recom- mendations are made to the respective Governments and must have their approval before going into effect. The background of the formation of this committee is interesting and 11- luminating. The cultural relations between Austria and Germany as two German speaking states and of presumably identic cul- ture have for generations been close, Authors and play- wrights of Austria found their principal audience in their much more - 11 - much more populous neighbor, while German writers considered the Austrian public as much their own as the Germane There were close relationships between the Universities in the ex- change of professors and students. There were many cultural, scientific, and intellectual organizations in both countries which maintained very close ties with each other. Although these relationships were considerably disturbed during the war, they were renewed, at least to a degree, after the war, but were in most respects definitely interrupted after the coming into power of the present National Socialist Government in Germany. Although it was a political event which was the cause of the interruption of these close relationships, it was in fact merely the concrete event which brought out the fundamental difference which existed between the Austrian and German cultures even before the National Socialist ideo- logy began to control all cultural developments in Germany, Austria is a German state and the Austrian people speak the German language and there was before the advent of National Socialism in Germany closer similarity between the Austrian and German cultures than with that of any of their neighbors. That fundamental differences existed already bew fore 1933 was obvieus to thinking Germans and Austrians. Since the beginning of 1933, that is, since the con- trol of German culture by National Socialist ideology, this cleavage between the two cultures has become much more ap- parents This is a cause of concern not only to National Socialists, but to Germans who have no sympathy with National Socialist - 12 - Socialist ideologye They both see German and Austrian culture, that is, the culture of the two German speaking states of Europe, growing farther apart and for both political and cultural reasons the present Government in Germany wishes to impose its ideology on Austria Although Germany has 67 millions of inhabitants and Austria only et millions and although to a degree Austria has habitually looked to Gerw many for cultural leaderships the National Socialist ideo- logy has made no pregress in Austria This is not due to any laok of German pressure and of very real pressure, but to a stubborn determination of Austria to maintain her cultural tradition, which it has now become the custom here to hold forth as the truly German traditions The ideologies of the two countries are opposed to each other and the Austrian has shown itself the more virile. This Cultural Commitee which has been formed is to be the medium through which the cultural relations between the two countries shall be renewed, that is, through the Uni= versities, exchange of students, the press, the theater, the film and oultural organizations. The Committee is a. German initiative, Characteristically, the principal question which Mr. von Neurath brought up during his visit was insistance on the immediate introduction into Austria of German newspapers. Until the present only a few German newspapers have been ad- mitted into Austria, smong them being Goering's newspaper, the - 18 . the ESSENERZEITUNG, On the Austrian side the only newspaper of importance admitted into Germany 1s the NEUR FREIE PRESSE, In order to give force to the representations of Mr. von Neurath, the Vienna NEUE FREIE PRESSE was definitely forbidden admission into Germany on the Sunday preceeding the Monday of Mr. von Neurath's arrivale The Austrian Government indicated to Mr. ven Neurath that it could not agree to the admission of the German newspapers without restriction in view of the unfriendly and misrepresentative news concerning Austria which consistently and persistently appears thereine It was decided to refer this question of newspapers to this Cultural Committee. It is interesting, however, that among the principal points which Mr. von Neurath raised while he was here M.S that of the free admission of German newspapers. T he members of the joint Cultural Committee were appointed at once and in view of the pressing German demands, it has already begun its meetings today. While this Committee will forma means through which the German Government can exert constant pressure on the Austrian Government in the di rection of spreading National Socialist ideology in Austria, it is not likely that the formation of the Committee will have much concrete results. Of the five German members of the Committee two are from the Propaganda Ministry in Berlin, and both of them have been among those in Germany who have written in a most misrepresentative manner ecncerning Austria, When the membership of the German Committee was annnounced, the Austrian Government - 14 - Government immediately appointed its five members, of whom two are Austrian officials of Jewish origine This, I think, will be sufficient indication to the Department of the fruitful work which may be expected from this Committee. The Austrian Government was deoply injured that two of the members of the German Committee would be among those who had written most objectionably in Germany concerning Austria, It is unquestionably for this reason that the Austrian Gove erment appointed the two officers on its Committee of Jewish origin, knowing that this would be equally distasteful to the German Government. The Committee therefore begins its work under anything but favorable suspices. I may say further in this connection that the Minister of Education had supper informally at my home on the evening of February 24, after a concert by the di stinguished American singer Alexander Kipnis. Although I refrained from any political discussion with the Minister, it was obvious that he was laboring under extreme resentment over the composition of the Germen Committee and he remarked to me that with two such men on the Committee who had written in such vituperative terms of Austria, be "would have just as little to do with the Committee as possible". As the Minister of Education is the officer of the Austrian Government through whom all recommend- ations of this joint Committee must pass before they can be- come effective, the outlook for a successful use by the German Government of this Committee to spread National Socialist ideology - 15 - ideology in Austria is not more promising than before the formation of the Committee. I have gone into what may seem to the Department too much detail with regard to this joint Cultural Committee, but I have done 80 because it is of fundamental importance. The visit of von Neurath has had the unfortunate effeet of bringing into the open the fundamental antagonism of the present controlling German ideology and that of Austria The object of Germany in proposing this Committee was that of furthering its political propaganda in Austria under the guise of intensified cultural exchanges. It is a part of the general plan of the present German Government of sowoalled peaceful penetration of Austria, the aim of which is to under- mine the authority and position of the present Austrian gov- ernment and to replace it with one which will invite Anschluss. There areobservers who are inclined to place a certain strees on that part of the communique which refers to the common policy of the two German states. The fact that Austria declares itself a German state is nothing new and therefore has no particular significance at this time. Austria has always considered and probably always will consider itself a German state. As to the common policy of the two countries, this is a courteous phrase which must be taken in its general and widest sense and the real situation must be read in the facts. More significant among these facts is that Austria in spite of the German pressure has not joined the anti- communist - 16 - communist front prepagated by Berlin, Rome, and Tokies Significant also is that Austria, in spite of pressure from Rame and Berlin, has constantly proolaimed her faith in and adherence to the League of Nations. But in addition to other facts which might be cited, I wish to add only one of immediate interest. The representative for Southeastern Europe of the United Press has been endeavoring for some time to get an in- terview from the Austrian Chanceller which he could publish, The Chancellor consented recently to give such an interview and when it was presented to him yesterday for approval it contained the following statement with respect to the Neurath visit, "Both Governments were in complete agreement on main points of policy" The Secretary of State for Foreign Af- fairs to whom the interview was submitted, refused to approve it pointing out the above mentioned sentence and stating, "Wo are not in agreement on main points". It was therefore necessary for the United Press representative to rewrite the interview, In some respects the major question which was raised during the visit but of which no mention is made in the 000m munique was that of restoration, The Austrian Government was prepared to have Mr. von Neurath raise this question for it had been raised during Dr. Schmidt's visit in Berlin when General Goering 1a said to have informed him true in case of restoration in Austria Germany would be obliged to march, The - 17 - The Austrian Government, however, was not aware of the form in which Mr. von Neurath would raise this question and the form in which it was raised aroused considerable surprise. From the despatches of this Legation in which an en- deavor has been made to show the increasing importance of the restoration movement, the Department will appreciate that it was most likely that this tendency towards restoration in Austria would form the main subject of Mr. von Neurath's conversations here. 80 decided is the German objection to restoration that the Little Entente has felt that it could tem- perarily permit its own objections to restoration to move into the background and permit Germany to take the lead. The Little Entente with growing disillusionment concerning Germany, realized that in pressing its objections to restoration it was really playing into the hands of Germany and as their obe jections became less vociferous and active, Germany had to come into the foreground. I am informed by a source which has heretofere never led no astray that Mr. von Neurath told Chancellor Schuschnigg that he hoped there would be no restoration, He said that if there were restoration Chanceller Hitler might be driven to desperate actions not because of Anschluss, as the Chancellor had renounced that, nor en account of his Central European policy in general, but because he was afraid of a separatist movement in Bavaria to join Austria if Otto came back to the Austrian 18 Austrian throne, Mr. von Neurath is, according to my in formant, said to have further explained to Chanceller Schusch- nigs that Chancellor Hitler considered the situation of the Catholic Church in Bavaria such that under the repressive meas- ures and policy of the German Government it was fostering a separatist movement to join Catholic Austrias and that Chan- cellor Hitler feared the success of such a movement if Otto was permitted to return to the throne in Austria, While I an not in a position to vouch for the cor- rectness of the above manner in which Mr. von Neurath pre- sented his remarks on restoration, my source is one in a position to be well informed and has over a period of years correctly informed me and I therefore believe that the above may be taken as correct. It is officially admitted in private, without any comment, however, that Mr. von Neurath raised the question of restoration, The reply of Chancellor Schuschnigg to Mr. von Neurath was that restoration was not a question open to discussion at this time as it was a purely Austrian internal affair and must be 80 considered under the accord of July 11, That this restoration question was raised by Mr. von Neurath in the conversations with Chancellor Schuschnigg is confirmed by the conversati on which Ambassador Dodd had with Mr. Dieckhoff in the Foreign Office in Berlin on Feb- ruary 23, and which conversation is reported in the telegram of February 24, 5 perso by the Embassy in Berling to the Department. That the 19 - That the question was raised by. Mr. von Noursth in the form not forth above would seem to be denfirmed by a conversation which I had this morning with a friend who has just arrived from Rome where he had several conversations with Cardinal Pacelli, Cardinal Pacelli informed him that the position of the Cathelic Church in Germany had never been worse. He said that the three German Cardinals and the Bishops who had recently been in Rome to confer with him and the Pope on the situation of the Church in Germany, consideredthe situation so hopeless that they recommended that the Vatioan should denounce the existing concerdate The Vatiean was against such a policy of renouncing the concordat as it believed it would weaken the position of the Church rather than strengthen its My friend was in- formed by Cardinal Pacelli that the Vatican had no intention of giving up the fight in Germany and had sent the Cardinals and Bishops back with renewed assurances of support and on- couragement to maintain their struggle. The German Princes of the Church, xy friend tells me, had informed Cardinal Pacelli that the unrest smong the Bavarian Catholic population was particularly great and that the resistance to the regime there might arrive at an explesive point. In this connection I remarked to my friend that knowing Germany even better than Is he must not fail to give real consideration to the importance of the effects politically which the repressive measures against the Church may have, particularly in Bavaria, The Bavarians - 20 - Bavarians, I said, were among the most sympathetic, genial, and pleasant of the German peoples, but that they had under- neath a hardness and a brutality which we had seen in the war for the Bavarian troops took fewer prisoners and left more dead than any of the other German troops, My friend, who is perhaps one of the best informed men in Europe concerning Germany, said that this was very important, particularly in connection with this repression of the Church in Bavaria, The Department will have noted that the repressive measures against the Protestant Church have not decreased the resistance in that group and that this resistance reached such a stage recently that Chancellor Hitler has agreed to at least certain formal elections being held among the German Protestants, That the German Protestant groups are asking further information concerning these elections and certain assurances with regard thereto before being willing to participate in them is an indication that the Protestant resistance remains equally firm with that of the Catholie, This idea that restoration in Austria may cause come cern in Germany for the same reason that it causes so much concern to Iugoslavia is not a new one. The Austrian Presi- dent in a strictly confidential conversation with a former ruling monarch in Europe, said in great confidence only a few weeks ago that as Austria was the real bearer of German culture and had closer affinity with most of the German peoples in Germany than Prussia, "that the real frontiers of Austria should 21 should be on the Rhine". By this he did not mean, I be lieve, that Austria nourished any ambitions in that direction or had any aspirations for such an extension of her frontiers, but was simply stating one of those old facts which a student of European history in the light of the traditions and re- lationships of peoples cannot ignore. There is therefore a. very real probability that Chancellor Hitler realising the disquiet and apprehension which has been brought about in Germany by this repression of the Churches through the National Socialist movement, may in roality fear serious repersussions in Bavaria follow- ing a restoration in Austria which is so definitely a Catholie country and under a monarch so definitely Catholic as the Habsburgers. The statement, however, that the German Chan- cellor is not opposed to restoration as this would involve renunciation of Anschluss or because restoration would inter- fere with his Central European policy in general must be taken with much reserve. Policy must be read in the faots and the policy of the present German Government is definitely one in the di rection of Anschluss as the first and necessary step towards German penetration to the Southeast. There are no indications whatever that German policy in this respect has in any sense changed, and the real direction of German policy must be seen, not in the above statement which Mr. von Neurath is said to have made to Chancellor Sehuschnigg, but, for example, in the statement that Mr. Dieckhoff made to 22 to Ambassador Dodd on February 23, in the Foreign Office that Mr. von Neurath was going to Vienna to defeat Habs- burg aspirations in Austria in an endeavor to bring both Hungary and Austria into closer relations with Germany - and that a restoration would prevent Austrian occperation with both Germany and Hungary. Whatever may have been the form in which Mr. von Neurath raised the question of restoration in Vienna, it is certain that he again stated the definite German objection thereto, and that Chancellor Schuschnigg responded with the now classie attitude of the Austrian Government that the question is a purely internal one which it is not in a position to discuss. In private conversation the Chancellor has recently constantly insisted that "there will be no experiments", which is his way of saying that restoration is actual but that he does.not wish to disturb the internal or external peace. The Austrian position with respect to restoration has been 80 thoroughly covered in the recent dospatches of the Legation that I will not go further into it here. The visit of Mr. von Neurath, while it has not re- sulted in any change of policy in Austria and most probably will not result in any further change of policy, and while it has had as its only concrete outward result the formation of this Cultural Committee which starts its work under such inauspicious circumstances, it would not be correct to say, as - 23 - as I have thought it necessary to bring out in this des- patch, has been without results. Mr. von Neurath left not in good humer, and the Austrian Government was dis- tinotly disappointed as a result of the visit. The emen- ities were observed and on the surface it passed without real incident. It brought out, however, the fundamental differences between Austrian and German policy. It brought out the fundamental difference between the ideologies and cultures of the two countries, and how definitely they are opposed to each other and how definitely the Austrian re- sistence to the acceptance of German ideology is, It lifted the veil which has heretofore obscured the real situation with regard to the accord of July 11g Although Mr. von Neurath represents to the Austrians the best there is in Germany, there is here distinct disappointment and further disillusionment, The visit has made distinctly worse rather than better the relations between Austria and Germany, I can best summarize the bad humor of Mr. von Neurath on his departure by saying that just a. few minutes before he left the German Legation to go to the train on Tuesday even- ing, the Czeehoslovak Minister here said to him, "I hope you are pleased with what we are doing for our Gurmans in Bohemia" - referring to the recent conciliatory measures taken by Czechoslovakia towards the Sudeten Deutschen, Mr. von Neurath 24 von Neurath replied in very bad humor and rather ill temm peredly "It is not nearly enough and you will have to go a long way farther". Perhaps also the remarks which Mr. von Papen made to some of his intimate friends today are significants To them he said, "Wo need only the visit one more of our Ministers to Vienna to put the accord of July 11 out of business entirely"4 To the same friends he remarked that they would have to give up all thought of organizing a definite National Socialist movement in Austria as it was absolutely impossible, there not being sufficient elements to work with, and that they would have to proceed "with the slow and somewhat precarious methods of peaceful penetration" which they had been using. What is particularly disappointing to the Austrian Government ie that it has bean pinning certain faith on the so-called conservative elements in Germany of which it has considered Mr. von Neurath as a leading representative, Mr. von Neurath's attitude, although entirely correct while he was here, has left the impression in Austrian ciroles that while he is representative of the Germany with which Austria can again at some time deal in the manner customary between states, that also to a degree Mr. von Neurath, and by in- ference some of his conservative associates, although they have not adopted the National Socialist ideology and program, have to a. not inconsiderable extent been affected thereby. This, to the Austrians who consider themselves as a part of the - 26 - the German nation but who are determined to maintain a separate identity as a state and to contimue inviolate their culture, is a great disillusionment, The failure of the visit of Mr. von Neurath will necessarily casue certain surprise and disillusiomment and may lead to more active measures for the sowealled peaceful penetration of Austria which has for its objective the under- mining of the present Government with the hope that it will be replaced by one more favorable towards Germany. The prophots of this peaceful penetration believe that once the Schuschmigg Government is gone the next one would not be so strengly opposed to Germany even if not National Social- ist, and that it would rapidly give my under aggressive measures to a National Socialist Government in Vienna which would invite Anschluss. These some prophets believe that once an Austrian Government on its own initiative invites Anschluss there is no further objection which Italy or any other country can raise to Anschluss, especially since then in marked distinction to the time of Seipl Germany would have behind it this great military force and would no longer be obliged to accept the dictates of the other powers in the matter. It is for this reason that the Austrian Chan- cellor, as has been pointed out in Ky despatches, has been obliged to consider as more actual and opportune the question of eventual restoration concerning which he, even as a legi- timist, has certain reservations which, however, in view of the - 26 - preservation of the independence and integrity of the country, would have to give way. My belief, after having observed the position here for three years 80 closely, is that although the German pres" sure on Austria will continue and perhaps come more out in the open, the Austrian position is stronger and that she is in a better position internally and externally to re-- sist this pressure. I would in this connection refer to the recent statement of the Secretary of State for Foreign Affairs to me that Austria had travelled 75% of the way towards complete establishment of her independence and in- ternal integrity, and that in his opinion the remainder of the way would be less difficult than that which they had already travelled. Respectfully American yours, George S. Messersmith, Enclosure: 1. Communique (100/27 2.J.N used for note) 080/800 GSM-MJP Enclosure No. 1 to despatch No. 1067 of February 26, 1937, from the Legation at Vienna, Austria. (treslation) OFFICIAL COMMUNI UE ISSUED FEBRUARY 24, 1937, by = AUSTRIA! government UPON CONCLUSION OF BAROH VON NAMATH'S VIEBLE VISIT. The Reich Linister for Foreign Affairs, Baron von Neurath, paid a visit to the Austrian Federal Government on the 22nd and 25rd in return for the visit of the Secretary of State for Foreign Affairs Dr. Guido Schmidt to Berlin. The two-day sojourn of the Reich Linister in Vienna offered to the statesmen concerned, Federal Chancellor Dr. Kurt Schuschnicg, Secretary of State for Foreign Affairs Dr. Schmidt and Reich Linister Baron von Neurath, an opportunity for detailed conferences which were held in a most friendly atmosphere. These conferences concerned above all the rela- tions between the two German states. It was noted with satisfuction that the agreement of July 11, 1956, proved a suitable basis for the re-establish- ment of friendly relations based on confidence and appeared of a nature calculated to guarantee further successful cooperation in this sense. In that con- nection reference was made to the conclusion of the economic agreement of January 27, 1937, and the hope expressed that the initiation of a more lively exchange in goods traffic and the tourist trade brought about by that agreement would have a favor- ablo offect on the general development of mutual relations. In cultural-political respects different important questions of nutual cultural intercourse were discussed in detail, and a committee for cultu- ral relations between Austria and Germany, which was proposed on the occasion of the Berlin visit of Secretary of State Dr. Schmidt, was appointed. This comittee will commence its activities on the 25th instant. or course, conferences concerning questions of European and particularly Central European politics et present in the focus of general interest followed. Full agreement was noted concerning similar endea- vors toward the preservation and durable insurance of general peace on which the foreign policy of both governments is based. LEGATION OF THE UNITED STATES OF AMERICA Vienna, September 20, 1937. No. 5. Subject: A AD INFORM- ME ALIMI LEMTING. DIVISION OF EUROPEAN AFFAIRS OCT 4 1937 DEPARTMENT OF STATE Distribution Instructions Rating Grade for STRICTLY J DEPARTMENT OF STATE ASSISTANT SECRETARY The Honorable 1937 OF STATE The Secretary of State, A-M. C Washington. THIS Sir: In comfirmation of by telograms llo. 49 of September 15, 1937, 1 p.. end No. 50 of September 17, 1 p.m., and no A sup lement to despected: io. 4 of September 18, 1937, I linve the honor to report that though the recent conversations but en Secretary of State Guido Schmilt :84 General Bring are cinted in U.e popular And ..ith 2: visit of Muscolini to Germany, the implications of both remain veiled in the obscurity of conjectures. The following is & brief résumé, for such interest 03 it may present, of impressions derived from private conversations in well informed diplo- matic and journalistic circles. Chancellor Schuschnige last spring successfully discouraged the proposed visit of the Duce to Austria for fear that it micht be untimely; that it might be interpreted es an inopportune demonstration of soliderity with the home-Derlin exis. The new situa- tion created by the Lussollni-Hitler meeting convinced the Choncellor that there should now be direct contact between him "n" the Duce before the letter proceeded to Gertiny. Ma overture to ussolini to thi: end rejected." implications of thi rebuff have been widely loonted. T. .inistor interprote it u3 con- finanties theirs that Lussolini is continuing oticy soulia Austria locemeal to the Third to Itdion olloy his mode ty POR Legrove :.. - 22 prodive : : ...... rit-in towar .... foll read receive THE southing Fina une transportary here at - mintion the uncollni +1 two _..ont... or more. The Severnment clounly stempoling Lei me. domentie - prelensfun yoore of adima new Jr. -cimidt Les did from Geneve des become In no way divint in tod in Autori- - novemb before, considers Accorian Independence - the exion of her olicy. optember 1.). The sulgarian Linic or, Dr. - Just made repld toor of in of general eall itement, las received He AUTHORIZED dermulation of Italia - e remarked to - tot in withhes LOTO In- `resting to THE in to ubject, Dr. It-lian gobie Aunosi van in the exercied the their of Distribut 5. the Imponese commitment in China, which may take on informance dimensions, may disincline - no C.. with on eye on the Soviet Union - : rb alrendy dellente equilibrium in sontr surope. Phone la also some expectution, - pertige the wish is father to the thought, : = the emonunter of the such positive spirits DO complini === Nition влу nive rise to conflict of vergione ent rather than to n. meeting of minds. In the the Austrien Government is following of revensement est restreint from ...114 hor-ine for ther brit, Vile officienty ttituue _f the Addriss - - diluted by tor, the wetch 444 : m - protably not the letter, reliabl France - maind 1,000 - THE MAILER product TELEGRAM REORIVEE STATE 90 JR This telegram must bE FROM clossiy paraphrased be- Vienna M9 at BE fore being communicated Dated Fabruary 15, 1938 to anyone. (B) LUMON OFREC di 12:31 Rem. Secretary of State, & OPEAN AFFAIRS FEB 16 1938 Washington. W DEPARTMENT OF STATE RUSH. 20, February 15, 1 p.m. My telegram February 14, 9 762.63/427 p.m. Dined last night at a large dinner given by Schmidt 762.63/428 with Chancellor Schuschnigg, Seyssinquart, members of the Government and diplomatic corps. Atmosphere most oppressive. To French Minister Schuschnigg described visit to Berchtesgaden as the most horrible day of his life. HE says that Hitler undoubtedly a madman with a mission and in complete control of Germany, Hitler openly told him of his desire to annex Austria and declared that hE could march into Austria with much greater EASE and HB 1938 FILED infinitely less danger than hE incurred in rsmilitarization of the Rhineland, Schuschnig admits that appointment of Seyssinquart is highly dangerous but states that hE will make it in order to avert the "worst". In respect of Italy, Schuschnigg declared that he can count only on moral not material support. Schmidt p2+ #20# Fabruary 15, 1 p.m., from Vienna. Schmidt is attempting to make best of bad situation and was in a long and friendly conversation with Sayssinquart. Hornbostal is in utter despair and states openly that there is nothing left for him to do but to leave Foreign Office. Italian Minister claims that he was informed of Berchtsgaden meeting only on the Eleventh and denied that Italy took any initiative in the matter. HE telegraphed full information to Mussolini. Latter however is engaged in winter sports and up to last night Ghigi had no information that his messages had reached the Duce. Italian Minister gives anxious impression. Papal Nuncio admits that Seyssinquart may bE good Catholic but fears nevertheless that it is the beginning of the End. The French Minister who has been here five years states that this is the most critical moment since July 1934. "It is not the end. It is the moment before the End". In his opinion Austria can only bE saved by immediate reconciliation of France and England with Italy and Energetic joint action. Enderrs author of May constitution made identical remark this morning. In -3- #20, February 15, 1 p.m., from Vienna. In my opinion Austria's situation is most unfortunate and menacing. If Styssinquart is loyal his appointment would not bE a solution. If hE is disloyal it is a catastrophe. Germany probably plans gradual Danzigfication and any unsupported efforts of Schuschnigg may make to outmaneuver Seyssinquart can nt best only retard process. REPEATED by telegraph to Peris, London, Berlin and Rome. VILE CSB & TELEGRAM RECEIVED J. This telegram must bE clostly paraphrased bE- VIENNA fort bein communicated to anyone. (E) FROM Dated Feb. 16, 1938 Recd 8:48 p.m. Secretary of State, Washington. RD RUSH 25, February 16, 10 p.m. "Cor Cor STRICTLY TAL 762.63/440 Y 21, February 15, 5 p.m. Have just seen : inister for Foreign Affairs Schmidt who seemed on the whole cheerful. HE EXPRESSED confidence that 3. period of internal quiet would ENSUE but felt nevertheless that like the agreement of July 11 only temporary appeasement could bE obtained. The task of Beyss-Inquart would bE to bring into the fold those Ele- ments which have so far been irreconcilable. HE did not know how this could be accomplished and foresaw that G-J 35yss-Inquart would have difficulty with Nazi Extremists. Probably several new councilors of state would bE appointed but this had already been under deliberation with Seyss- Inquart for SOME time. I asked what further steps the Austrian Government would take in carrying out Berchtes- gaden agreement. HE replied that pensions would bE given to tx-functionaries who were dismissed for Nazi activities FEB 10 1938 FILED They would, however, not bE reinstated. The amnesty did not apply to the Austrian Legionaires in Germany. HE desired CA --2--25 from Vienna HE desired that someone bE appointed in administrative capacity to look after Austro-German press matters under the two governments. This move hE said had not been dictated by Hitler. Schmidt said that present German maneuvers on the Austrian frontier had been planned for two months, HE did not believe that they were a military demonstration against Austria. Also saw the French Minister who has interviewed Schuschning and Hornbostel with both of whom he has unusu- ally close relations. Puaux told ME that formation of cabinet was bitterly contested. Papen made a last minute effort to have Glaise Horstenau made Vice Chancellor and an outstanding Nazi appointed Minister of Justice. (I am reliably informed that Bishop Gfoellner of Linz rushed to Vienna despite illness and urged resistance upon President Miklas. In consequence Catholic Thurch claims credit for saving these posts from Nazis) Schuschring informed the French Minister that in Ber- chtesgaden conversation Sitler boasted to him of military prowees of Cermany, deprecated French military Equipment, aller 4 that everything he did with respect to Austria and the Sudetin Germans was in entire agreement with Halifax, (critish inister has telegraphed this to the Fortign office) that in two years tier Italy would no longer mean anything to Germany and that it was holy mission to unite 80,000,000 #25, February 16, 10 p.m., from Vignna. 80,000,000 Germans into a nation which would mile Europs. In contrast with Schmidt the Chancellor frankly resents German maneuvers as military demonstration against Austria. Also articlt in today's National Zeitung of Essen that reconstruction of Austrian cabinet is first step in Glsichschaltung. French Minister believes immediate future unpredictable and hopes that there will bE at least a temporary perio³ of quist. E remains, however, most pessimistic regarding the future of Austria and is apprehensive that present German SUCCESS will encourage Hitler to undertake some new adverture within a few months which may precinitate European var. it stated that today the British Government had made representations nt Berlin and that tomorrow the French Government would de likewise. HE feared, however, that these ropresentations were of a harmless informative nature not to serve as an Effective Reterrent. I have also SEEN the Italian ininter who nasumes the attitude that nothing unusual 10 joing in and that Austrian independence is not minaced. 1151 sent message last night approving proposed A prominent Austrian bunker w'. 1.: exception: informed described the ottantion cont Invorable outcome for Austria. Austria MAS throstine! vith -4- F, February 1,, 10 p.m., from Vienna. action by Germany which could not bE resisted. Present compromise would prove far less successful for German aims than !'itler Expected. Seyes-Inquart was fundamentally weak and vacillating and would bE out-maneuvered by Schuschnige and Skubl the Secretary of State for Public Security. HE was sure that Austria had gained six months during which time international situation might change in SOME vey fevorable to Austria. Indirectly but ruliably informed of views of their present Left 7ing Lender. HE does not EXPECT immediate trouble from Austrian Mazis and believes that Austria will have some months of relative quiet during which Styss-Inquart will DE in constant and ineffective conflict with Skubl. There will bE frequent threats of resignation from Seyss-Inquart and in due course another crisis in relations "ith Germany. Central consensus is that Schuschnigg deserves sympathy and admiration for the manner in which he came out of Berchtesgaden ordeal. It is felt that he yielded minimum and rendered grent service to Austria and peace of Europe. Pending Hitler's speech of February 20 and clarification of attitude of Austrian Nazis it is impossible to make any forecast. - ILEY NPL:EMB LEGATION OF THE UNITED STATES OF AMERICA ASSISTANT SECRETARY Vionn OF,STATE OF Abru ry 20, 1009. / MAR 1 4 1938 A-M ..o. 119. MR. MESSER8N ITH filly in in. Subject: ..U TRO man RELATIONS. PM. m H Summary M cant have 3 El 12 44 O. N.I. In Hurt cofidence M.I.DJ 762.63/484 MAR 11 1038 Cn STRICTLY OF STATE ASSISTANT SECRETARY MAR 11 19 MAR DEPARTI de ENT OF START Nonorable desputch. / really excellent The Secretary of State, Washington. Ems To supplement recent telegrams in respect of the Borchtesgaden conversations as well as those re- FILED porting the reconstruction of the Austrian Govern- ment, I have the honor to inform the Department that several despatches are in course of proporation CONTIDENTIAL FILE which will embody the various com uniqués, official decisions and other announcements which have to do with AML with the events in question. The comments of the press will also be forwarded to the Department. In the present despatch I shall endeavor to give the Department some of the background. The meeting at Berchtesgaden is the newest and perhaps the most decisive phase of the struggle in respect of Austrian independence which has gone on since the beginning of the post-war era. As the De- partment will recall, the Austro-German Customs Union was prevented in July 1931 by the energetic repre- sentations of the interested powers. In July 1934, following the assassination of Dollfuss, Anschluss was averted by Italian troop movements to the frontier. The present crisis has found the Stresa front dis- rupted and the position of Italy altered. The inter- vention of France and Englend has been restricted to, representations in Berlin, which, according to the French Minister, are presumably informative rather than minatory in character. The Berchtesgaden interview is the direct outcome of the Austro-German agreement of July 11, 1956, where- in Germeny recognized Austrien independence and sovereignty while Austria accepted the status of a "Gorman state". The accord we.s accompanied by a "gentlemen's agreement" which had to do with the status of the "National opposition" in Austria. This agree- ment presumably provided for or at least implied a policy 5. policy of conciliation on the part of the Austrian Government towards the National Socialist movement in Austria, together with the obligation on the part of Austria to bring certain of its leaders into "political responsibility". Since the conclusion of the July agreement the Schuschnigg Government has made substantial pro- gress in consolidating its position. The Patriotic Front, the unique political organization of Austria, has had its heterogenous and conflicting elements shaped into cohesive form on a platform of Austrien independence and resistance to National Socialism. The Schuschnigg Government has appeared in the role of shield and buckler of all the elements in Austria which sought to oppose German encroachment, The memory of the troubles of February 1934 has been re- ceding, and ex-Social Democratic elements have been directly or indirectly supporting the several labor organizations created within the framework of the corporative state. The Legitimists, too, developed their renks both within and outside of the Patriotic Front into en organized force for the sup_ort of the Chancellor and Austrian independence. National Socialist manifestations had been limited largely to unimportant street skirmishes, the brecking of shop windows, destruction of telephone booths, end unimportant though malicious mischief. The current of Austrian life has been flowing if not smoothly certainly without serious 4. serious impediment. Moreover in the last year sub- stantiel economic recovery had further abated the menace of radicalism. The Catholic Church has also supported the Patriotic Front, like the Protestants and the Jews. Attempts have been made to regulate the press relations between Austria and Germany by a series of agreements or truces. In 1937, however, the tone of the German press became progressively sharper and more critical. It was evident that in Germany there was a feeling of profound irritation over the develop- ment of Patriotic Front and Legitimist activities. It was felt in Germany that the "National Opposition" in Austria - that is to say the National Socialists who were declared illegal as a party in 1934 - were being discriminated against in a manner contrary to the letter and spirit of the July 11 agreement. Chancellor Schuschnigg in various interviews with the foreign press maintained a firm attitude. This was also reflected in his public addresses as well as those of prominent spokesmen of the régime, such as Under Secretary* Zernatto and Press Chief Colonel Adam. The position of the Austrion Government seemed further fortified at the beginning of January as the result of the Budapest conference of the Rome Protocol States. The Rome Protocols, which are based on respect for the independence of Austria, were re- confirmed * Stantssekretür. 5. confirmed. Count Ciano, the Foreign Minister of Italy, assured Chancellor von Schuschnigg that Rome approved the policy which Austria was follow- ing and that Austria could count upon Italian support. Recent official visits to London (Minister of Finance Neumayer and Dr. Kienbock, President of the Austrian National Bank) had brought back en- couraging reports of British interest in Austria. Dr. von Schuschnigg was in constant and most intimate relations with the French Minister, M. Puaux, and there was an evident and growing feeling of self- confidence. It was clear that the National Socialist movement in Austria was under effective control, that there was no internal danger to the régime. The loyalty of the police and of the army was considered satisfactory. The efficiency of the police was demonstrated in the arrest of Dr. Tavs (vide telegram No. 4, January 27, 6 p.m. end despatch No. 106, January 31, 1938) and the closing of the premises in the Teinfaltstrasse of the "Committee of Seven"*, where incriminating documents were found. It we thought st the time that the arrest of Dr. Tevs und the police interrogation of Captain Leopold (vide telegrom No. 4, Jenucry 27, 1938, 6 p.m.) would further strongthen the position of Austria in her *_orried inter July 11, 1936, agreement with the consent of the Government of members of "National Opposition" allogedly to work for conciliation. 6. her unequal struggle against the Third Reich. A dossier was prepared containing documents showing the complicity of National Socialist officials in the subversive activities of the Teinfaltstrasse. Among these documents is allegedly one initialed "R. H." and attributed to Rudolf Hess. Herr von Papen, German Ambassador on Special Mission to Austria, who was presumably not taken into the con- fidence of the Party, was given this dossier and proceeded to Germany, where he submitted the evi- dence to the Fuhrer. For some time - I am told about two months - Herr von Papen and Dr. Guido Schmidt, the Under Secre- tary for Foreign Affairs, had been working together in an endeavor to formulate a plan to compose the differences between the two countries. It is under- stood that Herr von Papen encountered serious obstacles in persuading Herr Hitler to see eye to eye with him. At the same time Dr. Guido Schmidt had C. difficult task in converting Dr. von Schuschnigg to his version of conciliation. I understand that on two occasions Dr. von Schuschnigg declined to proceed to Berchtes- gaden for an encounter with the Chancellor. The previous Party crisis in Germany, that of June 30, had immedinte reporcussions in Austria, which resulted in the assessination of Chancellor Dollfuss. The racent Party crisis of February 1 also hed prompt offect on Austro-German relations. lerr von 7. von Papen we.s brusquely recalled, and after taking formal leave of his staff departed for Germany on Saturday, February 5. He left obviously crestfallen and dejected. En route he was summoned to Berchtes- gaden, whence he returned the following Monday in e. triumphant mood. Herr von Papen, it is supposed, had re-formulated his policies to Herr Hitler with such eloquence that the latter authorized his return in a last effort to bring Dr. von Schuschnigg to Berchtesgaden. Appa- rently Herr von Papen presented matters to Chancellor von Schuschnigg in a most urgent and pressing manner. The Führer stood at the crossroads of policy. While he, von Papen, was still in the picture there was still hope of conciliation. If Dr. von Schuschnigg refused to proceed to Berchtesgaden, the Führer would opt for positive action. The form of positive action threatened by Herr von Papen is not entirely clear. It must, however, have been very menacing. At the same time there must have been a substantial degree of cajolery employed. I think Dr. von Schusch- nigg went to Berchtesgaden in the belief that German policy towards Italy together with German desire for a better understanding with France and England would prompt the Führer to make a gesture of peace. It is, however, clear that Dr. Guido Schmidt worked in the closest harmony with Herr von Papen end employed his efforts in every way in order to persuade Dr. von Schuschnigg to proceed tc Berchtesgaden. On February 10 there WES a ball of the Patriotic Front 8. Front in the Hofburg. The Diplomatic Corps,was assembled in order to make an official entrance into the ball-room. The Chancellor was in intimate conversation with the Italian Minister, a conversa- tion marked with great cordiality on both sides. Dr. von Schuschnigg then turned to the French Minister, M. Puaux, and said: "I have directed Dr. Schmidt to make a sensational communication to you tomorrow. However, do not take it too sensationally". The following day, February 11, the British and French Linisters and the Hungarian Chargé d'Affaires were summoned to the Foreign Office. They were told of the visit and informed that Chancellor von Schusch- nigs was proceeding without a program. The Italian Minister was notified the previous day. I have been informed very definitely that Dr. von Schuschnigg did not request the advice of any of the governments concerned with regard to his meeting with Herr Hitler. The Austrian Government observed the greatest care to keep the plans of the meeting entirely secret. A notice was inserted in the press that there would be a cabinet council the following morning, and rumors were set in motion from government sources to the effect that long awaited cabinet changes would then be announced. The attention of the foreign press correspondents and al. other interested observers was so centered in this news that en inadvertent announce- mont in th. Cl: ncellor's organ, the assiblatt, to the effect that he had left for the Tyrol 9. Tyrol for the weekend and that Herr von Papen had gone to Berchtesgaden appears to have passed un- noticed. I vaguely suspected what had happened, and on the morning of February 12 while attending a Te Deum at St. Stephen's I noticed that out of the entire government only the Chancellor and Dr. Schmidt were not present. On returning to the Legation I was in- formed by a local correspondent that he had had a telephone message from Paris announcing the meeting at Berchtesgaden. Shortly after, the Federal Press Service confirmed the news to him. Subsequently it was denied to other correspondents. (I am informed that the Ministry of Propagenda in Berlin persistent- ly denied the news until late in the afternoon). The Chancellor since his return from Berchtes- gaden has talked very freely end very frankly to the French Minister. From my conversations with the latter, I believe that the remarks attributed to Herr Mitler during the interview, which I have re- ported by telegraph to the Department, are accurate. The British Minister, too, tells me that it would be impossible to exaggerate the violent nature of Hitler's remarks. Hitler apparently convinced Chancellor von Schuschnigg at Berchtesgaden that he was prepared to intervene by force of arms in Austria, that he was scornful of the possibility end efficecy of any opposition 10. opposition, that he openly intended the annexation of Austria end that he felt no concern whatsoever in respect of Italy, which within two years would no longer mean anything to Germany. Midnight of February 15, I understand, marked the time limit set by Herr Hitler, who apparently had threstened if Chancellor von Schuschnigg did not accede to his demands that military action would be taken on the 16th. At the last moment the reconstruc- tion of the cabinet was accomplished. The task was made doubly difficult by personal jealousies and am- bitions. During the afternoon Herr von Papen made great efforts to obtain two additional portfolios in the cabinet. Bishop Gföllner of Linz, had in the meantime hastened to Vienna, despite illness, and had inter- ceded with President Miklas in order to stiffen the spirit of resistance. The final result embodied only one obvious major concession to Herr Hitler: the appointment of Dr. Seyss-Inquart as Minister of the Interior and Public Security. Many, however, believe that the promotion of Dr. Guido Schmidt from Under Secretary for Foreign Affairs to Minister was also a significant concession to Berchtesgaden. It will be interesting to observe whether his taking over this portfolio will end the personal contact between the Chencellor and certain chiefs of mission. Dr. Seyss-Inquart, who is sup osedly the evil genius of the situation, is a Sudeten German, whose mother 11. mother was half Bavarian and half Carinthian. He was born near OlmUtz, a center of national feeling and now a strnghold of Henlein. He was educated at the University of Vienna, had a distinguished war record and was decorated four times. It is general- ly believed and even confirmed at the Federal Press Service that he was a member of the National Socialist Party of Austria until it was declared illegal in 1934. Chancellor von Schuschnigg denies this cate- gorically. He was a founder and subsequently Vice President, however, of the Oesterreichisch-Deutsches Volksbund, en organization for the furthering of Anschluss. He is & lawyer by profession and is understood to be personally very ambitious. Considerable lip service has been done to his alleged loyalty to Chancellor Schuschnigg and to Austria. Emphasis is loid on his status as a "good Catholic". Both the Chancellor and Dr. Schmidt speak reassuringly on the subject. However, an eminent Jesuit priest, who is close to Dr. von Schuschnigg, states that the Chancellor, who himself is a devout Catholic, has at last become convinced that a Catholic can be 2 Nazi. It takes great credulity to believe that Chancellor von Schuschnigz and those loyal to him can have any great confidence in Dr. Seyss- In uart's good faith. Dr. Seyss-Inquart entered office on February 17. Immediately afterwards he departed for Borlin, a gesture which was either tactless or cynical. Dr 12. Dr. Guido Schmidt has had a very rapid career, almost entirely under the auspices of Dr. von Schusch- nigs. It is known that he favored the trip to Berchtesgaden, and there is widespread belief that in order to further. his own career he has been slyly disloyal. His critics assert that he has seen the Nazi handwriting on the wall and is prepar- ing himself to be if not a Talleyrand at least a Neurath. My only personal knowledge of his attitude is that on his return from Berchtesgaden he attempted to present the situation in a favorable light. My information on the subject of Berchtesgaden would incline me to believe that Dr. von Schuschnigg went to the meeting because he felt that he did not dare refuse. He apparently was subject to gross dis- courtesy; indeed to a humiliating ordeal. It appears that he yielded the minimum. Among other things he was able to retain General Zehner as Secretary of State for War, he extended the amnesty to include Social Democrats and even Communists, but excluded the Legionaries in Germeny. The "recognition" of Austrian independence and sovereignty was, I under- stend, voluntarily proffered by Herr Mitler as uid pro quo. He is reported also to have consented publicly to disassociate the NSDAP from the H: tional Socialist movement in Austric. Following the conversations in the morning be- tween Dr. von Schuschnigg and Herr Mitler on de uste lunch 13. lunch was served. The conversations after lunch last- ed until 10.30 in the evening. There WE.S not even a cup of tea served. During the entire time smoking was not allowed, which must have been added suffering for Dr. von Schuschnigg, who is addicted to cigarettes. Dr. von Schuschnigg reached Salzburg at about 11 o'clock at night in a state of considerable exhaus- tion. There are rumors that before Dr. von Schuschnigg's departure for Berchtesgaden he had a long conversation by telephone with Signor Mussolini. I have informa- tion, however, from reliable sources that there was no such conversation, but that after his return from Berchtesgaden he unsuccessfully endeavored to talk directly with the Duce. According to the Italian Minister, who dined with me on the night of February 15, he had been informed in exactly the same way as the British and French Ministers end the Hungarian Chargé d'Affaires. He had not been consulted and had merely telegraphed the message to his Government. Late on the 15th a message came from Mussolini ex- pressing approval of the proposed reconstruction of the Government. So far as I can tell, the Berchtesgaden conversa- tions found Chancellor von Schuschnigg and Austria entirely isolated. Outside of bedside messages of sympathy he obtained nothing from any quarter. There are many rumors that he appealed to France and to 14. to England. This is-categorically denied by the British Minister, and I am inclined to believe that Dr. von Schuschnigg, though a patriotic Austrian and a devout Catholic, is sufficiently loyal to Germantum that he would not directly suggest forceful measures against the sister state. Be very probably had ex- pected that Italy, because of the Rome Protocols and self-interest, would take energetic steps at Berlin with her partner of the axis in order to protect Austria. lle subsequently admitted to the French in linister that he had discovered that he could not count on aid from Italy. Journalistic circles believe that Lussolini is endervoring to negotiate E. military alliance with Germany end that the present attitude of Italy is not only indicative of Itelian dependence on German support but of a "deal" which has either been made or is about to be concluded. The attitude of the French Minister has reflect- od confidence until the return of Dr. von Schuschnigg from Berchtesguden. The French Legation was convinced that Italy had revived hor interest in the independence the into rity of Austria and had reconstituted her line of Jefense on the Danube. It apparently did not occur to the French Legation that Italy could uiesce in anything that would put Austrian inde- bendence in jeoperdy. The French Minister believes that the develo ments bear elo uent testimony to the treatments of the It:lian position. The center of gravity 15. gravity of the axis has shifted to Berlin. While France may be deeply concerned over the fate of Czechoslovakia should Anschluss be consumma- ted, it was generally supposed that it would be equally incompatible with her national interests for Italy to have Germany as a contiguous neighbor. In this connection it is recalled that the coast is approximately sixty miles from the Austrian frontier. In the event that Austria is absorbed into the Reich, a small step only would suffice for Germany to bridge Europe from the Baltic to the Adriatic. The attitude of the newly appointed Minister of Czechoslovakia is one of complete detachment and sanguine expectations. He has just arrived in Vienna, having previously served in Bern. The Hungarian Chargé d'Affaires, who is in in- timate personal relations with Dr. Guido Schmidt, likewise radiates confidence, if not gratification. Whether or not this reflects the views of his govern- ment, I do not know. So far there has been the utmost satisfaction on the part of the Schuschnigg régime with the Deranyi Government and constant 011- phasis, both officially end privately, has boon placed on the solidarity between the two and the identity of their views. The Minister of Yugoslavia is visibly chagrined nnd blames the situation on the weakness of French foreign policy. L- test 16. Latest dévelopments have reflected a desire on the part of the Austrien Government to calm public opinion. The Federal Pross Service in a confiden- ti:l talk with the representatives of the Anglo- American Press expressed great appreciation for the sympathy end understending which they had shown in despatches to their newspapers. An urgent appeal was then made to them for the present to formulate news in CS calm a manner as possible. This afternoon the press service telephoned certain correspondents and asked them to deny in the name of the Chancellor rumors that Austria would withdraw from the League of Nations, join the Anti- Comintern Pact, conclude a customs union with Germany, revise the naturelization of Jewish citizens, or enter into C military alliance with Germany. More- over it was asserted that the Chencellor had had pre- vious knowledge of Dr. Seyss-Inquart's intention to proceed to Berlin, where he had gone with the Chan- cellor's approval for the purpose of concluding an agree ent between the Ministries of the Interior of both Austria and Germany for non-intervention in Austrien internal effairs. It is clear that Chancellor von Schuschnigg has not lost courage and intends valiantly to continue the struggle. Dr. Michael Skubl, the Under Secretary for Public Security, who will serve under Dr. Seyss- In uart, has had his functions enlarged by the Chr ncellor. From no:. on he will occupy the equivalent of 17. of four posts, in two of which he will be his own superior. In addition to being Under Secretary for Public Security he will serve as Inspector General of the Public Executive, which comprises both the police end the gendarmerie. He will con- tinue to serve as Inspector General of the police as well as Police President of Vienna. If Dr. Seyss-Inquart is indeed loyal to Chan- cellor von Schuschnigg, his appointment will not prove satisfactory to his German sponsors and the crisis will be renewed. If he is disloyal, he is in the strategic position of the Trojan horse. Chancellor von Schuschnigg end Dr. Skubl will undoubtedly endeuvor to out-manoeuver Dr. Seyss- Inquart; indeed in certain quarters there are sanguine hopes that such a policy may prove success- ful. It is argued that wr. Seyss-Inquart is not a strong character and not unduly intelligent. Austrians are masters of defensive tactics, and I do not doubt that their techni ue will be skillful. However, Herr Mitler imposed Dr. Seyss-Inguart on the Austrian Government in his present capacity by ultimatum. It is fair to assume that Dr. Seyss-Inquart will receive specific instructions with regard to what he is to do. It is also not improbable that oither officially or unofficially there will be a German police mission in Vienn to assist him. Resistance, passive or otherwise, on the part of Dr. von Schuschnige end Dr. Club? ill undoubtodly provoke C. "shoudown" end if necessary ultimt. The pross reports today that the 18. the visit of Field Marshall Goring originally expected last November will take place in March. It may, I think, be foreseen that Göring will not hesitate to repeat the threats of Berchtesgaden. There have been rumors and denials. The German press has denied that German generals were present in Berchtesgaden. According to official Austrian statements, General von Reichenau, General Keitel and General Sperrle were on hand. They apparently collaborated efficiently in the attempt to overawe Dr. von Schuschnigg. It has also been officially denied that there was a military demon stration at the Austrian frontier. This denial would also appear to be inaccurate. I queried the Foreign Minister, Dr. Schmidt. He replied, perhaps evasively, that he did not believe that it was a military demonstration. He thought it was manoeuvers which had been planned at least two months in advance. If those menosuvers had in fact been planned two months in advence, it would not establish their innocence of character. The Tavs "Plen of action for 1938", which I understand was scheduled to go into operation it the end of January, provided for military forces on the frontier on the pretext of menocuvers. In thy event, Ch ncellor von Schusch- nigs informed II. Pueux that it vos a military demonstration. The : ct that Germen troops were there was ::1so confirmed to me by the Minister of Yugoslavia, :.. Lemarevitch, who despatched n cent by 19. by motor car over the frontior. L.y information is that there was at least one division. Despite the reassuring amnouncements which have already been made and which may be made, it seems clear that Herr Hitler has decided to liqui- date the Austrian question. The only factor which awaits clarification is the time element. Sanguine circles in Vienna claim that Austria has won time and will have a breathing spell of from six to eighteen months. This was even announced in confi- dence to foreign press representatives by Colonel Adam, the Chief of the Federal Press Service. He concluded with the statement that "time was working for Austria". The British Minister believes that time is not working for Austria. He takes the pessi- mistic view and deplores the prospect that the end is approaching of the last free home of German culture. Efforts at Gleichscheltung will probably be directed primarily into the economic and military fields. The tactics which will be employed by Dr. Seyss-Inquart should indicate in the relatively near future whether it is intended to build up the National Socialist movement at an accelerated rate. Well informed circles think it possible if not probable that the radicals of the left who are re- leased under the amnesty will be arrested egain and that there will be considerable zeal in ferreting out unist activities. Among implicated Communists there will probably be many Jews. The activities of the 20. the Anti-Semiten Bund will presumably increase. The Legitimists are apparently divided into two camps. The conservative faction is completely dis- heartened, while the more rádical faction talks of the need of a monarchist coup. The Bishops of Austria are planning to meet and in Catholic circles there is speculation about endeavoring to enlist British and French support in order to put Otto on the throne. It would appear, though, that both the Catholic Church and the Legitimists are, for the moment at least, very much at a loss. I am reliably informed that Chancellor von Schuschnigg has very sharply re juested the Legitimists to remain inactive. Information indirectly but reliably received from left-wing sources indicates that in the present crisis, S.S distinguished from that of 1934, labor leaders and the renk end file are wholeheartedly supporting the Schuschnigg régime. The Government, however, through the labor organizations of the régime, hes energèti- cally intervened in order to prevent protest strikes and demonstrations. Reports from National Socialist sources indicate that in the Tyrol and elsewhere there is talk of "lightning" demonstrations following the Fuhrer's speech on February 20. In towns and villages National Locialist sympathizers would quickly assemble and rapidly disperse in order to give an exhibition of strength end organization. In other parts of Austria there tro rulors of National Socialist meetings which will 21. will pass resolutions. Following Herr Hitler's speech on Sunday next, Chancellor von Schuschnigg will address the Bundestag on February 24, the day, according to the Federal Press Service, which concludes the period of silence to which the Chancellor was pledged. To recapitulate: The Berchtesgaden conversations would appear to have been carefully planned, even to stage setting, in order to bring about the capitula- tion of the Schuschnigg régime. Chancellor von Schuschnigg proceeded to Berchtesgaden on short notice and without a program. He clearly did not know what he was going to encounter. It seems, moreover, evident that Herr Hitler has decided definitely upon the "coordination" and subsequent annexation* of Austria. The only element which remains in doubt is the speed with which he will attempt to accomplish his ends. It seems also confirmed that the Italian Government has not been in the picture beyond having been informed in advance on February 10 that the Chancellor would visit Berchtesgaden. Reports that Italy participated in the preparations for the meeting seem to be erro- neous. It is probable that in the long run the Berchtesgeden meeting will be found to have for- reaching implications. Respectfully yours, my Creams T'Affaires ad interim. JCW/LGW 800. * Herr Hitler spoke specifically of annexation to Dr. von Schuschnigg.