File No. 763.72/1581

The Ambassador in Austria-Hungary ( Penfield ) to the Secretary of State


548. While nothing has been consummated, I believe that Austria-Hungary is holding conversation with Italy looking to purchase of Italy’s non-entry into war by ceding Trentino to Italy. Vienna full of rumors and Foreign Office to-day confesses to us that negotiations are going on. Rumor has it that Germany will give Austria certain Bavarian territory if Austria will cede Trentino to Italy. For days there have been frequent conferences between Emperor Francis Joseph and his closest advisers.