File No. 763.72119/1938

The Chargé in Denmark ( Grant-Smith) to the Secretary of State


2813. The military comment in the German press evidently acting under inspiration is now proclaiming that the Entente’s military activity is dictated by the absolute necessity arising from political and economic causes of gaining a military decision this year so that anything less than this can be interpreted as a defeat.

In the past week political discussion suddenly assumed an almost unprecedented volume and intensity; most of it can be summed up in the one word peace. The Austrian note, Payer’s speech, the ministerial crisis, rumors of the Finnish throne question and Prussian electoral reform are all discussed with peace as a starting and finishing point. There is complete unanimity that Austria’s step was ill-timed and ill-advised; from the first there has been entire scepticism as to its results; the Conservative press is bitterly derisive and the Socialist press lukewarm. Even the thought that sharp rejection by the Allies may assist in reconstituting the inner front seems to offer little consolation. The press is likewise unanimous that the initiative for the note was solely in Vienna and many circumstances tend to indicate that this is in fact correct and that its despatch was rather without than with Germany’s warm approval. It is otherwise difficult to explain that such united disapproval was permitted in the German press and that Payer’s speech seemingly intentionally cut the ground from beneath the Austrian note before its despatch. Something similar to the Austrian note was to be expected in the course of the German peace offensive but it is difficult to believe that Germany would not have waited for a more propitious moment, while internal affairs may well have compelled Austria to immediate action, even in the face of German disapproval.

Payer’s speech was greeted as representing the Government’s peace program, which is undoubtedly the case. It found adherents among the Centrists and sections of the Progressives and National Liberals. The Pan-Germans were furious at its “renunciations” while the Socialists and Liberals of the Tageblatt brand see ever more clearly that Germany’s eastern policy makes peace out of the question. As a result the Reichstag Majority presents an appearance far from united, while never have the general cries from all quarters for unity of the inner front been louder.

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The hostility towards Hertling among the Socialists and Liberals has certainly not abated in spite of the over-plaintive denials of Germania that no crisis exists. The realization among Socialists and Liberals that the Chancellor’s conservative character also blocks the way to peace, seems to have reached a point where even the reaction from the Allied rejection of the Austrian note cannot possibly save him.

Copy to London.

American Legation