640.0031 Danube/120

Memorandum by the Under Secretary of State (Castle) of a Conversation With the Swedish Minister (Bostrőm)

The Swedish Minister brought up the question of the proposed Danubian Confederation. He said that he could not see how this [Page 859] could be brought about unless in some way Germany could be included as it would be disastrous for Germany. I told him that I did not agree with this because anything that would increase the prosperity of Europe would, in the end, be useful to Germany. He asked whether we would approve some kind of arrangement between these Danubian states. I said we would, on condition that the great powers did not receive special consideration, that the question of a Customs Union between Germany and Austria was different, since that would mean the practical absorption of Austria into Germany, but an agreement between the smaller powers would obviously be for the purpose of developing the economic resources of all of them. The Minister seemed to understand this and said that, in other words, I agreed with the old saying that the Austro-Hungarian Empire, if it did not exist, would have to be constituted. I said that I most emphatically did agree, not politically, of course, but that all the region was an economic entity which could not, for the good of the world, be broken up.

W. R. Castle, Jr.