751.65/209: Telegram

The Ambassador in France (Straus) to the Secretary of State

46. The Embassy has encountered unexpected delay in reporting upon the Laval–Mussolini conversations in Rome. Efforts to get in touch with more important Foreign Office officials were unsuccessful not only because of the critical situation in the Saar but also due to the fact that Laval left for Geneva within 48 hours of his return from Rome. Only one member of the American press in Paris (thanks to a close personal friendship of long standing) was in a position to have a frank talk with Laval and the following consists of a summary of the information obtained …

1. Financial.

Mussolini asked for permission to float an Italian loan in Paris but was told that France could not allow this until Italy had put her house in order. Léger,6 who accompanied Laval, told Mussolini that French financiers considered Italy as a bad risk at present and that if he did not balance his budget Italy could not hope to interest foreign capital or investors. It was agreed, however, that if the Italian currency again got into trouble the two Governments would “consult” before Italy took any decision concerning the gold standard. Under pressure the Italians agreed to play a more important role in the gold bloc7 but only when France had promised that if an emergency arose Italy might hope to secure “Treasury facilities” in Paris from the Bank of France. Laval stated that Mussolini had been promised [Page 174] that the French Government would favor an eventual floating of an Italian loan on Paris market if and after Mussolini strengthened the Italian financial situation along the lines which France felt was necessary.

Laval expressed the personal opinion that Mussolini is more worried by Italy’s financial troubles than by any question of foreign or domestic politics. Laval claims Mussolini is fundamentally ignorant on financial matters and has made the mistake of weakening his staff by dismissing able financial advisers who opposed his policies. Laval is also of the opinion that Mussolini knows that he is facing a serious financial question and that he feels that France alone can help him.

2. Military.

(a) Navy. Italy will not build the two 35,000-ton cruisers announced in 1934. Laval informed Mussolini that if Italy persisted in building these cruisers she need not expect any help from France. Laval added that there was a strong faction in the French Ministry of Marine headed by Piétri8 in favor of the concentration in the Mediterranean of a stronger French cruiser squadron and that while Laval had up to the present been able to defeat that plan he felt that he could not prevent it if Italy should start work on the two cruisers.

Both men discussed briefly the Japanese denunciation of the Washington Naval Treaty9 and mutually agreed that they have more to gain than to lose by adopting a “hands off” policy until they see which side is going to win. Laval pointed out the futility of France and Italy spending money on a naval race when both countries needed badly for the next 4 years a strengthening of their land forces. No final decision was taken on the Washington Treaty.

(b) Army. Laval made it the chief condition of rapprochement that Italy should abandon Germany and side with France in the French fight to prevent the legalization of the present German armaments without its counterpart in guarantees. Italy and France will be on the same side in Geneva and both will insist that acceptance of Germany’s present Army (three times Versailles Treaty)10 must depend upon Germany’s acceptance of control and of the two main central European pacts: (1) the noninterference pact in Austria; (2) the Eastern Locarno. Mussolini broached the idea also of obliging Russia and Germany to sign an aviation control treaty which idea Laval brought back to Paris and submitted to the Cabinet. It is now being studied by French General Staff. This treaty would limit [Page 175] the number of military airplanes just as the Washington Treaty limited naval tonnage.

3. Political.

Italy as soon as Mussolini can do it gracefully will withdraw her backing of Hungary’s revision claims. Laval found Mussolini hard to convince on this point as the latter feared it would react against his personal prestige. Laval in return stressed that it was a case of abandoning Hungary or seeing Yugoslavia mobilize the bulk of her Army in Croatia and Slovenia.

Although it was a bitter pill Mussolini was forced to swallow the Little Entente plum. The Rumanian Government agreeing to the French suggestion that not only Yugoslavia and Czechoslovakia but also Rumania be allowed indirectly to sign the protocol guaranteeing Austrian independence, Mussolini recognized the role of Rumania as third state of the Little Entente. Laval stated that Mussolini was bitterly critical in the matter of Carol11 and his entourage and insisted that while he was willing to deal with France he did not feel called upon to associate with or consult all of France’s allies particularly Yugoslavia and Rumania.

Mussolini agreed to call in the Ministers of the Little Entente and told them that Italy and France had agreed upon the necessity of territorial integrity (the status quo of present frontiers). This was done at Laval’s request because Yugoslavia threatened to quit France and to tie up with Germany and Poland if Italy refused to make some gesture to prove that she had no present desire of expanding her position in the Eastern Adriatic.

4. Vatican.

Laval stated that he gave the Pope a 30-minute essai on French foreign policies with special emphasis on Austrian and German problems. He did not ask the Pope to use the Vatican’s influence in any way but the Pope voluntarily expressed the opinion that he felt that Austria should not be taken over by Germany.

In conclusion Laval stated that on paper he felt that he had lost his shirt to Italy for he had given Mussolini land in the Sahara and near Djibouti and had received nothing much in exchange. To quote his own words, however, Mussolini could not raise a dozen bananas on that 117,000 square kilometers of African soil and from now on Italy will have to pay for its policing instead of France. Laval felt, however, that in getting Mussolini to drop Germany’s arms demands and Hungary’s revisionist claims he really came away with Mussolini’s shirt and studs.

  1. Alexis Léger, Secretary General of the French Ministry for Foreign Affairs.
  2. Belgium, France, Italy, Luxembourg, the Netherlands, Poland, and Switzerland constituted the seven so-called “gold bloc” countries.
  3. François Piétri, French Minister of Marine.
  4. Signed February 6, 1922, Foreign Relations, 1922, vol. i, p. 247. For denunciation of the treaty by Japan, see ibid., 1934, vol. i, pp. 405426.
  5. Treaty of peace signed June 28, 1919, Foreign Relations, The Paris Peace Conference, 1919, vol. xiii, p. 55.
  6. Carol II, King of Rumania.