765.84/916: Telegram
The Consul at Basel (Donegan) to the Secretary of State
[Received 2:20 p.m.]
For the Secretary of State from Ambassador William E. Dodd.63
“After conferences with informed German, English, and Swiss people I venture to summarize situation. Italy must win in Africa [Page 636] or the Duce gradually falls. The object is to dominate East Africa and gradually control the Mediterranean. England is fully aware of her decline in case Mussolini succeeds. As I have wired before Germany expects Italy’s failure. In case Italy does collapse after prolonged warfare, Nazi regime will move into Balkan zone at will. From economic point of view Germany cannot wait very long. However, Schacht’s64 removal might precipitate domestic crisis.
All opinion agrees the League is about dead. If England does nothing her decline begins and dictatorial Europe will hardly be limited. The only chance of more democracy in the world depends upon the blockade of warring Italy. Washington may be interested in this. Dodd”.