852.00/5010: Telegram
The Chargé in France (Wilson) to the Secretary of State
[Received March 24—6:47 p.m.]
406. I was told at the Foreign Office this afternoon that they are puzzled and uneasy over the Italian attitude as revealed by Grandi yesterday in the London subcommittee in refusing to discuss the question of withdrawal of volunteers from Spain. They feel that the recent defeat—indeed their information describes it as a rout—of the Italian forces near Madrid has been a severe blow to Italian prestige and there are, of course, few things so essential to a dictatorial regime as the maintenance of its prestige.
They feel it possible that Grandi’s attitude yesterday may have been only a first and natural reaction to events in Spain; but they also consider it possible that it may spring from something more fundamental and more disturbing. With reference to this second hypothesis they are bearing two [things?] in mind: First, information which they possess regarding the concentration of troops in Italy at various points which is what would be done if Mussolini had decided to withdraw from the Non-Intervention Agreement and to send troops openly into Spain. Second, the sudden announcement of Ciano’s visit to Belgrade: the French Government understood from the Yugoslavs just a week ago that their negotiations with the Italians which had been going on for months were not making any progress. Now they are suddenly advised that the Italians have agreed to many of the points the Yugoslavs had been requesting. The Foreign Office does not know what the Italians have received as a quid pro quo. They feel that this sudden decision of the Italian Government to reach agreement with Yugoslavia following upon Mussolini’s precipitate [Page 260] return from Libya can be interpreted in two ways. First, as an effort to restore prestige to the regime after Spanish defeats through playing up the agreement with Yugoslavia as a great diplomatic victory. It can also, however, be interpreted as a plan to assure Italy that she will have nothing to worry about from the Yugoslav quarter for a period of time, leaving Italy that much freer to engage herself on a large scale in the Spanish adventure.