The Chargé in Austria (Wiley) to the Secretary of State
[Received March 9—9:50 a.m.]
54. Am informed by Hornbostel that Schuschnigg during the next 2 or 3 weeks will endeavor to “take reins back into his own hands” establishing definite line between legal and illegal activities and acting with energy. Hornbostel states he is much less discouraged than a week ago. Hornbostel complains, however, crisis is costing Austria heavily in outflow of foreign exchange, export of art treasures, and business paralysis.
British Minister pessimistic but feels that National Socialists should not yet become too confident. He believes Schuschnigg will react energetically and still hopes Italy may endeavor to save the situation. He asserts categorically that Mussolini was not forewarned and is both annoyed and nervous.
French Minister states that though Austria is not yet lost things are going very badly. At Linz Saturday41 Seyss-Inquart spoke as though he were the Chancellor. Austrian Government had appealed for French and British financial support. Puaux42 frankly told Schmidt Monday that before he could recommend favorable action he would have to know whether money was going to Schuschnigg or Seyss-Inquart.
Schmidt admitted that Seyss-Inquart went further than “promised” at Berchtesgaden but insisted French Minister would soon see countermove by Schuschnigg to redress the situation.
Puaux complains that he is in impossible situation. He has urged Schuschnigg on to resistance but is able to support him only with sympathy. So far he has been entirely unsuccessful in endeavoring to persuade his Government to adopt forceful attitude.
He believes situation will develop rapidly. Austria could win out in a tactical war of wits but not against intimidation.
Government and Catholic press today openly critical of Nazi tactics. Burghermaster of Vienna has publicly protested against Nazi “mutiny”. Chancellor now in Innsbruck where he will deliver speech today.
Situation shows signs of becoming more acute with increasing friction over Nazi demands for inclusion in provincial and municipal councils.