740.00/588: Telegram
The Ambassador in the United Kingdom (Kennedy) to the Secretary of State
[Received 9:30 p.m.]
246. I saw Halifax and the Prime Minister this morning and as my visit with the Prime Minister was quite lengthy and covered all the points discussed with Halifax, I will merely give you the information from the Prime Minister, suggesting any possible differences of opinion between the two, when I come to them.
As to the general outlook: Chamberlain feels definitely that it is much better. He does not lose sight of the fact that Hitler is impractical and fanatical, but he sees no definite indication of moves toward Holland, Switzerland, or elsewhere to the west or to the Ukraine and in this he takes issue with the Foreign Office. He still feels that the only hope of doing business with Hitler is to take him at his word and when he says this he realizes that it is by no means certain that the word will be kept, but up to date he has no reason personally to disbelieve it.
He believes the reason for Hitler quieting down is primarily the President’s speech before the Military Committee29 and his rearmament program. He said it came at a psychological moment and he feels that his own correspondingly stiffening attitude has done much to make Hitler believe that the English would not take a fight lying down.
[Page 15]He believes there is a very definite chance of arriving at some solution through economics. He told me that in one of his visits to Hitler, while waiting for the latter, Ribbentrop proceeded to tell him what a specialist Hitler was on economics; that while he was in prison he worked out all the pros and cons and Chamberlain said that this coming from Ribbentrop, who knows nothing about economics, was faintly amusing. After he met Hitler and listened to a long dissertation on his economic theory for the solution of all our problems, Chamberlain was convinced that Hitler knew just a little more than Ribbentrop about economics, which was very little indeed. Chamberlain felt that Hitler’s reference in his speech to the economic situation that “we must have trade or die” was most significant because, in view of his attitude towards his immediate subordinates that he is god in the matter of economic policy, he would not have dared make this statement to the German people if there was not a very definite feeling amongst them that what he stated was the truth. Chamberlain also said that when Schacht was here he had a long talk with him and the latter was most outspoken in his criticism and personal vindictiveness towards Hitler but told Chamberlain not to believe for a minute that the economic policy would crack. Schacht said he was responsible for it but frankly did not know what kept it going. Schacht said there were two alternatives for Hitler to take: one was heavy taxation which they believed was impractical and the other inflation, the first steps toward which they were afraid would start internal agitation in Germany that would ruin the Government. So, with this in mind, Hitler has made definite overtures to England for economic consultation. They have made a coal agreement; they have invited Oliver Stanley30 to Germany and he is going the beginning of March; they have requested Gwatkin,31 who is under Leith-Ross,32 to come over and they plan to send Funk33 here. Both Halifax and Chamberlain feel that these are steps in the right direction and, while they are keeping their fingers crossed, they feel it essential to make as many industrial contacts as possible in order to keep their information as to what the Germans are thinking as much up to date as possible. Another indication of a more pliant attitude was that when Nevile Henderson34 went back to Berlin the other night and showed his speech to the Foreign Office they took back the speech of the Duke of Saxe-Coburg-Gotha and changed it to go along with Henderson’s speech [Page 16] and it was not returned to the Duke until during the dinner and he was ready to speak.
As to his visit with Mussolini, Chamberlain definitely considers him a practical operator. He contrasts Mussolini, as a man who likes to see the whole picture, very much like himself, as against Hitler, who looks out of the window at Berchtesgaden, dreamingly considering the future prospect of Germany without being very practical. He asked Mussolini what Hitler meant by all this flurry in connection with moves to the Ukraine, Holland and finally Great Britain itself. Mussolini shook his head and said there was no possibility of a move directly against England and he did not believe any possibility of a move against the other countries because Hitler, in his talks with him, had indicated that his problem had increased tremendously with the Sudetenland and Austria and that he wanted a long period of peace to put the whole situation in shape.
Chamberlain said that the Italians were talking loud in their threats against France, but he did not believe that Mussolini would take on France in a battle unless he had an absolute commitment from Hitler that he would go along and this, Chamberlain believes, he has not had. In fact he thinks, and I am of the opinion that this comes from Ribbentrop, that Hitler is urging Mussolini to play down the issues with France rather than make too great a fuss about them.
Chamberlain believes that a settlement of the Spanish situation will permit the Italians and French to get together. Mussolini said he had tried to do business with the French but had been unable to and therefore would not discuss anything further with them until the Spanish war is over. Chamberlain is holding up recognition of Franco in order not to give the opposition here a chance to say that he had recognized Franco just when the Government were on their way to win back Spain for the Loyalists. He says that this attitude is of course all nonsense, but, as he believes the war is likely to be finished in a very short time, he is holding off recognition and while he will not hold it up indefinitely, as he thinks the Government is liable to surrender any day now, he will grant recognition at what he considers the psychological moment. With the recognition of Franco, he thinks the Italians and French can get together for negotiations although he believes neither will want to start and that he may be called upon to use his good offices to get them together. He thinks that what will probably happen is that the Italians will settle for better treatment of the Italians in Tunisia, lower fares on the Djibouti Railroad and some improvement in their position on the Suez Canal, all of which he says the French will be willing to give them as Bonnet has already assured them, and as they would have been [Page 17] willing to give them without all this hollering, but Chamberlain is of the opinion that the dictators must holler loud to convince their people they are going forward.
Chamberlain does not take the possibility of a Russian-German alliance seriously. He says they are both so distrustful of each other that it would never work out; and that it is Hitler’s hope of course to stir up enough trouble in the Ukraine so that he can point out how badly the Russians are treating the Ukrainians and that he could go in if he wanted to and in this way get some more concessions without any strain on his resources.
Mussolini when talking with Chamberlain said he had very definite ideas on disarmament and Chamberlain said so had he and Mussolini agreed that, when the Spanish situation was settled, he would draw up a memorandum containing his ideas and send it to Chamberlain.
Chamberlain also considered as significant that Ribbentrop, who has been talking constantly about the decrepit English, now says that the one thing he wants to do more than anything else in the world is to have an arrangement between England and Germany.
I think that the point of difference on the whole question of England’s relationship with Germany is that the Foreign Office believes that Hitler is not to be trusted at all and that he will do something that will provoke trouble any day. Chamberlain’s idea is that he is going to go along, preparing and arming all the time, but assuming that he can do business with Hitler. He feels that America’s action psychologically and Britain’s tremendous amounts for defense have had a very definite effect on Germany and may do the trick.
I feel and the general impression here is that Chamberlain is stronger now than he has ever been and I asked him about this and he said he felt that was true. He is against having a general election at this time because he is afraid that it may interfere with trade. Business he says “is just starting to pick up and you want to cause more agitation.”
He was in very good spirits and looked very well and I would say that, in spite of all the evidence to the contrary, all of which he recognizes, he is very optimistic.
Incidentally he told me that he had had a report about guns being shipped over the Italian border from Germany and the answer he gets is that they are being shipped to Libya. He is not convinced however that what has been shipped up to date is of serious import.
It is very difficult to reconcile his two points of view: his hope that appeasement will still be worked out and his fear that Hitler has in his hands, and is quite likely to use them, the means of causing a world war. He definitely does not think Mussolini will cause it.
- January 1, 1939, at the White House, before a secret conference of the Senate Military Affairs Committee called by President Roosevelt. The general nature of the meeting was reported to the press.↩
- President of the British Board of Trade.↩
- Frank T. Ashton-Gwatkin, Counsellor in the British Foreign Office.↩
- Sir Frederick Leith-Ross, Chief Economic Adviser to the British Government.↩
- Walter Funk, President of the Reichsbank and Minister of Economics, who replaced Hjalmar Schacht.↩
- British Ambassador in Germany.↩