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306 Memorandum for Cabinet

25 October 1938

1. On 4th October, the Commonwealth Government was informed by the
British Government that the Italian Government had decided to
withdraw 10,000 troops from Spain on its own initiative and
without reference to the withdrawal of foreign volunteers by the
Barcelona Government, and that the Italian Government had in these
circumstances proposed to the British Government that the Anglo-
Italian Agreement should be brought into force at once. The
Commonwealth Government was informed in a subsequent cable [1]
that the Italian Government had stated that if its present
proposals were accepted no further Italian troops would be sent to
Spain and that it was quite probable that the remainder of the
Italian troops would soon be withdrawn. It also appears from this
telegram that the British Government has informed the Italian
Government that it could take no immediate action in regard to the
matter, but if the withdrawal of Italian troops now contemplated
could be effected, the Italian Government's proposal would be
brought before Cabinet at the first opportunity and, if Cabinet
agreed, would be laid before Parliament immediately on its
reassembly when the matter would become one of confidence in the
2. It will be recalled that the Anglo-Italian Agreement is to come
into force on a date to be determined by agreement between the two
Governments, and in this respect the British Government regards
the settlement of the Spanish question 'as a pre-requisite of the
entry into force of the agreement'.
During the past few months the Italian Government has repeatedly
urged that its acceptance of the British plan for the withdrawal
of foreign volunteers is, in effect, a settlement of the Spanish
situation, and that the Anglo-Italian Agreement should accordingly
be put into immediate effect. The British Government has, however,
maintained that the settlement of the Spanish question must be one
which would eliminate this matter as a source of international
friction, and that a settlement could only be achieved by:-
(a) carrying out the plan of the Non-Intervention Committee;
(b) a unilateral withdrawal of Italian troops from Spain;
(c) the conclusion of an armistice.
3. The non-intervention plan has not yet been put into effect. It
has been accepted by the Spanish Government, but General Franco
[2], after delaying for weeks in his reply, said that the plan
would only be acceptable if the Non-Intervention Committee were
first prepared to grant belligerent rights to his Government.
In the meantime, the Spanish Government raised the question of the
withdrawal of foreign volunteers from Spain at the League Assembly
meeting in September, and agreed to the supervision by a League
International Commission of the withdrawal of volunteers from
Republican Spain.
4. The intimation by the Italian Government to withdraw a large
part of its forces from Spain, and the reiteration of declaration
that it has no territorial or economic ambitions in Spain,
indicate that it genuinely desires the implementation of the
Anglo-Italian Agreement,
5. At the same time, it must not be overlooked that the continuous
drain on Italian resources of this unprofitable Spanish adventure,
frustrated hopes, growing opposition on the part of General
Franco's adherents, and the end of the war apparently as far off
as ever, may have considerably influenced Signor Mussolini in his
decision. A statement in the last Foreign Office despatch from
Burgos [3] is significant: 'Spanish and Italian relations have
steadily gone from bad to worse. No amount of propaganda or
mellifluous phrasing can hide the fact that the two allies are
heartily tired of one another and look forward to the day when
their partnership in arms will be dissolved.'
6. The real reason for the recent advance by Italy probably lies
in the strengthened position of Germany, and the correspondingly
weakened position of Italy. Italy now has a common frontier with
Germany, which increases and emphasises her vulnerability; she
fears the possibility of Germany endeavouring to obtain an outlet
to the Mediterranean for her Austrian territory; she looks askance
at the augmentation of German military and economic power by the
Anschluss, the acquisition of the Sudeten areas in Czechoslovakia
and the gravitation into the German camp of Hungary and Poland.
Reports from the British Embassy, Rome, during the recent crisis,
led to the belief that despite Signor Mussolini's public
declaration on the solidarity of the Berlin-Rome axis, Italy was
not prepared automatically to go to war on the side of Germany.
Various reports received by the Commonwealth Government indicate
that the economic and financial position of Italy, severely
strained by war, shows a continued deterioration.
The acquisition of Abyssinia has made her even more vulnerable
militarily than before. Like Great Britain and France she has a
strong incentive for the maintenance of a free Mediterranean, Suez
Canal and Red Sea by agreement, and it is this that, the Anglo-
Italian Agreement is designed mainly to effect.
7. The views of the Commonwealth Government on the question of
Anglo-Italian friendship were set out in two telegrams as
(i) Telegram to the Secretary of State for Dominion Affairs-dated
2nd February, 1938-

'My colleagues and I have read with great interest your telegram
of 27th January, 1938, with regard to international affairs. We
agree that the present situation calls for action and we feel that
the re-opening of conversations with Italy is of the utmost
importance. I should be glad if you would continue to keep me
fully advised as to the situation.' [4]

(ii) Telegram to the Hon. Sir Earle Page, London: from the Hon. J.
A. Lyons-dated 6th July, 1938:

'Information recently received from despatches and cablegrams
indicates a deterioration in Anglo-Italian relations which is
causing grave concern to the Commonwealth Government. We feel that
implementation of Anglo-Italian Agreement is of paramount
importance in the present international situation, and we would
like you to urge the United Kingdom Government that everything
should be done to bring it into effect at earliest possible moment
especially as it appears to us that slow progress in negotiations
over Sudeten question may lead at any moment to a crisis. [5]

8. The Prime Minister on the 21St October received a personal
telegram from Mr Bruce stating that Mr Chamberlain and Lord
Halifax were in favour of the application of the Agreement, and
that he thought it desirable for the Commonwealth Government to
indicate as soon as possible that it would welcome an early
application of the Agreement (See Annex 'A'). [6]
The views of the British Ambassador at Rome, dated 4th October,
are also attached (See Annex C). [7]
Lord Perth states that if we fail to bring the Agreement into
force, 'consequently he (Mussolini) will conclude a definite
military alliance with Germany even though this is against his
innermost wish and would be unpopular in the country.'
9. It is a matter for decision whether the Commonwealth
Government, considers it advisable again to inform the British
Government of its views.
10. Should the Anglo-Italian Agreement be put into effect this
would involve the de jure recognition by Great Britain of the
Italian conquest of Abyssinia, and it would then presumably be
necessary for the Commonwealth Government to indicate its attitude
in regard to this question. A copy of a submission dated 18th May,
1938, dealing with this matter is attached (Annex 'B'). [8]

1 Not printed.
2 Leader of the Nationalist side in the Spanish Civil War.
3 Not printed.
4 Document 122.
5 Document 227.
6 Annex A is already printed as Document 302.
7 Printed as the second attachment to this Document.
8 Printed as the first attachment to this Document.

Attachment I
Annex B

Cabinet Submission

18 May 1938


When considering the question of the de jure recognition of
Abyssinia, it will be recalled that certain general principles are
On the 11th March, 1932, the Assembly of the League of Nations
unanimously carried a resolution which contained a provision that
'it was incumbent on Members of the League not to recognise any
situation, treaty or agreement which may be brought about contrary
to the Covenant of the League of Nations or to the Pact of Paris.'
This resolution was carried by the Assembly when the position in
regard to Manchukuo was being considered, and Australia was a
party to this resolution. No countries other than Italy, Germany
and Salvador have in fact recognised the new status of Manchukuo
de jure.
Australia was also a party to the action taken by the League in
the course of the Italo-Abyssinian dispute. The Council of the
League of Nations came to the conclusion that the Italian
Government had resorted to war in disregard of its undertaking
under Article 12 of the Covenant of the League of Nations.
Australia was, at this time, a Member of the Council, and at the
meeting of the Assembly of the League of Nations on the 9th March,
1936, the Delegates of fifty countries, including Australia,
recorded their concurrence with the opinions expressed by the
Members of the Council.
The present position in regard to the Italian conquest of
Abyssinia is that this question was considered by the Council of
the League of Nations at its meeting on 9th May, 1938, at the
instance of the British Government. The British Government
addressed a communication to the Secretary-General of the League
[1] stating that it had given consideration to the anomalous
situation arising from the fact that many States Members of the
League, including five of those represented on the Council, had
taken action which directly or by implication involved recognition
of the sovereignty of the Italian Government over Ethiopia,
whereas other States Members had not taken any such action. The
British Government had accordingly formed the opinion that this
situation should be clarified.
At the recent Meeting of the Council, the British representative,
Lord Halifax [2], stated that the British Government considered
that each country should now be free to decide for itself in the
light of its own situation and obligations, the question of the
recognition of the Italian conquest of Abyssinia. As far as the
British Government's own action in this matter was concerned, this
would depend on the progress made in the solution of another large
and difficult problem. After a lengthy discussion by Members of
the Council, the President, M. Munters, observed that a large
majority of the Members of the Council were clearly in favour of
each individual State deciding for itself in the light of its own
situation and obligations the question of recognition of the
Italian conquest of Abyssinia.
It will be remembered that the Anglo-Italian Agreement which was
recently concluded, will not come into force until a date to be
fixed by both Governments concerned. The British Government
regards a settlement of the Spanish volunteer question as a
condition precedent of the entry into force of this Agreement, but
at the same time, the British Government informed the Italian
Government that it was desirous that such obstacles as might at
present be held to impede the freedom of Member States as regards
recognition of Italian sovereignty over Abyssinia should be
removed, and that it intended to take steps at the forthcoming
meeting of the Council of the League of Nations for the purpose of
clarifying the situation of Member States in this regard.
The actual recognition on the part of the British Government of
the new situation in Abyssinia would be effected if the British
Government were to decide on such recognition by the presentation
of a letter of credence addressed by His Majesty to 'The King of
Italy, Emperor of Ethiopia.' The ordinary form of letters of
credence describe His Majesty as 'George VI, by the Grace of God,
of Great Britain, Ireland and the British Dominions beyond the
Seas, etc.', and it is accordingly arguable that a recognition
effected in this form would bind Australia, as the Commonwealth
Government relics on the instrumentalities of the United Kingdom
for diplomatic and consular representation.
On the other hand, a resolution of the 1926 Imperial Conference
made it dear beyond doubt that no part of the British Commonwealth
of Nations could be committed to any action in the field of
foreign affairs without its specific concurrence. This view is
supported by the procedure adopted in the case of the recognition
of the Spanish Republican Government in 1931, when separate Notes
on behalf of all the Dominions were presented to the new Spanish
Government. In addition, Australia is, of course, a separate
Member of the League of Nations.
New Zealand seems to be definitely opposed to the de jure
recognition of the Italian conquest of Abyssinia, but owing to the
fact that the other Dominions are not Members of the Council,
their attitude in regard to this matter is not known.
It would appear, accordingly, that if the Commonwealth Government
were to decide to recognise the Italian conquest of Abyssinia, it
would have to take independent action and formally notify the
Italian Government through the British Ambassador at Rome. [3]

[AA : A981, ITALY 30, ii]

1 Joseph L. A. Avenol, Secretary-General 1933-40.
2 U.K. Foreign Secretary.
3 This submission was drafted by W. R. Hodgson, Secretary of
Department of External Affairs.

Attachment II
Annex C

Lord Perth, U.K. Ambassador to Italy, to Viscount Halifax, U.K.
Secretary of State for Foreign Affairs

Dispatch (extract) ROME, 4 October 1938

I feel that we have come to the parting of the ways. If it is
possible for His Majesty's Government to authorise me to inform
the Minister for Foreign Affairs [1] that they are prepared to put
the Anglo-Italian Agreement into force and to recognise the Empire
once ten thousand troops have either left Cadiz or reached Naples
then I believe that Signor Mussolini will work for a European
detente and general pacification. If we fail to do so he will
consider that although he has fulfilled condition B. of the
memorandum of 20th June [2] by withdrawing Italian troops on a
considerable scale we still refuse to give the desired equivalent
and that we have deliberately adopted and are still trying to
adopt a policy of chloroforming and that we have no desire and do
not intend to bring Agreement into force. Consequently he will
conclude a definite military alliance with Germany even though
this is against his innermost wish and would be unpopular in the
country. Signor Mussolini is of course hoping that his action in
connection with the crisis will receive concrete acknowledgment by
the United Kingdom Government in the shape of bringing into force
of the Agreement and recognition of the Empire. I think that he
feels that while the Prime Minister [3] has come back from Munich
with a signed Agreement with Herr Hitler for consultation with
Germany, he, in spite of his active intervention in support of the
Prime Minister's proposals, has been left out in the cold and that
the bad boy has secured a reward while the good one goes empty

[AA : A981, ITALY 30, ii]

1 Count Galeazzo Ciano.
2 The substance of the memorandum of 20 June is summarised in the
last sentence of paragraph 2 of Document 306.
3 Neville Chamberlain.

[AA : A981, ITALY 30, ii]

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