Letter from John W. Dulanty to Joseph P. Walshe (Dublin)
(Secret)

Late¹ last evening Mr. Eden invited the High Commissioners to meet him this morning at half past ten. At the meeting there were present in addition to the British Foreign Secretary, the British Dominions Secretary,² the High Commissioners for Australia,³ South Africa,⁴ New Zealand⁵ and myself.

Mr. Eden began what he described as an informal confidential talk by observing that there was no point in referring to the peace proposals except to say that unless something quite unforeseen happened they were dead.

He thought we should know that he had approached Greece, Turkey, and Yugoslavia and had received from them quite satisfactory assurances. They were each clear that there could be no unilateral war between England and Italy and their interpretation of Article 16, paragraph 3, of the Covenant agreed entirely with the British interpretation. Each of these three powers had instructed their Ambassadors to call on M. Laval and inform him of the assurance which they had given to the British. M. Laval had now been so informed.

The British Foreign Secretary was in some doubt as to whether the result of his conversations with the three powers just named should be communicated to Italy and he was about to advise them to tell the Italian Ambassadors in their respective capitals when the Italians themselves through their Ambassadors made enquiry of Turkey and Yugoslavia. The result of the conversations were communicated to the Italian Ambassadors in the capitals of those countries and by this time it was anticipated the Italian Ambassador in Athens had been similarly informed.

Mr. Eden said that arrangements were now being made for the British Naval and Military Attachés to enter into consultation with the Naval and Military authorities of Greece, Turkey, and Yugoslavia.

I enquired what was their position with regard to Spain. Mr. Eden said that the British had made a confidential approach to Spain but they had as yet received no answer.

A question which Mr. Eden said he had not yet resolved in his own mind was whether the Council should be told of the assurance which the three powers had given him.

Towards the end of the meeting Mr. Eden said he had made up his mind to inform the Council of the League at its next meeting.

The High Commissioners for Canada and South Africa said with some emphasis that at the next meeting of the League Council the Nations who had agreed that Italy was the aggressor should be pressed to say what they would be prepared to do if a situation arose in which military sanctions were unavoidable. Everyone must be made to face up to the realities of the situation.⁶

Mr. Malcolm MacDonald thought that this was a question which might more advantageously to the British be raised by one of the smaller nations. Mr. Eden was a little doubtful whether the question should be raised since it could be argued that the decision already given by fifty odd nations covered the situation.

Mr. Massey, High Commissioner for Canada, thought that, in view of the Chanak incident⁷ some time ago, it was important if any approach was to be made to Canada for action such approach should come from Geneva and not from London. In other words, the Dominions being League powers should be treated as such. Mr. Eden and Mr. MacDonald readily accepted that view. The High Commissioners for New Zealand and South Africa said that was the fit and proper procedure.

In my Secret report of the 10th December⁸ I recorded the British opinion that the now abandoned peace proposals were more favourable to Italy than they would have been if the British had felt more sure of the French. I asked Mr. Eden whether their position vis-á-vis the French had undergone any change since the dropping of the Peace proposals. He thought the French position had improved from the British point of view. They now wanted the League brought in much more than they did previously, and this, he thought, was due to their re-awakened apprehension of the emergence of Germany as a big military power. Except for M. Herriot no French politician had made the Italian position clear to the French people. His opinion was that the French Government could if they wished hold French opinion in support of military sanctions. It was more a question of ability to take action than of intention. The whole of the French military plans were formed with reference to one frontier and one alone and that was the German frontier. They had no preparations at all against the Italian front.

The British Foreign Secretary said that on his last visit to Geneva he found that nobody was keen to do anything at the moment about the oil sanction. The United States position was not clear and the death of the President of Venezuela⁹ further complicated the situation since it was not known what view his successor would take in this matter. His opinion was that the big oil companies in America were observing strict neutrality. The smaller oil companies of America which were not so easily controlled were certainly sending oil to Italy. I asked whether what Mr. Eden called the smaller companies were not, taken together, big enough to send substantial supplies. Mr. Eden said that he used the word smaller in a strictly comparative sense and that the combined export of these companies was in fact very considerable. Sir John Cadman, the head of the Anglo-Persian, had told him that Italy's oil supplies were falling short because of cash. Mr. Eden's opinion was that financial sanctions were hitting Italy badly. He said that the Austrian Chancellor¹⁰ had been speaking to him recently and had been very depressed and gloomy. The Chancellor had thought that Austria might do well in obtaining the trade with Italy that would otherwise have gone to the sanctionist countries. This in fact had not happened because Italy had not the money with which to pay for supplies.

With regard to the immediate future, Mr. Eden said his policy would be to keep quiet and go steadily. To begin with, the Italians loathed him and he had better let the storm about his appointment blow out. He hoped that by the January meeting of the Council the whole situation might become much clearer, especially in regard to the oil position. The experts were at work on this question and it might be that when they met in January the reports would be that owing to supplies from countries outside the League the oil sanction would prove to be not really effective. He was not to be understood as saying that oil sanctions were dropped, but merely that at the moment they were hardly expedient.

Mr. te Water said that his Government was in favour of oil sanctions being imposed, and Sir James Parr said that his Government, a new Socialist Government, had instructed him to press for the fullest use of sanctions.

I did not express any view.

Early in the New Year the British Foreign Secretary would invite us to meet him again so that he might tell us what, if any, changes in the situation had taken place.