ITALY AND ETHIOPIA
League Council Session.—After much backing and filling, the European powers finally decided to call a meeting of the League Council on August 1 to tackle again the task of staving off an Italo-Ethiopian war. In a note of July 27, Italy agreed to attend the session, but with the implied conditions that its activities should be limited to an effort to revive the commission of conciliation and arbitration, which broke up in disagreement on July 9. In this policy of delay, Italy was supported by France, though England and certain of the smaller powers indicated a readiness for more decisive action. As the Council met, it appeared practically certain that a compromise plan would be agreed upon by which the arbitration commission would resume for another month, appointing a fifth neutral member as soon as possible.
Earlier in the month the efforts of French and British diplomacy were directed chiefly toward finding some formula for concessions on the part of Ethiopia which would induce Italy to call off military operations. Minister Eden’s early proposal that England cede to Ethiopia the port of Zeila as compensation for sacrifices to Italy was quickly rejected by Premier Mussolini, and it also aroused much criticism when it was heard about in England. Ethiopia on her part manifested approval of such a scheme, and in fact of other economic concessions involving no surrender of sovereignty. Italy’s price, however, apparently stopped little short of political control. There was some talk of a zoned hinterland joining Eritrea with Italian Somaliland, through which Italy could run a railway and in which she should maintain order. But back of such details was the fact that Italy had gone too far to stop without substantial gains. In Premier Mussolini’s mind is the fixed determination to win for Italy a colonial empire, in the belief that only thus can the old Roman dominance in the Mediterranean be revived, and that Italy can never stand with England and France until she shares with them colonial interests outside the Continent. Surrender of these aims would mean an end of the fascist regime. Unfortunately for Italy, empire building is a more difficult, and perhaps less profitable, enterprise today than it was in the past.
Restriction of Arms Exports.—A good demonstration of the effect of arms export restrictions in handicapping one belligerent against another was afforded by the difficulties experienced in this respect by Ethiopia. Italy indicated that export of munitions to the African state would be regarded as an unfriendly act. Up to the meeting of the League Council, the British as well as the French policy was to refrain from granting licenses for such exports. In the House of Commons the Ministry stated that in this regard Italy and Ethiopia were accorded the same treatment, and that Ethiopia had made no ’ application for munitions export licenses in recent months. Doubtless, however, such applications would have been made if there had been some assurance of -their being granted. Sweden late in July stated that she would permit the export of arms to either power.
Costs of War.—At a meeting of central bank representatives at Basie on July 8, fear was expressed that Italian war financing might upset world economic and monetary conditions. Signs of this were seen in Italy’s suspension on July 22 of the 40 per cent gold coverage of the lira. On the other hand, there is a general tendency to underestimate a nation’s ability to stand the economic strain of war. The costs of Italy’s African adventure has been placed at 10,000,000,000 lire, or something less than $825,000,000. Up to July 1 about one billion lire had been spent, a half of which was still owed abroad.
American Policy.—In the United States the danger of war in Africa gave rise to two very divergent popular sentiments. The first was that America should be “kept out of war,” and that events overseas were none of her concern. The second was that Ethiopia should be “kept out of war,” to accomplish which certainly called for something more than mere sympathetic interest. Both these ideas were suggested in the moves made by the State Department. On July 5, in response to an appeal from Emperor Haile Sellassie for some action under the Pact of Paris, Secretary Hull pointed out that arbitration was already in process, and that his government was “loath to believe” that either Italy or Ethiopia would resort to other than pacific means. On the next day, with unintentional irony, the State Department warned Americans to quit Ethiopia. Subsequently, on August 10, the Secretary expressed to the Italian Ambassador his concern over the African situation and its effect on world progress and economic recovery, and two days later he issued a statement drawing attention to the Pact of Paris and to the fact that it was “no less binding now than when it was entered into by the 63 nations that are parties to it.” The government gave no indication of an intention to seek international action under it, as had been attempted by the previous administration.
THE NAVAL SITUATION
Quotas Ended.—Sir Bolton Eyres-Monsell, First Lord of the British Admiralty, gave final recognition in the House of Commons late in July that the whole ratio system of naval limitations has gone by the board. This follows primarily from the denunciation of the Washington treaty by Japan, but also from the subsequent declaration of France that she considers herself no longer bound by treaty ratios. An alternative scheme suggested by the First Lord is that each naval power should submit its building program for the years up to 1942. A comparison of these programs might open the possibility of reductions, while providing each nation with adequate strength for “security.” The plan would appear sufficiently vague, and any reductions would be wholly voluntary, but it at least avoids the injury to national pride involved in the ratios. England no doubt considers that a beginning has been made by Germany’s acceptance of a navy only about one-third the strength of the British Navy, and in the Anglo-German arrangement may perhaps be seen some approach to the idea repeatedly advocated by British authorities—that in fixing the strength of navies it would be better to start with a smaller navy, i.e., Germany’s, and work up, rather than vice versa.
In accordance with the plan noted above, England at the close of July out-lined her building program for the next six years.
EUROPEAN POLITICS
Violence in Germany.—Throughout July the renewal of attacks on Jews, Catholics, and other elements of dubious Nazi loyalty in Germany indicated at least a temporary ascendancy of the radical wing of the Nazi party, and aroused fears of some new political upheaval. The anti-Semitic violence began on July 15 with riotous attacks in Berlin, apparently connived in by the police, and four days later Count Wolf von Heledorf, one of the more ardent Nazi Jew baiters, was made police president of the city. Despite the effect of hostile sentiment abroad, the anti-Jewish agitation showed little abatement at the close of the month. A report issued by the League of Nations Commission on German Refugees indicates that 80,500 persons, mostly Jews, have left Germany since Nazi rule. Of these 27,000 have been settled in Palestine and some 42,000 in other lands, but about 15,000 remain unplaced.
Simultaneously with the attacks on the Jews, the government took measures to dissolve the old Stahlhelm and other veteran organizations in many parts of Germany, on the ground of lack of full co-operation with Nazi policies. Strife with the Catholics took the form of a sweeping decree issued by General Goering warning the church that any form of “political Catholicism” would be swiftly punished as plotting against the state. Nazi officials attended church services on the following Sunday to take note of any hostile criticism. As the campaign went on, the Vatican made energetic protests against the alleged violations of the concordat involved particularly in the restrictions on Catholic youth organizations, in the advent of the “new paganism,” and in the application of sterilization measures to Catholics.
The American reaction was evidenced by the proposal of Senator William H. King of Utah that the treatment of American citizens in Germany be investigated as possibly warranting the severance of diplomatic relations. Diplomatic questions were also raised by the refusal of Mayor La Guardia of New York to grant a license to a German masseur, and a Communist attack on the German flag aboard the SS. Bremen in New York Harbor was the cause of further friction.
Austria and the Hapsburgs.—A step toward the restoration of the Hapsburg monarchy in Austria was seen in the Austrian government’s sponsoring of a measure restoring the property rights of the former dynasty. The bill, which was passed by the Federal Chamber on July 10, removes all restrictions on the return of members of the royal family to Austria, and restores estates and property in Vienna together with a cash indemnity of about $10,000,000. After a subsequent family council of the Hapsburgs in Belgium, the Archduke Otto, as claimant to the throne, announced that he would return “only with the approval of all parties concerned.” Chief barrier is the Little Entente, over whose policies Foreign Minister Benes of Czechoslovakia aims to retain a guiding hand. For these powers, it was announced that the restoration of monarchy in Austria or Hungary would be the signal for instant mobilization of troops. In a press article, Mr. Benes argued that the return of the Hapsburgs, far from preventing Anschluss with Germany, would drive all Austrian anti-monarchists into the arms of the Nazis and thus hasten the union.
Greece Considers Monarchy.—After tentatively setting the week of September 22-29 as the date for a national plebiscite on the question of restoring a monarchy in Greece, the Tsaldaris Cabinet went to pieces as a result chiefly of the Premier’s inability to control the predominant monarchist element in the ministry led by General Kondylis, hero of the recent rebellion. At the time of the break-up, Kondylis had just returned from a visit abroad, and indicated that he had approval from Italy and Yugoslavia for the proposed change of government. If the monarchy should be established, it is still a question whether the throne will be given to Prince George, recently divorced by his wife, or possibly to the British Duke of Kent. From Paris,M. Venizelos threatened that any effort to restore the monarchy would bring him back into the troubled field of Greek politics.
French Economies.—More successful than his predecessors in office, Premier Laval of France was able in July to put through a series of decrees which, it was estimated, would effect a reduction of the 1935 budget from 53 billion to 47 billion francs. Of the twenty-eight decrees, twenty were designed to lower rents and the prices of necessities; the remainder imposed new taxes or effected cuts in pay and in other government expenditures. The gains from these measures may be somewhat offset by resultant injury to government revenues and to the national economic system. Though on July 19 government workers engaged in a big demonstration against the pay cuts, the decrees in general appear to have gained a fair popular acceptance.
UNITED STATES AND LATIN AMERICA
Russo-American Trade Agreement. —After the long drawn out failure of their combined trade and debt negotiations, the United States and Soviet governments announced unexpectedly in July a working arrangement which, while in no way affecting the debt question, provides for considerably increased Soviet purchases in this country. The United States extends to Russia all the tariff concessions granted in the recently negotiated treaties with Belgium, Haiti, and Sweden, and the Soviet government agrees in turn to purchase American goods to the value of at least $30,000,000 during the next twelve months. This will represent a 100 per cent increase over the value of American goods exported to Russia in 1934, and about 150 per cent over the average exports in the three years from 1932 to 1934 inclusive.
Chaco Negotiations Delayed.—Now that war in the Chaco has been definitely ended, there is presumably little need for haste in the difficult negotiations for a final settlement of the territorial problem. President Tejada Sorzano of Bolivia announced in July that his government would seek an intermission in the Buenos Aires peace conference until after August 15. On that date the five-month period during which President Sorzano has a mandate to act as chief executive will expire, and it is his expressed intention to quit the office at that time. It will be difficult to hold elections in Bolivia until after demobilization of troops, but it is expected that this will be practically completed by the end of July, as stipulated by the agreement of July 8.
FAR EAST
Japan’s Progress in China.—Though Japan’s demands have been pretty fully complied with in North China, and Nanking control pretty thoroughly disestablished, Japanese leaders have shown resourcefulness in keeping relations unsettled, and a tendency to criticize General Chiang Kai-shek for his failure to assume a positive policy. General Chiang, according to one official, will be given “about two months to make up his mind” whether to stay in Szechwan province fighting bandits or return to Nanking and assume definite responsibility for Chinese policy toward Japan. It is true that, with General Chiang at a distance and Premier Wang Ching-wei ill at Tsingtao, the Executive Council at Nanking, led temporarily by Finance Minister H. H. Kung, has had little real authority. Among Chinese leaders there is a general fear that Japan plans next to secure in the Yangtze valley the same dominant control she has already gained in the north.
Russo-Japanese Relations.—Early in July the Soviet ambassador at Tokyo made another protest, this time averring that “grave consequences would ensue” if Japanese troops and gunboats persisted in entering Soviet territory along the Amur River frontier. This dispute involved particularly certain islands with alluvial gold deposits and a large island at the junction of the Amur and Ussuri rivers, possession of which by Japan would threaten the Soviet provincial capital at Khabarovsk and the Siberian railway bridge across the Amur.
At Tokyo, War Minister Hayashi, in commenting on the Manchurian situation, declared that, while the army there were adequate to cope with banditry, larger forces were needed in view of possible difficulties with Russia and in Outer Mongolia.
Mongolian Dispute.—At the close of July there was still a deadlock at Manchuli over the Japanese-Manchukuoan demand for a demilitarized zone in Eastern Mongolia and the stationing of a permanent military mission in Mongolia. The difficulty arose over the arrest of a Japanese officer on June 23. Mongolia proposed a temporary joint commission to settle this and other difficulties, but the Japanese contention is that a permanent exchange of officials is needed, and that Mongolia must abandon her policy of seclusion.
Naval Needs in Pacific.—In the July issue of Pacific Affairs, a magazine issued by the Institute on Pacific Relations, an Australian writer, in reviewing recent naval volumes by Admiral Richmond, R.N., and Mr. Hector Bywater, takes the opportunity to present his view of the general naval problem in Pacific waters.
It is his idea that Great Britain and the United States may as well recognize that I they have neither the will nor the means to exert a coercive influence on Japanese policy in China. If this is recognized, and his further point is admitted that distances in the Pacific render aggressive action well nigh impossible for any of the great powers on its borders, then, in his opinion, the way is clear for naval reductions. Such reductions, as he sees it, should begin with the United States, which, unlike England, does not have a large part of its naval forces tied down by disturbed conditions in Europe.
The writer’s view, that distances in the Pacific render the possessions of all nations free from aggression, is somewhat unexpected as coming from an Australian, and probably would not be shared by all those who consider the exposed situation of the Philippines, the Dutch East Indies, and other insular territories in the Pacific in which the Western nations still have a vital concern.