ANTI-AXIS DIPLOMACY
Danzig Storm Center.—In Europe it was estimated in August that 8,000,000 men would be under arms, for maneuvers if not for war, before the end of the month, and there was an ominous note in Premier Chamberlain’s speech of August 4 in Parliament in which he declared he did not see how the problem of rapidly accumulating armaments could be resolved except by war itself. He said his pledge of July 10 still held good, that Britain would give military support to Poland against any unapproved alteration in the status of Danzig. And this pledge was further backed up by 4-day conversations at Warsaw between Marshal Smigly-Rydz and Sir Edmund Ironside, Inspector General of British Overseas Forces. A British credit of over £8,000,000 for Polish war purchases in England was put through, and there was talk of a further cash loan of £5,000,000 on which no restrictions would be placed. Together with loans of 16 million pounds to Turkey, 5½ million to Rumania, and 2 million to Greece, the Polish loan brought the total to over 31 million extended by Britain to continental states, out of 60 million set aside for that purpose. From Germany came reports that the government still expected the return of Danzig without war, and that failure of the Moscow parleys would lead England to support a Danzig compromise. But Marshal Smigly-Rydz, heading the anti-surrender faction in the Polish Army and Government, declared in a speech at Cracow on August 6 that any nonnegotiated alteration of the status of the free city would mean war. In Danzig itself extensive defense measures and customs disputes with Polish officials increased the danger of an open break.
Progress at Moscow.—Substantial agreement in Anglo-French-Soviet negotiations was implied by arrangements in August for joint military and naval conversations at Moscow, though failure to complete a political accord was emphasized by the return to London of the special British representative, William Strang. In explanation of the 4-month delay, Premier Chamberlain pointed out that past international negotiations had been equally slow, and that the Soviet government, instead of joining in a preliminary pledge, wanted complete agreement on all points before affixing its signature. The difficulties of a political nature were said to be narrowed down to the formula for defining indirect aggression, such as would warrant coming to the aid of the smaller Baltic states. In view of the opposition to these guarantees from the smaller states themselves, the British wished to avoid any appearance of encroachment on their independence, and the proposed Russian formula was thought to carry such implication. Behind the delay was also the evident fear in Moscow that appeasement influences might again dominate Franco-British councils. Such fear found some basis in continued reports of softening over the Danzig issue, and other Anglo-German approaches, particularly the unexpectedly revealed conversation in London between Robert Hudson, British economic expert, and Dr. Helmuth Wohlthat of the German trade staff, in which there was mention of a huge loan for Germany in return for pledges of good behavior.
Fate of Small States.—The Foreign Policy Report of July 15 consisted of a careful and useful review of current European diplomacy, including particularly the ties and pledges of one kind and another which now link England with France, Poland, Turkey, and smaller Continental nations. Incidental to the main analysis, the author remarks two opposing trends affecting these smaller states of Europe, which are given as follows:
Perhaps the most striking trend of the post- Munich period has been the outspoken reluctance of small states to accept any commitments or guarantees with respect to the rival great powers. This attempt by the small states to resume a neutral status is in direct conflict with the Anglo-French efforts to revive collective security. Their reluctance to join the “peace front” plays into the hands of Hitler, who hopes to achieve his objectives without risk of general war by applying pressure to one small state after another and, if worst comes to worst, engaging in a “local” war which, in his opinion, could not fail to end in a German victory. It is not impossible, however, that the small states might eventually form regional groups interested primarily in preserving their political and economic independence against encroachments from all great powers, democratic or totalitarian.
Simultaneously, the great powers, under the guise of guarantees, have tried to interfere in the internal affairs of small states on the ground that these states are threatened with communism (Germany’s argument in the case of Spain and Czechoslovakia), or fascism (Russia’s argument in the case of the Baltic states). This trend, if it goes unchecked, will transform the small states either into battle grounds of a conflict between the great powers, or else force them to become vassals of one or other of their great neighbors.
The latter trend, especially, would seem to have considerable significance for the future of the lesser European powers.
AXIS POLITICS
Germans in Trieste.—Reports in July that the Adriatic port of Trieste had been turned over by Italy to Germany on a 10-year lease were sharply denied by both nations concerned. It was admitted, however, that the matter had been considered by economic experts of the two countries, and since Trieste’s very existence depends on its value as a sea gate to Austria it appeared not unlikely that an arrangement was being worked out whereby Germany would secure even greater trade privileges in the port than those enjoyed by Austria in the past. The denials were taken chiefly as an indication of Italy’s sensitiveness to any suggestion that she might be surrendering vital interests to the major axis power.
Tyrolese Germans Ousted.—One extraordinary outcome of the Rome-Berlin partnership was the news in July that the 210,000 German-speaking inhabitants of the Italian Tyrol would be transferred bag and baggage to Germany, or else be forced to settle in some other Italian province. Thus by drastic methods, hotly resented by the Tyrolese themselves, would be solved a minority problem which might trouble the good relations of the partnership. As a preliminary move all foreign residents in the province were requested to leave on short notice, limited in some cases to 48 hours. That these changes should be started in the midst of the tourist season seemed to suggest exigencies of a military or political nature behind the transfer.
Factions in Spain.—Reports from Spain have indicated increased discord between the dominant Falangista Party, led by General Franco’s brother-in-law, Minister of the Interior Serrano Suner, and the more conservative monarchists, Carlists, and other groups who supported Franco in the war. In foreign policy the Falangists favor closer ties with the kindred dictatorships, and it was Suñer who represented the government during the visit of Spanish troops to Italy and figured prominently in the entertainment of Foreign Minister Ciano on his July visit to Spain. The conservative parties and older army officers, on the other hand, prefer a return to Spain’s former policy of neutrality in European affairs. Evidence of the present ascendency of the Falangista element was seen in the recall of Generals de Llano and Queipo from their commands, respectively, in Andalusia and Morocco, and the issue of decrees giving the Ministry of the Interior increased power to prevent public meetings and political organizations.
UNITED STATES AND LATIN AMERICA
Neutrality Laws Unchanged.—Efforts to revise United States neutrality legislation were halted when on July 18 the Senate Foreign Affairs Committee by a 12-11 vote decided to postpone action till the next session of Congress, and a subsequent White House conference with legislators revealed insufficient votes to put through the proposed changes. In a statement on July 21 the President declared that this failure to adopt Administration proposals increased the probability of war, and might necessitate a special session in case of emergency. The Administration view had been fully set forth in a special message a week earlier, with an accompanying statement by Secretary Hull. The arguments against an automatic arms embargo at the outbreak of war, as presented in the Secretary’s statement, were in part as follows: (1) that there is no basis in international law for the theory that “the advantages that any particular belligerent might procure through its geographic location, its superiority on land or sea, or through other circumstances, should be offset by the establishment by neutral nations of embargoes”; (2) the argument that an arms embargo will tend to keep us out of war is illogical since trade in equally essential war materials will continue; (3) since the right of belligerents to seize munitions in sea transit is universally recognized, there is no reason to suppose that the sale of arms will lead to serious controversy; (4) an arms embargo “works directly against the interests of the peace-loving nations, especially those which do not possess their own munitions plants.”
In continuation of this last line of argument the Secretary raised points which were construed by isolationists as justifying their view that presidential control over arms shipments might be employed to discriminate between aggressors and nonaggressor nations. He wrote:
As a matter of fact, almost all sales of arms and ammunition made in recent years by our nationals have been made to governments, whose policies have been dedicated to the maintenance of peace, but who have felt the necessity of creating or of augmenting their means of national self-defense, thereby protecting otherwise helpless men, women, and children in the event that other powers resort to war.
In the face of the present universal danger, all countries, including our own, feel the necessity of increasing armament, and small countries in particular are dependent upon countries like the United States, which have the capacity to produce armaments.
Our refusal to make it possible for them to obtain such means of necessary self-defense in a time of grave emergency would contribute solely towards making more helpless the law-abiding and peace-devoted peoples of the world.
If such action is moral, and if, on the contrary, sales of the means of self-defense for the protection of peaceful and law-abiding peoples are immoral, then a new definition of morality and immorality must be written.
Refugee Conference in Washington.—President Roosevelt in July extended an invitation to leading officials of the Inter-Governmental Committee in Refugees to confer with him at the White House in September in an effort to speed up measures of relief. Though up to that time the Committee had accomplished little in the way of practical aid for refugees, it was reported to have under consideration plans for financing settlements in British Guiana, the Dominican Republic, the Philippines, and elsewhere, and to be weighing also the British proposal that member governments contribute to the committee funds, now derived wholly from private sources.
Mexican Oil Proposals.—Possibilities of ending the long deadlock between the Mexican government and foreign oil companies were raised by a Mexican proposal of August 2 which was reported to offer the foreign companies a share in the management of their former holdings, and control of all foreign sales. The offer was made by Francisco Najera, Mexican Ambassador at Washington, in conversations with Mr. Donald R. Richberg as representative of the companies. Though the offer was not accepted, the companies have suggested an arrangement which, while raising no question as to Mexican ownership, would permit them to manage their former holdings on long-term leases, with some assurance against labor troubles and excessive taxation. They object to fresh outlays of capital with the Mexican government still retaining a controlling voice in the management.
Argentine Claims in Antarctic.—Reports from Buenos Aires in July indicated that the Argentine government was setting forth extensive claims to antarctic territory between 20° and 68° West Longitude, as a natural geographical dependency of the South American Continent and property of Argentina as the nation whose continental territory extended farther south than that of any other South American nation. Argentina has always contested British ownership of the Falkland Islands, and will also dispute British title to the South Orkneys, South Georgia, Graham Land, and islands in the vicinity of the Weddel Sea. The Argentine claims will be presented at the International Conference of Arctic Explorers to meet in Bergen next year.
Panama Treaty Ratified.—At the close of July the treaty between the United States and Panama signed in 1936 was finally approved by the U. S. Senate and ratifications were exchanged to put the treaty into effect. In the Senate some question arose as to whether Art. X of the treaty, providing for consultation with Panama “in case of an international conflagration or threat of aggression,” did not put some limitation on American power to defend the Canal. It was shown, however, that this difficulty was removed by diplomatic correspondence in connection with the treaty. Otherwise the chief significance of the document lies in its assurance that Panama will receive her $250,000 annual canal rental in the equivalent of that amount in gold in Panamanian money and not in devalued United States currency, payments in that form to be retroactive to 1934.
FAR EAST
Trade Treaty Abrogated.—The American State Department on July 27 gave the necessary 6-month notice of its decision to abrogate the 1911 treaty of amity and commerce with Japan. The move, described in Japan as “unbelievably abrupt,” was generally interpreted as a step to avoid violation of treaty pledges should the United States decide to adopt an embargo on shipments of war materials or other goods of value to Japan in prosecuting the China War. At a time of strong pressure on Britain to compromise with Tokyo, it also served as a warning that the United States might adopt economic or other measures to defend its rights and interests in the Orient. American exports to Japan last year amounted to about $240,000,000 and imports to $127,000,000. The British Empire and the United States together take about 60 per cent of Japan’s total exports.
Tokyo Conference.—In his speech to Parliament on August 4 before its adjournment, Premier Chamberlain declared that some of the things happening in the Far East made his “blood boil,” and gave warning that despite dangers at home Britain might in certain circumstances find it necessary to send a superior fleet to Eastern waters. The situation in Europe, however, called for avoidance of a crisis in the Orient. The first step of the Tokyo Conference was a preliminary agreement in which Britain recognized “the actual situation in China,” where Japan had to “suppress or remove such causes or acts as will obstruct them or benefit the enemy,” and the British government declared it had “no intention of countenancing any acts or measures prejudicial to the attainment of the above- mentioned objects.” This might mean much or little. Japan took it as a pledge of co-operation. According to Premier Chamberlain it meant no change from previous British policy.
In subsequent negotiations at Tokyo, Japan pressed strongly for economic cooperation, including primarily withdrawal 1345 of British support given to Chinese national currency and consent to the seizure of large quantities of silver held in Chinese banks in the British Concession at Tientsin. Even as the negotiations continued the Chungking dollar dropped rapidly in value—from 17 cents to 7 cents or less. What withdrawal of foreign support for Chinese national currency meant to Japan was suggested by a statement from London, quite possibly exaggerated, that its continuance would “break the Japanese attack within a measurable number of months,” and that this largely explained the anti-British campaign. Of the latter there was no marked letup during the Tokyo conversations. The blockade at Tientsin continued, and below Ichang on August 6 a Japanese air raid injured a British subject, destroyed oil properties, and set fire to two British steamers in an anchorage for foreign vessels.
While thus urging England to accept “the new order in East Asia,” the Tokyo government was also considering closer ties with Rome and Berlin. This was strongly urged by the Japanese ambassadors at those capitals, and a Japanese mission headed by Count Terauchi and Baron Osuma was due to arrive in Naples at the close of August, authorized to discuss closer political as well as economic relations with the Axis powers.
Mongolian Border Warfare.—In August the air and land raids in the Mongolia-Manchukuo frontier had apparently quieted down, though the Soviet press still reported “victories” and made adverse comment on Japanese air equipment and morale. From Manchukuo came a press suggestion that Japan would be willing to negotiate directly with the Soviet government for a settlement of the conflict on the borders of their two protectorates. A new dispute arose over Russian threats to confiscate Japanese oil concessions in the Soviet half of Saghalien, and Japanese naval forces were sent to the vicinity.