E (PD) (37) 12 (extracts) LONDON, 3 June 1937
Anthony Eden's speech was intended to deal with comments on and criticisms of British foreign policy made at earlier meetings of Principal Delegates, including remarks by R. G. Casey at the third meeting (Document 27).
CENTRAL AND SOUTH-EASTERN EUROPE
Mr Eden said that he now came to the difficult question of German relations with Austria and the United Kingdom Government's policy as regards Central Europe, including the suggestion that it was dangerous to stimulate the South-eastern countries to any resistance to German penetration. Austria, for all her considerable cultural and historical differences from Germany, was inhabited by a Germanic people. She had tried on more than one occasion to enter into closer relations with Germany than were permitted by the Peace Settlement. It had to be admitted that Article 80 of the Treaty of Versailles, which prohibited the 'Anschluss,' was in conflict with the one of President Wilson's fourteen points which concerned self-determination. It was, however, necessary to consider the situation as it existed at present and this was that the majority of Austrians were probably opposed to an 'Anschluss.' It was clear, for instance, that no Catholic, Liberal, Socialist or Jew would advocate union with Germany and Mr Eden thought that German propaganda with regard to the numbers of Austrians who desired the 'Anschluss' was misleading. Whilst it was difficult to estimate the exact situation, he considered that only about 30 per cent. of the Austrian people would be in favour of such a change. It was important not to confuse those who were hostile to the present regime in Austria, with those who were in favour of the 'Anschluss.' He felt that the Austrian population was perhaps divided into 30 per cent. supporters of the Government (largely Catholics), 30 per cent. in favour of union with Germany and 30 per cent. of the Left parties, who favoured neither the Government nor the 'Anschluss' but preferred the former to the latter.
In these circumstances it would be wrong for the United Kingdom to encourage the 'Anschluss'; this would, however, be the effect of a statement indicating that that Government were disinterested in Central Europe. Furthermore, the United Kingdom was the only great European Power which had no axe to grind in the affairs of Central Europe and could not adopt the attitude that she had no views as to how the problems of Central Europe ought to be solved. On the contrary, the United Kingdom Government would like to see the problem dealt with by the practice of self-determination in its fullest sense, by the promotion of economic and political co- operation between the Danubian States and by the exclusion of the rivalries of other European Powers from the Danubian Basin. If, however, Austria did express a definite wish for union with Germany, the United Kingdom Government would not necessarily wish to oppose it. But such Union would not solve the Central European problem; on the contrary, owing to the difficult situation in which Czechoslovakia, Poland and Yugoslavia would then find themselves, rivalries in Central Europe would probably become keener as the result of an 'Anschluss' than they were at present.
Mr Eden then turned to the observations made by Mr Casey with regard to his speeches at Leamington and Bradford and recalled the fact that Mr Casey had stated that doubts had been expressed whether the very definite limitations laid down at Leamington had not been to some extent qualified at Bradford. Mr Eden read to the Meeting the following passage from his speech at Leamington:-
'These arms will never be used in a war of aggression. They will never be used for a purpose inconsistent with the Covenant of the League or the Pact of Paris. They may, and if the occasion arose they would, be used in our own defence and in defence of the territories of the British Commonwealth of Nations. They may, and if the occasion arose they would, be used in the defence of France and Belgium against unprovoked aggression in accordance with our existing obligations. They may, and, if a new Western European settlement can be reached, they would, be used in defence of Germany were she the victim of unprovoked aggression by any of the other signatories of such a settlement. Those, together with our Treaty of Alliance with Iraq  and our projected treaty with Egypt , are our definite obligations. In addition, our armaments may be used in bringing help to a victim of aggression in any case where, in our judgment, it would be proper under the provisions of the Covenant to do so. I use the word 'may' deliberately, since in such an instance there is no automatic obligation to take military action. It is, moreover, right that this should be so, for nations cannot be expected to incur automatic military obligations, save for areas where their vital interests are concerned. 
Mr Eden remarked that in addition to the treaties with Iraq and Egypt there was also the treaty with Portugal  but that this did not contain such definite obligations. He thought that the policy with regard to the use of arms laid down in the Leamington speech was that which had always been visualised by the authors of the Covenant of the League. There had, however, been a general realisation lately that it was impossible to impose economic sanctions against a great Power unless the Powers imposing those sanctions were prepared to use military force. He thought that an overwhelming majority in the United Kingdom would support the policy outlined in his Leamington and Bradford speeches. It was true that some would not go so far, whilst others would go further, but neither of those bodies of opinion could compare with the size of the middle block.
Mr Eden said that he would now quote from his Speech at Bradford so that the meeting might judge whether it conflicted with that which he had made at Leamington. The relevant passage of his Bradford speech was as follows:-
'There are in the world certain vital British interests, and it is a contribution to peace that those should be clearly made known to all. This I sought to do at Leamington, and I have nothing to add or subtract from the definition there given. Yet, if I were to say that Britain's interests in peace are geographically limited, I should be giving a false impression. If our vital interests are situated in certain clearly definable areas, our interest in peace is world-wide and there is a simple reason for this. The world has now become so small-and every day with the march of science it becomes smaller-that a spark in some sphere comparatively remote from our own interests may become a conflagration sweeping a continent or a hemisphere. We must therefore be watchful at all times and in all places. We cannot disinterest ourselves from this or that part of the world in a vague hope that happenings in that area will not affect us. We must neither mislead others, nor be misled ourselves, by any of those comfortable doctrines that we can live secure in a Western European glass-house. It is for this reason that I have again and again insisted that the foreign policy of our country, with its many and comprehensive interests, must work for a comprehensive settlement. Nothing short of that will give us the peace and the confidence that we so ardently desire.'
He thought that there was nothing in this passage which was inconsistent with his statement at Leamington. The United Kingdom Government desired a world settlement because they were conscious that a spark in some distant area might ignite a great conflagration, but they were only prepared to undertake military commitments in definite and limited areas.
MR MACKENZIE KING said that Mr Eden's statement had been so informative that it had anticipated most questions. He suggested, however, that it would be helpful if the meeting took up the various points in the order in which they were mentioned by Mr Eden.
This was generally agreed, and the meeting proceeded to the consideration of questions arising out of the Versailles Treaty.
TREATY OF VERSAILLES
MR MACKENZIE KING, MR LYONS, and MR SAVAGE said that they did not wish to offer any observations on this question.
GENERAL HERTZOG said that he did not wish to ask any questions, but he would like to say a few words. He thought that it was important that all countries should be made to feel that the policy of the United Kingdom was based on absolute impartiality and accompanied by proofs of sincerity in this respect. The impression had been given that the United Kingdom's policy was too much biassed in favour of France and too much prejudiced against Germany. In respect of certain matters which had arisen with regard to the Treaty of Versailles, action could have been taken which would not have encouraged any nations to take risks but would have convinced Germany that there was no bad feeling against her. When the Treaty was signed, the United Kingdom's relations to France were, of course, very different from her relations to Germany and it was understandable that, at the beginning, because of that close connection with France, the United Kingdom's course should have been more in favour of France than Germany. In the Union of South Africa, however, it has been felt that the time had soon come to modify this policy, but that a change had not been made early enough to make Germany feel that, in the United Kingdom, there was to be found that impartiality which was so important if all other nations were to look to her, and if she was to be able to make her influence felt in the event of any aggression. The United Kingdom should, he felt, be very careful to preserve an attitude of impartiality in the eyes of the world.
The Union Government could not help feeling that, so far as Central Europe was concerned, the United Kingdom had taken up an attitude less favourable to Germany than to France. There could be no harm in Germany feeling that if she attacked there, the United Kingdom might become involved, but that, on the. other hand, the United Kingdom would not stand in the way of any agreement which Germany could reach there. This applied especially to the United Kingdom's opposition to the 'Anschluss' which was a source of very strong complaint in Germany and was held to be the negation of self-determination and of the principles of the League. It must also be remembered that whatever might be the intentions of the United Kingdom and France in any given circumstances and whatever they might say, Germany might well interpret their actions in a manner different from that which they intended. He felt that it was important to extricate the world from the position resulting from the Treaty of Versailles and to modify the present position in a way which would accord with the principles on which the Members of the Conference were agreed.
MR BRUCE thought that the position might be put in the following way. The Treaty of Versailles contained provisions directed against Germany which any nation would resent if they were directed against itself. We were all wiser now than we were in 1919, but even in the intervening years we had missed a great many opportunities of conciliation. The result was that we had a more difficult problem to face at the present juncture than we ought to have had. For example, some years ago we could have arrived at a reasonable arrangement with Germany about armaments which would have saved the world from the armaments race of to-day.
Broadly speaking, no action had been taken by the ex-Allies to modify the rigours of the Treaty of Versailles, and it had been left for Germany herself to take action to break through a number of its provisions. Her action in doing so had met with a great deal of sympathy abroad.
There were parts of the Treaty, however, which were still not abrogated. A conspicuous example was Article 80, the effect of which was to deny to Germany and Austria the right to unite if they wished to do so. Was there anything which we could do, while there was yet time, to modify Articles of this character? This, Mr Bruce thought, was the point to which General Hertzog's argument had led. It was not clear, however, what remedy General Hertzog had proposed. Did he propose to say to Germany 'We recognise that you have the right of self-determination. If as a result of developments in Central Europe you and Austria are desirous of an "Anschluss" on the basis of self-determination, and if you are prepared to compass your ends in a peaceful manner and without aggression, we will release you from the restrictions of Article 80.' GENERAL HERTZOG thought that he could best answer by attempting to define Germany's grievance. Her grievance was against those countries, including the United Kingdom, which in the German view had adopted a hostile and discouraging attitude towards the 'Anschluss,' and indeed had said that they intended to prevent it.
The only reasonable view was surely that two independent nations such as Germany and Austria ought to be perfectly free to conclude any agreement which they thought necessary in their own interests.
We had no right to object unless some vital interest of our own was prejudiced. In the absence of any such interest our attitude should be one of absolute impartiality, as it would be if, eg., Denmark and Holland concluded some kind of working arrangement.
MR BRUCE said that General Hertzog's answer had not dealt with the fact that the status quo was perpetuated by Article 80. Ought we in General Hertzog's view to call the Powers together and say that Article 80 was another part of the Treaty of Versailles which should now be set aside? GENERAL HERTZOG was certain that it ought to be set aside. It was contrary to the objects of the Allies in entering the Great War and to the real spirit of Peace. He would not of course suggest that we ought to encourage Germany to march into Austria to- morrow. He would simply say that we ought to refrain from giving Germany the impression that we were hostile to her desires.
MR CHAMBERLAIN remarked that the real point of difference seemed to be as to who should take the initiative.
MR CASEY thought that he had understood Mr Eden to argue that, quite apart from its being forbidden by the Treaty of Versailles, the 'Anschluss' would not be in the best interests of Europe as a whole-that it would in fact lead to a situation more dangerous for Europe than even the present one.
MR EDEN said that these were very difficult matters. On the whole, however, that was the view which he took. So long as Article 80 remained in force, it would not be right for us to encourage Germany to violate it. There could be little doubt that the suggestions to which they had been listening would, if they were put into effect, be interpreted by Germany as definite encouragement.
Mr Eden added that he did not believe that the people of Austria were in favour of union with Germany.
MR CASEY wondered whether there was any means, e.g. by relaxing the most-favoured-nation provisions of commercial treaties, by which economic appeasement in Europe might be hastened. He made this suggestion with some diffidence, as he realised that the cost of any concession would fall upon the United Kingdom.
MR CHAMBERLAIN was afraid that the only form of economic appeasement which would have any attraction for Germany would be the offer of external credits. He did not say that any of these suggestions were unsound in themselves. They were all suggestions which might properly be considered once we had got into the region of a general settlement. It would be reasonable to offer much more as the price of a general settlement than we should be prepared to offer piecemeal.
MR CASEY, referring to Mr Chamberlain's remarks concerning a general settlement with Germany, asked if any machinery was in motion towards this end.
MR EDEN said that we were in fact trying to get into direct contact with Germany on some of the points which had been mentioned. This information should be regarded as very confidential.