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 [1] and our projected treaty with
Egypt [2], 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. [3]

Mr Eden remarked that in addition to the treaties with Iraq and
Egypt there was also the treaty with Portugal [4] 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.'[5]

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.

[matter omitted]

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.

[matter omitted]

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.