148 Mr J. A. Lyons, Prime Minister, to Mr N. Chamberlain, U.K. Prime Minister

Cablegram unnumbered 21 March 1938,

PERSONAL

I need hardly tell you that we have been following the course of events with the greatest of attention and have carefully reviewed recent developments during Cabinet Meetings [1] over the last few days. My Government in the belief that an understanding with Italy will be the most valuable contribution to general appeasement at the present time and in the best interests of the Empire, hopes that no effort will be spared to come to terms with Italy. In this respect, the outline of the resumption of conversations in Circular telegram B. 66 [2] appears most hopeful. We are greatly appreciative of your efforts to prevent any further deterioration in the situation, and of your handling of an extremely difficult situation and we hope your efforts to obtain general agreement for the principle of friendly collaboration in the rectification of grievances instead of the methods recently employed, will be successful.

LYONS

1 No record of these Cabinet meetings has been found.

2 Circular cablegram B66 of 19 March 1938 from Dominions Secretary MacDonald to Prime Minister Lyons, not printed, stated that on 15 March conversations had been resumed between the Italian Foreign Minister, Count Ciano, and the British Ambassador in Rome, Lord Perth. The cablegram summarised the progress being made on a number of issues (See AA : A981, Italy 30, i).

[AA : A981, GREAT BRITAIN 8B, ii]