HOUSE OF LORDS, LONDON, 25 May 1938, 4.30 p.m.
PRESENT Viscount Halifax, U.K. Foreign Secretary Sir Earle Page, Minister for Commerce Lt Col T. W. White, Minister for Trade and Customs W. J. Jordan, New Zealand High Commissioner in London J. W. Dulanty, Eireann High Commissioner in London Sir Earl of Birkenhead, Parliamentary Private Secretary to the U.K. Foreign Secretary R. G. Menzies, Attorney-General S. M. Bruce, High Commissioner in London C. T. te Water, South African High Commissioner in London
Page, Menzies and White were in the U.K. to discuss revision of the Ottawa Agreement of 1932 on tariffs.
LORD HALIFAX said that during the past week-end the United Kingdom Government had received reports of troop movements in Czechoslovakia and Germany. Each had stated that the other had moved troops first, and it was perhaps impossible to say which was correct, but the result had been the development of a situation in which they had felt it necessary to take all possible steps to prevent a crisis developing. They had issued a very serious warning of the danger they were running, to the Czechs, and it had been pointed out to them that if war broke out between Czechoslovakia and Germany the result, even if France and the United Kingdom were to come in, would inevitably be that Czechoslovakia would be overrun by the German forces, and that it would probably be a year or two at least before it would be possible to hope that they would be forced to withdraw. He had intentionally left it to the French Government to tell the Czechoslovak Government to withdraw their mobilization order, because he had felt that if we had pressed them to demobilize and they had subsequently been attacked, it might have been possible for them to argue that there was a moral obligation to the United Kingdom to come to their support, France had a treaty with Czechoslovakia which obliged her to come to the support of the Czechs in the event of an attack, and therefore no new responsibility was involved by the issue of the warning by France.
At the same time His Majesty's Ambassador at Berlin  had been instructed to remind the German Government of the terms of the Prime Minister's  reference to Czechoslovakia in his speech in the House of Commons on the 20th March. He had felt that it was important that the exact significance of this action should not be misconstrued by the French Government, and he had therefore instructed the Ambassador in Paris  to inform the French Government that the action taken at Berlin did not constitute any fresh obligation on the United Kingdom, but was limited to exactly what the Prime Minister had already publicly announced. The French Minister for Foreign Affairs  had quite appreciated the position and had stated that he was exercising all possible pressure on the Czechoslovakian Government. In fact he had gone so far as to say that it was always open to France to denounce the alliance with Czechoslovakia if her advice was not taken. Finally he had felt that it was also important to avoid statements in the Press about a 'diplomatic victory', for anything of that sort could only make it more difficult for Hitler to act in a reasonable manner. He had seen the Press on Sunday night, and the result in the United Kingdom had, he felt, been satisfactory.
Unfortunately the French Press had not been so good, and they had indulged in a good deal of flag-waving.
MR TE WATER said that he personally had gathered the impression from the information available to him that the French Government had indeed followed the United Kingdom, but that they had been hanging behind somewhat. Was this impression correct? LORD HALIFAX replied that he was sure that the French were not egging on the Czechs. M. Bonnet , in the course of the talks between the United Kingdom and French Ministers, had told him how worried he was by the obligations of the Franco-Czechoslovak Treaty of Mutual Guarantee. He felt that the French Ministers were obsessed by the nightmare of this alliance. The position had changed since 1925, when Germany was disarmed and France was able, by reason of her occupation of the Rhineland, to come to the assistance of Czechoslovakia.
MR DULANTY then enquired what Lord Halifax had meant by saying the French 'could not' come to the assistance of the Czechs, LORD HALIFAX explained that now the German frontier was in process of being rapidly fortified, and Germany had completely rearmed, France was faced with the alternative of dishonouring her signature of the Treaty or of engaging in a war, the issue of which would, in any event, be doubtful, and which would do nothing to prevent Czechoslovakia being overrun by the German forces before the French Army could come to its assistance. He added that the High Commissioners might like to know what he personally had in mind as a possible solution of the difficulty. He hoped that they might succeed in getting the Czechoslovak Government and the Sudeten Germans to agree upon some sort of cantonal system on Swiss lines, and he was doing all he could to speed up conversations between them with this in mind, but he did not wish the United Kingdom to be brought into the actual discussions. This would involve risk of the United Kingdom being dragged into underwriting whatever settlement might be reached, and he was determined to avoid this. He also felt that if such a system could be adopted, they might pass from that to the logical conclusion, the adoption by Czechoslovakia of a position of neutrality in Central Europe. This position might be guaranteed in some way by the neighbouring Governments and recognized by the larger countries in Europe. A consequence of the adoption of a neutral position would, of course, be the termination of Czechoslovakia's alliances with France and the U.S.S.R. This would have the great advantage that Germany could no longer argue that Czechoslovakia was a dagger pointed at her heart. The greatest possible pressure would have to be used to induce the Czechoslovak Government to make concessions, but he hoped, by pointing out to them that the time had been reached when, if they did not make concessions, Czechoslovakia would cease to exist, it might be possible to get the Czechoslovak Government in the necessary frame of mind. He hoped, however, that those present would regard his remarks as most confidential, for it was, of course, imperative that no hint of what we were telling the Czechoslovak Government should get to Berlin, where it was necessary for us to emphasize the risk to Germany involved in the outbreak of a European war, in order to keep the German Government as reasonable as possible.
MR MENZIES said that he personally had been very puzzled by M.
Benes'  attitude during the past week. He had frankly been unable to understand what his policy had been. Was it bluff, and if so, was it not almost a suicidal bluff? He wondered whether Lord Halifax could tell him what his personal view was.
(Lord Halifax left for a few minutes for a division in the House of Lords).
MR TE WATER said that his personal opinion-which was based on a close acquaintance with M. Benes lasting over eight years-was that he was absolutely fearless and that he had the most astute mind of any continental politician he had ever met. He believed M. Benes would, if he felt it necessary, bluff to the limit, and then, if his bluff was called, be ready to face up to the consequences.
MR BRUCE thought that it was necessary to bear in mind that M.
Benes had built up the existing domination of Czechoslovakia by the Czechs over a period of 20 years. It had been his life work and if it was to be destroyed and the Czechs were to cease to control the country, he might feel that defeat was preferable.
There was also the personal consideration that if Czech domination was to be terminated, as it would be by the creation of a cantonal system, then M. Benes, who had been so closely associated with that policy, would probably be shelved. Further they must remember that at present Czechoslovakia had military alliances with France and Russia which bound these countries to come to her assistance in the event of aggression by Germany, and there was the possibility that Great Britain might also be drawn in. M. Benes probably argued that in these circumstances it was more than possible that Germany did not really want to fight and that it was therefore worth taking the risk of bluffing.
(At this point Lord Halifax returned).
LORD HALIFAX agreed with Mr Bruce's analysis of the situation, but thought it was not necessary to believe that M. Benes was influenced to any great extent by personal motives in reaching his decision. He had indeed been informed that M. Benes had considerably changed his views in the course of the past six years. Originally it had seemed more than likely that he would eventually succeed in building up a unitary State in Czechoslovakia, but the events of the past six years had, he was informed, considerably modified M. Benes' views, and he thought that he might now be found to be much more ready to compromise than he would have been in the past.
MR TE WATER said that he knew from telegrams that the Union Government appreciated the policy which the United Kingdom had been following, but he wondered whether it would not be well to take a long view in framing their immediate policy. They had been, in the present discussion, tending to look at the problem from the Czechoslovakian point of view, and he would like for a moment to tackle it from the point of view of Germany. His Government were convinced, and this was the firm conviction of their Minister at Berlin , that Germany would never stop until the Sudeten Germans had been absorbed into the Reich. In their view the separation of the Sudeten Germans from Germany had been one of the many blots on the Treaty of Versailles, and an indefensible one.
He wondered whether it was also the view of the British Ambassador at Berlin that absorption was inevitable. If so, was it worth while trying to defer the crisis by attempting to get a temporary agreement on some sort of cantonal system, when the only effect would be to postpone a decision until 1941, when all the great powers would be armed to the teeth and war might come about before a peaceful solution could be reached? Was it not wise to try to reach a final decision at the present moment? LORD HALIFAX agreed that it was the view of His Majesty's Ambassador that in the long run Germany would probably never be satisfied until the Sudeten Germans had been absorbed, and he agreed with Mr te Water that it would be better to sacrifice 3 1/2 million Sudeten Germans than to get involved in a European war;
but he would like to put the position in another way. If the Sudeten Germans were ready to accept a settlement which left them within the borders of the Czechoslovakian State (and Herr Henlein  had been very moderate in his talks in London), and if Germany also was prepared to accept such a solution for the time being (and it was conceivable that Germany might prefer not to be faced with the task of absorbing 3 1/2 million Sudeten Germans whose economic position was serious and who would be competitors with German industry at the present moment, especially as their presence within the boundaries of Czechoslovakia might enable Germany eventually to control the whole of Czechoslovakia through them), was it not wise to try to achieve this limited result, which was certain to decrease international tension. He had indeed been told himself by the German Government, when he paid his visit to Herr Hitler in November of the previous year, that they were ready to accept self-government for the Czechs, and he thought it was quite probable that their views had not changed.
SIR EARLE PAGE said that he would like to put the Australian point of view for a moment. It was not until Germany had been satisfied that there would be any prospect of easing down on the armament race, or any change from the policy of autarchy which the German Government were at present following, or consequently any general revival of world trade. Germany was now offering to foreign countries, and had already made with the Union and New Zealand trade agreements on a balanced basis. It was impossible for the Commonwealth Government to make such an agreement with Germany so long as they followed the policy of Imperial preferences, but Germany had formerly been one of Australia's most important markets for her wool and other raw materials, and there could be no revival of this market until more normal trading arrangements with Germany were possible. What Australia desired, therefore, was a politically satisfied Germany which would be ready to take her share in the peaceful development of the world. Would the German Government be satisfied if they got the Sudeten Germans, and if they would be satisfied, would it not be wise to give the Sudeten Germans to them? LORD HALIFAX thought that now the Germans had got Austria, the Sudeten Germans were the most important immediate objective, but there were also Memel, Dantzig and the former German Colonies.
MR MENZIES wondered whether the German Government would even stop short of the rest of Czechoslovakia.
LORD HALIFAX said that he thought they might, for the Nazi philosophy was one for home consumption, and its emphasis on race and racial purity might make the Germans unwilling to add to their Jewish problem by the addition of a Czech problem. On the other hand it was impossible to say that the German appetite might not grow.
MR TE WATER expressed his agreement with Sir Earle Page. It was also the South African view that Germany must be satisfied before there could be any real detente in international relations and any consequent hope of prosperity. Would it not be wise to face up to the situation and take a long view? What he feared was that the crisis would come, not in years or months, but possibly in a few weeks' time, and it was imperative that they should know their own minds before it came and have made their own position clear.
MR BRUCE asked what exactly was the Union Government view.
MR TE WATER said that if war broke out and first France and then the United Kingdom was involved over Czechoslovakia, it was very doubtful if the Union would come in.
MR BRUCE said that he had not meant that. What he had meant was, what scheme the Union Government had in mind for dealing with the immediate crisis. Did they contemplate that it should be publicly announced that we disassociated ourselves from the fate of the Sudeten Deutsche? MR TE WATER said that that was not the manner of diplomacy, but he felt that our views could very speedily be made known.
MR BRUCE said that he personally agreed with Lord Halifax that it was wise to aim at an agreed settlement on cantonal lines between the Sudeten Germans and the Czechoslovak Government, but he felt that it was important to emphasize, and especially to the Czechs, that such a settlement would not mean the destruction of Czechoslovakia, but that it would put Czechoslovakia on the lines of development which were envisaged in 1918. It would be a logical, historical development, and it would fulfil the intentions of the Peace Treaty. It was going to be difficult to convince the Czechs, indeed it was going to be a great shock for them, and he felt that it was only by emphasizing that the proposed settlement was following the historical lines that it could have some hope of acceptance.
MR TE WATER wondered whether there would be enough time for convincing the Czechs and for achieving all the other arrangements that would be necessary. Would the Sudeten Germans, even if they got a cantonal system, be ready, in the long run, to stay in Czechoslovakia? LORD HALIFAX in conclusion said that he felt that progress would be very difficult on the lines, in the first place, of asking Germany what she wanted and then of trying to get a general comprehensive settlement. The German Government liked to dictate their own timetable, and previous enquiries as to their requirements had obtained no definite answer. Moreover, while the discussions would be getting entangled in the many general questions which would be raised, the Czechoslovakian crisis would be going on. On the other hand, he did agree with Mr te Water that one of the difficulties of a cantonal settlement as a permanency would be that all the forces acting on Czechoslovakia were centrifugal as distant [sic] from the centripetal forces which were the major factor in the existence of the Swiss Federation, Switzerland had three powerful neighbours to whose mutual interest it was to keep the Swiss Federation in existence, but Czechoslovakia was surrounded by small States with the single exception of Germany, which dominated them all, and if Germany began to dismember Czechoslovakia, the others would probably prove to be jackals. They might like to know, however, that in order to get their own minds clear, the Cabinet had agreed that morning that we should send a member of the Foreign Office staff at once to Berlin and Prague-and he was now on his wayto bring back his appreciation of the atmosphere in the two capitals. Meanwhile the French were pressing the Czechoslovakian Government strongly to demobilize, and we could assure them that the last thing which the United Kingdom Government were doing was to sit back and wait on events. They realized the supreme importance of the time factor.