198 Mr S. M. Bruce, High Commissioner in London, to Mr R. G. Menzies, Prime Minister

Cablegram 298 LONDON, 1 May 1940, 10 p.m.

IMMEDIATE MOST SECRET FOR THE PRIME MINISTER

My telegram 297. Italy.

(1) We could not restore our prestige by immediate declaration of war against Italy unless we could render effective aid to Yugoslavia. On the other hand to sit passively by and allow Italy to work her will would be a further serious blow to Allied prestige.

Certainly no desire to add to enemies but consequence of letting Mussolini get away with it have to be considered.

Would not his attitude be-have successfully held the Allies to ransom for eight months for my neutrality-having quickly overrun Yugoslavia would he not hold the Allies to higher ransom for neutrality and be able to pick his own time for further adventures up to the point of entering the war on Germany's side.

Argument as to dispersion does not seem sound save on basis that attack on Yugoslavia is a trap to get the Allies to declare war on Italy. If dispersion is the objective it must be the result of agreement between Hitler and Mussolini. Allies' failure to walk into the trap would be followed by Italy coming into war on German side.

(2) I find difficulty in accepting the view that there is nothing the Allies could do to interfere with Italy in her adventure against Yugoslavia. At least having declared war on Italy we could endeavour to induce Turkey and Greece to take some co-operative action to help Yugoslavia whereas if we keep out we could do nothing in this direction.

(3) Suggestion of possibility of a quarrel between Hitler and Mussolini appears to me in view of the facts like wishful thinking.

Hitler at Brenner meeting apparently convinced Mussolini that he, Hitler, was going to win. That view will be greatly strengthened by Allies' forced withdrawal in southern Norway. Until Hitler suffers some serious reverses, Mussolini will see to it he does not quarrel with what he is convinced is the winning side. It is difficult to see such reverses being inflicted for a considerable time to come.

(4) Mussolini's attitude-Allies no match for Germany, therefore decide to risk an adventure notwithstanding opposition of King, great part of the population and Vatican.

The Italian people's attitude-uncertain. True that Germany strong but cannot forget history. Allies in a position to react quickly against Italian soil and would do so. Very doubtful adventure. Is Mussolini right or is this not too perilous? I feel that the Allies' failure to react immediately vindicates Mussolini's action and shows people their hesitancy and doubts unjustified. In reaction enthusiasm would grow with possible popular demands for realisation of Italian aspirations in the Mediterranean and with regard to Italian Empire. Mussolini would then be exactly where he wants to get vis-a-vis his own people.

On the other hand immediate Allied action against Italy has possibilities in proportion to the effectiveness of action taken of rousing people against their German ally and their own leaders and making the King the popular figure instead of Mussolini.

Against this must be set the possibility of the people being roused against their seeming friends who suddenly attack them.

(5) Between these two arguments the balance would appear to be in favour of immediate action. By it Italy may be prevented from growing in strength. On the other hand unless it were visualized that immediate bringing in of Italy could result in a knock-out blow to the Allies our strength will progressively grow.

(6) The arguments in favour of immediate action here are very strong. The arguments against would be effective if our capacity to meet the suggested attacks was going to be increased very rapidly.

A period of months at least must elapse before the position is materially altered and during that period Mussolini's intervention would appear extremely likely.

On the other hand one point which causes me the gravest anxiety is the position in Egypt vis-a-vis the air. I have not sufficient information however to express a view upon this point.

(7) In view of possible developments in South East Europe the sooner we get Turkey in the better. We cannot ignore the possibility that there might be such a deterioration in South East Europe as to render it extremely doubtful if Turkey would be able to live up to her undertakings to come in on the Allied side.

(8) The benefit of more effective blockade that would be possible would appear extremely valuable. The arguments against do not appear to me to be substantial in comparison.

Could not Roumanian oil supplies be diverted without bringing them through the Mediterranean to other Empire countries, at present acquiring supplies for payment in 'hard' currencies? (9) If Italy could be knocked out it would be admirable but this is extremely doubtful. Is this point however a very real one as it is difficult to see how Mussolini could have kept out of joining in on the German side if she achieved successes to the point of being in a position of being a threat to the Dardanelles? (10) On latest information it appears unlikely that Italy could draw Spain in and, if this were the only danger in immediately reacting to an Italian adventure in Yugoslavia, I feel that it would have to be risked.

BRUCE

[AA: A981, ITALY 60B]