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