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 [1] had been
instructed to remind the German Government of the terms of the
Prime Minister's [2] 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 [3] 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 [4] 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 [5], 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' [6] 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 [7], 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
[8] 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.