E (PD) (37) 3 (extract) LONDON, 21 May 1937

At the first meeting of principal delegates on 19 May 1937 the
U.K. Foreign Secretary, Anthony Eden, introduced the discussions
on foreign affairs in a speech outlining British policy. He
explained that it was undesirable to adopt an attitude of
disinterest in the Central European area for that 'would most
certainly invite aggression'. Nor was it feasible to declare
readiness to fight for Czechoslovakia or Austria should they be
victims of aggression. British policy, as outlined in recent
speeches, followed a third course, 'namely that without
undertaking any military commitment we should make it clear that
we were interested in events in Central Europe'.

At the third meeting R. G. Casey spoke on this question for the
Australian Delegation.

FOREIGN POLICY

MR CASEY felt Sure that all the Principal Delegates must feel
under a great debt of gratitude to Mr Eden for his very clear
description of the European situation and for his masterly
compression of so vast and complicated a subject. The Dominion
Delegates must also feel considerable diffidence in commenting
upon Mr Eden's statements, more particularly as none of the
Dominions had entered into specific commitments vis-a-vis foreign
policy in Europe. At the same time all must be impressed by the
great gravity of the situation, and any comments that he had to
make would be for the purpose of elucidating points of doubt
rather than of formulating definite criticisms.

The supreme aim of Great Britain, and it might be hoped the
supreme aim of the whole Commonwealth, was to preserve peace in
Europe. The main factors in the preservation of European peace
related to Germany and Italy and to the potential dangers which
the Berlin-Rome axis had created. So long as Germany and Italy
continued closely to co-operate as at present, so long would this
nightmare, namely the fear that such co-operation involved a
definite anti-British trend, continue.

It was, of course, realised that the domination by Germany of
Austria was specifically prohibited by the Treaty of Versailles,
and that at Stresa, Great Britain had announced that the continued
independence and autonomy of Austria was a matter of importance to
her. Mr Eden had mentioned that Hitler's minimum objective
appeared to be the reinclusion in the German Reich of all the
German-speaking elements in Europe. This involved qua Austria the
'Anschluss.' It concerned the 3,000,000 Germans in Czechoslovakia
and the Germans in Dantzig, Memel and other localities.

As regards Austria, a conceivable solution might be that Great
Britain should cease to offer any further opposition to the
realisation of the 'Anschluss' provided always that Germany could
attain this objective peaceably and without the shedding of blood.

One great advantage would be that Italy and Germany would be at
once divided. Germany at the Brenner would be very little to
Italy's liking, and instead of sharing a common axis, each of them
would be at the other's throat.

It must, of course, be realised that the absorption by Germany of
Austria would lead to a claim by Germany for a port on the
Adriatic which, no doubt, would be Trieste. Would the transfer to
Germany of Trieste create a very grave danger to the United
Kingdom and the rest of the Commonwealth? Doubtless Germany might
be expected to become more arrogant and difficult, but she would
have to count on the opposition of Yugoslavia and the other
Eastern and Baltic States.

There were great difficulties in the way of any solution, but this
proposal might possibly be the lesser of two evils, and it was
very much to be feared that unless Germany was given some let-out
of this kind that she might, within the next two years, take the
law into her own hands.

The clear statement of the United Kingdom commitments in Europe
contained in Mr Eden's Leamington Speech had been very well
received in Australia. Then came the Bradford Speech, and doubts
were expressed whether the very definite limitations laid down at
Leamington had not been, to some extent, qualified at Bradford [1]

It seemed clear that if Czechoslovakia was menaced by Germany,
Great Britain would not be prepared to go to war in defence of the
independence of Czechoslovakia. If this was the true position,
would it not be very much fairer to the smaller countries, and
particularly to those in Central and Eastern Europe that the
position should be explained to them without possibility of
misunderstanding?
He hoped that at a later stage Mr Eden would be able to comment on
his suggestion that Germany should in future be allowed a freer
hand in Europe, particularly in regard to the 'Anschluss' with
Austria.