LONDON, 1 November 1938
Received n.d. [due 10 December 1938]

GERMANY

Between the end of 1933 and the end of 1936 there were constant
exchanges with the German Government designed to bring about a
'European settlement'. They all failed, for various reasons of
which the chief and the singly sufficient, was that Hitler did not
want a European settlement. This is quite clear from the
imprecisions and evasions with which he met every attempt of the
United Kingdom to clinch anything more than a two-sided agreement,
even when founded on one of his own 'offers'. Admittedly, Hitler
has always spoken in reproach of what he calls the rejection of
these offers, but this can only be self-deception. hi the light of
what has happened, it is only too obvious that they would if acted
on have been incompatible with the realization of the Nazi foreign
programme.

2. Not only did Hitler not want a European settlement precisely
because it was his aim to unsettle Europe, but he showed also a
manifest dislike of this diplomatic idea temperamentally. If he
felt it to [be in] his interest to negotiate, or appear to
negotiate, he preferred to do so on one thing at a time, avoiding
thereby any unforeseen restriction on his future freedom of
action. Conversely, he has always refused to be specific about his
intentions. He has proved himself, that is to say, a supreme
opportunist with the faculty of usually accomplishing more than he
had in mind to do at first.

3. It was, therefore, a mistake, though one that was hardly
avoidable at the time, to attempt to bring Germany into discussion
on the basis that consideration of one point entailed more or less
vaguely in the future consideration of others. This was what
happened time and again; proposals for an armaments convention
(1934) were linked with the return of Germany to Geneva and
guarantees of good behaviour in Eastern Europe; similar
aspirations wrapped up the plan for a Western air pact in 1935; in
1936 the efforts to reach a new Locarno agreement foundered
likewise on the desire to make them the preliminary to something
else. Given that the United Kingdom Government in these years had
no choice, politically speaking, but to keep in step with France
and were ruled as to public opinion here by League of Nations
idealism, they cannot be blamed entirely for the subsequent
failures. But it remains the truth that on the whole they failed
to realize in time that there was no will in Germany for a general
settlement and that the attempt to conduct affairs as if there was
one could only be an irritant.

4. There was not, however, a complete lack of any alternative.

Study of the period also shows that Nazi policy, while too dynamic
to be confined to any 'collective' system, could at some points at
least have been diverted or blunted by very simple methods, for
Hitler seems to have been consistently ready to come to
arrangements on specific matters where a basis for arrangement
existed, i.e., where the other party was in a position to withhold
its contribution. Thus with the non-aggression pact with Poland,
the guarantee of Belgian independence, the naval agreement with
England, and thus it might have been with an arms convention up to
1934. After that time the Versailles Powers could offer Germany no
comparative level of land or air armament which she could not
reach with impunity on her own account.

5. Furthermore, advantage might have been had from anticipation in
certain cases where the eventual outcome was not in doubt, e.g.

the Saar. Here Hitler was given a quite unnecessary opportunity
for scoring a success simply because the French insisted on the
plebiscite.

6. From the whole period, the deduction is plain. By calculation
of what were immediate German interests, by the use then of a
bargaining position wherever it existed (and rigid restraint from
the attempt where it did not), and, above all, by doing this in
time, a series of agreements with Germany on individual questions
would have been possible. Each would have been, as those actually
concluded were, one less reason for conviction on the part of
Hitler that he had no choice but to act, whenever he saw the
opportunity, on his own arbitrary decision. And his arbitrary
decision has usually led to his taking more than need have been
conceded in the first place.

7. Admittedly, this policy of piecemeal accommodation would not
have led Hitler, and would not now lead him, to depart from the
main lines of the programme of 'Mein Kampf'. But that programme
has been shown to be highly flexible, both as to time and as to
the choice of objectives, and it is clearly to the interest of the
countries concerned to moderate as the chance offers the rate and
manner of its execution. Short of complete passivity and on the
assumption, proved by the experience of 1933-36, that Nazi Germany
will consistently refuse to accept any general limitations on
future action, there is indeed no other course open except that of
a preventive war.

8. The prospect is not an agreeable one and in particular it falls
far short of the hopes sometimes expressed of a 'real
understanding' between Germany and the British Commonwealth. The
possibility of that need not be entirely ruled out, but it is
bound to be remote so long as there is suspicion that the long-
term Nazi ambition is the domination of Europe with a view to
extending the process to the Near and Middle East and so long as
the regime is prepared to offer war as readily as in the case of
the Sudeten Germans. Exactly because these are the circumstances,
however, the conduct of British relations with Germany on the
lines suggested above becomes essential. It may be taken as
certain that the present directors of German foreign policy will
push to the utmost every advantage they may conceive themselves to
have over this country, that they will follow this course where it
leads them, even if it may involve eventually a direct challenge
to British influence and interests, and that they will then not
hesitate to bring about war (there would be plenty of ways of
getting round assurances to the contrary) as soon as the moment
seems opportune. Their record is such that even the'alliance' with
England which Goring [1] at one time proposed could be no
guarantee against this. The conclusion surely is that the only
course left is to treat with Hitler on his own ground and by his
own methods, taking one question at a time.

9. Although there is nothing in this policy that could be
represented as merely hostile or obstructive to Germany, the
result could therefore hardly pass even as that Anglo-German
political settlement which has often been looked for as the
natural sequel to the agreement with Italy. But the fact must be
faced that the basis for such a settlement does not exist, for the
reason that Hider has no need of it. Just as in the 1933-36 period
he was able to elude every attempt to bring Germany back into the
Geneva system because France and England were never in a position
to offer a compelling inducement to the contrary, so at the
present time he is unlikely to make a gratuitous surrender of the
undoubted bargaining superiority which Germany enjoys in relation
to this country. An AngloGerman 'settlement' would be expected on
the British side to include, with other matters, an arms
convention and guarantees of the exclusion of the threat of force
from future German diplomacy; it would be surprising if Hitler
found it worth while to concede so much in return for mere British
goodwill, especially as the maintenance of the present balance of
military strength is well within German capacity for some years to
come. 10. The omission of colonies from this estimate is
deliberate. Opinion may differ on the point, but the prevailing
evidence suggests that the return of colonies to Germany, under
whatever form, could not be used to extract terms from Hitler on
something else. There should be no illusion about this. A colonial
settlement is desirable (in conformity with the policy outlined
above) before Germany decides the question by arbitrary means; it
can and should be hedged round with the most stringent conditions
designed to dispose of the issue finally; but to imagine that it
could be made to bring about a wider settlement is utterly
unrealistic. In this question, as in others in the past, the
Germans win engage their 'honour' whenever it is convenient to do
so, with results destructive of the normal give-and-take of
diplomacy that are only too well-known.

11. It may be objected that if, accepting these facts, we discard
the hope of bringing Germany under her present leaders into line
with those Powers whose chief interest is the avoidance of war and
adopt instead as a short-term policy the expedient of diverting
and braking German expansion whenever we are in a position to do
so, then Anglo-German relations will merely be back to the uneasy
and sterile state which led to the conflict of 1914. But such an
argument overlooks a fundamental difference between that period
and the present. Whereas then British policy turned on the
doctrine of the European balance of power, it has now to take into
account the views of the Dominions, which are quite ready to
accept the fact of German domination of the Continent east of the
Rhine. This acknowledgement is not in itself, of course, enough to
avert eventual war, but it does offer a condition on which the
Third Reich and the British Commonwealth can live together,
provided always that specific differences as they arise are
handled from the British side resolutely enough to discourage Nazi
opportunism.

12. The Commonwealth Government have throughout been disposed for
co-operation with Germany, in full recognition of the status of
the German nation and irrespective of the nature of its
Government. Now that such a disposition is finally beside the
point, for nothing could be clearer than the indications since the
Godesberg meeting [2] of the resolve of the present Nazi regime to
utilize its military superiority in all future transactions, the
question is how their influence can be most usefully exercised in
the future. The above conclusions, if they rightly represent the
position and because they are not at the moment very widely home
in mind in this country, provide the answer. The issue here is
still commonly regarded as being between those who hold that the
present danger can only be met by a combination of Powers against
Germany and those who are confident that an Anglo-German
settlement, securing the general peace, can be had by new methods
of approach. The chances that the former idea will prevail can, of
course, be ruled out for the time being, but it is to be feared
that the disappointment of exaggerated hopes built on the latter
will eventually bring about a reaction in just that direction.

There is therefore a strong case for presenting a feasible middle
course in time.