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Viena% February 14* 19S§» M : * Dear Mr. Phillips*

X last wrote you on February 1 and 8* I am very glad to a«y that February 12, the anniversary of Social­ ist incident* of laat year, passed eartraordinarily quietly herft* There was only one incident in ¥1 enna on the 12th* A group of ab

A curious paradox in the Austrian situation la that now that the people are more quiet and the Government 1ft many waya more strongly established than for a year, some Of the leading people in thft Government are less confident than they havft been for some time. It It too bad that this is so, for it is ft very undesirable situation, but I think it is one which we have to reckon with. I gave you an indication of this in my letter of February •# in the last paragraph on page 5, in whieh I said that thft Foreign had toll me that if foreign support disappeared or iftsakened, they would have to be- oome more Nazi than the Nazi*. X added the comment that if this support disappeared or really weakened there would be ft landslide her* to get into the Nazi fold in order to save as much out of the wreck as possible far Individuals. In order to appreciate the realities of the Austrian situation, one must constantly keep 1ft mind that thft men who are today direct­ ing thft Government of were brought up with the idea that the closest cooperation between Austria and Germany was essential end to whoa the doctria* of political unity with Ger­ many was taught as a desirable goal. Germany was the power­ ful and ever so much bigger brother to the North* The tame men today are sincerely convinced that political union with

The Honorable William Phillips, Under Secretary of State, Washington, D. 4*

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Germany is undesirable, certainly as long as this regime 1c in power in Germany, and erven if a more reasonable regiae should eoaMI there. They are putting up a good fight is de- fen.se of Austria*s sovereignty. They are now iwavinced that whatever the conditions In Europe, Austria ean live as a sepa­ rate state and they wish to live as such, but they cannot get away from looking towards the North, 1&atever happens there Is of the deepest interest to them both from the point of view of Austrian sovereignty and their own personal security. They realise that in taking this stand for Jcstrian cevereignty they have taken their lives In their hands and far the Nazis have beeorae Marked men*

The conversations in Rome and later in London gave a oertain additional feeling of seourity to the members of the Government. They felt that they really had a good part of Europe behind Austria* which also meant personal seourity for them. The failure of Berlin, however, to follow the path to­ wards appeasement has created new fears here. After,all, for the Aastrians the 85 millions of Germans make up a great country and they believe still a powerful one. They know the ruthless- ness and the intolerance, aa wall as the objectives of Berlin, and 111 the back of their cdnds thereis always the fear of the strong neighbor to the Norflb The recent intransigeanc© of B erlin, following the London conversations, and what seems to the Government here the clear desire of Germany tc continue to pursue her policy of asking trouble, has created, I seem to sense, a new feeling of Insecurity here* It is an indefinable sort of thing, but which I sense very clearly from my contacts and, as I have already said, we must reckon with it. These people here know that if the foreign support disappears or in any way becomes less clearly defined, their fats is sealed and will overtake them very quickly* This makes them more timor­ ous Is their attitude than the circumstances require and they do not give altogether the leadership to the Austrian people which they deserve* In other words, to return to my original statement which no* seems clearer, the Government here ia less sure of itself at a time when It really has greater popular suppert than it has had before and when it should feel *»re secure.

This uncertainty finds expression, for example, in news with respect to Germany being suppressed in the local news­ papers which it is very desirable from the Austrian and the airopean point of view should be printed. The will explain that it is due to their desire not to irritate the Ger­ mans at a time when appeasement may be possible, but in feality - 5 - thers is behind It a fear. It also finis oppression in various leas important ways, but all pointing in the same direction. /

I should say, however, that all this must not be taken too seriously and is, la my opinion, more or less natural. Madariaga has been spending some days here and he got, X think, a wrong impression "when he first same here. He seemed is think that the Austrians did not know what they wanted. I eonfess that this Is one of the most difficult situations to gauge that I havs ever been confronted with, but I find that behind all these surface indications and these fundamental facts there Is now in Austria a real desire for the maintenance of har sovereignty irrespective of what changes may take plaoe in Germany* I think the Socialists, and even ths CoiOKinists very largely, share this sentiment and even parts af the Nazi groups* I believe, are sincere in saying that they want Austria to remain an independent but Hasi state. Hhat a good many people here do nob realise is that no matter how Nazi the Government might become, is would serve nothing and nobody here* Perhaps more realize this than la apparent, but cling to the hope that a more tol- erant attitude may save something out of the wreck for them.

As I have said, I don't think too muoh importance must be given to theas fears obviously held by some of the people in the Government here, but at the same time enough importance muss be attached to this situation to make me men­ tion it to you. It might become at a given moment, or under giva» circumstances, a very important consideration which would explain a great deal which may happen. The Austrian character la ourious and is, as you know, mild. It does not like ex­ treme measures in any direction. But as long as the support Austria now receives from London, Paris, andRome ia accorded, Austria oss be depended upon to maintain her position of defense of har sovereignty.

Perhaps one of the principal factors wh ich has dis­ turbed people ia the Government here is the still somewhat un­ certain aaw'tlon of England. ^hlle It is felt hers that as a result of the London conversations England has more definitely committed herself SB ths Austrian question than before, there is s feeling of uncertainty in view of the parliamentary sit­ uation in England. Some of the English nervspapers have been grossly slsrepresanting the internal situation in Austria, • 4

of course, with an object. I saw some of the headlines in London papef» • few days ago and they were most misleading, All this, combined with the :ntransigeanee of Berlin, h«s a tendency to increase these fears ever lurking in the backe of the minds of very worthwhile people here.

I have aeen my British and French eolleagues quite frequently recently and I think I correctly forecasted the real nature and ob^eot of the tendon and Faria visits of the Chancellor end the Foreign Minister in my letter to you of February 8, I gather from my colleagues that there are no particular subjects for discussion and the principal object is to strengthen the prestige of this Government. Since 1 wrote, however, it is clear that these visits alM will e» used as a definite opportunity for strengthening the backbone of the Chancellor and of the Foreign Mnister. The Chanoellor at times looks very worried and I think he would be ever so much happier if he could be Minister of Education where hie interests principally lie. Freu Sohueehnigg has the same %vorried look that Frau Dollfuss used to have. Frssu Dollfus* slsj&ys felt that her husband would be destroyed by the Hazis and she always gave me the impression of a hunted animal. I gather the same eensation now when 1 am with Frau Schusoh- nigg and I think all this is bound to work an a husband for Sehuschnigg is not quite made of tha stern stuff that Doll- fuss -was. Berger-^faldenegg is considered by quite a few people ss an amiable but ineffective person. X do not share this opinion at all for I think he i« quite capable, both of fka% however, have been inclined to take too mild an atti­ tude with respect to important matters and the visits to Paris and London will make it elear to them that while no prise is being exacted for the support -ahioh Austria is getting, their own attitude must at all times be es elear and unequivocal as that, for example, of Starhemberg*

Unquestionably the process of disillusionment in ustria with respe ct to Germany oontinuea. The failure of Germany to take a reasonable attitude after the London con­ versations has, I think, entirely destroyed any illusions which might still be held here with regard to the ultimate ends of the present regime in Germany* Those who know thesituaties in Memel and the plans in Berlia seem to be convinced that the possibilities for trouble in Memel sre very real. I saw the French Minister last evening and he says he knows the sit­ uation there very well from his services ia those parts and he fecla that active Nazi actions there might face Europe with another fait accompli, adding to the already difficult situation. - 5 -

According to other well-informed persons it seems thst sev­ eral opportunities to improve the cituatiOB in Mamel hare been lost in the past and M a result the economic situation there and aeneequent dissatisfaction provide a fertile ground for Basi actions. In ^ell-informed quarters here it is believed that Party activity will be concentrated on Memel rather than Austria for the immediate present*

The first official German reaction to the London conversations Is to be handed in today. In official Austrian circles and among ray most interested colleagues the impression is thatwhile the reply will be mora receptive and in some ways more satisfactory than was planned In Berlin irasediately after the conversations in London, it will be on the whole very un­ satisfactory and serwe as a clear indication of the attitude of Berlin not to permit Its hands to be tiod with respect to Eastern frontiers and expansion towards the ftouthesst. I think I can appreciate the #Iffieulties in Berlin, for oca** plete acceptance of the pacts amounts to practical suicide for the Party. Hth the economic and financial* and a good part of the social program already gone, with a definite de­ feat in the Church problem staring it in the face* there re­ main only the cultural and political programs* as I indioated in my last letter* To let go on the political program would be equivalent to tsking out of the movement what t% nolds for msny IK It and tremendously accelerate the opposition to trne regime outsid* *f the Party* Under these conditions one can appreciate that the policy of Berlin will be to try to gala time by splitting hairs and endeavoring in the Besetime to curry favor in England by apparent full aceeptane* of the air pact.

London remains the principal objective for activity from Berlin, although from what X learn from good source* »ome of the capitals to the Southeast of Vienna re not aeing neglected. It la interesting that theresistance la these Southeastern Suropean capitals is for the moment at least at strong as it is la London. Any weakening la London, however, will be re­ flected oil through this part of the world and in my opinion will have very serious consequences. X think I realize the difficulties in the British position. England le the deciding factor and I still think that the next few montfe^will tell us what -m may expect In Europe. If London, Paris end Rem* hold together absolutely firmly* there is hope for peace Mi the chances for peace are considerable. If not, then it takes a greater optimist even than I em to see any hop* for the main­ tenance of peace for any considerable wime. By this I do not * /

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mean that there would b© aggressive action by Germany or any­ one els© im th© immediate future, bat we would know what ts eouati o» when Germany is ready*

Sou are so jaaeh better Informed with regard to Gor­ man activities la •various ospitelsthan t that I hesitate to give you anything from hero in this raspeot, but from what 1 gather here, German-Polish understanding la pretty eaglet* and the contact between Berlin and Tokyo sore and mora act lire. ^her© ©re strews which show the way the wind blow© and I learned Ml good authority this morning that the Poles already know tha #omtents of th© first offieial German reaction ta the Loa» dan conversations although it is to be eosxaunicated to the English tad French during the course of today.

I think the hop* for ©ny early decisive action by Berlin on the road opened so well at London cannot now be ex­ pected. The plan now seem© to be to exert an such pressure at London as la at all possible to apparently favor almost without reservation the air pscx, to show clearly dafined op­ position to the Eastern pact, to split hairs with regard to the Danubian pact, to insist on recognition of ©quality without conditions, and in the meantime aontlnue party activity in raising demands for plebiscites IS Mem©! end Austria. In other words, a policy of tteiaying an at to gain time in the hop© that th© teak of the regime may continue and a few mora fait eeeosipli add to its internal prestige and consolidate its internal pos Ition* The fim, united front between London, Paria, and Bonn will keep Austria and Southeastern Europe in lina and if aoc'wpsnied by announo©-.uenta of Increased arma­ ment program in inglsad and the return of the two-year servioa in Franoe, the eoraaom front will be sufficiently implemented to have greater eff©at« Tha nope swat ba that this will bring the regime in Germany into a concert of tha powers. It may be only a hopa, but it is tha only alt ©rest ivw Which Europe now has.

Oardially and faithfully yours.

George S. Messer smith.