The¹ outcry in Jugoslavia against Hungary, Austria and Italy following the events at Marseilles² has rendered very difficult if not impossible at present, the consummation of the scheme by which an Italo-Jugoslav rapprochement was to be achieved. The visit of the Austrian Chancellor³ provided an opportunity for discussing the future of the Hapsburgs. The return of that dynasty to the throne of Austria, especially if that throne were shared by an Italian princess, would it is believed not only tend to stabilize the country internally but it would be a strong bulwark against the Nazi tide. The marriage of the King's youngest daughter to Prince Otto is desired neither by France nor Jugoslavia and perhaps to a lesser degree by Czechoslovakia. It would give Italy a very strong position in Austria. The Holy See is believed to be in favour of this arrangement, or in fact any arrangement which would restore a Catholic dynasty at Vienna. The Vatican is definitely suspicious of republics. For one thing, rulers of republics are not so susceptible to pressure such as the Holy See can apply as are rulers of monarchical countries and the tendency to confuse democracy with bolshevism and socialism is ineradicable. The Dolfuss Government by its relentless destruction of the Socialist Party (which preached a very tepid brand of socialism by all accounts) earned the most exaggerated praise by the Holy See. Austria is held up here as the model of a Catholic State although the oppression existing there has no justification in any Papal Encyclical. On this subject the Papacy and the Royal Government are for once in complete accord but from very different motives.

The danger inherent in the Austrian situation is fully appreciated here as is the fact that Germany's temporary distraction by the Saar matter will not last more than a few months more when she will be in a position to return to her Austrian activities which no one believes to be terminated despite von Papen's assurances. The Holy See appears to be completely helpless in the face of Hitler. In some quarters a more positive attitude has been urged but the policy appears to be one of 'wait and see'. Had Cardinal Gasparri been in office, they say, things between the Vatican and Germany would not have come to this pass. On the other hand Cardinal Pacelli knows Germany very well, an advantage he has over his predecessor and it is more reasonable to assume that he is biding his time rather than waiting and seeing.

There is some apprehension here that Jugoslavia may in fact be able to connect Hungary or Austria in some way with the assassination of King Alexander and follow up her case with demands of a nature incompatible with the self respect of these countries. Therein lies the danger as Italy has practically bound herself to support them. The danger is not now of war but of widening the breach between Italy, Austria, Hungary and the Petite Entente to a point where it would be well-nigh irremediable.

It is said that after Dolfuss' assassination the fact that Italy has a secret treaty with Austria leaked out and that the leaders of the present Austrian Government were unaware of it. By this treaty Italian troops were to be sent into Austria in certain circumstances and, it is alleged, only the absolute refusal of the King prevented 16 Italian Divisions marching into Austria in July. The King had a better perception of the likely consequences than Mussolini.