Dear Joe,
The Anti-Semitic campaign here is causing a lot of under surface comment. The average man does not know quite what to think of it or what it may lead to, but many of the working class are under the illusion that it will open up to them a number of posts. The places of the five or six hundred University and High School Teachers who have been dismissed is nothing more than a drop of water among an ocean of aspirants, and the number of Jews who support themselves by manual labour is infinitesimal.

What is coming next, nobody knows. There are a few who are of the opinion that after a lapse of five or six months those Hebrews who have not left Italy will be given the option of either going to Ethiopia or having their property confiscated. This possession did not figure in the list of those from which the Jews are debarred.

But the real cause of the Race campaign is a mystery to all but¹ those who do not enjoy the confidence of the Fascist Grand Council and they are very few indeed. While some believe it is due to the pressure from Hitler others attribute it to the aspirations of the Duce to become the accepted protector of the world of Islam. The strife in Palestine has roused Moslem feeling to a state of exaltation unprecedented in our time. Italy's restrictions on the Jews must consequently make a favourable impression on them, giving them comfort and relief while England's attitude only provokes their resentment and illwill. If this is the case, as it would seem, the Duce has found another means of propaganda among the Arabs to replace the Radio appeals that were suspended in accordance with the recent Anglo-Italian Agreement.

The antagonism of the Pope to the Racist programme is said to have so provoked the Fascist leaders that many of them are for tearing up the Lateran Agreements. The less hot-headed, however, realise the danger of such a step. Behind the scenes they are by no means a happy family. The Duce alone stands above their rivalries and squabbles. Even on international matters they are said to be sorely divided. The leadership of a pro-German group is attributed to Ciano, and of another group, seeking a better understanding with England and France to Ambassador Grandi. Other members of the Grand Council are lined up behind these either through conviction or interest or both. The differences that divide them are said by foreign newspapermen with inside contacts to be so acute that there is danger of the faction who eventually gets the upper hand making a short shrift of its opponents. The Duce is aware of all that is going on but his policy is one of non-interference. He commands the loyalty and obedience of all of them and evidently does not wish to diminish his authority and prestige by taking sides.

While it was believed by many that the Italian Govt. was neutral in the Czecho-German dispute an official note issued yesterday (annexed)² indicates the contrary to be the case. It states that Italy has not mobilised in reply to France as her internal mechanism permits her to face any situation at a moments notice. Nevertheless, the Polish Ambassador who was in here yesterday told me that several Aviation and Artillery units were moved up closer to the French frontier.