Dear Joe,
The political situation viewed from Rome seems more disturbed now than before the Munich gathering. War was no doubt averted by that, but only on the condition that Hitler had his own way.

The Duce, although he was justly acclaimed for his efforts in the cause of peace is, nevertheless, dissatisfied with his German colleague and this dissatisfaction is finding expression in the support he is giving the 'just revendications' of Poland and Hungary.

The Czechs are resisting the common frontier idea but it is apparent that in doing so they have German backing. Italian support of Poland and Hungary at this juncture will give the Duce good cards to play later and create perhaps another axis in East Europe that would still function when the Rome-Berlin one gets too hot. A very high Polish official told me that despite officials' denials they can count on Italian support for their claims.

A new French Ambassador is coming in a few days. It is common property that Daladier¹ made this move, recognising the Empire out of spite because the Chamberlain-Hitler agreement was negotiated without his being aware of it. The result is, of course, that British-Italian relations have not been bettered and political pressure at home has obliged Chamberlain to ask for the withdrawal of more than double the number of Italian troops from Spain than would have satisfied him two months ago. It seems that Perth has had several conversations with Ciano during the past fortnight without being able to make much progress. The French recognition of the Empire should facilitate the British rather than serve as a fresh barrier.

Because of many difficulties in the line of furnishing, I have not yet been able to get in the new premises, but I hope to get possession on Saturday. I will cable the Department immediately on doing so.