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Report from a British diplomat in Naples to the British Ambassador in Rome, 4 February 1936
(Catalogue ref: BT 11/386)

Sir,

With reference to my Despatch No. 1 of the 3rd ultimo I have the honour to report that while the reports of extensive victories have probably relieved somewhat the feeling of discouragement here regarding the outcome of the Abyssinian campaign it would seems that very considerable pessimism still remains regarding the probable cost both in men and money. This feeling is aggravated by increasing economic difficulties. While these are to a certain extent the natural result of conditions already in existence there can be little doubt that the operations of sanctions has greatly contributed to them. An instance of their effect cited to me recently was that instead of seven steamers a month from here to the East Coast of South America the service now consists of only two. So far as I know no increased sales to other countries have in any way compensated for the loss of markets in the sanctionist countries. On the contrary I believe that there has been a reduction in shipments to the United States. Although the official attitude seems to be that the effect of sanctions is negligible it is note-worthy that any economic inconveniences are generally attributed to their operation, even in cases of the increased price of goods of purely domestic origin. There is too, I believe, very considerable uneasiness with regard to any possible extension of the sanctions. Largely as a result of them great difficulty seems to have been experienced, in some cases at least, in financing supplies of necessary commodities from abroad. It is said also that very considerable hardship is being caused through the slowness of clearing house operations. As a result of the hardships caused by the economic position three or four manifestations of discontent are reported to have taken place, but none of these was apparently of any real importance.