The status of Ethiopia was changed in 1938 by the fact that a number of countries, at their head Great Britain and France, officially recognized Italy's conquest of the former empire. Meanwhile parts of the country still remained unconquered, although on account of strict censorship no definite news of the extent of Italian occupation could be gained. The Italian administration pushed its program of road-building and improvements, but on the whole it seemed that the expected progress in the colonization and exploitation of the country was slow in becoming realized. There were continuous rumors that Italy was looking for a loan from foreign sources for the development of Ethiopia.
Towards the end of 1938 Italy with great insistence raised the question of French Somaliland which she wished to incorporate into her East African Empire. The capital of French Somaliland, Djibouti, is an important port on the Red Sea, and is connected by a railway with Adis Ababa, the capital of Ethiopia. The Italians declare that their control of the port and of the railway is necessary for the development of Ethiopia. The French seemed ready to discuss the participation of Italy in the administration and exploitation of the railway, and the grant of special facilities to Italy in the port of Djibouti, but they refused to consider the cession of their territory to Italy, as it is a colony of considerable strategic value. Thus at the end of the year great tension developed again in East Africa, and the French saw themselves forced to send re-enforcements to Djibouti.
With the sudden development in 1938 of an Italian anti-Semitic racial policy, the Italian Government seemed to contemplate opening up Ethiopia for the immigration of Italian and other Jews. Whereas the Italian Kingdom itself, Lybia and the Dodecanese were declared strictly closed to Jewish immigration and settlement, Ethiopia was excluded from such restrictions. In view of the difficult problems of colonization and modernization which Ethiopia offers, it was thought that the Italian Government might make it available for the immigration of Jews and for the creation of a Jewish settlement. This was especially noticeable in February, 1938, when the anti-Jewish campaign in Italy had not yet begun, but when the Italian Government had hinted that for the solution, on an international scale, of the Jewish question the creation of a Jewish state in some country other than Palestine was desirable. At the beginning of January 1939, however, Mussolini flatly turned down a proposal emanating from President Roosevelt to use Ethiopia for the settlement of Italian and other Jews. (See also FRANCE; Foreign Relations; INTERNATIONAL LAW; ITALY; U.S.S.R.; Foreign Relations.)
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