1939: Italy

For Italy, as for the rest of Europe, the year 1939 was the most eventful since the signing of the Treaty of Versailles in 1919. For 1939 saw the outbreak of what may come to be known as the Second World War; and though Italy failed to enter this conflict alongside her ally, Germany, she found that the position of a neutral was almost as uncomfortable as that of a belligerent. Indeed, ever since 1935, Italy had been at war — first in Ethiopia and then in Spain. Her economy, her political life, her whole psychology had thus been geared to war — a state which according to Fascist doctrine is the normal one for a young and virile nation.

It is therefore hardly necessary to explain that in 1939 questions of foreign policy dominated the attention of the Italian Government. And that in this review of events for that year we must devote more attention than usual to diplomatic and military developments.

FOREIGN AFFAIRS

Italo-French Relations.

The anti-French press campaign which had been raised to a high pitch in early December, 1938, continued on into the new year. Though the Italian Government refrained from publicly specifying its claims against France, the tenor of Fascist newspaper editorials and of speeches by Party hierarchs indicated that those claims included: the 'return' of Corsica; the continuance of a privileged position for Italian subjects in Tunisia; a share in the ownership and administration of the Suez Canal; a free port at Djibouti, or even the outright cession of French Somaliland so that the railway up to Addis Ababa would lie wholly in Italian territory.

During the early part of January 1939 the French Prime Minister, M. Daladier, made an official tour of Corsica and French North Africa. This was interpreted by the Italians as a gesture of defiance towards them. Upon his return, Daladier declared (Jan. 15) to the Executive Committee of his party (the Radical Socialist) that France would make no territorial concessions in North Africa. Between Jan. 11 and 14. Mr. Chamberlain and his Foreign Secretary, Lord Halifax, paid an official visit to Rome, where they were cordially welcomed by the populace. The interviews they had with Mussolini and his colleagues were reported to have been frank and comprehensive, though they by no means reconciled the Italian and British points of view. Mussolini was said to have promised Mr. Chamberlain not to go to war with France in pursuit of his claims on her. As concerned Spain, however, he refused to withdraw any of his support for Franco until the latter had won a complete victory.

What the Fascist Government evidently desired was a concrete offer from France. The King, in his speech opening the new Chamber of Fasci and Corporations on March 23, 1939, barely referred to the Axis, spoke warmly of Britain and declared that Italy's claims on France were contained in a note sent to Paris on Dec. 17, 1938. On March 26 Il Duce made a speech, violent in tone but relatively moderate in content, in which he virtually invited France to open negotiations by specifically stating that the issues could be summarized in three names: Tunisia, the Suez Canal and Djibouti. The French press wanted to know whether this meant that Italy's claims did not include the cession of French territory. The Italian papers replied that Italy did indeed desire territory, that she needed a Lebensraum for her rapidly increasing population.

In a radio address of March 29, Premier Daladier repeated that France would not cede any of her rights or a foot of her land; however, he offered to negotiate with Italy if she would state her demands clearly. At the same time the French published the Italian note of Dec. 17, and their reply of Dec. 25. From these it could be seen that Italy had not specified her claims. Mussolini's rejoinder, made in a speech at Cosenza on March 30, was that Italy refused to be suffocated in the Mediterranean. Il Duce's words were published in the Italian papers only in summary form and it was assumed that he was content to let she matter drop for the time being. Gayda wrote that, though France had closed the door to further discussion, Italy 'could wait.' (See also FRANCE; TUNISIA.)

Italy's Interests in Spain.

Spain was the real issue dividing Italy and France. France naturally feared that Italian influence might become entrenched along her Pyrenees frontier in the event of a Franco victory. And a Franco victory had become a certainty by the end of January — thanks to the generous assistance of Italy and Germany. Yet despite this danger, the French refused to open their frontier so that munitions could be shipped to the hard-pressed Loyalists; they feared that such a step might provoke a general war.

The fall of Barcelona on Jan. 26 was celebrated in Italy as a national victory. On Feb. 5. Virginio Gayda, editor of the Giornale d'Italia of Rome and generally regarded as an unofficial but reliable spokesman for the Fascist Foreign Ministry, wrote that, in order to attain certain political objectives, the Italian troops in Spain would stay there even after the complete defeat of the Loyalist armies. France naturally regarded this proposal as a clear threat to her security, while to the British it represented a violation of Italy's promise, made in connection with the Anglo-Italian Agreement of 1938, to remove all troops from Spain as soon as the war was over. Consequently, on the very next day, Mr. Chamberlain gave France a sweeping pledge that Britain would come to her assistance in the event that any of her 'vital interest' were threatened 'from whatever quarter.' On Feb. 6, the Italian Foreign Minister, Count Ciano, explained to the British Ambassador that Gayda's view was not shared by the Government and that Italy would keep her pledges. Thus, by a well-concerted common front, the French and British managed to keep Italy from capitalizing on Franco's victory in Catalonia. In so doing, Chamberlain and Daladier showed that the Munich days of easy diplomatic victories were over for the aggressors.

In mid-February, as the remnants of the Loyalist army were being driven into France, Paris and London prepared to recognize Franco. Rumors that England and France intended to loan money to the Burgos Government infuriated the Italians who feared that their position in Spain — bought at such a tremendous cost in material and men — would be lost through the superior financial bargaining power of the two democratic states. Threats and counterthreats flew back and forth. The French threatened to occupy the Spanish Zone in Morocco. The Italians declared that if France invaded Spanish Morocco, they would refuse to leave Majorca. The British concentrated their fleet in the Mediterranean. Rome talked of calling a parley between Hitler, Mussolini and Franco in order to overawe the two Western Powers. The crisis finally subsided after France and England had simultaneously recognized Franco (on Feb. 27).

On March 28 Madrid fell, effectively putting an end to the civil war. Yet the Italian 'legionaries' tarried — on the excuse that they must participate in Franco's triumphal entry into Madrid. This event, after being postponed several times, finally took place on May 19 — with Italian troops leading the procession. After further delays, the 'last' Italian soldiers sailed for Naples on June 1, Further contingents of 'last' troops returned at intervals during the summer. Whether there were any left in Spain at the outbreak of the general war in September was a matter on which neutral observers gave directly contradictory reports.

In June the official magazine Forze Armate revealed that Italy had sent no less than 100,000 men to Spain between December 1936 and April 1937. According to the same source, 149 vessels of the Italian navy participated in the hostilities and were responsible for sinking a number of Loyalist ships. Official figures released at other times during the year indicated that 6,011 officers and men of the Italian air force had gone to Spain, where they had carried out 5,318 bombing raids in which 224 enemy vessels had been damaged or sunk and 903 Loyalist planes destroyed. The casualties among the 'legionaries' were reported to have been: 3,064 killed; 10,708 wounded; 214 missing; 366 prisoners. The air force admitted losses of 174 men and 88 planes. Many neutral observers said these Italian casualty figures were gross underestimates.

Presumably in the hope of obtaining Franco's adhesion to a 'Pact of Steel' (see Italo-German Relations). Ciano made an official visit to Spain in mid-July. The Italian press sought by every means to inflate the importance of this trip. The Spanish papers, on the other hand, derided the idea that Ciano had come to ask for an alliance. Spain's debt to the Axis, they held, had been paid by the destruction of Communism and henceforth Spain had every intention of remaining neutral — as she did when war broke out in September. (See also SPAIN.)

Conquest of Albania.

While the Italians were 'waiting' for France, they consummated a long, nurtured desire by conquering Albania. That country had been under the Italian influence ever since 1921 when the Council of Ambassadors had tacitly recognized Italy's special interests there. Italy's position had been fortified by subsequent treaties with the Albanian Government, until it can be said that politically and economically Albania was little more than an Italian protectorate. This fact helps explain why the Western Powers, especially Britain, did not feel free to protest more vigorously against the extinction of Albanian independence.

The full history of the Fascist stroke which overcame Albania in Holy Week will probably not be known for many years. According to reliable information, Rome brought considerable pressure to bear on King Zog in an effort to make him surrender — without a fight — what was left of Albanian freedom. This he was determined not to do — though some of his closest advisers turned out not to have been so immune to Fascist blandishments.

Rumors that Italy was preparing to take action in Albania received wide circulation on April 2 — the day before Matchek went to Belgrade to seek a settlement of the long-standing Croat-Serb controversy. It was Yugoslavia which stood to lose most from an Italian occupation of Albania, for such a step would clinch Italy's control of the Adriatic. The prospect that the Yugoslav Government might finally succeed in working out a compromise satisfactory to both Croat separatism and Yugoslav nationalism was certainly one of the motives impelling Mussolini to act without further delay. So, assured of the solid support of Germany and not too deeply alarmed by Britain warning that an attack on Albania would violate the 1938 Anglo-Italian Agreement not to upset the territorial status quo in the Mediterranean, Mussolini ordered his combined land, sea and air forces to conquer Albania. Troops landed at Durazzo and three other ports on April 7. Tirana, the capital, fell the next day while King Zog, Queen Geraldine and their two day old son were seeking refuge in Greece after a wild ride through the mountains of Epirus. On the following day Rome announced that the entire country had been pacified. This announcement was premature, though Albania resistance soon evaporated because it lacked time to be organized. The conquest of Albania was a Blitzkrieg in the proper sense of the word, and as such served as a sample of what the Germans were to do in Poland five months later.

The Italian army lost no time in setting up strong defensive works along Albania's frontiers, especially those facing Greece. Italy's new position in Albania gave her a foothold in the Balkans. Thenceforth her word would count for much more in that area than it had in the past. She could bring direct pressure on Greece and Yugoslavia, and more remotely on Bulgaria, Turkey and Rumania. As a result, the Axis momentarily became predominant in Southeast Europe — but only for a moment, because Britain and France now finally shook off their lethargy and negotiated pacts with Poland, Rumania, Turkey and Greece guaranteeing Anglo-French help for those countries if they should choose to resist an aggressor by force of arms.

In Albania the Italians set up a puppet government of relatively unknown men willing to take orders from Rome. The cabinet was headed by Shefket Verlaci, reputedly the richest man in the country. Albania was not made an integral part of Italy, but was joined to her in a personal union — Victor Emmanuel, in addition to being King of Italy and Emperor of Ethiopia, became King of Albania. In his name a Lieutenant General administered the country. The first incumbent in this office was the former Italian Minister to Albania, Jacomini di San Savino.

One of the first tasks set by the Italians for themselves in Albania was the construction of a network of roads, primarily for strategic purposes, but also to open up the country economically. For a number of years Italian enterprise had been developing Albania's oil deposits, and it was now proposed to increase the scope of these operations to include such resources as iron, copper, chrome, asbestos and timber. There were also large areas of fertile land available for Italian colonization as soon as they had been drained and freed of malaria. In June the Italian Government appropriated 1,200,000,000 lire for the economic development of Albania and 800,000,000 lire for the construction of roads there.

As might have been expected, the Albanian affair served only to bring France and Britain closer together; military conversations took place between their staffs; their Mediterranean fleets put to sea for undisclosed destinations; and in Eastern Europe they redoubled their efforts to bring Russia and the smaller states into their political orbit. On April 10 the British cabinet decided to declare that Britain would regard an aggression against Turkey, Greece or any other countries in the Eastern Mediterranean as an 'unfriendly act.' Nevertheless, despite all these alarms, the Albanian crisis passed, like the many others before it, without setting off a general war. (See also ALBANIA.)

Italo-German Relations.

Ever since Hitler's bloodless victory at Munich in September 1938 the Italians had been wondering when their turn would come to make use of the Axis. At the height of the Spanish crisis Hitler had declared, in his Reichstag speech of Jan. 30, that he was unconditionally on the side of Italy 'if for any motive whatsoever war should be precipitated against that country.'

Yet it was to be Germany, not Italy, which next made use of the Axis, this time to invade and annex what had been left of Bohemia and Moravia after the Munich settlement. The Italian Government was clearly not at all pleased with this step, about which apparently it had learned only at the last minute. Officially it pretended that the destruction of Czecho-Slovakia had strengthened the Axis; but in reality it saw that the Axis was in danger of becoming a means for insuring the immobilization of Italy while Germany made herself impregnable in Central Europe. Among the Italian people the distrust of Germany, already widespread, became even more pronounced after the Czecho-Slovak coup; and the question — when does our turn come? — became ever more insistent in Italy. Her turn came in the invasion of Albania in April (see above, Conquest of Albania).

This summary annexation alarmed all Europe and statesmen became more than ever determined to line up as many allies and friends as possible for the final showdown. British efforts in this direction were, however, impeded by Mr. Chamberlain's unwillingness to cultivate the Soviets too cordially for fear of throwing Mussolini even deeper into Hitler's embrace. Mr. Chamberlain never deviated from the belief that Italy was not happy in her alliance with the Nazis and that England and France, by not burning all the bridges on the road to Rome, might eventually win the benevolent neutrality, if not the outright support, of the Fascists. On several occasions the British Prime Minister urged the French Government to enter into negotiations with Rome. But Daladier apparently feared that any move toward satisfying the Italian claims would be interpreted in Rome as a sign of weakness and would automatically cause new demands to be raised. For her part Italy was reported as willing to make terms which did not involve any cessions of French territory. By mid-May there was a general détente in Italo-French relations, and Il Duce was able to declare in his speech at Turin (May 14) that there were no problems in Europe 'big enough to justify a war.' Yet at the same time he warned the democracies that they would await the economic collapse of the Axis in vain.

Indeed, the Axis was at that moment on the verge of being converted into a military alliance — the so-called 'Pact of Steel.' For some time the relations between the two Fascist Powers had been growing closer, not only in the field of diplomatic action, but as regards economic and military collaboration. Reports increased that Italy was being honeycombed by German military instructors, industrial experts, Gestapo officials, propaganda agents, and the like, etc., until the whole of Italian life was coming under Nazi influence. German regiments were said to be camped in northern Italy, while others had passed through Trieste to Libya. But these rumors were apparently exaggerated, though it was true that enough German functionaries had filtered into Italy to fan the latent anti-Teutonic prejudices of the Italian people. This sentiment even a dictatorial government had to take into consideration, and it no doubt accounted for the hesitancy with which Mussolini entered the military alliance with Hitler, Many Italians, some of them important hierarchs in the Party, would have been content to let the less binding terms of the Anti-Comintern Pact govern Italo-German relations. But the leading spirits in Mussolini's cabinet and in the Fascist Party felt that the only way to protect Italy front 'encirclement' and to put her in a position to expand into the Balkans, Near East and Africa was to join with the mighty Nazi war machine in a close military alliance.

On April 29 General von Brauchitsch, Commander in Chief of the German Army, arrived in Italy for an official visit that carried him as far south as Libya — a place that seems to exercise a fatal attraction to Germans, especially military men. During his stay in Rome he evidently went into the details of the proposed alliance. Goering also spent considerable time in Italy during these weeks.

On May 6-7 Foreign Minister von Ribbentrop conferred with Ciano at Milan in one of the most important diplomatic meetings in recent years. As Ciano revealed in his speech to the Chamber of Fasci and Corporations on Dec. 16, Italy agreed to enter the alliance because its aim was to 'consolidate peace' while both countries were finishing their armament programs. 'The duration of this period was set by us at three years; on Germany's part at four or five,' he said. 'The Reich agreed with us not to raise any question that would be likely to arouse new polemics before this lapse of time had passed.'

In the end the Italians' fear that Germany would drag them into a general war over the question of Poland was overcome by the greater fear that they would be isolated. The treaty was signed at Berlin on May 22 by Ciano and von Ribbentrop. After asserting that the two peoples were 'firmly bound to each other through the inner relationship of their philosophies of life and the comprehensive solidarity of their interests,' it provided inter alia that 'If contrary to the wishes and hopes of the contracting parties it should happen that either of them should become involved in military entanglements with one other power or with other powers, the other contracting party will immediately rally to its side as ally and support him with all its military resources on land, at sea and in the air.' The pact became effective immediately and its duration was set at ten years.

With this treaty in their pockets the Italians began to talk even louder than before about their right to 'living space.' As we now know, one of the conditions under which Stalin consented, in August, to make his pact with Hitler was that the Germans in the Baltic States should 'return' to Germany, even though many of the families involved had lived in their adopted homes for centuries. A similar undertaking on the part of Hitler as regards the German population in the Italian South Tyrol may have accompanied the conclusion of the Italo-German alliance. At any rate, early in July the world suddenly learned that the Fascist Government was planning to send to Germany all German citizens and all German speaking inhabitants who had not become Italian citizens when the territory was taken from Austria and given to Italy after the World War. There were even reports that all the 210,000 German-speaking inhabitants of the South Tyrol would be obliged to leave, if not for Germany, at least for other parts of Italy. On July 10, all foreigners were ordered to leave the district within 48 hours — and this as the height of the tourist season was approaching.

The purpose of these drastic measures is still open to conjecture. The official explanation mentioned 'political and military' reasons. But neutral observers believed that the Fascist authorities wanted to remove foreigners so that they could not witness (1) the mass eviction of thousands of peaceful people from their homes, (2) German troop movements through the Brenner Pass into Italy, or (3) other military activities of a highly confidential nature. As regards the property left behind by the deportees, it was pointed out that it might be used by the Italian Government to liquidate part of the 342,000,000 lire which the Germans owed to Italy in the clearing balance. In the end, however, the only people who were forced to leave Italy were some 10,000 German citizens, most of whom settled in Moravia. (See also GERMANY.)

Polish Question: Nazi-Soviet Pact.

And indeed, neutrality was the policy that Mussolini was to follow in this crisis. The Fascist Government had always looked askance at Germany's designs on Poland and did not in the least wish to be dragged into war over the Polish question, as Ciano had made plain to von Ribbentrop at Milan in May. Mussolini's interest in the 'Pact of Steel' was confined to the defense of Italian claims in the Mediterranean and the Balkans, and did not extend to supporting Hitler in any more rash adventures in Central Europe.

Ciano had visited Poland at the end of February. The Italians and Poles were probably drawn together by a common wish to keep Czecho-Slovakia from failing under complete German control. The Italians also had an interest in keeping Poland from tying up too closely with Britain and France, and in preventing the relations between Berlin and Warsaw from degenerating to the point of war. During the spring and summer, therefore, the Fascist press sought to persuade the Poles, with logic and threats, to give in to Germany's demands 'before it was too late.'

But, of course, it had been 'too late' for some time, since Hitler was determined to go ahead with the dismemberment of Poland, come what might. Ciano went to Salzburg on Aug. 11 to confer with Hitler. Though this meeting was of the utmost importance, we still know very little about what went on at it. The conversations which included Hitler at least part of the time, lasted from Aug. 11 to 13. The press communiques which were issued at their close were laconic and non-committal, but managed nevertheless to convey the impression that all had not gone well.

Ciano, in fact, was stunned by the news, imparted to him by Hitler, that the Germans had fully resolved to settle their score with Poland, by arms and at once. He apparently sought desperately to dissuade Hitler, but to no avail. As he later revealed, in his speech of Dec. 16, Ciano told the Germans that Mussolini was willing to arbitrate their conflict with Poland. When they refused this offer, 'we did not fail to let the Reich know the reasons why the Fascist Government would have desired a peaceful solution or, at least, a localization of the conflict.' In other words, the Italians refused to put the military clauses of the alliance into operation because Germany, contrary to the understanding reached at Milan in May, had decided to go to war over Poland.

Mussolini, who was constantly kept informed of the course of the conversations, was also considerably taken aback on learning of Hitler's imminent rapprochement with Stalin. The Fascist Government harbored strong antipathies to Communist doctrines and it objected to any step which might reintroduce Russia into Central Europe or the Balkans. The Italians were not impressed with the Nazi argument which insisted that the German-Soviet Pact had made it impossible for Poland to resist and had therefore removed the danger of a general war. All this explains why in the second half of August, Italy gave no signs of preparing to join her ally in a war on Poland, France and Britain.

Italian Neutrality in European War.

Mussolini, with the King and the Italian people solidly behind him, was determined to do his utmost to keep Italy out of the war. More than that, he strove up to the very last minute to prevent its outbreak.

When, however, Germany invaded Poland, the Italian Government issued (Sept. 1) an official communique declaring Italy's neutrality. No mention of the Axis was made in this announcement and the word disappeared from the Fascist press for three months. The Italian people were overjoyed when, contrary to their expectations, their country did not join its ally even after Britain and France entered the war. And as the conflict proceeded, with its ruthless assaults on the civilian population of Poland and its increasingly close cooperation between the Nazis and the Bolsheviks, Italian opinion veered more and more to a neutral position, though the Fascist press continued to pretend that Italy was wholeheartedly behind Germany.

After the Blitzkrieg in Poland, Germany wanted peace — on her own terms, of course. On Oct. 1 Ciano was in Berlin. Though he later declared (Dec. 16) that the Germans asked nothing of Italy on this occasion, we can assume that Berlin did in fact try to induce the Italians to support their 'peace' maneuver. Ciano seems to have made it clear that Italy not only intended to stay neutral, but that she refused to act as Berlin's 'go-between.' To this blow against the Axis was added another when Hitler declared, in his speech of Oct. 6, that Germany and Russia would settle the destiny of Southeast Europe. When von Ribbentrop praised Mussolini and German-Italian friendship, in an address at Danzig on Oct. 24, there were no cheers from his audience, a fact duly noted in Italy.

Eradication of Nazi Influences.

On Oct. 31 Mussolini executed a major re-shuffle in his Cabinet, the first since 1935. The only members retained were Ciano, Grandi (Justice), Thaon di Revel (Finance) and Bottai (Education). In addition, the Secretary of the Fascist Party, Achille Starace, was replaced by Ettore Muti; while General Parian gave way to Marshal Graziani as Chief of Staff. Mussolini himself retained the portfolios of War, Navy, Air, Interior and Land Reclamation, though he relinquished the Ministry of Italian Africa to General Teruzzi. These changes were generally interpreted as a move to get rid of some of the men most closely tied to the Axis. Though Ciano had formerly been a warm advocate of close relations with Germany, his ardor had waned markedly since Salzburg. Two of the new appointees — Muti and Pavolini (Minister of Popular Culture, i.e., Propaganda) — were understood to be Ciano's men and their presence in key positions was regarded as evidence that Il Duce's son-in-law was strengthening his own position.

Balkan Interests.

During November the Fascist Government apparently encouraged the Balkan countries to form a united front against the threat of an invasion by any of the other Great Powers. When the attempt failed, the Italians denied that they had sought to create such a bloc. Yet the fact remains that on several occasions (e.g., in the communiqué issued by the Fascist Grand Council on Dec. 8) the Italian Government warned the other Powers — particularly Russia, but also Germany and the Allies — that it would not remain indifferent to a change in the status quo south of the Danube.

The fear of a Russian advance into Rumania and Bulgaria helps explain the bitter anti-Soviet editorials which appeared in Fascist newspapers during the late fall, as well as the popular enthusiasm manifested for Finland when Russian troops invaded that country early in December. Italo-Russian relations became so strained that in the middle of that month the newly-arrived Soviet Ambassador to Rome returned to Moscow without even presenting his credentials.

Reiteration of Axis Friendship.

Those who believed that the Axis had become a dead letter after the Salzburg conversations, were proved wrong, or at least premature, by the communique of Dec. 8 and by Ciano's speech of Dec. 16. The Italian Government and press had been silent about the Axis for some three months. But in both these pronouncements Italy's adherence to her alliance with Germany was explicitly reaffirmed. At the same time, Gayda warned France and Britain, in a radio speech on Dec. 12, that Italy had not forgotten her colonial claims against them. The Fascists were also very much irked by the rigors of Britain's two-way blockade against Germany, which interfered greatly with Italian shipping.

As the year drew to a close it was becoming increasingly obvious that the Italian Government was following a policy dictated solely by the national interests of Italy and not by any ideological or sentimental sympathies. For the moment, all efforts were bent on keeping Italy out of the war.

MILITARY, NAVAL, AND COLONIAL AFFAIRS

Preparedness Program.

The fluctuations in the number of men under arms corresponded roughly to the vicissitudes of Italy's diplomatic situation. During the tense period in late January and early February caused by the disintegration of Loyalist resistance in Spain, additional men were called to the colors. By mid-April between 950,000 and 1,200,000 (not including the militia or the 80,000 militarized workmen in Ethiopia) were reported to be on active duty, of which 60,000 were in Ethiopia, 40,000 in Albania, 90,000 in Libya and from 15,000 to 45,000 in the Aegean Islands.

Large-scale maneuvers were carried out by the army in the upper Po valley during the first week of August. They were later described in official statements as successful, though outside observers reported that certain deficiencies in equipment and organization had been disclosed. As the Polish crisis deepened during the summer, more and more men were called up, until by Sept. 3, no less than 1,800,000 men were believed to be in uniform. A step long demanded by the Fascist militia and long feared by the regular army was taken on Sept. 1; when the pay scales of the two services were equalized. Many regarded this as another step towards the ultimate fusion of the militia with the army.

An official communique issued on Oct. 27 stated that since the advent of the Fascist Government in October 1922 it had spent on military preparedness the sum of 133,281,000,000 lire, divided as follows: army — 72,672,000,000; navy — 32,652,000,000; air force — 26,515,000,000; militia — 1,442,000,000. Marshal Badoglio, Chief of the Armed Forces, and the most brilliant officer in the Italian army, survived the general shake-up of high civil and military officials that occurred on Oct. 31 even though he had reached the retirement age of 68.

Fascist Italy's determination to become top dog in the Mediterranean was reflected in her strenuous efforts to increase her naval power. One feature of her current naval program is the construction of ships capable of 'oceanic' operations. The official magazine Forze Armate revealed in January 1939 that during the previous year Italy had laid down 14 submarines capable of cruising to America and back, in addition to six smaller ones. By the beginning of 1940 Italy probably had 125 submarines, more than any other country in the world, except possibly Soviet Russia.

At the time of the budget speeches in May it was disclosed that Italy intended soon to build nine large cruisers as well as more destroyers and submarines of a special type. The Italian aspiration to possess 8 capital ships was advanced a step when the 35,000-ton Impero was launched on Nov. 15, to join the Littorio and the Vitiorio Veneto. The Fascist Government was expected, sooner or later, to use its growing naval strength to enforce its claims to a Mediterranean and African Lebensraum. Certainly, the French and British Governments had every reason to look askance at the rapid alteration of the naval balance of power in the Mediterranean in Italy's favor.

Pari passu with the growth of the navy went an increase in the tonnage of the Italian merchant marine. In early February, for instance, 22 mixed cargo and passenger boats were ordered. In November a semi-official announcement stated that 650,000 of merchant tonnage was then under construction. These ships will doubtless prove, in time of war, to be valuable auxiliaries to the navy — as transports, supply ships and even converted cruisers. But are they really needed for commercial purposes at a time when Italy is supposedly making every effort to dispense with foreign trade and become self-sufficient?

Libya and Northern Africa.

Libya figured in the year's news principally as one of the bases from which the Italians were expected to launch an attack on French North Africa and Egypt. During the spring and summer it was frequently rumored that German troops were being shipped to Libya to reinforce the Italian troops already concentrated there in large numbers. Count Ciano told the British Ambassador in early February that the Fascist Government had been obliged to increase its North African garrison in order to meet French 'provocation' from Tunisia, Algeria and Morocco — where France had 100,000 troops under the unified command of General Noguès.

The threat of an Italian attack on Egypt or Tunisia still hung over the Allies at the close of the year, as Virginio Gayda made clear in a radio broadcast on Dec. 12 when he declared that 'Italy must be assured of a free outlet from the Mediterranean.' In the meanwhile, the Fascist Government continued its policy of settling large numbers of Italian peasants on the land in Libya. At the end of October, 7,700 of them went over en masse from Venetia, with some 11,000 scheduled to follow them later from Southern Italy. (See EGYPT.)

Events in Italian East Africa.

Italian East Africa dropped out of public attention almost entirely during 1939. Ethiopian resistance still continued in certain places — this fact was officially admitted in Rome — but without seriously challenging Italian control. On July 22 official statistics were issued showing that in Italian East Africa there were 8,792 commercial and industrial undertakings with a capital of nearly $200,000,000. On Oct. 25 an official report gave the number of Italians in Ethiopia as over 200,000. However, few of these were colonists in the true sense of the word for practically all of them were officials, professional men, merchants, engineers, road workers, officers and soldiers.

Late in September it was announced that the road from Assab to Addis Ababa had finally been completed after an average of 32,000 men had worked daily for 2½ years at a cost of 675,000,000 lire to build it across 538 miles of the most desolate country in the world. The completion of this highway meant that the Italians could transport freight and passengers to and from the heart of the new empire without having to use the French-controlled railway up from Djibouti or the long and very rough overland route from Massaua in Eritrea. Three 'oceanic highways' to connect Addis Ababa with the Indian Ocean in Somalia were still under construction when the year closed.

In October it was reported from Rome that Frank Gildemeester, president of a body to assist Jewish refugees, was seeking to obtain a concession of land in the Lake Tana region in northwest Ethiopia on which to settle large colonies of Jews. In November Mr. Gildemeester appealed to President Roosevelt to assist him in raising a $50,000,000 loan to effect this plan. At the end of the year it remained to be seen whether the Italian Government would really concede the necessary terrain, whether the money to set up the colonies could be raised, whether refugees could be found who were willing to be transplanted to the wilds of Africa, and whether the colonies — once established — could become self-supporting. For the fact of the matter was that Ethiopia was proving to be far from easy to colonize or to exploit. Though primarily an agricultural country, it was not even producing enough cereals, of which considerable quantities had to be imported at great expense. The Italians were discovering that the new empire was an economic liability. See also ITALIAN EAST AFRICA; RELIGION: Jews.

INTERNAL AFFAIRS

War-time Economy.

On Nov. 18 Mussolini declared that the distinction between a war and peace economy was 'simply absurd,' and implied that a war economy was the natural state for Fascist Italy. There was no gainsaying that ever since the Ethiopian war began in 1935, Italian economy had been on a war basis. Indeed, the attempt to create a corporative economy, on which so much enthusiasm had been lavished in the early thirties, had by 1939 been almost wholly abandoned in favor of an out-and-out Wehrwirtschaft.

The basic feature for this war economy was an attempt to achieve self-sufficiency. This attempt necessitated a vast governmental apparatus for controlling the country's economic life down to the smallest particular. In January 1939 a small inter-ministerial committee on self-sufficiency was set up with power to create new factories, fix prices, etc. All this, of course, was done while preserving the fiction that Italy was not a socialistic state. Nevertheless, it is safe to say that by 1940 only in Russia and Germany was the economic life of the nation more tied up with the red tape of bureaucracy than it was in Italy.

Italy's trade balance, adverse by some 5,739,000,000 lire in 1937, was reduced to about one half of that figure in 1938 and continued to show a decline in 1939. These figures were interpreted by some as an indication of the lowered standard of living in Italy. Coffee, for instance, was by autumn no longer obtainable, so drastic were the Government's measures to eliminate 'unnecessary' imports. Albania, it was hoped, would help cover part of Italy's oil deficit. Prior to the Fascist conquest that country had been producing around 150,000 tons of oil a year — mostly for the Italian State Railway. Even if this amount were to be doubled in 1940 (as was hoped) it would still fall far short of satisfying Italy's annual oil requirements, which are over 3,000,000 tons. On July 5 the Cereals Corporation announced that the 1939 wheat crop would be about the size of that for 1938, or approximately 80,000,000 quintals — still 5,000,000 quintals short of Il Duce's goal. As for coal, Italy was still importing large quantities from Wales and elsewhere, though the carboniferous deposits in Sardinia were producing a low-grade product in increasing quantities.

The fact of the matter is that a country so poor in natural resources as Italy cannot hope to become completely self-sufficient. Unless she is to return to the barbarism of the Stone Age, she must always carry on a considerable trade with the rest of the world. For a maritime country any other policy would on its face seem suicidal.

The struggle for autarchy was, in fact, relaxed after the outbreak of the war. Since Mussolini wanted Italy to take the fullest advantage of her neutral position by selling manufactured goods to both sides, Italian industry was forced to increase its imports of raw materials. Mussolini's object in encouraging Italian industry to cash in on the war was not only to make easy money, but to strengthen Italy's long-range industrial and commercial position against the day, after the war, when her competitors would return to the foreign trade field. This desire to seek trade advantages served as an added reason for keeping the country out of the war as long as possible. Unfortunately, however, Italy's exports (especially to such regions as the Balkans where she was trying to capture some of Germany's trade) depended to a large extent on the importation of raw materials and fuel from regions under Allied control — one reason for the renewed demands for colonies which were voiced in Italy during the closing weeks of the year.

At the beginning of March the Ministry of Corporations ordered a wage rise for some 7,000,000 workers, effective March 23. The rate of increase varied from 6 to 10 per cent, depending on the occupation or industry. This measure, necessitated by the rising cost of living, was expected merely to increase that cost still more.

Finance.

The complete subjection of Italian economy to war purposes was mirrored in the country's financial position. According to the report of the Governor of the Bank of Italy, the gold reserve at the close of 1938 was 3,826,000,000 lire (including Italian credits abroad), or 202,000,000 less than a year before. During the same period the paper circulation had risen to 18,955,500,000, an increase of 1,488,000,000.

On Dec. 14, 1938, the Council of Ministers had approved the budget for 1939-40 (the Italian fiscal year runs from July 1 to June 30) in which expenditures were estimated at 29,316,000,000 lire and receipts at 24,561,000,000 lire. But on May 23, Finance Minister Thaon di Revel revealed that he anticipated that expenditures for 1939-40 would be approximately 32,000,000,000 lire, or about the same amount that expenditures for the fiscal year then drawing to a close (1938-39) were expected to be. The discrepancy (nearly 3,000,000,000 lire) between this sum and the figure agreed on in the previous December was largely due, he said, to the increase in the pay of civil servants, the cost of the campaign in Albania, and fresh expenditures on armaments. During the five fiscal years 1934 to 1939 the total deficit amounted to over 50,000,000,000 lire.

In addition there were the extraordinary expenditures, which for 1938-39 were calculated at 6,500,000,000 lire. This extraordinary budget — now a normal feature of Italian governmental finance — had to be met by income other than taxes since the latter were inadequate to balance even the ordinary budget. The size of the government debt at the end of 1939 was a matter of conjecture, but the figure probably exceeded 210,000,000,000 lire.

By 1939 the Italian Government had discovered virtually every form of taxation and had exploited it to the utmost. Nevertheless, the authorities sought new sources of income. The whole machinery of tax assessment and collection was overhauled to insure greater efficiency and to stop up any leaks. Further, on Sept. 30 the Cabinet approved two new taxes. First, it imposed a 2 per cent tax on all receipts (tassa sull'entrata) to replace the old sales tax (tassa scambio). (In effect this is a form of income tax.) Second, it invented a new tax of one half of one per cent to be levied annually on the net capital of all individuals, joint-stock companies and other organized business concerns. These new taxes, which were expected to yield from 5,000,000,000 to 7,000,000,000 lire a year, were justified on the grounds that they were necessary to finance the country's gigantic armament program. See also WORLD ECONOMICS.

Political Situation.

In the realm of internal politics the outstanding event in Italy during 1939 was the inauguration of the new Chamber of Fasci and Corporations to replace the old Chamber of Deputies as set up in the Statuto of Charles-Albert and modified by Fascist legislation in 1923, 1925 and 1928. This fundamental change had long been planned and discussed, but was actually put into effect only on March 23, 1939.

The new Chamber of Fasci and Corporations is, strictly speaking, not a parliamentary body. Its members are not chosen by any electorate, but hold their seats because of their functions in the Government, the Party or the Corporations. The nation is thus 'represented' according to its professional and economic interests rather than by its geographical subdivisions. The new Chamber consists of from 650 to 700 men. Its functions are strictly limited. It cannot criticize or even discuss the Government's acts or proposals except in certain specified cases. Such functions as the Chamber does perform are carried on largely in committees rather than in plenary sessions. Bills are submitted to it by Il Duce, but they cannot be rejected or amended without his consent. And as a last protection to the régime, the voting in the Chamber is not secret. In other words, the Chamber of Fasci and Corporations is largely a decorative organ of the government — which explains why almost nothing was heard of it after its inauguration.

It was officially announced on July 12 that the number of men in the Fascist militia had risen from 467,814 in October 1938 to 1,309,477. During the same period, however, the membership in the Party dropped from 2,430,352 to 2,210,252.

A week later Mussolini announced that he intended to attack the age-old problem of the Latifundia Sicily by breaking up the big estates into small holdings. This program would necessitate irrigation works, road building, the construction of rural housing, etc., and would, it was hoped, eventually result in doubling the island's population. Ten billion lire would be spent over a period of ten years on this project. The reclamation of Sicily has been undertaken in the past, with mediocre results and it remains to be seen whether the Fascists can succeed where others have failed, for they may have against them powerful social and economic forces, including the largest Sicilian landowner of all — the Church.

Mussolini celebrated his 56th birthday on July 29 without any fanfare for he does not like to think himself as getting old. His health is said to be none too robust, though the rumors — there are few admitted facts — on this subject are not at all in agreement. In August the Rome office of the United Press was closed and its chief expelled from Italy for reporting that Mussolini had suffered a heart attack. This acting was interpreted by some as punishment for revealing an unwelcome truth and by others as a lesson 'liemongers.'

Ecclesiastical Situation.

In ecclesiastical affairs the most important event in 1939 was the death of Pius XI on Feb. 10 and the election of Cardinal Pacelli, as Pius XII, on March 2. The vigorous reign of Pius XI had been marked, as far as the relation of the Vatican and the Fascist Government were concerned, by periods both of conflict and cordiality Since the new Pope had for a number of years been his predecessor's Secretary of State, it was widely assumed that the general policies of the Holy See would not change appreciably.

The conclave of Cardinals called to fill the papal throne was the first held for that purpose during the Fascist régime. The Government therefore felt on its honor to see that the proceedings took place without any untoward incidents. It also promised not to interfere in the choice of the new pontiff, a resolve which the Nazis did not share, for the German envoy to the Vatican hinted in an address to the Cardinals on Feb. 16 that they would do well to choose a pope favorably inclined towards the Fascist Powers. The election of Cardinal Pacelli was generally regarded as a rebuff to German wishes.

The Italian Government, however, indicated that it expected Pius XII to be friendly, and later events did not belie this expectation. On Aug. 1 it was announced that Catholic Action in Italy was being thoroughly reorganized and that all its political activities — to which the Party hierarchs had long objected — were to be ended. In like manner, the 3,000-odd Catholic mutual aid societies were scheduled for absorption by the Party.

During the last days of August — and indeed, after the outbreak of the war — the Vatican worked ceaselessly, first to preserve, and then to restore peace, but without making any apparent impression on the belligerent governments.

On Dec. 21, King Victor Emmanuel and Queen Helena paid a ceremonial visit to Pope Pius at the Vatican. A week later, the Pontiff returned the visit, in token of the accord achieved by the Lateran Treaty of 1929. His appearance in an open automobile was hailed by cheering thousands on the way to the Quirinal Palace.

On the question of racism the Church continued to differ with the régime. The Government nevertheless pursued its campaign against the Jews.

Population Statistics.

A countermovement took place in the form of a repatriation of 'Aryan' Italians resident abroad, especially in France and her colonies. Estimates as to the number of Italians in France varied from less than 1,000,000 to over 2,000,000. In any case, few of them had any desire to return to Italy. On Feb. 26, 3,000 were reported to have arrived in Italy en masse. At the same time 250 Italians from Egypt, Tunisia and Algeria were stated to have settled in Libya. Out of the 20,000 Italians in Corsica — where the Fascist press had been insisting that Italians were being mistreated — only 710 were reported to have gone back to the homeland. Whether it was the French or the Italian Government which was primarily responsible for this migration was a matter of dispute. Repatriations continued during the spring at the rate of around 3,500 per month. It was anticipated that by the end of the year anywhere from 50,000 to 100,000 would have returned.

In 1939 it was officially announced that in the previous year there had been 1,031,193 births in Italy — more than in any year since 1931 — with a net increase in population of 424,394. The total population of the country on Sept. 30, 1939, was reported to be 44,304,000.

Cultural Progress.

In the field of culture, there is practically nothing to report for the year. Seventeen years of Fascist dictatorship do not constitute the most favorable milieu for the creative arts; and now that the nation is on a permanent war footing, there is even less scope for individual genius. Italian scholarship continued to turn out compendiums, résumés and specialized monographs, but nothing original of great importance. The only event to record is the completion of the 'Enciclopedia Italiana,' a truly magnificent work in nearly forty volumes. This series is undoubtedly the most substantial scholarly achievement of the Fascist Era.

Work on the World's Fair, to be held at Rome in 1942, was commenced and by the end of the year buildings were already rising from the campagna between Rome and Ostia. More than once Mussolini pointed to this Fair, which is planned to celebrate the twentieth anniversary of the March on Rome, as a gauge of Italy's fervent wish to stay at peace. See also FASCISM.