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Showing posts with label Italy. Show all posts
Showing posts with label Italy. Show all posts

1942: Italy

Campaign in Egypt and Libya.

The year 1942 was undoubtedly the most unhappy experienced by the Italian people in many decades. And by the end of the year the indications were that 1943 would be even more unhappy. Having been drawn into the war on the side of Hitler in the expectation of an easy victory over England, Italy found herself in 1942 tied to the chariot of the German war lord, in whose ultimate victory she had less and less reason to believe. The Italian people now began to feel that whichever side won, Italy would lose. Or, as the saying went in Italy, 'If the English win, we are losers; if the Germans win, we are lost.'

Among the various reasons why the Italians could not look back upon 1942 with any rejoicing was the adverse outcome of the campaign in Egypt and Libya. Having lost her East African Empire during the preceding year, Italy was by the end of 1942 on the point of losing her remaining North African possessions. Already over 250,000 Italian soldiers were in Allied captivity, with many others destined to be taken in 1943. (See LIBYA AND EGYPT, CAMPAIGN IN.)

Following the landing of American forces in Morocco and Algeria, Nov. 7 (New York time, Nov. 8 North Africa time), 1942, the center of attention in the Mediterranean naturally shifted to French North Africa. The British offensive in Egypt and Libya and the Anglo-American invasion of French North Africa were accompanied by very destructive raids on a number of Italian cities — notably Genoa, Turin, and Milan. Italian morale began to sag, and even in authoritative quarters there was talk of making no stand in Tunisia. When one recalls the importance of the naval base at Bizerte and of the proximity of Tunisian airfields to Sardinia and Sicily, one can appreciate the panic which must have seized government circles in Rome.

However, by Nov. 20 the Government seems to have pulled itself together, no doubt due to stern prodding from Berlin, and troops were being rushed south to protect Sicily from any invasion threat. The Germans also poured in troops and were reported to be feverishly engaged in building fortifications along the southern Italian coasts. During December the Axis forces in Tunisia increased in size and in armament, and it became clear that before the Allies could take Bizerte and Tunis and other important ports in eastern Tunisia, they were going to have a real fight on their hands.

Operations in the Mediterranean.

Naval operations in the Mediterranean Sea during 1942 were marked by a continuous war of attrition waged by each side against the other. After their defeats of the previous year, the larger units of the Italian Navy showed themselves very infrequently outside their bases. Nevertheless, Britain's erstwhile lifeline from Gibraltar to the Suez Canal remained virtually closed to merchant shipping, except for infrequent convoys jammed through to Malta at considerable loss. With not only Italy and Libya but also Greece and Crete under Axis control, the Luftwaffe and the Italian air force were able fairly effectively to deny the use of the Central Mediterranean to British shipping. Also during the opening weeks of the year there was evidence that the Germans had been able to place a number of their U-boats in Mediterranean waters.

The British, too, were able — from bases in Egypt, Malta, and Gibraltar — to imperil Axis communications from Italy and Libya. Hence the repeated large-scale aerial assaults upon Malta that were launched at various times during the year. On several occasions it looked as though the Axis were preparing for an attempt to invade and destroy this 'permanently moored aircraft carrier,' but due to the heroic resistance of the armed forces and inhabitants of the island and to the fact that the British managed to push several convoys of supplies through to the island, Malta succeeded in staving off every assault. When the Anglo-American invasion of French North Africa took place in November, Malta was of the utmost value in rendering support.

The following chronology of important naval events in the Mediterranean will give an idea of the constant seesaw in that arena. On March 9 R.A.F. planes set fire to an Italian cruiser, a destroyer, and a cargo vessel in the central Mediterranean. Six days later light British naval forces and planes inflicted a surprise bombardment on the island of Rhodes. The British announced on March 23 that their submarines had sunk two Italian submarines, a motor ship and six schooners. On the following day the Admiralty reported that a convoy had got through to Malta from Alexandria with the loss of one British merchant ship sunk and four British warships damaged. Three times the British convoying warships drove off superior Italian naval forces, inflicting damage on an Italian battleship and two cruisers. On April 9 the Admiralty claimed the destruction of a 10,000-ton Italian cruiser in the Central Mediterranean. The following day four more Axis supply ships were reported sunk by British submarine action, with four more meeting the same fate later in the month.

On the other hand, in the early part of May Nazi bombers sank three out of four British destroyers in a group attacked in the Eastern Mediterranean. On June 16 it was officially announced that convoys for Tobruk and Malta had gone through from Alexandria and Gibraltar respectively, but only after real fights in the course of which one Italian cruiser and two destroyers were sunk and two battleships damaged. American ships participated in the convoy for Malta which the British admitted reached its destination only after suffering considerable losses. The British admitted in August that they lost the aircraft carrier Eagle, two cruisers and a destroyer on convoy duty to Malta.

According to an Italian broadcast of July 12, the ships which had been damaged by the famous British torpedo-plane raid on Taranto in 1941 had been repaired. From Berlin came reports that the 35,000-ton Impero and its sister ship the Roma were in service. However, these large units apparently feared to put to sea, perhaps because of a shortage of fuel and lack of target practice. Journalists coming out of Italy reported that during the year increasing numbers of German sailors were seen in that country; this raised the question as to whether Hitler intended to take over at least part of the Italian Navy.

As the year wore on, American bombers took an ever-growing part in the war against the Navy and merchant shipping of Italy. On Aug. 10 they hit three out of four Italian cruisers lying in Navarino Bay. On Sept. 7 and 11 they delivered heavy blows against Suda Bay on Crete. The R.A.F. revealed in Cairo on September 25 that British and American bombers had sunk 40 Axis cargo ships (totaling 60,000 tons) since June, and had damaged 40 others. Another American raid on Navarino caused two large supply ships to explode on Oct. 3.

Aug. 13 was marked by another British bombardment of Italian-held Rhodes, an obvious jumping-off place for any Axis invasion of Asia Minor and the Levant. According to Admiralty reports, issued from time to time during the last four months of the year, British submarines were responsible for sinking some two dozen Axis ships and disabling a number of others. One of the stratagems employed by the Italians to get supplies to Libya was to use Tunisian ports. They were thus able to send supplies across at the narrowest point in the Mediterranean, where British air and sea power would naturally be least effective. One of the objectives of the Allied invasion of French North Africa was doubtless to deprive the Italians of this relatively safe route. As the year closed American and British bombers operating from Cyrenaica, Malta and Algeria were gradually putting the ports of Tunisia and Tripolitania out of commission.

The Balkans.

The occupation of Albania and Greece and of the coastal areas of Yugoslavia continued to drain Italian strength from the main theaters of war. Upon several occasions the Italian Government reported losses in the Balkans exceeding those for either the Libyan or Russian fronts. In Serbia General Mikhailovitch continued to wage his guerrilla warfare against the combined forces of the Axis and its Hungarian and Bulgarian satellites. In addition, partisans, apparently under Russian inspiration, organized bands that roamed through Bosnia, Dalmatia, Croatia, and Slovenia, making life miserable for the Italian occupying forces. The newly created Kingdom of Croatia was torn by conflicts among the Croatians themselves, and consequently the recently chosen King of Tomislav II, formerly the Duke of Spoleto, found it prudent to remain in Italy.

Nor was all the rivalry between the various bands of Yugoslavs, or between the Yugoslavs and the Axis; for between Berlin and Rome difficulties were reported as arising over the disposition of the conquered territories. In spite of the thanklessness of the task of trying to pacify Yugoslavia, the Italians preferred to do this rather than send their troops to the steppes of Russia. Also, it was rather clear that the Italian Government hoped by political maneuvers in the Balkans to recoup some of the prestige it had lost on the field of battle. This naturally annoyed the Nazis, who felt that to the victors belonged the spoils. The intra-Axis conflict was at its sharpest in Greece, where the Germans had turned over much of the dirty work of garrisoning the country to the Italians, after having stripped it of most of its food and valuables. The Italians, though less inhumane masters than the Germans, were more inefficient, and thus earned the contempt of the Greek people.

The Albanians likewise lost few opportunities to annoy their Italian rulers. From time to time attacks would be made on isolated Italian posts or supply trains, and even in Tirana life was not safe for the occupying forces. With their long tradition of guerrilla fighting, the Albanians were — in their small way — able to tie up considerable Italian forces. The same was true in the mountainous area of Montenegro, where no less than five Italian divisions were reported under arms in March. Upon several occasions the Italian Navy and Air Force bombarded Montenegrin and Dalmatian towns. Even in Italy itself the Yugoslav bands made their pressure felt, for several raids in Istria and on Trieste were reported by neutral sources.

Things apparently got so bad early in August that Mussolini had to visit Gorizia in order to organize resistance to these Yugoslav depredations. Well-substantiated reports indicated that British help was reaching Mikhailovitch in small quantities by plane and submarine.

On May 15 an Italo-Bulgar pact was signed by which the Fascist Government hoped to obtain more food from Bulgaria. However, on October 7 another accord was reached which provided for a road from Durazzo (in Albania) to Sofia, but which apparently failed to promise the Italians the foodstuffs they were so anxious to obtain.

As the year closed a new offensive was being launched by the Yugoslav 'rebels' who were no doubt encouraged by the Allied victories in Egypt, North Africa, and Russia. Albanian resistance was likewise given new impetus when on Dec. 10 Secretary of State Hull published a statement in favor of a free and independent Albania as one of the Allies' peace aims — a statement concurred in by Soviet Russia.

Air Raids on Italy.

During 1940 and 1941 Allied air raids on Italy had been few and not particularly destructive. The year 1942, however, saw the beginning of real aerial warfare waged against Italy, doubtless in the hope of softening up the peninsula for an actual invasion. By the end of the year some of Italy's most important industrial and shipping centers had been badly damaged.

One part of Italy had been undergoing intermittent raids ever since the beginning of the war — Sicily. The Luftwaffe had taken over a number of airfields and bases on this island, and from them had ferried supplies and men to Rommel in Libya, as well as harassed British shipping in the Central Mediterranean. The conduct of the Luftwaffe in Sicily was such that it thoroughly alienated the good will of the Sicilians. British air raids on that island were almost welcomed by the inhabitants.

On April 13 the British raided Genoa and Turin, giving those cities a foretaste of what was to come in the autumn. On Oct. 22, simultaneously with the beginning of General Montgomery's offensive in Egypt, a heavy raid was made on Genoa, causing extensive damage. Thereafter raids were made not only on Genoa but on Turin, Milan, and other North Italian cities. Lacking adequate air raid protection and anti-aircraft artillery, the Italians were unable to put up much of a defense or to inflict serious losses on the British raiders. Not only were the huge British 'Block-buster' bombs highly destructive, but the Italians themselves added to the loss of life by becoming panicky. This seems to have been especially true in Genoa. In order to calm the population of this port city, King Victor Emmanuel made a special visit there, where he is reported to have been greeted by cries of 'Peace, Peace!' The situation became so bad that Mussolini himself felt called upon to instruct the inhabitants of large cities to leave them for the open country. This increased the feeling of panic which manifested itself, inter alia, by runs on banks. In general, the British raids exposed once again the inefficiency of the Fascist régime.

On Nov. 6 and 7, coincident with the Anglo-American invasion of French North Africa, further large raids were made on Genoa, followed by an even larger one on the 8th. On the 13th and 15th this much-battered city was again visited by large forces of the R.A.F. Bomber Command. On November 18 a heavy raid was made on Turin, and on November 20 the worst raid so far made over Italy hit the Piedmontese capital. From then on, raids on northern Italian towns became more or less a matter of course.

The raids on Genoa, Turin, and Milan were made primarily for the purpose of destroying the manufacturing establishments and communications systems of those cities. In Genoa the particular targets were the port facilities, shipbuilding yards, artillery factories, etc. In Turin the attackers repeatedly bombed such points as the Royal Arsenal, the Fiat works and other large factories turning out war material. The same was true for Milan, which is also the greatest railroad center of Italy. Even when the factories were not destroyed, their operations were brought to a standstill by the exodus of workers from the bombed cities. British officials estimated that by Dec. 1 the 1,500 tons of bombs dropped on North Italy had damaged three-tenths of that country's war industries.

Next came the turn of Naples, which on Dec. 4 was attacked by American bombers flying from Egypt. This event has an historical importance all its own, since it represents the first blow ever struck directly at Italy by the armed forces of the United States. Other raids on Naples were reported to have destroyed a number of the communications and port facilities in that great city. The question naturally arose as to whether attacks would also be made on Rome, since that city contained numerous military installations, not to mention the seat of the government of Italy itself. Presumably the Allies would be very reluctant to bomb Rome as long as it was the residence of the Pope. Nevertheless towards the end of the year there was considerable talk in Fascist circles about the desirability of declaring Rome an open city and removing its military installations.

Relations with Germany.

The entry of the United States into the war and the forebodings of increased pressure against the two Axis partners in Europe inevitably entailed an increasing control over Italian affairs by the Nazis. Mussolini had led the Italian people to believe that the war would be short; when war was declared upon the United States they realized once again, and more forcibly than ever before, that the war would not only be long but very likely would result in an Axis defeat. In order to keep the Italians in line the Germans were compelled to send more and more 'experts,' Gestapo agents, and troops to Italy. This became especially noticeable late in the year after the Allied invasion of French North Africa and the disastrous bombings of Genoa, Turin, and other Italian cities.

On Jan. 18 the three Axis partners — Germany, Italy, and Japan — signed a new military pact providing for 'common operations' and 'close cooperation.' The exact details of this accord were not revealed, but the general assumption was that it provided for some sort of a synchronized military and political program to be executed in both the Pacific and the European theatres of war.

Late in January Marshal Goering went to Italy and stayed for several days, conferring with high Fascist officials and inspecting the installations of the Luftwaffe in Sicily. Neutral reports indicated that he also sought to increase the number of Italian laborers in Germany, perhaps by as much as 300,000. On Mar. 16 the Italians announced that they had just concluded a new trade pact with Germany under which the Rome Government was committed to a 'considerable increase' in the number of Italian workers to be sent north of the Alps. This agreement, signed by Count Ciano and the German trade expert, Dr. Clodius, provided for an anticipated trade volume between the two countries of a value of one billion marks a year. Italy was reported to be short on her trade balance vis-à-vis Germany by some 10% or 15%. However, this discrepancy could be balanced if one included the 300,000,000 marks a year which Germany paid for the Italian labor sent to her by the Fascist Government. Though it was not stated by any Fascist source, outside experts concluded that this agreement helped fasten German control over Italian industry and economic life in general. In particular, Italian heavy industry and communications had by now come pretty completely under the supervision, if not outright control, of German officials. This fact helped explain why Italy, though its people were suffering from malnutrition, was obliged to send Germany considerable amounts of food, especially fruits and vegetables. On the other hand, it seems clear that Germany did make a sincere effort to provide Italy with the monthly delivery of 1,000,000 tons of coal which had been promised in a previous agreement.

As German military, political and economic control spread throughout Europe — in both Axis-occupied and neutral countries — Italy found herself at a growing disadvantage in her efforts to provide for her wants from sources outside her own territory. Whenever the Italians bid against the Germans for the products of such places as Spain and Portugal, they found that Germany very definitely had the inside track. For one thing, Italy, having no credit, was obliged by these producers to pay cash — something that was next to impossible for her to do.

On April 26 Hitler made his famous speech in which he dwelt at length on internal conditions in Germany, making it clear that things were not going well in the Reich. The Italians had evidently expected another bloodthirsty, sword-rattling harangue, and were consequently stunned by Hitler's tacit admission of growing opposition and defeatism in his own country.

Hitler and Mussolini had another of their periodic meetings on April 29 and 30 — this time at Salzburg. Each of the leaders was accompanied by high military and diplomatic functionaries, which made it rather evident that the whole world situation was canvassed by the two dictators. Again, our knowledge of what transpired is extremely meagre, but the general assumption in neutral quarters — substantiated by later events — was that Hitler told Mussolini that the war would not be over in the near future and that the Italians must therefore contribute more men to the Russian campaign. Hitler is also believed to have confronted Mussolini with proof of growing disaffection in Italy and to have insisted that more Gestapo agents be sent south of the Alps. The Führer seems likewise to have urged upon his colleague the necessity for a thorough purge in the Fascist Party so as to rid it of elements lukewarm toward the Axis connection.

When the American correspondents came out of Italy in mid-May along with the American diplomatic officials repatriated at that time, they reported circumstantially concerning the constantly increasing German control over Italian economic and political affairs. It was estimated by them that there were at least 200,000 Germans in Italy at that time, with the prospect of more to come. Certain parts of the country had, they declared, been taken over by the Germans and were, to all intents and purposes, governed as if they were an integral part of Germany itself.

Meanwhile the number of Italian troops in Russia was constantly augmented by the arrival of new divisions. It is unnecessary to say that the Italian people were anything but enthusiastic about having their sons and husbands sent off to freeze to death on the eastern front. On May 30 Ciano declared before a committee of the Italian Senate that the idea of the war against Russia had in fact originated with Il Duce — which must have been news to Hitler! Ciano's claim may well have been made in order to increase the enthusiasm of the Italian people for the Russian campaign. However, service on the eastern front continued to be unpopular. Nevertheless by the end of the year over twenty Italian divisions were reported to be in Russia. The lack of fighting zeal among them was indicated when the Russians plowed through a sector held by Italian troops in their Christmas campaign to relieve Stalingrad.

In mid-October the King, at Mussolini's suggestion, amnestied around 51,000 persons charged with, or convicted of, political offenses, in order that they might go to Germany to work. Some 22,000 of this number were reported to be in prison at the time. This measure speaks volumes concerning the popularity of labor service in Germany among the working classes of Italy!

With Rommel's retreat from Egypt and the Anglo-American invasion of French North Africa early in November, Nazis began flowing into Italy at a greatly stepped-up tempo. Some of them were merely in transit, bound for Tunisia; but others were destined for Italy itself, where the untoward events in North Africa, coupled with the devastating raids on northern Italian cities, had shattered public morale. Late in November there were well-authenticated reports that no less than 60,000 Elite Guards and Gestapo agents had been rushed to Italy, where they had already made numerous arrests.

In the middle of December the Germans were said to be taking over Italian railways, port facilities, airfields, etc. By the end of the year there could no longer be any doubt that Italy was a German-occupied country with a status only slightly more tolerable than that of France. More and more, Mussolini was drawing into his own shell and leaving the administration of his country to Nazi officials. His health was also reported to be poor. Heart trouble, ulcers, cancer and various other ailments were ascribed to him — naturally no official information was forthcoming from Fascist sources. A photograph of him taken late in the year showed him much thinner than he had been for several years.

On Dec. 18 and 19 another two-day politico-military conference was held at Hitler's headquarters, with Ciano and Marshal Cavallero representing Italy. Laval was also present at one of the meetings — which must have annoyed the Italian delegates. The object of the conference was obviously to give Hitler a chance to explain the next stages of the war and to issue orders to his satellites.

Relations with France and Spain.

Ever since the fall of France, Mussolini had been obsessed with the fear that he would be supplanted by Pétain, Laval, or some other Frenchman as the Number 2 man in Hitler's scheme of things. The reasons for this fear are obvious. The industrial apparatus, the natural resources, and the military and naval establishments (particularly the fleet) of France were far more impressive than those of poverty-stricken Italy. Even though France had been but lately an enemy of the Third Reich, the Fascists suspected that Hitler would welcome a pro-Nazi French régime as his foremost collaborator in the construction of the 'New Order' in Europe. That this did not eventuate, at least during 1942, was due more to the resistance of the French people than lack of willingness on the part of Laval and his stooges, or to Mussolini and his objections.

One of the tactics pursued by the Fascists to impress upon Hitler their importance and to insure that Italy should not go entirely unrewarded for her sacrifices in the war was to make repeated demands for the annexation of Savoy, Nice, Corsica, and Tunisia. For example, at the end of May, Il Duce was reported to be putting considerable pressure upon Vichy in regard to these French-owned territories. In order to reinforce this pressure Mussolini caused 300,000 Italian troops to be concentrated in Piedmont, where they were reviewed by the King.

Early in November the armistice with France was declared invalid by Hitler as a result of the Anglo-American landings in French North Africa on Nov. 7. On Nov. 11 German troops entered the previously Unoccupied France and within a few hours even cities on the Mediterranean coast such as Marseilles were patrolled by German forces. At the same time Italian troops entered the French Riviera, Savoy, and Corsica. The Fascist press naturally sought to play up these occupations as representing the final achievement of Italy's irredentist ambitions. The Italian people were then being harassed by the heavy raids of the R.A.F. and by the incubus of the American army in Algeria and Tunisia, and they were therefore not impressed.

It will be recalled that Mussolini had already, before 1942, publicly presented Spain with a bill for the extensive assistance in men and material Italy had rendered Franco during the Civil War. On February 5 the official bulletin of Spain stated that General Franco had ordered Spanish bonds to a value of 5,000,000,000 lire transferred to Rome in payment of this debt. In June Franco's brother-in-law and Minister of Foreign Affairs, Ramon Serrano Suñer, visited Rome, but for what purpose was not officially divulged.

Relations with United States.

The negotiations between the American and Italian Governments for the repatriation of their diplomatic and journalistic representatives in each other's country trailed on through the early months of 1942. In fact, it was not until May 16 that all of the American contingents from Italy finally reached safety in Lisbon, where they passed the Italians coming from America. With the arrival of the American journalists on neutral soil it became possible for them for the first time in many months to give a candid picture of conditions in Italy.

On Oct. 12, which is celebrated in many American states as Columbus Day, Attorney General Biddle announced that after Oct. 19 the approximately 600,000 Italian aliens in the United States would be freed from the stigma and disabilities of enemy aliens. It was revealed at this time that during the ten months the United States had been at war with Italy, only 228 nationals of the latter country had had to be interned.

Meanwhile there grew up in both the United States and the Latin American countries a movement for a Free Italy, under the general leadership of Count Carlo Sforza, former Italian Foreign Minister. On August 14 a Free Italy convention opened in Montevideo, capital of Uruguay, at which were assembled some 1,500 delegates from all parts of the Western Hemisphere. At this convention an organization was set up and a program adopted. The principal aim of this movement was, of course, the establishment of a democratic régime in Italy, and to this end it pledged full support to the war effort of the United Nations.

Internal Problems.

As the year wore on the Italian Government had to contend more and more with the problem of diminishing supplies of food and other consumption goods, and with the resultant rise in prices and the ever-present threat of inflation. In a country like Italy, where the great mass of the population lives close to the margin of subsistence, any rise in prices could not fail to have serious social consequences. On March 15 the bread ration for Italians (except those doing heavy manual labor) was reduced from 200 to 150 grams (5½ ounces) a day. The seriousness of this reduction in the bread ration was all the greater since the poorer classes in Italy rely upon bread as the veritable staff of their life. After this cut had been put into effect Italy's food ration was lower than that of any country in Europe except Belgium and Greece — being only half that of Germany.

The increasing lack of popular confidence in Italian currency and the growing fear of inflation obliged Mussolini to declare on March 26 that he intended to take whatever steps were necessary to protect the savings of the common people.

At the end of March the Italian people were asked to subscribe to a new loan, the third one of the war.

By summer the lack of balance between wages and prices had become even more alarming. The black market operations of Fascist officials became a public scandal, and in August the Government was obliged to announce that 66,000 party members had been stricken off the rolls. However, none of those thrown out were important hierarchs. One of the reasons given for depriving men of their party membership was their growing lukewarmness towards the alliance with Germany. By the end of the year neutral observers in Italy reported that unrest was becoming widespread, that in some places riots and uprisings had had to be put down with troops, and that in general the people clearly showed their weariness of the war and their antagonism to the Germans.

On December 2 Mussolini broke a silence of several months, when he made a speech to the Chamber of Fasces and Corporations which was broadcast throughout the world. In general the speech conveyed a very distinct impression that Il Duce was tired and disillusioned. In this he certainly reflected the feeling of his people.

1941: Italy

The year 1941 was one of the most disastrous in the history of modern Italy. Mussolini had taken his country into war on June 10, 1940, in the belief that the war was about to end in a German victory, and that Italy must therefore join in the fight if she were to obtain any of the spoils. France was, at that moment, on the point of collapse, and it was fully believed in the Axis countries that England, staggering under the loss of her war apparatus and much of her army at Dunkirk, would likewise soon have to surrender. But the fall of France was not followed by the fall of Britain. Mussolini had miscalculated, and from his miscalculation there followed a series of misfortunes for the Italian people that had by no means reached its end at the close of 1941.

Italy had not gone to war at the side of her ally in September 1939 because — as the Fascist Foreign Minister, Count Ciano, later admitted — she was unprepared to wage a war of any length or intensity. As Ciano explained, the wars in Ethiopia and Spain had so depleted Italy's supply of war matériel that her armed forces, especially the army, were in no condition to engage in serious warfare. The complete truth of this assertion was soon evident in the manner with which the Italians conducted their operations against the Greeks.

Disastrous Campaign Against the Greeks.

The advance of the Greeks in 1941, after their initial successes in Albania in the fall of 1940, was held up more by bad weather than by the resistance of the Italians. Early in January 1941 there were reports that Nazi aircraft were fighting in Albania — an interesting development in view of the fact that the Fascist leaders had originally wanted to defeat Greece without any help from their German partners. On Jan. 19, Athens claimed that the Greeks had brought down 105 Italian planes since the start of the war. Units of the Greek and British navies were active in the Adriatic during January and February, and accounted for the sinking or damaging of a dozen or more Italian troop and supply ships. A Greek flotilla also bombarded Valona, one of the two principal ports of Albania, early in January. On Jan. 10 Klissoura was taken.

Altogether, the Greek campaign was one long series of reverses for the Italians, on land and on sea. On Jan. 30, presumably in an effort to instill new vigor into the Italian forces, Mussolini appointed General Ugo Cavallero to succeed General Ubaldo Soddu as commander in Albania. General Cavallero was regarded as more pro-Fascist and pro-German than his predecessor, and his appointment was therefore interpreted as a sign that Italy's war machine was coming more and more under Nazi domination. However, General Cavallero's offensive, into which he threw men and machines regardless of cost, failed to register any gains and by the end of January his forces were in retreat. The organization and the supply services of the Italian Army in Albania were bad — inefficiency, demoralization and even graft being widespread. Thousands of soldiers died of wounds or suffered amputation of frozen limbs because they lacked adequate clothing and facilities. The Fascist forces in Albania were saved from a complete débâcle only through the intervention of the Germans, who attacked Greece via Bulgaria and Yugoslavia.

The situation in the lower Balkans was already threatening as 1941 opened, and it rapidly became worse. By the middle of February it was clear that Bulgaria was in process of occupation by German troops. On March 2 they were in Sofia, and on the next day they reached the Greek frontier. In other words, Hitler was preparing to rescue Mussolini from the Greeks. But before being rescued, Mussolini asked for time to undertake one more offensive in the hope of defeating Greece singlehanded. It was reported that Il Duce visited Albania in early March and that he was appalled at the chaos and defeatism prevailing there. By March 14 his offensive, which had beaten in vain against the Greek lines for five days, had failed after causing over 40,000 Italian casualties. The Nazis, therefore, had to rescue their partners.

Thus on April 6, Hitler sent his troops into Yugoslavia from the north and east. The German thrusts against the Yugoslav Army, only partially mobilized, and against the Greeks, led to a steady succession of victories. Salonika fell on April 9, and three days later Italian and German forces met north of Lake Ochrida. The threat of a Yugoslav invasion of northern Albania did not materialize, and Italian morale improved. On April 23 the Greek Army of Epirus and Macedonia under General Tsolakoglu surrendered to the Germans. This brought the Greek campaign to an end as far as the Italians were concerned, for they do not appear to have taken part in the Nazi drive against the Anglo-Greek forces in eastern and southern Greece.

This conquest had been almost exclusively a Nazi triumph, for Italian troops had occupied only a small zone in Epirus, plus the island of Corfu — which they reached only a few hours ahead of the Germans. In the Aegean Sea, however, Italian forces occupied many of the more important Greek islands during the early days of May. Italy's role in the campaign in Crete late in May was very minor. On June 10, first anniversary of Italy's entrance into the war, Il Duce announced that Italian troops were to take over the occupation of Greece. This was done in order to free German troops for the attack on Russia. Many Nazi officials remained in Greece, and there were thus in effect two occupying administrations, often in conflict with each other. The Germans in particular did not disguise their contempt for the Italians. The latter were inclined to be less harsh with the Greek population, but both enemy forces plundered and engaged in graft on a large scale.

Italy Gains a Balkan Empire.

The invasion of Yugoslavia from the north was carried out almost exclusively by German and Hungarian troops. Only in Slovenia and along the Dalmatian and Montenegrin coast where Italian forces engaged. On April 12 Fascist troops were reported in Ljubljana, capital of Slovenia, and on April 15 more than a third of the Dalmatian coast was in Italian hands. The Fascist press had of course been reminding Germany of Italy's historic claims to this region. These territorial ambitions had been promised satisfaction in the Treaty of London (1915) between Italy and the Allies, as the price of Italian participation in the First World War. The Paris Peace Conference had, however, refused to be guided by this engagement, and hence the reconquest of Dalmatia — the 'Fifth Shore' — had been one of the slogans of Fascism. The Fascist press now expanded its demands and claimed the Kossovo region of Serbia on the ground that it contained a large Albanian population.

Croatia.

On April 10 it was reported that the Ustashi, a group of anti-Serbian Croat terrorists, had set up a Croat state with Ante Pavelich as President and Sladko Kvaternik as Prime Minister. On April 15 the Axis Powers formally recognized the sovereignty of 'independent' Croatia. Once set up, however, the new Croatian government did not always accede to Rome's wishes, for on April 25 the Italians were complaining that Croatian troops were taking over parts of Dalmatia which Italy had earmarked for herself. There was some suspicion that in this the Croats had the blessing of Berlin, for everyone knew that the Germans wanted the Italians to take only a small share of Yugoslav territory. On May 3, Italy annexed the part of Slovenia nearest her own territory, including Ljubljana.

On May 18 an Italian prince, the Duke of Spoleto, was designated as King of the revived kingdom of Croatia. At the same time the new Croatian government recognized Italy's sovereignty over 'classic' Dalmatia — the area promised her in the Treaty of London. Italy also obtained the islands off Dalmatia, except Pago, Brazza and Lesina, in addition to Suak, Cattaro and the Montenegrin coast. The Croatian government promised to demilitarize its zone along the Adriatic and not to create a navy. Italy guaranteed the independence and territorial integrity of Croatia, in return for which the latter agreed not to make any foreign commitments contrary to Italian interests. Italy was also to have charge of the organization of the Croatian Army. The treaty, which was to last for 25 years, also stipulated that further accords would be made to cover such matters as currency, customs, railways, minorities and cultural relations. On May 19 Virginio Gayda, foremost Fascist political commentator, declared that Italy was going to force the Fascist form of life on Croatia. On June 16 in a ceremony held at Venice, Croatia signed as a member of the Axis alliance.

Dalmatia and Montenegro.

The part of Dalmatia annexed by Italy was divided into three provinces — Zara, Spalato and Cattaro — and placed under the governorship of Giuseppe Bastianini, former Italian Ambassador in London. On June 7 the Italian Cabinet decided that 500,000,000 lire were to be spent on 'immediate and urgent' public works in the Dalmatian provinces. Montenegro was also within the Italian sphere of influence, and the Fascist Government sought to occupy this small but rugged land of mountaineer warriors. Repeated attempts only resulted in a mounting toll of casualties among the occupying troops and the few Montenegrins who were willing to collaborate with the Fascist Government. Apparently the authorities at Rome had expected the Montenegrins to acquiesce in Italian rule because Queen Elena of Italy was a Montenegrin princess, daughter of the last king of that country. During the latter half of the year the Italians were obliged to bombard various coastal towns in Dalmatia and Montenegro in order to suppress or punish nationalist insurrections.

War in Africa: Early Libyan Campaign.

The close of 1940 found the Army of the Nile pushing into Libya in pursuit of the crumbling Italian Army of Marshal Graziani. On Jan. 4 Bardia fell before a combined land, sea and air attack; and 25,000 Italians (including six generals) were captured. The authorities in Rome waited three days before disclosing this reverse to the Italian people. Other Fascist defeats followed in rapid succession: Tobruk was captured with 20,000 prisoners on Jan. 22; Free French forces operating from Chad raided several bases in southern Libya; Derna fell on Jan. 30; and Bengasi itself, chief city and port of Cyrenaica, was taken on Feb. 7. At the same time, overland escape to Tripoli via the coast road south of the Gulf of Sirte was cut off by a brilliant maneuver of the Empire forces.

Thus, in less than two months Cyrenaica had been conquered by a small Allied force numbering no more than 25,000. Mussolini, in a speech on Feb. 23, admitted that the Italian Tenth Army and the Fifth Air Squadron had been destroyed. The excuse he gave was that the British attack had caught Graziani just as he was on the point of launching an offensive of his own. Neutral observers were inclined to doubt this; they pointed out that in equipment and morale, the Italian Army, as shown in its subsequent collapse, was in no shape for waging an offensive. In addition to the 150,000 men captured during this campaign, the Italians lost — according to British sources — 1 cruiser, 4 destroyers, 22 merchant ships, 2 torpedo boats and 1 tug boat.

The British thus found themselves in possession of a vast area containing several hundred thousand inhabitants, mostly Arabs but also including a considerable number of Italian colonists. As far as possible these were left undisturbed; in fact, many Italian civil officials were allowed to continue in their functions. The natives welcomed the British troops, for Fascist rule had been harsh and many natives had been dispossessed of their land to make way for agricultural colonists from Italy. The Arabs naturally took this opportunity to pay back old scores: a number of Italian settlements were looted and some colonists killed. But these disorders were sporadic and the British authorities did their best to maintain order. In the south the nomadic tribes were reported to be restive, and this fact may help to account for the occupation of the Kufra oases in late February by Free French forces.

The British success in Libya was destined to be short-lived. The necessity to implement Britain's guarantee of assistance to Greece obliged General Wavell to remove most of his best troops and equipment from Cyrenaica. Only half-trained and poorly equipped troops were left to hold that large area, and as events proved, these were inadequate to hold it against a new Axis force, stiffened with German troops and arms, which began to exert pressure on the British forces at the end of March. The Axis counter-push caught the British unprepared. As General Wavell admitted on Nov. 10 before the Council of State at New Delhi, it came a month earlier than he had anticipated.

On March 24, El Agheila, at the head of the Gulf of Sirte, was wrested from the British. On April 3 Bengasi was retaken, and on April 7 Derna fell. The retreat of the British continued until the Axis forces under General Rommel reached the Egyptian frontier a week later. The front again became stabilized along the line held by the Italians before the British offensive, except that Tobruk remained in British hands. This was important, for that town possessed one of the best harbors on the North African coast. Just before the Axis counter-offensive had begun, it was announced in Rome that Graziani had resigned as Chief of Staff and as Commander in Libya. He was succeeded in the first post by General Mario Roatta, said to be close to the Germans, and in the second by General Italo Garibaldi.

Collapse of the Italian East African Empire.

By its geographic location Italian East Africa was destined to become isolated on the day that Italy went to war against England; for the only practicable way to reach the new Fascist empire from the mother country was via the Suez Canal, and this could be closed by Britain at a moment's notice. This is exactly what happened, with the result that by the beginning of 1941 Italian East Africa had been isolated for nearly seven months.

In January 1941 the situation became even worse, when the British invasion of Libya forced the Italian Government to stop sending supplies to Italian East Africa by air. At the same time it was evident that the British were planning to attack Ethiopia from several directions. On Jan. 15, Haile Selassie, who had come from England by plane, raised his banner on Ethiopian soil and called upon his countrymen to throw off the Fascist yoke. Three days later Kassala was retaken; on Jan. 20 Eritrea was invaded; on Feb. 1 Agordat was captured, and the retreat of the Italian forces in the north became general.

By mid-March Allied forces were striking into Italian East Africa along some twelve fronts. Among those fighting against the Fascist Army of some 200,000 men were troops from Britain, Free France, the Belgian Congo, British West Africa, Kenya, Rhodesia, the Union of South Africa, the Sudan, India and elsewhere. In addition, 'patriot' forces of Ethiopians loyal to Haile Selassie, and organized British officers, fought against the Italians, particularly in Gojjam province. On Feb. 4 Foreign Secretary Eden announced that the British Government would welcome the reappearance of an independent Ethiopian state and that it recognized the claim of Haile Selassie to the throne.

In early February an invasion of Italian Somaliland was begun, and within a few weeks it achieved phenomenal successes, as is indicated by the dates for the capture of the following places: Afmadu, Feb. 11; Chisimaio, Feb. 14; Mogadiscio, Feb. 25; Jijiga. March 18; Harrar, March 26; Addis Ababa, April 6. By April 1 more than half of Ethiopia was reported lost by the Italians. Italian losses were also heavy on the sea. At Chisimaio, nine Axis ships were captured or scuttled; in March an Italian raider in the Indian Ocean was taken by the British; in early April five Italian destroyers were scuttled or captured in the Red Sea. Thus ended the Fascist threat to British seapower along the short route to India south of Suez.

In Eritrea the Allied advance was held up by the stubborn defense of Keren, which surrendered only on March 26. Asmara, the capital, was taken on April 1, and nine days later the port of Massowah fell. In the west Debra Marcos, capital of Gojjam, was taken April 7 by Ethiopian forces, and on May 5 the Emperor Haile Selassie reentered Addis Ababa. The remnants of the Italian forces, cut up into small pieces, surrendered one by one: those under General Santini in the south on April 4; those under the Viceroy, the Duke of Aosta, on May 19 at Amba Alagi; and finally the last pocket of Italian resistance at Gondar on Nov. 27. Thus ended Mussolini's costly adventure in East Africa. (See also ITALIAN EAST AFRICA.)

British Victories Against Axis in Libya.

The most important land operations in which Italian forces were engaged at the close of the year were those in Libya. On Nov. 17 the British announced the formation of a new Eighth Army in North Africa. Two days later this Army launched a heavy attack against eastern Cyrenaica. This assault, well-prepared and buttressed with many new American tanks, sought to split the Axis forces into small groups for annihilation one by one. In general the British avoided following the coast, choosing instead to spring upon the Axis units from the south — a strategy that helped isolate the various Axis garrisons and posts from one another.

One of the first objectives of the British thrust, achieved on Dec. 10, was to relieve the long-besieged garrison at Tobruk. The task of splitting up and annihilating the Axis mechanized forces proved not to be an easy one, and the campaign lagged during early December, while each side sought to consolidate its position and bring up reenforcements. In this the British had the advantage, for the Italians and Germans were cut off from Europe by the British Navy. Air superiority in Cyrenaica also lay with the British. By Dec. 18, however, General Rommel's forces were in full retreat; Derna was entered two days later; and Bengasi fell on Dec. 25. At the year closed, the remnants of the Axis forces were in process of dissolution under the pounding of Allied tanks, artillery and planes, while their retreat to Tripoli seemed to be cut off by Allied concentrations south of the Gulf of Sirte.

Naval Warfare.

One of the most vital links in British grand strategy has always been the retention of naval control in the Mediterranean Sea. In spite of serious aerial opposition, this control was maintained during 1941. As a result, the threatened Axis thrust into French North Africa and the Near East was made impossible, or at least so costly in men and material that it was not attempted. At the same time, Britain's control of the Mediterranean helped her carry out land operations in Greece and Libya. Most of all, it made possible a war of continual attrition against the Italian Navy and merchant marine. With her long coastline and under the necessity of supplying and reinforcing her army in Libya, Italy was — as every strategist had always predicted — exposed to constant attack from the warships, submarines and planes of Britain and her allies.

Early in January German planes, particularly dive bombers, made their appearance in the central Mediterranean. These planes were based on airfields in Sicily. The British bombed these fields frequently and heavily, from Malta — which in turn was subjected to large-scale Axis raids. The British cruiser Southampton was put out of action in mid-January by Nazi planes off Sicily, and had to be abandoned and sunk by its crew. In spite of other similar attacks, British ships continued to pass through the narrow waist of the Mediterranean between Sicily and Africa.

Battle of Cape Matapan.

On March 28 occurred the Battle of Cape Matapan, described by some observers as the greatest naval engagement since Jutland. The losses sustained by the Italians were a matter of dispute, but they apparently lost at least 3 cruisers and 2 destroyers and sustained damage on several others, including one of Italy's newest battleships. For their part, the British lost only a few planes. The battle, which took place at night, left the Italian fleet, already crippled by the attack on Taranto of the previous year, in such a sorry physical and moral state that during the remainder of the year it stayed very close to home ports. This made it possible for British ships to scour the central Mediterranean from time to time, and sink Italian supply ships and their naval escorts. On May 28 the British claimed that since the start of the war they had accounted for 215 Italian ships, aggregating 1,100,000 tons.

British naval units, with the help of planes, shelled Tripoli on April 21 and Bengasi on May 22, in each case inflicting serious damage. The bombardment of Tripoli lasted 42 minutes and was said to have been the heaviest assault of its kind in naval history. Even Sardinia was subjected to heavy raids, one by the R.A.F. on the Elmas air base near Cagliari, on July 30, and one on Porto Conte and Alghero by the Navy, on August 1. In retaliation for these and other attacks, Axis planes inflicted considerable damage on the Suez Canal area during July and August. On Aug. 15 Cairo was bombed, thus putting Rome in jeopardy under the threat made by the British to bomb holy city for holy city. The Italians also made a daring attack on Gibraltar with some of their mosquito fleet of MAS boats in mid-September, though the British maintained that only one old hulk was sunk. The Italians also claimed that on Sept. 27, torpedo-carrying planes attacked a large British convoy, sank 3 cruisers and 3 merchantmen, and damaged 9 other ships. But three days later the British Admiralty replied by asserting that the convoy had reached its destination with the loss of only one merchantman and some damage to the Nelson.

September was a bad month for Italian shipping, with losses amounting to approximately a vessel a day. This serious situation continued into October, when the British reported that they were sinking or damaging 50 per cent of the convoys going to Libya. On Nov. 9 the British wiped out near Taranto 2 convoys of 9 or 10 merchantmen and 2 destroyers. Two days later 4 troop or supply ships, 2 sailing vessels, and a destroyer were sunk by the British. December saw further serious losses inflicted on Fascist supply and naval vessels. For instance, 3 cruisers were sunk on the 12th and 13th, together with 3 transports. Two days later 6 more Axis ships were sent to the bottom, followed in a week by another 6. The only outstanding Axis success was the sinking of the British aircraft carrier Ark Royal, by a Nazi submarine Nov. 11.

According to official Italian figures, released on Nov. 27, Fascist submarines had sunk 82 enemy ships, with a tonnage of 524,958, in the Atlantic Ocean, since the war started. The next day the British countered by declaring that since Aug. 1 they had sunk 72 Axis ships in the Mediterranean, with 35 probably sunk, and 33 hit. By the end of the year it was doubtful whether more than half of Italy's prewar merchant fleet was still of use to her.

Italian Token Army in the Russian War.

The Nazi attack on the Soviet Union in June caught the Italian people unawares, though Il Duce had presumably been informed of it by Hitler at their meeting at the Brenner Pass on June 2, if not before. Shortly afterwards Italy took over the major part of the task of occupying Greece in order to free Nazi troops for the Eastern campaign. Italy dutifully declared war against Russia on June 22. Four days later Mussolini reviewed a motorized division destined for the Eastern front; on July 3 he reviewed another. By the latter part of the fall, four Italian divisions were believed to be in Russia, with four others preparing to go. Reports from Rome indicated that the Fascist forces found a greater enemy in the mud of the Ukraine than in the Soviet army. However. Soviet accounts told of wholesale desertions by Italian soldiers, sometimes led by their officers, especially after winter clamped its icy vise on the steppes of southern Russia. Neither the Italian people nor the Italian Army manifested any enthusiasm for the war against Russia, and when in December the campaign turned into an Axis retreat, their disillusionment increased still further.

British Air Raids.

Much more than in 1940, the Italian people in 1941 felt the force of the war at home. On New Year's Day heavy air raids were made by the British on Naples, Taranto, Syracuse, and other cities. These were followed a few days later by more attacks, including one on Turin, where the Arsenal was fired. On Jan. 9 units of the British fleet bombarded the city and harbor of Genoa almost without resistance, causing considerable havoc. In the middle of February British and anti-Fascist Italian parachutists dropped to earth in southwestern Italy and wrought a certain amount of damage before they were rounded up.

British air raids increased in intensity during the fall, Naples in particular being pounded severely. With the smoke and illumination of Vesuvius to guide them, the R.A.F. fliers made repeated attempts to destroy the various arms plants near that city, and to wreck its port in order to disrupt the shipment of supplies and reinforcements to Libya. Other port cities in southern Italy — such as Palermo, Syracuse, Brindisi, etc. — were given similar punishment.

Casualty Statistics.

The number of casualties suffered by the Italian armed forces was a matter on which Fascist and British figures differed widely. According to Rome, the losses for all branches, in dead, wounded, prisoners, and missing, were 207,398 from the beginning of the war up to the end of May 1941. The bulk of these casualties were in the army, with the navy suffering only to the extent of 8,500 men, and the air force about 2,000. The Italians were reported as having lost 232 planes compared with 1,439 for the enemy. Against these statements must be placed the British estimate of 582,000 Italian casualties (including 206,000 native African troops) up to the end of June 1941. The Albanian campaign alone was said to have cost 100,000 dead, wounded (including many thousands of cases of amputation due to frostbite), and prisoners. Most of the latter were later liberated, however, when Greece was conquered by the Nazis. There is no way of verifying either of these sets of figures; but we do know that in general the Axis Powers make a policy of understating their losses.

Foreign Relations.

Germany.

Italy's relations with Germany were, of course, more important than those with any other nation. However, as Italy's military and naval strength waned and as her prestige diminished, her position within the Axis became more and more that of an inferior, until by the end of the year it was almost literally true that she could be classed, with France and Hungary, as a vassal state in the Nazi 'New Order.' Most of the outward forms of equality were maintained in the relations between the two countries, but the reality no longer existed. Not only was it necessary to send German troops and planes to help Italy on her own soil, but German technicians, experts and secret agents appear to have gone to Italy in growing numbers. The productive apparatus, especially in industry, of the two countries became even more closely connected and interdependent. In this combination Germany played the predominant role, for Italy's industrial functions tended to become limited to the production of parts and semi-manufactured goods for fabrication in Germany. This development was in line with the Nazi policy of centralizing all important industrial production of a military nature in areas and plants controlled by Germany, thus depriving the rest of Europe of the apparatus for making those machines of war without which they could not hope to fight for their own liberation.

As already indicated, German air forces were operating in southern Italy early in the year. Furthermore, the Italian squadrons sent to northern France in 1940 were recalled, except for a 'token' unit, to take part in the campaigns in Libya and Albania, and against British vessels in the Mediterranean. The first joint action of Italian and German planes in the latter theatre occurred early in January. One of the results of the transfer of several Luftwaffe squadrons to southern Italy was a series of orders from the Fascist Government limiting the movements of foreigners. On Jan. 10 all non-Italians except Germans were reported to have been ordered out of Sicily. The next day foreign diplomats were informed they must stay in Rome unless given special permission to leave. On Feb. 14 foreign correspondents were also forbidden to leave Rome.

On Jan. 7 the Fascist Council of Ministers felt obliged to issue a solemn order of the day reaffirming the strength of the Axis, and Italy's determination to fight on to final victory. On Jan. 20 Mussolini and Hitler, together with their military chiefs, met and 'exchanged views.' Plans were presumably laid for the spring campaign in the Balkans. In February Rome was visited by a German economic delegation under Dr. Clodius, which made a comprehensive agreement with the Italian Government. Though the details were kept secret, the accord was described by Virginio Gayda as effecting the 'coagulation' of the economies of the two countries. It was apparent that the terms called for Germany to give Italy raw materials — such as coal, iron, copper, etc., in return for foodstuffs, certain specialty manufactures and labor. No effort was made to balance trade accounts between the two countries. On paper Italy was obviously in the debt of Germany, and there was some speculation as to whether Berlin might not sometime present Rome with a bill similar to that sent by the latter to Madrid (see Spain) on the same day (Feb. 27) that the signature of this Italo-German economic pact was announced. According to German sources the annual turnover under this agreement was expected to reach 2,000,000,000 marks a year. Italian workers continued during the year to go to Germany in increasing numbers, most of them to work on farms but some to serve in factories. By June, 400,000 of them were reported to be so employed, thus helping to relieve the unemployment situation in Italy.

Another meeting between Mussolini and Hitler took place at the Brenner Pass on June 2, where plans for the Russian campaign were doubtless gone over. Still another encounter occurred late in August when Mussolini paid the Eastern front a five-day visit. At this conclave, evidently intended as an answer to the Atlantic meeting of Roosevelt and Churchill, the two dictators pledged themselves to destroy 'the Bolshevist danger, and plutocratic exploitation.'

On Oct. 20 Walther Funk, German Minister of Economics, told an audience at the University of Rome that under the 'New Order' Italy would have political and economic control of the Mediterranean. He also declared that since the start of the war the volume of trade between Germany and Italy had tripled. On the following day Dr. Clodius arrived in Rome with a large staff of experts. Two days later Funk announced that 'full agreement' had been reached and declared that the two countries were now virtually merged economically. In return for giving Berlin a high exchange rate on the mark, Rome obtained a promise that Italy would receive more war goods, now manufactured almost exclusively in Germany.

In an imposing ceremony at Berlin on Nov. 25, seven new satellite states signed up with the Axis — Bulgaria, Croatia, Denmark, Finland, Rumania, Slovakia, and the Nanking régime of Wang Chingwei. Perhaps this event was intended to discount in advance the impending entry of the United States into the war against the Axis. On Dec. 11 — the day Germany and Italy declared war on the United States — the three principal Axis Powers signed a pact precluding a separate peace by any one of them.

Spain.

With Spain, Italy continued to enjoy superficially cordial relations during the year. Mussolini met Franco and Serrano Suñer at Bordighera on Feb. 12, apparently in the hope of persuading them to bring Spain into the war as an active Axis partner. Failing to accomplish his purpose, Il Duce allowed the official Italian news agency Stefani to disclose on Feb. 27 that the Fascist Government had asked Spain to pay 5,500,000,000 lire, in 24 annual instalments, for Italian help during the Civil War. The total value of Italian aid to Franco, according to this announcement, amounted to 7,500,000,000 lire. The items furnished by the Fascist Government were listed as follows: for the air force — 763 planes, 1,414 airplane motors, 1,672 tons of bombs, 9,250,000 rounds of ammunition; for land operations — 1,930 cannon, 10,135 automatic guns, 240,747 small arms 7,514,537 rounds of artillery ammunition, 324,900,000 rounds of small arms ammunition and 7,668 motor vehicles; on the sea — 91 Italian warships engaged in hostilities; 92 vessels ferried war material to Spain; and Italian submarines sank 72,800 tons of 'hostile' shipping. These figures administered the coup de grace to the fiction of Fascist 'non-intervention' in the Spanish Civil War.

France.

With France, Italy's relations were those of a rival for Germany's affections. France had more to offer Germany in the way of natural resources, industrial plants, and naval and air bases (in North and West Africa) than Italy, and under the influence of such men as Laval and Darlan the Vichy Government bade fair to supplant Italy as the No. 2 Power in the 'New Order.' Throughout the year Mussolini maintained (for instance, in his speech of Nov. 3) that Italy had not forgotten her grievances, nor her territorial claims, against France. Early in December Darlan went to Turin to confer with Ciano. This visit gave rise to much speculation concerning the French fleet, the French merchant marine, Bizerta, etc.; but no important facts were divulged by either government except that Italy had released the French war prisoners she had taken — one officer and 136 men. The French counter-concession for this gesture was indicated when the Journal Officiel at Vichy revealed, late in December, that on Nov. 22 there had been signed a Franco-Italian protocol by which Italy obtained the right to demand the French arms and munitions that had been used against her. From Libya the British reported that the Fascists were, in fact, using French war matériel. Whether this détente in Franco-Italian relations foreshadowed a watering-down of Rome's ambitions in the Mediterranean remained to be seen.

United States.

Italo-American relations deteriorated as the year progressed, until finally on Dec. 11, simultaneously with Germany, Italy declared war against the United States. The long story of growing friction to which this event was a culmination is summarized in the following chronology:

Early February saw troops thrown around the American Embassy in Rome to 'protect' it from student demonstrations. In a speech on Feb. 23, ll Duce referred to the United States as 'a political and financial oligarchy dominated by Jewry through a very personal dictatorship.' Three days later the Rome correspondent of the Chicago Daily News, John Whitaker, was asked to leave Italy. On March 5 the American Government ordered the Italian consulates at Newark and Detroit closed. On March 30 all Italian ships in American ports were boarded by the Coast Guard, which found that considerable sabotage had taken place aboard some of them. In all, 28 vessels (168,944 tons or 5 per cent of Italy's merchant marine) were seized. The United States asked the recall of the Italian naval attaché in Washington, Admiral Lais, for complicity in the sabotage. Italy thereupon asked the recall of an American military attaché.

Anti-American campaigns in the Italian press usually followed the significant speeches and acts of President Roosevelt. Colonel Lindbergh was one of the few Americans who met approval in Fascist eyes. On June 10, Mussolini told the Chamber that the United States was already in the war, and six days later he retaliated against Washington's freezing the Axis funds by doing the same to American funds in Italy. On June 19 Italy, synchronizing her action with Germany's, ordered all American consulates closed by July 15. The United States replied with like action on the following day. One of the last incidents, before the actual break on Dec. 11, was the arrest of the pastor of the American Church in Rome on charges of 'espionage.'

Mussolini announced Italy's declaration of war against the United States in an address on Dec. 11 in which he declared that 'one man, one man alone, a true tyrannical democrat ... wanted the war and prepared for it day by day with diabolical obstinacy.' In Washington, when the Italian Ambassador went to the State Department, he was told by one of the officials that the American Government had fully expected Italy to 'follow obediently along' with her Axis partner.

Italy's Sad Economic Plight.

The effect of the war on Italian economic life during 1941 showed itself in many ways. In January a seven-day week had to be decreed for workers loading freight, in order to break a traffic bottleneck. In February the use of taxis was restricted to conserve gasoline and rubber. On April 10 the consumption of gasoline by private cars was cut by 50 per cent, and on Oct. 1 it was stopped entirely, apparently because the oil that had previously come from Rumania was now being used by the Nazis on the Eastern front.

Coal likewise became very scarce and Germany found it impossible to deliver the million tons a month promised early in 1940, because of the demands put on her railroads by the Russian campaign. At the end of September it was announced that private consumers would receive coal for the coming winter on the basis of 30 per cent of their 1939-40 deliveries, while prices would be increased by 20 to 30 per cent. Strict limits were also placed on the days and hours when radiators could be turned on, residents in northern Italy being allowed more heat than those of the center and south. On Dec. 1 the use of gas for heating and cooking was restricted to 7 hours a day. Industry naturally suffered too, not only from lack of fuel but from the countless rationing systems imposed by the government.

Italy is not so dependent on foreign sources for her food supply as she is for fuel. Nevertheless, the food situation was far from a happy one. The Italians have always been a frugal people, but during 1941 frugality became a government-imposed necessity for everyone in the country. After Feb. 1 spaghetti, rice and noodles were rationed, and heavy sentences were imposed on hoarders and profiteers. Another stunning blow fell at the end of the same month when the ration of olive oil, butter and fats was cut in half, and meat consumption was further restricted. By May meat could be served on only two days a week.

By June it had been decreed that all wheat, oats, barley, rye, straw and hay must be turned over to the government for distribution, private sale being strictly forbidden. In spite of the threat of large fines and long prison terms, many dealers raised prices, and this led to much public outcry, even from important Fascist spokesmen. Food bootlegging also became rife. As a result, the government promised to increase wages, family allowances and other subsidies.

The most sensational steps were taken at the end of September, when suddenly the sale of most consumer goods was banned for two weeks, during which interval stocks were to be inventoried and plans drawn up for a rationing scheme. This edict stunned the Italian people and brought home to them the bitter realization of their sad economic plight, and this caused a new lowering of public morale. On Oct. 1 several other new restrictions were imposed: public eating places could serve only standardized meals at fixed prices; shoes and clothing were rationed; a bread ration was imposed allowing 200 grams (c. 7 oz.) a day per person, this was later modified for certain classes of workers and other special categories of persons. The explanation for this last measure was that the wheat crop for 1941 — 71,500,000 quintals — had been below estimates, even though slightly above last year's harvest.

Breadlines, an evil omen of worse times to come, appeared in Italian cities at the end of September, though Herbert Matthews, reporting to the New York Times from Rome, stated that 'people with money to spend are not going to go hungry.' By December real shortages developed in many indispensable foodstuffs; the ration of edible fats and oils, for instance, had to be cut to 38 per cent of the per capita consumption for 1938. The Italian people were paying for the miscalculation of their government, which, gambling on a short war, had allowed its food reserves to disappear through a too liberal rationing system and because of the large shipments to Germany during the first year of the war.

Financial Affairs.

The intensity of the war effort was naturally reflected in the country's finances. From time to time the Fascist Government issued statements in regard to its budget, and lacking any other source of information we must accept these, if not at face value, at least as an indication of general trends. It must never be forgotten that Mussolini himself has proclaimed that 'statistics' should be made to serve the purposes of the totalitarian state.

Finance Minister Thaon di Revel reported on Jan. 7 that the deficit for the fiscal year 1939-40 had been 28,000,000,000 lire, of which 22,000,000,000 were for military purposes. The total expenditure for the year had been over 60,000,000,000 lire. For 1941-42 he presented a 'normal' budget of 39,876,000,000 lire, in which the estimated deficit was put at 8,794,000,000. However, this did not include the 'extraordinary' budget, much larger than the 'normal' one. As the Finance Minister revealed to the Budget Committee of the Chamber on April 18, the deficit for the current year would be 65,000,000,000 lire. The previous six years of war, he said, had cost 82,000,000,000, to which must be added 96,000,000,000 for 1941-42. Obviously, then, the proposed budget of 39,000,000,000 for the coming year had very little relation to the actual state of the government's finances.

Nor was the budget, once drawn up, sure to endure for long without considerable changes. The navy, for instance, was authorized in mid-August to spend an extra 2,500,000,000 lire for war purposes, and 482,858,000 lire on ship construction. On Aug. 30, 24,000,000,000 lire were put at the disposal of the army — the largest budgetary provision in Italy's financial history. This colossal sum more than absorbed the 18,000,000,000 lire which the government had raised by Oct. 1 in its campaign, launched Sept. 15, to sell 9-year treasury bonds. In view of some of the compulsory features of this campaign, it was in the nature of a forced loan.

One of the interesting phenomena of the year was the wave of speculation in stocks and bonds, excepting those of the government. In January many stocks were listed at prices which brought in an income of less than 2 per cent. By the end of June the index of stock prices was up by 69.5 per cent. They went still higher during the next three months, only to crumble at the end of September when the market was hit by a selling wave, induced by the sudden ban on the purchase of many consumer goods, already described above.

Internal Disorder and Dissatisfaction.

The events of the year in the field of domestic politics — if such an expression can be used in regard to a totalitarian state — reflected the growing restlessness, not only of the masses, but among the armed forces and even within the ranks of the hierarchs of the Fascist Party. The gap between the Party and the people had tended to widen with each costly and unsuccessful venture abroad. With defeat following upon defeat, it became even more difficult for the régime to justify the tremendous sacrifices it was calling upon the Italian people to make. Mussolini felt obliged, on Feb. 23, to break his long silence and deliver a speech, dripping with sarcasm and hate for the democratic Powers, in which he assured the Italians that victory would eventually be theirs. He also resorted to one of his well-tried formulas — 'Go back to the people.' It was announced on Jan. 22 that all men in the fighting services could join the Fascist Party, whereas in the past, wholesale admissions had been frowned upon. At the last roll call the Party membership totaled 3,619,848.

During the next month or so, several dozen high Fascist officials resigned, voluntarily or otherwise, and were sent to the front. Among those who went were 16 Federal secretaries and 7 Cabinet ministers, including Ricci, Bottai and Grandi. The shakeups extended into the provinces where, as in Rome, many of the younger men were replaced with old Party stalwarts. This housecleaning, which continued intermittently through the year, was interpreted in some quarters as indicating that Mussolini was afraid of a 'palace revolution' by the 'Young Turks.' In May the worst student riots in the history of the University of Rome caused the temporary closing of that institution. On May 17, a Greek Nationalist fired several shots at King Victor Emmanuel in Tirana (Albania), but without hitting him.

By late summer the Jewish question appeared well on the road to a solution along Fascist lines. In July a report from Rome stated that a law to fix the status of Jews had been drafted and would soon be put into effect. The object of this legislation was to eliminate all Jews from Italian life except a few who were entitled to 'favorable discrimination.' Those with a 'pure Aryan' in the family, and those who had performed 'patriotic services' to the fatherland, might apply for 'Aryanization' and the reacquisition of rights as Italian citizens. Jewish schoolteachers, however, were not to be allowed to have their positions back. Jews not subject to these exemptions were to be forced to leave Italy. Apparently even Christianized Jews were included in this ban, a policy against which the Church had protested on several occasions.

An official communiqué of Oct. 24 stated that there were then in the country 39,444 Italian Jews and 3,674 foreign ones, or only one tenth of one per cent of the total population of 45,354,000. According to this announcement, 25,000 Jews had left Italy since 1938. An interesting and amusing angle to this policy of 'racial' discrimination was given by the Fascist spokesman who declared that Italy's Japanese Allies were 'yellow Aryans.'

During the latter part of the summer the dissatisfaction of certain elements in the Fascist Party with Mussolini's subserviency to the Nazis seems to have forced him to effect further drastic changes in personnel. Articles which appeared in his paper, the Popolo d'Italia, called for ridding the Party of 'democrats,' 'Socialists' and other undesirable elements. The malcontents appear to have been found on both the Right and the Left, and one of the uses to which Il Duce put the Gestapo agents around him was to track down and intimidate those Fascists who strayed out of line. The employment of the Nazi secret police for this purpose naturally only accentuated the bitterness of the dissident elements.

In order to insure that no politically undesirable persons filtered into the administrative services, the Council of Ministers decided on Sept. 27 that no appointment to any post involving the public interest or political structure of the state could be made unless first approved by the Fascist Party. On Oct. 25 Mussolini dismissed the heads of 19 out of the 22 guilds, ostensibly to improve the efficiency of the country's economic machine. However, it was noted that this drastic action was taken only a few days after the signing of a new Italo-German economic agreement, and it was felt that at least some of the victims of this purge had suffered for their lack of pro-Nazi zeal.

Early in December the Fascist Government officially announced that a plot had been discovered, with the aim of killing Mussolini, starting a revolution, and setting up a Yugoslav Communist régime. The conspiracy, the announcement said, had been discovered in time, and as a result 60 persons were being held and others were being sought. Foreign Powers were accused of complicity. A trial was to be held at Trieste before the Special Tribunal for the Defense of the State. There naturally arose in the minds of foreign observers the question as to why this trial should receive such a fanfare. The choice of Trieste was regarded as far from accidental, for it was known to be an anti-Fascist and partly Slav city. Holding the trial there would thus not necessarily reflect on the loyalty to the régime of the Italian people as a whole. On Dec. 14, 9 defendants were condemned to death, 48 were sentenced to prison, and 3 were acquitted.

As the year closed it was becoming increasingly evident that Italy had become merely a Nazi gau with Mussolini as its gauleiter. Only members of the Fascist Party, and by no means all of them, were happy at this turn of events. The army in particular was opposed to it. Furthermore, the officer corps, at least its older members, were in no mood to forgive Mussolini for the great damage inflicted upon the army's personnel, matériel and morale by the ill, advised war against Greece. In December, nearly three-fourths of the Italian army was outside the country, and therefore in no position to make its weight felt in the councils of the Fascist Government. But there were those who believed that the time was not far distant when Mussolini might have to reckon with his generals. See also GREAT BRITAIN; WORLD WAR II; YUGOSLAVIA.

1940: Italy

The year 1940, one of the most fateful in the annals of modern Italy, will go down in history as the one in which Mussolini chose to stake the continuance of his Fascist régime on the defeat of the Western Powers and the victory of the Axis. Questions of foreign policy must, therefore, occupy the major portion of our résumé of the year under review. The remainder of the space must go largely to an account of the military operations in the Mediterranean and East Africa.

FOREIGN AFFAIRS

Rome-Berlin Axis.

In the closing weeks of 1939, several significant statements concerning foreign policy were made in Italy. On Dec. 8 the Fascist Grand Council, in the first important pronouncement made on international affairs since the outbreak of the war in early September, reaffirmed Italy's adherence to the Rome-Berlin Axis. Prior to the Grand Council's communiqué, considerable doubt had been cast on Italy's position, because of her failure to take up arms at once in aid of her German ally. It was generally felt that the announcement of Dec. 8 would put an end to any remaining hopes that Mussolini might be induced to join the Allies. On Dec. 12 Virginio Gayda, Mussolini's recognized spokesman on foreign affairs, declared in a radio address that Italy must have control over the outlets from the Mediterranean so as no longer to be a 'prisoner' of that sea, a demand that he reiterated in his organ, Il Giornale d'Italia, on the 21st.

On Dec. 16, Count Ciano, the Fascist Foreign Minister, delivered an epochal address before the Chamber of Fasci and Corporations. He sought to justify Italy's not having automatically entered the war at Germany's side as provided in Article III of the Pact of Steel of May 22, 1939, on the grounds that the alliance contained an unpublished proviso pledging the signatories to seek to avoid war for at least three years. According to Ciano, Italy had asked for this proviso because her armaments would require that interval for repair and renewal after 'the huge wear and tear on material caused by the wars we had fought.' This statement was interpreted abroad as an admission that Italy had stayed out of the war because she was quite unprepared—an interpretation indignantly, if not convincingly, repudiated in Italy.

The Soviet Union's war against Finland aroused considerable anti-Russian feeling in Italy, where a few months earlier sympathy for Poland had been notable by its absence. Crowds demonstrated, editors deplored, and there were even reports of Italian citizens volunteering to fight for Finland. By mid-December 1939, the situation had become so serious that the new Russian Ambassador to Rome was summoned home even before he had presented his credentials; a few weeks later Ambassador Rosso returned from Moscow. In January and February it was persistently reported that Italian planes had been sent to the hard-pressed Finns, first via Germany, then via France when the Nazis refused to let them pass through their country. There was naturally considerable speculation as to whether Berlin's support of her new Russian friends might not be unfavorably regarded by Rome, and the sudden end of the Finnish War in March was doubtless greeted by relief in both of the Axis capitals.

During the winter, Italy sought to keep France and Britain guessing as to her ultimate intentions. The Western Powers, of course, wanted Italy to stay out of the war, but they were unwilling to make those concessions, territorial and otherwise, which might have placated the Fascists. It may well be doubted that any concessions, no matter how extensive or humiliating, would have won real neutrality from Mussolini, for the fate of his régime had become so closely tied to that of the Nazis that he was in a very real sense a 'prisoner' of Hitler. In other words. Hitler was in a position to obtain Italian 'cooperation' whenever he wished to exert the necessary pressure.

Relations with Germany.

Italy's relations with Germany during the winter months were, as befits allies, intimate though not always without certain contretemps. The Germans were, of course, pleased at the Fascist declarations of December 1939 closing the door on the possibility that Italy might join France and Britain. At the same time Mussolini sought to keep from becoming too closely tied to the Germans by pursuing what his spokesmen described as an 'independent' policy. Any such policy was doomed to failure by the utterly disproportionate strengths of the two partners. In the Balkans, where the Fascists hoped in particular to have an 'independent' policy, they were completely checkmated by the fact that any opposition to German designs there would be exploited by the Soviets—the last thing that Rome wanted.

On May 7, 1939, Hitler had declared in a speech in Rome that he intended 'to recognize the natural boundary which providence and history have clearly traced for our two peoples,' and that 'the frontier of the Alps . . . shall be regarded as untouchable forever.' On Dec. 31, 1939, the two governments agreed that a plebiscite should be held among those inhabitants of the South Tyrol who were of German origin. Those voting for German citizenship were to be given until the end of 1942 to go to Germany. After the vote had been held in January 1940, it was found that out of 229,500 eligible to choose, 166,488 (72 per cent) opted for migration to Germany, 27,712 (12 per cent) decided in favor of Italian citizenship, and some 35,300 (16 per cent) failed to register a choice and therefore remained Italians. In February the return of those who had voted for German citizenship got under way. In order to settle all the claims arising out of this mass migration the two governments entered into a trade agreement on Feb. 24. But there was a wide divergence between them as to the amount of compensation due Germany for the property of those who had chosen to migrate to the Reich, and this may have had something to do with the report of March 22 that Mussolini had consented to let 82,500 Germans stay in the South Tyrol.

On Feb. 25 Hitler declared in a speech that 'we are travelling along parallel lines with Italy because our interests are mutual.' Three days later an Italo-German cultural accord was signed. In early March, Foreign Minister Ribbentrop made a hurried trip to Rome, where he saw Mussolini on the 10th and Pope Pius on the 11th. Whatever his visit may have had as its object, it was generally believed to have been a failure. In any event, General Soddu, Undersecretary of War, declared in the Chamber on the 13th that Italy had constructed an 'Alpine Line of the Lictor' along the French, Swiss, German and Yugoslav frontiers. This statement confirmed previous reports that the Fascists were busily strengthening the fortifications defending the Brenner Pass.

Apparently in an effort to clear up outstanding differences and to concert plans for the future, Hitler met Mussolini at the Brenner Pass on March 18. The substance of this historic interview, which lasted two and a half hours, has been the subject of much speculation. In general, observers tend to agree that the initiative came from Hitler and that he sought more active collaboration from Mussolini. Whether this collaboration was to take the form of a renewed drive for peace, or of more intimate relations between Italy and Russia, or of actually getting Italy to join in the war against France and England, is difficult to say. Perhaps Hitler had several cards up his sleeve and played them one after another. He may, as the Pact of Steel requires, have informed his partner concerning his plans for the invasion of Scandinavia and have used this revelation as a means of luring Italy into a diversion against the southern flank of the Western Powers. At any rate, the feeling in Italy after Mussolini's return from the Brenner was that the meeting had been a failure from Hitler's point of view.

Franco-Italian Relations.

The early spring saw a few feeble and final efforts on the part of France and Britain to improve their relations with Italy. An Italian trade delegation arrived in Paris on Feb. 26, and on March 6 reached a commercial agreement with the French Government. Two weeks later M. Reynaud told the Foreign Relations Committee of the French Senate that France sought an end to her differences with Italy. He declared that a Mediterranean entente among France, Italy and Spain was an indispensable basis for peace. Little attention was given to this conciliatory gesture in the Italian press, and on April 25 Count Ciano described it as 'inopportune.'

Anti-British Reaction.

The British were, meanwhile, encountering similar rebuffs. In the latter part of March a British Treasury official was sent to Italy to renew trade negotiations and to hear Italian complaints about the blockade. Little came of these talks and by mid-April there were mass demonstrations against Britain in Milan and other Italian cities. On April 30 the British Government announced its decision to deflect British merchant shipping bound for India from the Mediterranean to the longer route around the Cape of Good Hope. The Italians were alarmed, and became even more so when on May 2 Prime Minister Chamberlain announced that a considerable portion of the British Fleet was on its way to the Eastern Mediterranean.

For further data on Italy's relations with other countries, see EGYPT; FASCISM; JAPAN, and YUGOSLAVIA.

Tripartite Alliance.

Ribbentrop's hasty trip to Rome in September may have had something to do with arranging for the signature of the tripartite alliance by Germany, Italy and Japan which took place at Berlin on Sept. 27. The Italian public was apparently surprised that Japan had been substituted for Spain as the new ally (See SPAIN: Internal Affairs), and there was some doubt as to whether the obviously anti-United States animus of the pact was politically wise. Italy, not being an Asiatic Power, was expected to profit from the arrangement only indirectly, presumably through a diversion of British attention from the Mediterranean area to the Far East.

Other Powers were said to be on the point of joining this alliance in order to share in creating the 'new order' not only of Europe but of the whole Eastern Hemisphere, perhaps even of the world. However, nothing very spectacular or tangible came of Molotov's visit to Berlin, Nov. 12-14. Later in the month Hungary, Slovakia and Rumania joined the alliance. But the expected adherence of Bulgaria did not take place, and by Nov. 25 it was admitted in Berlin that no more adhesions were expected for the present. As long as Russia, Turkey, France and Spain were not members, the alliance could hardly pretend to represent the European continent as a whole.

Relations with the United States.

Italy's relations with the United States went from bad to worse during the year. The American people were much disappointed when Italy entered the war, for as long as she remained a non-belligerent there remained a glimmer of hope that she might not go in on the side of the Nazis. Throughout the spring the United States Government continued to urge Mussolini not to go to war.

On June 10, the very day that Italy finally entered the war, President Roosevelt delivered an address at the University of Virginia in which, after recounting his fruitless efforts to persuade the Italian Government not to extend the war to the Mediterranean area and Africa, he declared that 'the hand that held the dagger has struck it into the back of its neighbor.' This remark naturally aroused intense resentment in Fascist quarters. On June 19 the State Department warned both Germany and Italy that in their armistice negotiations with France they must not violate the Monroe Doctrine by tampering with the French possessions in the Western Hemisphere.

As American help to Britain mounted in volume, so did the anti-American tone of the controlled Fascist press. The deal announced in early September by which Britain gave the United States sites for naval bases in return for 50 over-age American destroyers was particularly annoying to Italy because small vessels of that type were especially useful in the confined waters of the Mediterranean. Later in the same month, after the Axis had persuaded Japan to join it openly in an alliance, the Fascist press took a bold line towards the United States, telling it to mind its own business and keep out of European affairs. Another incident arose over the despatch sent on Oct. 3 by Herbert Matthews to his paper, The New York Times. In this he reported that the Axis Powers were vitally interested in seeing President Roosevelt defeated in the forthcoming election. The President quoted from this despatch in a press conference shortly thereafter, and as a result Mr. Matthews was expelled from Italy on Oct. 7—only to be readmitted a few weeks later.

ITALY AT WAR

Rumors of War.

The fact of the matter was that Italian participation in the war had long since been decided on in principle. The only question still remaining open was the exact date on which it should take place. On April 14 Giovanni Ansaldo, editor of the Leghorn Telegrafo and a spokesman for Count Ciano, told the armed forces in a radio broadcast that Italy's entry into the war was only a matter of months, even of weeks or days. On April 27 Count Dino Grandi, President of the Chamber, declared that Italy would not stay out of the conflict indefinitely. Cynics explained Italy's increasingly bellicose attitude by citing the rapid spread throughout the world of the idea that Germany might win the war, now that she had made such an easy conquest of Denmark and Norway.

In the opening days of May, on the eve of Germany's Blitzkrieg against the Low Countries and France, Italy's position was described as no longer 'non-belligerent,' but 'pre-belligerent.' After the Blitzkrieg began, the warlike ardor of the Fascists rose in direct proportion to the success of the German armies. Public demonstrations, press campaigns and all the usual instruments for working on public opinion were employed to prepare the country psychologically for war.

It must be admitted that the Italian people were anything but enthusiastic about the war. They had been in a virtual state of war since the summer of 1935, and had been living under a war economy for over a decade. The only inducement which the Fascist Government believed would overcome this apathy was the promise of easy conquest and loot. It, therefore, constantly held out assurances of a quick victory and of large territorial gains. With no dissenting voices allowed, this campaign to arouse the people's lust could not fail to attain considerable success. Reports that the Royal House, the Army, the Vatican, and even some of the Fascist hierarchs were opposed to Italy's going into the war, however true they may have been, were beside the point, for in Italy it is Mussolini—and Mussolini alone—who decides what the country is to do.

On May 17, Il Duce's paper, Il Popolo d'Italia, warned that Italy was about to go to war, a warning virtually confirmed by Ciano two days later. Herbert Matthews cabled from Rome to The New York Times on the 26th that Italy would probably enter the conflict between the 10th and 20th of June. On May 30 he reported that mobilization had been going on quietly in Italy and that by then some 1,500,000 to 1,800,000 men were under arms. By June 1 the success of Hitler's victory in France appeared to be so overwhelming that Mussolini was obliged to enter the conflict at once or lose any hope of profiting from a Nazi victory. Last-minute French efforts to buy him off with concessions in regard to the Addis Ababa-Djibouti Railway, the Suez Canal, Tunisia and perhaps elsewhere were 'too little and too late,' as Fascist observers remarked. Premier Reynaud told the Senate Committee on Foreign Affairs on June 4 that if Italy entered the conflict it was because she deliberately wanted war, for France had offered to negotiate the issues separating the two countries. This offer he repeated on the radio two days later.

War with France.

On June 10, as the Germans were reaching the outskirts of Paris, Italy finally declared war. At 4:30 P.M. Count Ciano handed the French Ambassador a note stating that 'His Majesty the King and Emperor declares that from tomorrow, June 11, Italy considers herself at war with France.' Fifteen minutes later a similar document was handed to the British Ambassador. At 6 P.M. Il Duce spoke to the crowd from the balcony of the Palazzo Venezia. He asserted that 'this is the hour of irrevocable decisions' and that Italy was going to war 'against the plutocratic and reactionary democracies. . . . We want to break the territorial and military chains that confine us in our sea, because a country of 45,000,000 souls is not truly free if it does not have free access to the ocean. . . . This gigantic conflict is only a phase of the logical development of our revolution. It is the conflict of poor, numerous peoples who labor against starvers who ferociously cling to a monopoly of all the riches and the gold on earth.' He went on to declare that 'Italy does not intend to drag other peoples who are her neighbors into this conflict. Let Switzerland, Yugoslavia, Turkey, Egypt and Greece take note of these words of mine, for it will depend entirely on them and only on them whether these words are fully confirmed or not.'

Clement Attlee, speaking the following day in the House of Commons on behalf of Prime Minister Churchill, said that Mussolini's decision to embroil his country in war was wanton and without excuse, and that Britain and France had constantly striven to come to an agreement with her. Mussolini's declaration of war, he declared, was for the sordid motive of picking up the leavings from the kill of another beast—the policy of the jackal. In France Prime Minister Reynaud ordered the seizure of all Italian holdings. In both countries suspected Italian fifth-columnists were rounded up.

Actual warfare between Italy and the Western Powers was initiated on June 11 by an air raid on the British naval base at Malta. The same day also saw raids by Italians on Aden, and by the British on points in Libya and Eritrea. The next day British planes bombed industrial centers in Genoa, Milan and Turin, a procedure repeated frequently thereafter. On the 22nd there occurred the first air raid on Alexandria, the great British naval base in Egypt, a city that during the succeeding months was to be a constant target for Italian attacks.

Along the Franco-Italian frontier there were only light skirmishes even though the French were holding their line in the Alps very lightly; most of their troops had been drawn off to meet the German thrust in the north. Paris fell on the 14th and on the 16th Marshal Pétain asked for an armistice. Hitler and Mussolini, therefore, met in Munich on the 18th to settle on the terms to be offered France. The Nazis, however, made it quite clear that the negotiations with the French would not be a joint Italo-German affair. The armistice signed in Compiègne Forest on June 22 was, therefore, between France and Germany only. However, one of the clauses provided that it would come into effect only when a similar agreement had been made between France and Italy. French delegates arrived in Rome on the 23rd, and on the following day an armistice was signed by General Huntziger for France and Marshal Badoglio for Italy. It provided that the 'Italian troops will stand on their advanced line in all theaters of operations'; that along the French frontier a zone extending 50 kilometers westward from this line was to be demilitarized; that zones of greater depth were to be demilitarized on the Libyan frontier along Algeria and the French territories to the south; that an unspecified zone (shown only on a map which was not published) in Tunisia, and all of French Somaliland, were likewise to be demilitarized, while Italy was to be given the use of Djibouti and of the French section of the Addis Ababa railroad. Furthermore, the naval bases of Toulon, Bizerta, Ajaccio and Oran were to be demilitarized—in the German Armistice the French had already been obliged to concentrate their warships in designated ports for laying up under German or Italian control. Armistice commissions were to be appointed by the Italian Government to see that these terms were enforced.

Thus in two weeks, during which the Italian forces were engaged in only minor skirmishes, the position of France as a Mediterranean Power was virtually destroyed. The Italian Government later announced that during the first four weeks of the war its losses in dead, wounded and missing on all fronts were 4,097. Control commissions were sent to North Africa and Syria to supervise the carrying out of the armistice terms. These did not, however, succeed in obtaining anywhere near all the demands they made on the Pétain Government, demands which would virtually have changed those regions into Italian colonies. Whatever hopes the Axis may have had of utilizing the units of the French Navy which had not fallen into Britain's hands were shattered by the latter's successful attack on Mers-el-Khebir on July 3. Six days later, British warships operating in the Western Mediterranean chased several Italian warships into harbor. Thereafter, the Italian Navy tried to avoid direct encounters with the British, preferring instead to confine itself to submarine and aerial forays. One of the few exceptions to this rule was the fight on July 19 in which the Australian cruiser 'Sydney' sank the fast new 'Bartolomco Colleoni.'

War in Africa.

When Italy entered the conflict it was widely remarked that Mussolini must be calculating on a war of no more than six months' duration, for it was known that Italy's resources were sufficient for a period of only about that length. During the summer the Fascist Government was clearly going on the assumption that Britain would soon collapse, presumably as the result of a successful Nazi invasion. The Italians, therefore, were content to let the war on land—on the Libyan-Egyptian frontier, and around the borders of Ethiopia in the Sudan, Kenya and British Somaliland—simmer while the Germans broke the British Empire at its center. The only exception to this policy of 'economical warfare' was the invasion and conquest of British Somaliland. This area was of very little strategic value to the British; and after the Italian occupation of French Somaliland it had become virtually untenable. The Italians invaded the protectorate on August 4. The small British forces, after putting up a stiff rearguard fight against the greatly superior numbers of Fascist troops and materiel, withdrew by sea from their last foothold, Berbera, on August 19, and Italy celebrated a rather empty victory.

Italian East Africa had been cut off from the homeland both by land and by sea since June 10. Only by air, across many hundreds of miles of barren desert, was it possible for the Italian Government to communicate with its East African empire—and even then only by escaping British vigilance in the Sudan. Supplies of food, ammunition, gasoline and other necessary war commodities, collected in Ethiopia before the war, were gradually consumed as the year wore on, with small or no possibility of replenishing them. It was thus possible for a relatively small mixed force of British, Rhodesians, South Africans, Anzacs and colonials to keep in check the 100,000 or more Italian troops in East Africa.

The British Government naturally made use of the anti-Italian ardor of the Ethiopians. On July 12 it was announced in the House of Commons that Ethiopia was to be recognized as an ally. Six days later it was divulged that Haile Selassie had reached Khartoum from his place of exile in England. The British hoped that he would give new life to the revolt which had been smouldering in Ethiopia ever since its conquest by Italy. On Nov. 3, Dr. Martin, Ethiopian envoy in London, asserted that one half of his country was then in the hands of rebels.

In the Eastern Mediterranean desultory operations were marked during the summer by the exchange of air raids on such places as Tobruk, Bengasi, Alexandria, and Haifa. A particularly devastating raid was made by the Italians on Tel Aviv, an undefended city of slight military value in Palestine, on September 9. British naval units also bombarded ports in the Dodecanese Islands and in Libya. On June 28 occurred the still unexplained death of Marshal Balbo in an airplane accident over Tobruk in eastern Libya. The British denied that any of their planes were in the vicinity. Rumors of skullduggery within the Fascist camp have been neither proved nor disproved. Balbo was succeeded by Marshal Graziani, a famous colonial fighter and a veteran of the Ethiopian campaign.

Italian Advance into Egypt.

Early in September the much-heralded 'big push' of the Italians into Egypt got under way. There was also intensified fighting in Kenya, where Italian patrols made local advances here and there, without, however, seriously endangering the British position. Likewise in the Sudan the Italians occupied British border positions at such places as Gallabat and Kassala, but failed to press the attack on towards Khartoum and other important strategic centers. The only serious Italian attack was that made from Cyrenaica along the Mediterranean coast into Egypt towards Alexandria. A less hospitable country could hardly be imagined than that through which Graziani had to launch his attack, for the region is noted among geographers and explorers as one of the most difficult in the world. As the Italian forces, estimated at around 250,000, went forward into Egypt their line of communication and supply became correspondingly longer—even water had to be supplied from a distance. Furthermore, since Mussolini was unwilling to let his fleet contest the sea with the British Navy, Graziani's left flank was constantly exposed to bombardment from British ships.

After offering only slight resistance, the Allied forces—'Free French' and Polish troops, as well as the Anzacs, fought side by side with the English—fell back beyond Sidi Barrani, taken by the Italians on Sept. 17. At this point the Italian advance came to a halt. During October there was little activity on land in this sector. On the sea that month was marked by the sinking of three Italian ships by the cruiser Ajax (one of the victors in the battle with the Graf Spee off the River Plata) on the 12th, and an Italian long-range bombing attack on American-owned oil refineries in the Bahrein Islands in the Persian Gulf on the 19th.

Italian Debacle in Egypt.

On Dec. 9, in Western Egypt, the British Army of the Nile suddenly took the offensive at Sidi Barrani. The post was taken in a surprise attack of British and Australians from the rear, while Italian attention was engaged by a feint from the sea, and shelling of the British fleet. Though Graziani later declared, in a remarkably frank report to Rome published in Italy on Dec. 22, that he had had advance knowledge of the attack, the evidence seems to indicate that the Italians were taken by surprise. By the 15th the British had reached the Libyan frontier after smashing five Fascist divisions, taking some 40,000 prisoners and capturing quantities of matériel. Some 30,000 Italians took refuge in the fortified camp at Bardia, where they were subjected to a siege from land, sea and air. On Jan. 5, 1941, Bardia fell. (See also EUROPEAN WAR; GREAT BRITAIN: War in the Mediterranean and Africa.)

Italo-Greek War; British Air Raids on Italian Objectives.

Ever since the Italian occupation of the Dodecanese Islands in 1911, relations between Italy and Greece have been far from cordial. The inhabitants of this archipelago are, for the most part, Greeks; and, by every test of history, geography and ethnography, they belong to Greece. Italy's failure to return the islands to Greece as once promised caused deep resentment, and this feeling was aggravated by the harshness of Fascist rule. Nor have the Greeks ever forgiven or forgotten the Italian bombardment and occupation of Corfu in 1923.

The Fascist Government pretended to take great offense at the British guarantee extended to Greece by the Chamberlain Government early in 1939. The truth of the matter was, of course, that Rome regarded Greece as within its Lebensraum, or spazio vitale. After the Fascist conquest of Albania at Eastertime in 1939, it was foreordained that sooner or later an Italian attack would be made on Greece—unless, of course, by some means or other the Greeks could be persuaded to submit to Italian rule without fighting.

During the latter part of the summer constant Italian pinpricks kept the Greek Government on its guard. In mid-August the Fascist authorities accused the Greeks of beheading an Albanian patriot. Axis pressure on Greece to renounce Britain's guarantee was underlined when, on Aug. 15, a submarine, at the time described as 'unidentified' but later proved to be Italian, torpedoed and sank the Greek cruiser Helle in the harbor of Tinos in the Aegean Sea. The Greek Government replied by decreeing emergency measures and sending large bodies of troops to the Albanian frontier. On the 22nd a British spokesman in Athens promised air and naval support from his country if Greece were attacked.

Following Ribbentrop's visit in Rome, Sept. 19-22, the Axis Powers renewed their pressure on Greece. On Oct. 12 the Greek army was said to have reached full mobilization. On the 26th an Italian communiqué declared that the Greeks had attacked an Albanian frontier post. When, therefore, the Italians invaded Greece at 6 A.M. on the 28th, the event came almost as an anticlimax.

The Italian invasion was undertaken by several Fascist columns operating from such bases as Porto Edda (Santi Quaranta), Argyrokastron, and Koritza. At the same time various Greek cities, largely undefended, were treated to aerial bombardments in the classical Blitzkrieg manner. The Italian campaign proved, however, to be anything but a Blitzkrieg. For one thing, British assistance—which in the cases of Poland, Norway and the Low Countries had proved either not forthcoming at all or else 'too late and too little'—reached Greece at once in the form of planes and naval units. The British occupied the Greek island of Crete, with its valuable harbor at Suda Bay and its potential naval and air bases. Thus the noose around the Italian Navy was drawn another inch tighter.

On Nov. 1 the R.A.F. made its first raid on Naples, bombing a number of military and industrial objectives. On the 13th Churchill gave the House of Commons details about the now famous attack by British bombing and torpedo-carrying planes against the Italian fleet at Taranto. For some time Admiral Cunningham, Commander of the British Mediterranean Fleet, had been trying to lure the Italian fleet into combat, but in vain. He therefore decided to go in after it with his air arm. According to Churchill, three of Italy's battleships, one-half of her Navy's capital strength, in addition to several smaller craft, were put out of commission. The Italians belittled the effect of the raid, calling the British report fantastic. Two weeks later the British again reported that they had inflicted damage, this time on six Italian warships, in an encounter near Sardinia—after which the Italians ran for cover. Rome again denied these claims, while making large counter-claims of its own. But the fact remained that as the year closed the Italian Navy was conspicuous by its absence even in Adriatic waters, where British and Greek ships repeatedly penetrated to sink transports or bombard Albanian ports.

During the first few days of their campaign against Greece the Italians made a certain amount of headway in some sectors, but without cracking the main line of Greek defense. By Nov. 8, however, the deepest Italian thrust—that toward Yanina—had been stopped. From then on the invasion went into reverse, and by the end of three weeks of war the Italian forces were back where they started from. On the 10th, Rome announced that General Visconti Prasea had been replaced by General Soddu as Commander in Albania. The Greek counter-invasion of Albania was marked on Nov. 22 by the fall of Koritza to the invaders, and on the 30th by the taking of Pogradee. Along the Adriatic coast the Greek advance reached Porto Edda on Dec. 6, Palermo on the 14th, and Khimara on the 23rd. Inland, Argyrokastron fell on Dec. 9, and by the end of the year the Greek forces were converging on the port of Valona, already reported to be useless as a result of Allied naval and aerial bombardments. (See also GREECE.)

One may well ask why a supposedly first-class military Power like Italy met such resounding reverses at the hands of a relatively weak nation like Greece. There is, of course, first of all the fact that the Greeks are a tough, liberty-loving people and that they were defending their own soil against invasion, whereas the Italian soldiers had no such incentive. There was also the fact that the Italian troops were told by their Government that the Greek Army would not resist, either because it would regard discretion as the better part of valor or because some of its commanders were said to have been suborned. In either case, the Fascists were cruelly disappointed by Greek 'deception.'

The question then arises as to why Mussolini should have embarked on such an adventure on only a few hours notice—Gayda later admitted that the attack had been improvised almost on the spur of the moment. The best explanation seems to be that Il Duce, who was scheduled to meet Hitler at Florence on Oct. 28, wanted to confront his Axis partner with a fait accompli. For several weeks Laval, then Vice Premier in the Vichy Government, had been trying to persuade Hitler to make him the Number 2 man in the 'new order in Europe.' Laval had great inducements to offer Hitler in the form of the French colonies and several ships of the French navy. Mussolini, aware of this plot, decided that the best way to maintain his position in the Axis was to stage a brilliant Blitzkrieg against Greece. The Germans were not at all pleased at their partner's action, but it was not until Nov. 24, after Koritza had fallen, that there was any official German utterance condemning the Greeks for extending the war and acting as a tool of the British.

Speaking publicly for the first time since the war began. Mussolini declared, on Nov. 18, that in the end Greece would be conquered and 'her back broken.' On Nov. 30, in the face of repeated Italian reverses in Albania, Il Duce's newspaper asserted that Italy would defeat Greece without help from Germany. As December wore on, however, it became increasingly clear that German help was not only needed but was actually being received in the form of both men and matériel. Presumably to facilitate cooperation with the Germans, Mussolini, on Dec. 6, replaced Marshal Badoglio as Chief of Staff with General Ugo Cavallero, known to be very pro-German. The following two days also saw the 'resignations' of the Quadrumvir De Vecchi as Governor of the Dodecanese Islands and of Admiral Cavagnari as Chief of the Naval Staff. On Dec. 23 Prime Minister Churchill made a surprise broadcast calling upon the Italian people to overthrow Mussolini, whom he described as a 'criminal,' alone responsible for his country being at war. On the same day, casualty figures were published in Rome covering the first six months of Italy's war: 4,531 killed, 10,055 wounded, 4,238 missing. Foreign observers were inclined to regard these figures as gross underestimates, in view of the heavy losses inflicted on the Italian forces in Africa and Albania. (See also EUROPEAN WAR; GREECE.)

Summary of the Year.

As the year closed, then, the situation in the Mediterranean may be summarized as follows: The Greeks were in possession of more than a quarter of Albania and were steadily pressing ahead there, though the tempo of their advance had slowed down. In North Africa the threat of an Italian invasion of Egypt had been turned into a British invasion of Libya. In Italy the Government was threatening those who spread discontent and defeatism with drastic penalties—a clear sign that dissatisfaction with the war and the government was rising. Perhaps most serious of all was the accumulation of evidence that Italy was already on the road to becoming a Nazi satrapy—economically, politically and militarily.

Italy and the Western World.

Italy's entry into the war caught many of her ships in Western Hemisphere waters. Some 250,000 tons of shipping—or one twelfth of her merchant marine—were reported to have tied up in North and South American ports rather than risk capture by the British Navy. The Italian airline—Ala Littoria—continued to operate its services to Brazil throughout the year, although with considerable irregularity. With the collapse of the French line to Brazil and Argentina, Ala Littoria became the only direct aerial connection between Europe and South America.

DOMESTIC AFFAIRS

Italy and the Vatican.

The outbreak of a general European war was bound to test the degree of freedom possessed by the Vatican as a supposedly independent state. Completely surrounded by Italian territory and able to communicate freely with the outside world only by means of the radio, Vatican City had seemed to many observers not to be endowed with the necessary means for insuring its freedom and neutrality in case Italy should participate in a major war. Others pointed out that the Pope, the majority of the Cardinals and a large part of the Vatican staff, being Italians, could not hope completely to dissociate their emotions from the outcome of the conflict.

The year 1939 had closed with an exchange of visits between the Pope and the King and Queen of Italy. This led some to believe that the Vatican and the House of Savoy were concerting efforts to keep Italy at peace. In late January and early February the Vatican City radio broadcast several condemnatory reports on the behavior of the Nazis in Poland, and this aroused the ire of the more violent pro-German Fascists like Roberto Farinacci, former Party Secretary. Relations between the Fascist and Papal Governments became increasingly strained as the latter's rift with Germany widened. The conflict came to a head in April and May when the Italian Government put pressure on the Osservatore Romano, the daily organ of the Vatican, to force it to cease publishing views and editorials unfriendly to the Axis. The circulation of this paper had grown by leaps and bounds throughout Italy because it alone among journals published in Italian tried to give impartial reports on world politics and the war. Its sale was therefore banned by the Fascist Government. In the end, the Vatican officials had to confine the contents of their newspaper to non-political topics. (See also RELIGION: Roman Catholic Church.)

Economic Situation.

The transition from non-belligerency to belligerency was far less abrupt in Italy than it had been in the democratic countries, since the life of the Italian people had for many years been regimented in every aspect. This was particularly true of economic life under the 'corporative' system. On Jan. 13, in an article in the Popolo d'Italia which was generally believed to be from the pen of Mussolini, the Fascist principles of 'corporatism, anti-democracy and anti-bourgeoisie' were vehemently reaffirmed. At the end of February the government took charge of the production of mercury and forbade its export except under license. The Popolo d'Italia described this as a step towards a state monopoly over all raw materials, which was coming 'gradually but surely.'

One of the objectives of the corporative economy has been to make Italy as self-sufficient as possible in foodstuffs, raw materials and fuel. It is hardly necessary to point out that in certain key commodities such as iron, coal, coffee, cotton and oil Italy is hopelessly dependent on foreign sources of supply. Only in a few of the important items is it possible to increase production materially either in Italy or in her colonies. For this reason, as already pointed out, she has been particularly vulnerable to the British blockade.

On Jan. 20 it was announced that after Feb. 1 sugar would, like coffee, be rationed. The following day Mussolini expressed the hope that the wheat harvest for 1940 would approach the point of national self-sufficiency. The goal, he said, was now 90,000,000 quintals—an increase of 5,000,000 over his previous objective. Almost simultaneously Virginio Gayda announced that under no circumstances would Italy, now or later, join a European customs union or engage in any sort of free commercial exchange, for Mussolini had reiterated 'very clearly that Italian autarchy is not to be touched.'

During the winter, which happened to be especially cold, there was a serious coal shortage in Italy, felt by both industrial and private consumers. Schools were closed, office schedules curtailed, trains cancelled and many other means adopted for husbanding the supply of coal. Italy's own production of coal in 1939 was reported as: 1,058,000 tons of lignite, 1,925,000 of soft coal (from Sardinia and Istria) and 100,000 of hard coal. There was some dispute as to the accuracy of these figures, but in any case they showed that Italy still had to obtain at least four-fifths of her coal supply from abroad—which for practical purposes meant Greater Germany. What was true of coal was also true in varying degrees of iron, copper, oil, etc. For all of these Italy was almost wholly dependent on German or German-controlled areas in eastern Europe. The shortage of oil was especially disastrous: Albania produced only about 300,000 of the 2,500,000 tons normally consumed—and even this source was cut off when the Greek campaign began. The relative inactivity of the Fascist navy and air force was ascribed, in part at least, to the desire of the government to conserve its small oil stocks.

On July 25, a letter from the Ministry of Agriculture to Il Duce was published in which it was stated that the current harvest was expected to fall almost 10 per cent short of the average for the three previous years. A report released by the United States Department of Agriculture on Nov. 29 stated that the blockade had entirely cut off Italy's imports of coffee, meats, rubber and jute, and that those of oils, fats, raw cotton and wool had been reduced by 95 per cent, and those of cereals by 70 per cent. (See also WORLD ECONOMICS.)

Italian Commerce.

One great instrument—the blockade—gave the Western Powers a strangle-hold on Italy's foreign trade. In times of peace some 85 per cent of Italy's foreign commerce is seaborne; and of this maritime traffic nearly 90 per cent is from outside the Mediterranean Sea. In its communiqué of December 8, 1939, the Grand Council declared that Italy intended to safeguard her maritime traffic 'in the most explicit manner, both for her prestige and for the indisputable necessities of life.' At the outbreak of the war the British had imposed contraband control on Italian trade at such places as Gibraltar, Aden and Haifa. The consequent delays slowed up the commercial offensive which the Italians had hoped would give them a large slice of the markets lost by the warring Powers. In order to avoid some of these inconveniences British control officers were being allowed, according to reliable reports in January and February, to inspect cargoes at Italian ports.

The Italian Government sought to take advantage of its non-belligerent status by importing large quantities of key commodities. To do this it had in many cases to promise the Western Powers to return a considerable portion of them in the form of manufactured goods. By letting Mussolini make money out of orders for war goods, France and Britain hoped to stave off his active participation in the conflict. In January and February numerous reports from Italy told of industries working at top speed on French and British contracts. In late January, for instance, the Carnegie Endowment divulged confidential information to the effect that since the beginning of the war Italy had 'traded machines against raw materials up to $250,000,000,' and that Britain had ordered materiel worth 4 billion lire, a sum almost equalled by French orders. The Italians were said, however, to be slow both in paying for their imports and in making deliveries to the Western Powers.

This situation was in fact responsible for the crisis which took place in Anglo-Italian commercial relations in the middle of February. This crisis led first to a breakdown in negotiations for a trade agreement, and second, early in March, to the enforcement of the blockade against Italian ships carrying German coal from Rotterdam to Italy. Britain had announced that such a blockade would begin in December, but had postponed its application until March 1. The gravity of the seizure is evident from the fact that Italy normally imports 12,000,000 tons of coal a year, at least three-fourths of which come by sea from Germany. Within ten days, however, the British released the coal ships on condition that henceforth Italy make no further attempts to run the blockade. German coal bound for Italy thus had to go overland and this naturally put a serious strain on the trans-Alpine rail lines at a time when Germany's railways were already seriously overstrained by her war effort. (See also WORLD ECONOMICS.)

Finances.

The country's financial situation reflected its growing economic straits. On Feb. 1 new taxes went into effect on business transactions (2 per cent) and net capital (0.5 per cent). During February the lira was reduced in order to give Italian exports a chance to compete with the depreciated currencies of Britain and France. On May 17 Finance Minister Thaon di Revel presented a 'war budget.' His report on the fiscal year 1939-40 showed a deficit of 26,400,000,000 lire. In the 'ordinary' budget, expenditures were 35,975,000,000 lire and income 29,740,000,000 lire, leaving a deficit of 6,235,000,000. It was the 'extraordinary' budget which accounted for the other twenty billion of the total deficit. The figures for the proposed ordinary budget for 1940-41 were slightly under those for the previous year. Altogether, the deficits from 1934 to 1940 came to a grand total of 74,345,000,000 lire. The amount of the national debt probably stood in the vicinity of 250 billion lire.

Clearly, as the year closed, Italy's economic situation was rapidly deteriorating and would soon constitute a tremendous burden on the resources of her Nazi partner if the latter were to keep her from social and political disintegration. See also INTERNATIONAL BANKING AND FINANCE; TAXATION.