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      CONFIDENTIAL
 
      
 
 
21 Feb, 1939.
 
      From: THE SECRETARY TO THE PRESIDENT
 
      To : THE PRESIDENT
 
      
 
 
0021 The following is a brief summay of a lengthy telegram 
      received from Ambassador Kennedy:
 
      Halifax predicts British loan to China by cabinet decision wednesday, 
      expects such action will be provocative and hopes when announced 
      someone wil recall all that United States has done, thus conveying 
      impression both countries have assisted China. Halifax states 
      ni change in British attitude towards Spanish situation. Recognition 
      is fairly imminent. British, while distrustful of Hitler, believe 
      chances for explosion are small. Halifax reiterated our action 
      (Wilson's return, your remarks to Senate Committee, and our Rearmament 
      Program) and speeding up of British production has been Boyd 
      flow for peace. Henderson, British Ambassaddor, Berlin, Reports 
      goering continues to evince greatest interest in a deal with 
      England. Kennedy, after talks with Hoare, Chatfield, and Simon, 
      in addition to Halifax and Chamberlain and many others, states 
      his impression that all f them thoroughly believe England is 
      on her way, that Germany will not attack, that conditions which 
      forced them to do things last fall that perhaps they would not 
      have done otherwise havechanged, and that while Britain would 
      not go to war for German move to east, she would at once declare 
      was if Germany moved towards Switzerland or Holland. Kennedy 
      states that Psychology resulting from what United States has 
      done is a determining factor in the peace of mind which exists 
      at the moment.
 
      
 
 
From Hull 
 
      1843 
 
      Distribution:
 
      
 
 
President, Naval Aide, Mil. Aide, Adm. Leahy