-7- Mussolini replied that in his opinion the only neutral powers which had any influence were the United States, Japan and Italy, and that Italy was not technically a neutral because of her relationship to Germany. (This was his only reference in our conversation to the Axis.) He said that when peace came the influence of the United States would be decisive, and that our views on economic relations, which he would support, would have to be accepted, if we insisted. But he felt that no efforts at moral influence at this time would prove effective. What was required before any constructive steps could be taken was the finding of a Just political peace in Europe. I then Said that as he already knew I was charged by the President with the duty of reporting to him on the present possibilities of the establishment of the bases for a permanent and stable peace in Europe. I would greatly value Mussolini's views, and I was sure he knew from Count Ciano that any views he expressed to me would be reported solely to my President and Secretary of State. Mussolini said he knew this, and that he would speak to me with utmost frankness. He would answer any questions I desired to ask. He then set forth what he believed would be the terms Germany would accept. Austria to remain a part of the Reich after a plebiscite had proved Austrian determination in that regard; an independent Slovakia and Bohemia-Moravia under German protection. He then came to |