Evening star., 1938-04-24
British Financial Shrewdness
Colors Agreement With Italv
Effort to Bend Berlin.Rome Axis Fails, in Spite of
Ballyhoo, but The City Gains
Hope of Dividends.

offered Italy. But freedom of transit
through the Suez Canal has never been
denied to Italy-not even in 1885 when a.
British fleet was concentrated at Alexan.
dria and watched, without interfering.
scores OF Italian war vessels and transports
pass through the canal on the way to Aswa
and thence to Ethiopia. And freedom OF
the seas in the Mediterranean itself de-
pends on the strength Of the Italian and
the British navies in times of disturbance.
In times Of peace there is no question Of
anybody interfering with the movements
Of any ships
Italian concessions" to Britain are Of
equal importance" For instance, Italy
agrees to recognize Saudi Arabia and Ye-
men as being in the British sphere of In.
huence. Nobody has ever denied this, ex-
cept possibly King Ibn ben Saud himself,
when the British did not come across with
his yearly allowance. The Italians have
been worrying London by the radio propa-
ganda from the Bari station Mussolini has
promised to be good boy now and produce
nothing but lullabies and fashion talks.
But the Bari station remains in existence
and could resume its insidious activities
any time II Duce desires.
Italy agrees to conduct a good -neighbor
policy in regard to Egypt. But II Duce has
never said that he had anything against
the Egyptians On the contrary, Fascist
agents have shown during the last four
years love OF Egypt and her independence
which worried the British foreign ONCE
more than 1t did the King Of Egypt.
Italy agrees to withdraw gradually the
reinforcements 1t has sent to Libya in the
last few months-a gentle blackmail against
Britain and France. These Withdrawals
will occur periodically until the garrsons
are reduced to the normal standard, which
Is sufficiently large to engage in preliminary
operations until reinforcements are once
more rushed from the mainland. There
has been no mention Of the naval and air
bases which the Italians have erected In
the last few years in the Mediterranean
and which have been thorn in the side of
the British admiralty.
Italy undertakes not to infringe on
SPANS territorial integrity either in Europe
or Africa-the Spanish Morocco. Observers
who send regular reports to Washington on
1taly's activities in Spain say that Italy
never contemplated hoisting flags in any of
Francois territories. But this does not pre-
vent Italian and German specialists from
fortnying the coast of Spain and building,
as quickly as possible, new air bases at
Frances ports on the North African coast
as we'll as in continental Spain.
Italy also agrees to withdraw all its
divisions from Spain in due course-that
Is to say, as soon as Franco becomes the
ruler Of the whole country. Here again, the
whole question depends on how Mussolni
has crossed his fingers when he signed that
provision.
Avenue of Duplicity.
The British and the French have been
worrying over the possibility that q large
portion Of the Blackshirts will remain in
Spain after the war is over There were
reports about pretorian guard which
Franco will be urged to FORM foreign
police force to supervise the pacifcation Of
Spain when all the able-bodied Spaniards
return to constructive work In the mine,
that Franco might be compelled to hire
portion of the Fascist Blackshirts as his
gendarmerie: military police which would
have the dual role of keeping in order
Spaln-and Franco Mussolini has prom
ised to withdraw his forces. But he might
simply release them from military service
oemoollize them. In such an eventualitv
there Is nothing to prevent Franco from
hiring these veterans" in the Spanish serv-
ice and thus defeat the provision Of the
Rome-London agreement.
But while this Is the truth behind the
much ballyhooed agreement there Is M
doubt that there are some definite adyan.
tages which do not appear In the treaty
itself.
Great Britain is rearming as speedily as
she can. Her progress is somewhat handi-
capped by the fact that her sources ~
supply from Spain have been much reduced
Furthermore. the City stands to lose At
least 00,000,000 in the event Franco de-.
cides, at Mussolini's suggestion. to take
over the mines in which British canital Ne
vitality interested. The copper mines NJ
Rio T1nto, the mercury mines Of Alamden
and the iron ore mines of Bilbao until 1895
were only nominally Spanish. The bulk Of
the captal-and the profits-were British.
Double Need.
The possibility Of q naturalization n,
these important sources of wealth has
been troubling the City and the British
considerably. The government needs them
Tor the rearmament program and the City
Tor the dividends. While Eden was the
high priest Of Britains foreign affairs an
attempt was made to win Franco over IN
the British side as far as these natural re-
sources were concerned, and the Spanish
generalissimo was promised a substantial
amount If he gave a definite understand
Ing that British interests would remain
untouched. Mussolini's pressure was rap
idly applied and the negotiations fell nat.
Now the City is turning directly toward
II Duce for assurances that the national
1zation" operations will not be as thorough
as the City fears Mussolini is willing to
talk business Ethiopia is the black pearl
Of 1taly's crown but 1t Is not mounted. It
would require hundreds of millions of dol
lars to set that pearl to the taste of Musso-
lini and King Victor Emanuel. The CITY
was given to understand by Count Dino
Grandi that comprehensive loan for the
development Of Ethiopia would soften Mus.
solini's heart In regard to Britain's vital
interests in Spain and the Citv co,,ld thu,