By the mid-Thirties the international situation had begun to darken.  It was not yet Desperate.  The worst—another World War—might still be avoided.  Serious men had to deal with situations in a realistic way.  What were the situations? 

First, there was the conflict between the “democratic” and “status-quo” powers (Britain, France, and the United States) and the “authoritarian” and “revisionist”: powers (Nazi Germany, Fascist Italy, Communist Russia, and Imperial Japan.  Each of the “revisionist” powers desired to expand its territorial control over adjoining areas.  To accomplish these goals they would have to overthrow the system of international order—often called the Versailles settlement—created after the First World War.  Beyond that common goal they were often at odds among themselves. 

            Second, there were the military realities.  The conventional economic policy adopted to respond to the Depression (1929-1939) combined lower taxes with spending cuts, while limiting international trade (autarky).  Where countries stuck with this policy, military budgets suffered.  Where they did not stick with this policy, they rearmed faster.  Meanwhile, autarky spurred both isolationism and aggression.

            Third, Britain had three enemies threatening its global position: Germany in Europe, Italy in the Mediterranean, and Japan in the Far East.  It had the military resources to fight one major war at a time.  Britain lacked good allies.  America was deeply isolationist; Communist Russia hated capitalist counties—democratic or authoritarian; and France had been “bled white” in the First World War, while the Depression intensified partisan polarization.  If Britain fought one major power, the other two enemies would pile on.  Unless they were bought off or deterred. 

            In July 1934, Austrian Nazis had tried to seize power.  Hitler’s fingerprints were all over the failed coup.  The Italian dictator Benito Mussolini ordered four army divisions to the border with Austria to deter German intervention.  In London and Paris, this seemed a good omen. 

            In March 1935, Nazi Germany declared that it would begin rearmament in violation of the Versailles Treaty.  In April 1935, representatives from Britain, France, and Italy met in the resort town of Stresa.  They agreed to resist any further German violation of the Versailles Treaty.  During the conference, the Italians raised the issue of Ethiopia.  Italy wanted to take over a big chunk of Ethiopia.  This was Italy’s bill for helping contain Germany.  The demand embarrassed the British, so it never made it into a written agreement.    

Mussolini had not abandoned his goals.  In October 1935, Italy invaded Ethiopia.  Public opinion, but especially “progressive” opinion, in both Britain and France went wild.  Demands rang out for support for the League of Nations and economic sanctions on Italy. 

British and French leaders still hoped to save the Italian alliance against Germany.  In December 1935, British Foreign Secretary Sir Samuel Hoare met secretly with French Foreign Minister Pierre Laval.  They agreed on a plan that gave most of Ethiopia to Italy while leaving a fragment independent.  News leaked, public opinion revolted, the plan was abandoned, and Hoare resigned.  King George V said “Ah well Sam, no more coals to Newcastle, no more Hoares to Paris.” 

Lesson: If you want the “status quo” in one area you may have to accept “revisionism” in another.  Who is the main enemy?  What are the alternatives?