Messersmith, G.S., Vienna. To Secretary of State [Cordell] Hull., 1936 August 28

Does not know substance of conversation [Nicolas] Horthy de Nagybanya had with Hitler, but has learned [Franz] von Papen arranged visit with object of forcing Austria into Vienna-Budapest-Berlin combination; Hungary unhappy over her inactive role and disappointed that her revisionist aspirations were receiving no attention; health of Hungarian Premier [Julius] Goemboes poor and Regent Horthy has had to take more active part in government; Horthy being pressed by legitimists for restoration in Hungary, but he does not want to lose job as Regent and he sees in closely knit Budapest-Vienna-Berlin a strengthening position against restoration; meeting of Little Entente in September will concern itself with Austro-German accord and implications for Little Entente; von Papen an intriguer; he saw fertile field in Hungary for open manifestation of Hungarian friendship for Germany and hoped this would be lever forcing [Kurt] Schuschnigg to cooperate more closely with Berlin; von Papen has been urging Schuschnigg to meet Hitler, but Schuschnigg has so far wisely refused; Schuschnigg determined to have his hands free, and has the support of President [Wilhelm] Miklas and most Austrian people; Yugoslavs disturbed over Horthy visit and see it as threat to Little Entente; Germany hopes to swallow all of Southeastern Europe, but will find it an indigestible meal, for what pleases one country displeases another; Chancellor back from holiday and rested, but disillusioned and disgusted; if right kind of successor were available, believes he would be happy to retire; German influence bound to increase; English jitters increase as Germany announces two-year military service; has been informed British placing large orders in U.S. for armaments; British attitude seems to be stiffening; should have good effects; German barrage of misinformation and misrepresentation continues; they now place responsibility on Russia for the two-year military service; Mr. and Mrs. [Wilbur J.] Carr now in Vienna; both looking rested and fit.