Memorandum prepared by G.S. Messersmith on conversation with Secretary of State for Foreign Affairs [Guido] Schmidt., 1937 February 17

Enclosed with No. 857. Dined at Bulgarian Legation yesterday evening, and after dinner was drawn aside by Schmidt for talk; Schmidt asked impression of Chancellor's speech of last Sunday and Messersmith said it was his best yet, and should have favorable influence on Austria's internal and external situation; Schmidt said there would be no change in Austria's policy and that Anschluss with Germany would be disaster for Austria; mentioned approaching visit of German Foreign Minister [Konstantin] von Neurath; said von Neurath would probably press certain matters, but Austria's position was firm; von Neurath a charming man and would be glad to see him, but feared Austrian Nazi demonstration on his arrival; German political and financial policies foolhardy and cannot succeed; Rost von Tonningen, formerly League representative in Austria, now editor of Nazi newspaper in Holland but Nazi movement in Holland on decline, and von Tonningen having hard time; joined by Bulgarian Minister who spoke of disappointment in Bulgaria over peace terms of last war; Schmidt spoke of U.S.-Austrian friendship.