Messersmith, G.S., Vienna. To Cordell Hull, Washington.

Learned of [Breckinridge] Long's stomach ulcer and operation; had same experience in 1919 and recovery was slow; hopes Long will take plenty of time, but will eventually return to the field; [William] Phillips a wise choice to replace Long, but he will be missed in Department; [Anthony] Eden went to Paris for conversation with [Yvon] Delbos; Little Entente at instigation of Yugoslavia requested them to halt rapid progress toward restoration in Austria; Chancellor [Kurt] Schuschnigg invited to come to Geneva during session on sanctions but Schuschnigg pleaded pressing duties at home; incident had effect of curbing move toward restoration without formal demands being made; French and English considering conversion of Austrian loans to lower interest rate; no progress in "modus vivende" between Germany and Austria, nor likely to be; some progress in Anglo-French cooperation; will be difficult to bring Italy into any concert with Paris and London, but still no basis for positive cooperation between Berlin and Rome; Nazi plans in progress to take over Danzig; split in [Konrad] Henlein's party in Czechoslovakia weakens his position; weather in Austria favorable for tourist trade; Nazi outrages, in form of stink bombs in public places, intended to discourage tourists; Chancellor informed [Franz] von Papen that if outrages continued there could be no further talks on improving relations with Germany, and immediately nuisance stopped; German commercial policy beyond comprehension; forcing economic bondage on Southeast Europe; trying same tactics in South America, but meeting resistance in Brazil; U.S. has tremendous investments in Germany but because of discriminatory measures cannot take earnings out to pay American investors; must use earnings in Germany to build new plants for manufacture of armaments; National Cash Register Co., International Telephone and Telegraph Co., and General Motors are examples; United Fruit Co., Gulf and Standard Oil Companies also having difficulty; Department should take such matters into consideration when German delegation in Washington talks of trade agreement