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

Extraordinary press reports regarding Austrian visit of [Konstantin von] Neurath; reports of four power agreement between Germany, Italy, Austria, and Hungary with arrangement for Austro-German Anschlus in near future traced to German sources; origin unknown of report that after exchange of letters between von Neurath and Chancellor [Kurt] Schuschnigg, Schuschnigg gave up idea of restoration; no foundation for either report; Chancellor disappointed in Italian press reaction to restoration but lays it to Mussolini's desire not to impair further Rome-Berlin cooperation; Austrian government assured by Italian Minister in Vienna that Italian attitude had not changed either on restoration or Austrian independence; Chancellor plans trip to Rome to talk to Mussolini before his Secretary of State for Foreign Affairs [Guido] Schmidt goes to London for coronation as he is to discuss Austrian position with British and French on this trip; Chancellor can take no definite action on restoration without complete assurance of Italian support; Nazi activities in Hungary and Rumania being suppressed; Yugoslavian Minister President in recent speech made strong references to friendship with France and England and showed disappointment in Yugoslav relations with Germany; Czech Government in Prague reached agreement with more reasonable element of Sudeten Deutschen; general European prospects more favorable, but situation still delicate and picture could change overnight; at leading Berlin theatre recently Schiller's play "Don Carlos" was presented with [Paul Josef] Goebbels and other members of German Government present; one line from play, "It is necessary to re-establish freedom of thought," brought down the house, an indication of how most Germans really feel; has heard from reliable observers in Italy that Italian position is shaky and its economic condition almost as bad as in Germany; Mussolini said to be worried and showing his age; personal attitude of [Galeazzo] Ciano not clear; any information passed out by totalitarian governments to diplomatic observers must be viewed with suspicion; action to eliminate [Odo] Neust??dter-St??rmer from Austrian cabinet has been postponed, but he has been suspended from most of his duties as Minister of Defense