of its influence in the Balkans, is detested in Italy and regarded as an injury to Italy's position there. In consequence of an optical delusion, in face of the inevitable threat by her neighbour Austria, the Slav danger, which is really much greater, is not recognized. Quite apart from the fact that the policy of the Government in Italy depends materially upon the variations of public opinion, the above view is that which is held by the majority of Italian statesmen. On every occasion that there has been a question of a threat to Serbia by Austria I have noticed an extraordinary nervousness. If Italy took the side of Serbia this would unquestionably and materially encourage Russia's desire for action. In St. Petersburg they would calculate that Italy would not only not fulfil her pledges to the alliance, but, wherever possible, act directly against Austria-Hungary. And a collapse of the Monarchy would also open up for Italy the prospect of gaining some long-desired territories.
"It is therefore, in my opinion, of the greatest importance that Vienna should come to an arrangement with the Cabinet in Rome about the objects to be pursued in Serbia, in case of a conflict, and should keep Italy on her side, or—as a conflict with Serbia alone does not mean a casus fæderis—strictly neutral. By her agreements with Austria, Italy has a right to compensation in case of any alteration in the Balkans in favour of the Danube Monarchy. This compensation would form the object and the bait for the negotiations with Italy. According to our information the cession of Valona, for example, would not be regarded in Rome as an acceptable compensation. Italy seems at present to have
