The British White Paper on defence spending provided a pretext for the US Navy to weigh into the debate on US rearmament. Affecting to treat mention of building up the Royal Navy as being aimed at the US, Admiral Leahy publicly asked whether the moment had arrived to match the British building programme. It was still an episode of the cart of armaments was put before the horse of diplomacy. Leahy’s remark only made sense if an Anglo-Japanese alliance against the US in the Pacific was a meaningful risk. It sounded pleasant, though, to US traditionalists. An Anglo-US agreement aimed at Japan was equally improbable; no such thing was even talked about, but in the calculus of diplomacy Japan’s aggressive expansionism threatened the English speaking powers with a force and immediacy, which entirely eclipsed their historic mutual rivalry. The President wisely ducked this aspect of naval rearmament, and instead focused on steering it through the minefields of his own social legislation. The Welsh-Healey Act restricted government contracts to corporations applying a 40 hour week to its workforce. The US steel companies had muttered that this was a deterrent to bidding for contracts and even raised the entirely imaginary possibility that British orders might crowd out the US government. With the CIO labour organization publicly committed to an assault on the steel industry when it was done with the car producers, caution was called for.
After weeks of attacks the Nationalist attempt to capture Madrid had ground to a halt and General Miaja, the Republican commander for the city, launched a series of counter-attacks. These boosted morale and prestige, but failed to address the key strategic issue that the Republican government faced. Its military weakness compared to the Nationalists, above all in heavy weapons, did not really support costly, attritional warfare of this kind. The Republican was not going to defeat Franco in the suburbs of Madrid, but it was a harder question as to where a decisive result could be achieved. Options were further constrained because the Basque and Catalan fronts were practically fighting wars of their own.
Baron von Neurath, the German Foreign Minister, paid the country’s first official visit to Vienna since 1930. He was greeted by large numbers of Austrian Nazis, marshaled to clamour for union with Germany. Neurath received a rather less enthusiastic response from Schuschnigg, the Austrian Chancellor, who trumpeted friendship with Italy as well as esteem for the western powers notably Britain. He also stated firmly that Austria did not suffer from the menace of communist subversion, so by clear implication had no need of German assistance in combating such a menace. For the time being at least, Austria wanted to remain independent.