865.857 An 2/88: Telegram
The Ambassador in Austria-Hungary (Penfield) to the Secretary of state
[Received December 24—2:30 p. m.]
1049. From informal conversation with a responsible official of the Ministry of Foreign Affairs I am inclined to anticipate that the Austro-Hungarian reply to our last Ancona note will again contend that the American demands are based on inaccurate and insufficient evidence. Feeling in responsible quarters opposed to rupture of diplomatic relations. Should a settlement through diplomatic channels prove impossible it is probable that suggestion will be made that the dispute be submitted to arbitration. In an interview published today the Hungarian Premier, Tisza, says that the dispute must be amicably settled in a few days satisfactory to both parties which can only be accomplished through correspondence between the two Governments. Article by jurist, Dr. Lammasch, was excluded from the Freie Presse of the 19th by the Government but appearing in both morning and evening editions today may indicate views of the Government undergoing change. He says that the sources of our information are open to question especially since our contentions are in such sharp conflict with Austro-Hungarian Admiralty’s report. He recalls the Dogger Bank incident between Great Britain and Russia and suggests that the present difficulty with the United States be settled by recourse to a similar arbitral board. Ministry of Foreign Affairs informally advise me that their reply to our last note will be delivered early next week.