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Little Entente. It was feared that Greece had come to an arrangement with the Little Entente, of which YugoSlavia is a member, providing for assistance in ease of war between her and Italy. It was also feared that YugoSlavia would decide that the Corfu occupation was directed against her. Any aggressive attitude on the part of the Little Entente was sure to plunge the whole of the Balkans into fanatical ferment. France (overlord of the masters of Central Europe) had counselled "watchful waiting"; therefore the attitude of the Little Entente was neutral.
League's Action. Action by the League of Nations was thwarted by Italy's threat to withdraw her membership from that body. The League offered the alternative proposal that Italy and Greece submit their dispute to the World Court. Greece was willing and Premier Mussolini was expected to agree to this proposal. Britain favored settlement by the League, but France favored the Council of Ambassadors.
Italy's Defence. Premier Mussolini stated that the occupation of Corfu was only a temporary measure and "not an act of war." The object was "to force the indemnity out of Greece and to secure general compliance with the terms of the ultimatum" nothing more."The Premier then said that Italy will stand by every demand she has made. His position was adequately backed by the people, as shown by the message of the Veterans of the World War at Venice:"At the first blast of the bugle we will be with you, Chief."
Appeal to the Allies. The Greek Government, in a note answering the various Allied notes, appealed for the formation of a special commission to inquire into the murders, suggesting that representatives of Britain, France, Italy be empowered to carry on investigations on both sides of the Greco-Albanian frontier. The note contained a significant paragraph to the effect that the Government reserved the right to collect indemnification from Italy for the Corfu occupation. Despatches from Athens described the populace of Greece as being in a high state of indignation. The press is solid in supporting the Government. In no instance was the Greek Government reported to have undertaken any armed action against Italy.
Wall Street. Big Business on Wall Street viewed the Italo-Greek situation " cheerfully", It was pointed out that in 1914 the international financial markets were thrown into a high state of excitement by European demands for loans. The present state of the market was practically unaffected by the Italian ultimatum, and no loans were asked for by Italy from U. S. or European (including Italian) bankers. As Italy cannot go to war without money, it is assumed that Italy is not planning an offensive.