Britain and Italy; The Strange Story of Britain's attempts to buy aeroplanes from Fascist Italy
Sometimes truth can be stranger than fiction. The story of how the RAF could have fought the Battle of Britain in Italian airplanes has been told in the past but is possibly known only to a few aircraft enthusiasts. Iiii was last told a few years ago and probably deserves a new outing , with some added details. It almost reads like an Eric Ambler novel, but it is all true – although it might have been embellished in some of the previous telling. Here from British and Italian sources is more or less the whole story. It neatly illustrates one of those lessons from negotiation skills courses, identify the ultimate buyer , since if you do not get them onside the negotiation is going to fail.
Following the Munich Agreement in October 1938, the British embarked on a massive program of rearmament and modernization ready for war. This included plans to purchase planes abroad. The French needed their own planes, so this left the British with two potential sources of supply, the United States and former World War One ally, Italy. Since Mussolini had come to power relations between Britain and Italy had not also been at their best, especially since the Italian invasion of Abyssinia, However, British Prime Minister Neville Chamberlain had done his best to keep Italy from falling too far into the German camp and prided himself on his good relationship with Mussolini. In January 1939, the British began to sound out the Italians on the possibilities of a considerable arms purchase. Surprisingly these negotiations continued almost until the Italians declared war on Britain and France on 10 June 1940.
Chamberlain and Foreign Secretary Lord Halifax visited Rome in January 1939, to talk to Mussolini. 1939. The British did not go to Italy to negotiate anything in particular-, they had almost invited themselves- their main aim was to iron out a few remaining areas of contention and to talk to the Italians. After a long journey by train from Paris continuously interrupted by welcome greetings, the British finally arrived in Rome, in time for a 5.45pm meeting with Mussolini at the Palazzo Venezia. The other diplomats stayed outside while Chamberlain and Halifax were ushered into the Sala Mappamundo. According to his son -in-law and Foreign Minister, Count Ciano Mussolini was not impressed by his British guests.
“These men are not made of the same stuff as the Francis Drakes and the other magnificent adventurers who created the empire. These after all, are the tired sons of a long line of rich men and they will lose their empire”.
While in Rome, Chamberlain met the King of Italy , the British were taken to see a display of Fascist gymnastics, a celebration of Italian Minerals , the Opera and to various receptions. They met the Pope and met with Mussolini a couple of further times before departing. At least they had tried to make the Italians feel loved and wanted.
In January 1939 the British needed planes and the Italians needed cash. Although the Italians had signed the Pact of Steel with Germany and Japan, the British remained hopeful that much as they had abandoned the Triple Alliance and come over to the Allied side in 1915, the Italians might eventually join the Allies against Germany. Despite , the mutual friendship between Hitler and Mussolini , the Italians remained fearful that the Third Reich now bordered them on the Brenner pass and of what their intentions were. The British and Italians had a mutual interest in doing a deal for armaments.
One man stood to gain the most from putting the deal together and making it sure it did not collapse, Conte Caproni. In 1908, Caproni founded a factory in the Taliedo district of Milan, to manufacture biplanes., the following year he opened an industrial airport near the Cascina Malpensa to manufacture and test his aircraft. In 1910, he designed and built his first powered aircraft, the Caproni Ca. 1, an experimental biplane which was the first aircraft built in Italy. It was destroyed during its first flight on May 27, the same year. In 1911, the year his company was named Società de Agostini e Caproni, and switched to monoplane construction, which was greater success. After Italy entered World War I in 1915, Caproni devoted his efforts to designing and constructing bombers. Following the war, Caproni was an early proponent of the development of passenger aircraft, and developed a variant of the Ca.4 bomber into the Ca.48 airliner. During the Interwar period , he devoted most of his effort to the design and production of bombers and light transport aircraft, During this period, his company became Società Italiana Caproni, a major conglomerate which purchased other manufacturers, creating subsidiaries which included Caproni Bergamasca and Caproni Vizzola, purchased the Officine Reggiane, where it began aircraft production in the 1930s and the Milanese automobile and engine manufacturer Isotta Fraschini.
Conte Caproni
It is not clear who made the initial contacts between Caproni and the British. Caproni had a commercial office in London in Piccadilly , Caproni Agency Corporation (London)) Limited , the Chairman was Philip Grantham Yorke, the 9th Earl of Hardwicke., the Managing Director was a former Italian racing driver and wheeler dealer, Edgardo Fronteras. Apparently born in Naples in 1899, he had served as an officer in the First World War. Sometime in the 1920s , Fronteras seems to have turned up in London. , claiming to be a racing driver with connections to the Maserati brothers. Records indicate that Fronteras did race cars in the UK at least for a short period. He is recorded as having participated at Brookland’s , the Tourist Trophy in Belfast and the Irish GP in Phoenix Park driving Alfa Romeo, Maserati or OM as an independent. He never seems to have finished higher than 12th position and several times “Did Not Finish”. Despite his lack of success, Fronteras participation in the British Motor Racing scene probably gave him entry to a certain milieu and allowed him to further his British contacts.
Some still remaining parts of the Caproni factory in Milan
In January 1939, Caproni sought permission from the Italian Air Ministry for a British delegation to visit the Caproni factory at Taliedo in Milan. The Italians approved a British delegation of four for the visit consisting of Hardwicke , Francis Rennell Rodd, Wing commander J Casperi and Squadron Leader D’Atcheley. There are apparently no RAF records indicating Wing Commander Casperi ( or any close name) , D’Atcheley was probably Squadron Leader David Francis William D’Atcheley of the Air Staff. Apparently two other Britons were refused visas The British delegation visited Italy for two days specifically to investigate the Caproni’s plane the Ca. 310.
The Caproni Ca. 310 which interested the British
In 1937 , the Chief of General Staff of the Italian Air Force, General Giuseppe Valle, had persuaded the main aeronautical companies, SIAI, Caproni, CRDA, Macchi, Breda and Piaggio, together with the Isotta-Fraschini and Alfa Romeo engine manufacturers to form a consortium to coordinate their activities to avoid internal competition . Consorzio Italiano Esportazioni Aeronautiche , which took care of publicity activities and initial contacts, delegating the management of the advanced stage of the negotiations and the finalization of the contracts to the individual companies. The final decision on whether to proceed with a contract rested with the Ministry of the Air Force, which also took economic return of about 20% of the price increases of the material exported compared to that sold in Italy. Between 1937 and 1940, 1,645 aircraft were exported by the Italians compared to 280 in the previous three years, but this market success was short lived , and served to consolidate the tendency to keep existing planes in production rather than innovate. An increase in exports, could not compensate for the decrease in government orders, and the attempt to expand the production, without technical and operational guidelines, only served to exacerbate a situation in which the bad quality products were accompanied by excessive variety and absence of mass production. Initially Italian export efforts were directed towards Europe, particularly towards Bulgaria and Hungary, and to nascent Air Forces in South America, supported by the presence of influential Italian communities. Later export attempts concerned the Middle East, (Saudi Arabia and Iraq) and Afghanistan , exploiting a growing unease with British hegemony in the region, China and later Japan. In the early 1930s, the Italians had developed particularly warm relations with the Nationalist Chinese Government , to the extent of creating a Sino- Italian aircraft assembly and manufacturing plant. In view of the developing situation in Europe, negotiations with Belgium ,France and Scandinavian counties commenced. On the downside , the Consorzio Italiano Esportazioni Aeronautiche, by putting all the plane manufacturers together prevented the identification of national "champions" with the greatest chances of export success. Production quality often did not live up to expectations, and there was a lack of attention to logistical support or after sales service, two problems accentuated by the tendency to offer potential buyers types of aircraft that were outdated, if not even out of production or had not been adopted by the Regia Aeronautica.
The ex Caproni Factory in Milan
There was a conflict of interest between the Ministry of Foreign Affairs, who wanted to strengthen the sphere of Italian influence, and the Ministry of Exchanges and Currencies, who saw foreign sales mainly a source of hard currency. The burden of export support ended up with the Ministry of Aeronautics, which was forced to give precedence to foreign orders over its own, to acquire the aircraft subject to non-finalized foreign orders and to bear the costs of the 15 military aeronautical export missions between 1933 and 1939. In this rather chaotic context, by the second half the 1930s, Caproni Companies represented 25% of the Italian domestic production of aircraft and 50% of the export market. There was intense competition in the Italian domestic market and Caproni was struggling to get orders from the Regia Aeronautica especially for the Ca. 310. The Italians made a small order of 16 planes sent to the Legione Aviazione fighting on the Nationalist side in the Spanish Civil War . Orders were also concluded with Yugoslavia, Hungary and Norway and Peru. The Norwegian contract was part of a barter invoking salted codfish for planes. In any case the Norwegians weren’t happy with the first delivery and refused to take the rest of the order forcing Caproni to offer them instead the improved Ca. 312. Small orders in Eastern Europe or South America were one thing, what Caproni really needed was big orders which meant the French or British Air Forces. The British had already had dealings with the Caproni Group. The British ship builder Vosper had purchased Isotta Fraschini engines for the use in its new Motor Torpedo Boat ( MTB) design the MTB1. They were now willing to talk to Caproni about aircraft as well.
So in January 1939, the British delegation arrived to visit the Caproni factory at Taliedo in Milan, specifically to investigate the Ca.310. The Ca. 310 “ Libeccio”. had performed well in the Raduno Sahariano in February 1938, an air race held in Libya, where the plane had taken five out of the top six places in a grueling circuit of 3440 km from Ghades- Brak-Cufra -Bengasi-Tripoli. Although the British seemed very interested in the Ca.310 as a potential trainer matters then when quiet for several months.
More of the Caproni factory
After the German invasion of Poland in 1939, the British discovered a sudden sense of urgency for the negotiations, but by then matters had become more complicated. The Italians were determined to stay out of the war and the British treated them as a neutral state, This was the source of a lot of bad feeling as the British attempted to prevent contraband reaching Germany through neutral states, involving the need to search Italian shipping in the Mediterranean , something that intensely irritated the Italians. Italy’s big problem was its lack of natural resources, especially coal and coal figured largely in discussions. Italian industry was cursed by the lack of domestic coal reserves, which included small deposits in Sardinia and Istria, Although, they had substantial hydro-electric resources , which allowed widespread and early rail electrification, industries like Iron and Steel needed coal. The two biggest coal exporters in Europe were Britain and Germany. In the years before sanctions were introduced following Italy’s invasion of Abyssinia, the UK had supplied on an average over fifty percent, by value of Italy's coal imports: By the time of the so-called Easter Accords in 1938, when the British had basically ditched the Abyssinians and sought a rapprochement with Italy this had fallen to around 29 percent, the difference of course being picked up by Germany. .Italy’s coal imports from Germany came mainly by sea , of the eight million tons imported from Germany in 1937, about two million tons were sent by rail through Switzerland , four million tons were shipped from Rotterdam, and the remainder from other (mainly German) ports.
Following the outbreak of the war , Italy had to rely on ships flying neutral flags for shipping the coal, which, in view of the British plans for chartering most excess neutral tonnage, would probably mean ships flying the Italian flag only, the Italians thus faced a great fear of their vital coal supplies being interrupted. British imports from Italy were mainly foodstuffs (fruits, fresh and canned vegetables, cheese), artificial fibres and wool yarns (largely produced from imported raw materials), hemp, and sulphur. Germany also took a large percentage of most of these commodities: 37% of citrus fruits ; 58% of other fruits, 75% of hemp, 44% of silk, and 43% of nuts. In addition to coal, Germany supplied Italy with machinery (amounting in 1938 to 68% by value of Italy's total imports ), 48% of wood , iron and 38% of steel, and 22% of chemical wood-pulp Of these German supplies only the coal could conveniently be supplied by the Allies. Overall Italy relied on Germany for some 27% of her imports against 14% from the Allies, while Germany took 19% of Italian exports, compared with 14%, taken by the Allies. Although the Italians maintained secrecy regarding the position of the German-Italian clearing account, the British Embassy learned on good authority in September that German indebtedness to Italy amounted to nearly 2,000 million lire (approximately £27 millions). Even if this figure was exaggerated Italy did not want further debts with Berlin.
Sir Percy Loraine, His Britannic Majesty's Ambassador to Rome
The war began with Italy neither an all-out friend nor an all-out enemy of the British. The line taken by the British Government was based on the Foreign Office assumption, which the War Cabinet accepted, that there was potential that Italy could be induced to join the war on the Allied side. Sir Percy Loraine summed up British policy:
It was therefore the policy of His Majesty's Government, while fully safeguarding their belligerent rights, neither to seek nor to provoke a conflict with Italy, and to use all honourable means of amicable negotiation, not only for the solution of such difficulties as might arise, but also for the adjustment to mutual advantage of the eco- nomic relations between the two countries which war conditions were bound to unsettle.
Senator Amadeo Giannini, director-general of economic affairs at the Ministero degli Affari Esteri who was in London in September, led the British to understand that Mussolini had been 'beside himself with rage' at Hitler's attack on Poland, he had now “done with Heir Hitler for good”, and that Italian policy was to keep out of trouble and to trade as much as possible with England and France. Giannini stated that Italy expected to be treated 'firmly as a neutral, advised against too much official negotiation on war trade and blockade matters' and hinted that British orders for purchases in Italy would be given preference over German.
The British were fortunate that in September 1939, a rather more forceful figure joined British Ministry of Economic Warfare and more or less took over trade relations with Italy, Francis Fennel Rodd. Rodd knew Italy well. He had spent some of his formative years in Rome, where from 1908 his father had been British ambassador to Italy and had been instrumental in persuading the Italians to join the war on the Allied side in May 1915. Educated partly at Eton and partly during stays in Weimar and Geneva, by the time Rodd went up to Balliol college, he was fluent in French, German and Italian. In the First World War he had served with the Royal Field Artillery on the Western Front before transferring to the British Military Mission in Italy in 1916. In 1917, the opportunity had arisen for an Italian interpreter to join a British mission to Libya and he had seized that opportunity. After this foray into the Libyan desert Rodd had served as a liaison officer with the -Italian Detachment in Palestine. Post-war Rodd had entered the Foreign Office and then the Bank of England. In the late 1920s, the Bank had sent him to Italy to sort out the collapse of the Banca Italo- Britannico during which time he had met Mussolini, He then worked as a partner in the Merchant Bank Morgan Grenfell. Seconded to the Ministry of Economic Warfare at the start of the war, it was natural that with his Italian background and language skills, Rodd would end up taking a prominent role in Italian matters.
In September at a Foreign Office meeting Rodd representing the Ministry of Economic Warfare proposed that Britain should try and gain leverage over Italy through becoming its main supplier of coal. The plan was that Britain would purchase products like aircraft engines and spare parts from Italy and with the profits, the Italians would buy British Coal. The Chancellor of the Exchequer reported to the War Cabinet, that the Ministry of Supply would be able to make purchases of around £3 million from Italy ( including fuses, instruments, Sulphur, hides, machine tools an anti-aircraft equipment if was considered suitable ), the Ministry of Food was committed to purchasing around £690, 000 of lemons, The Admiralty was already contracted to purchasing the Isotta engines for the MTBs and the Air Ministry was having difficulty in formulating its requirements without knowing what the Italians had to offer. The Air Ministry favoured sending a technical mission to -Italy to investigate further, a view support by the Chancellor. In return the British would increase coal production to guarantee a supply to the Italians. Preferably although this was to be paid for through the Anglo- Italian clearing account. The policy was agreed at the War Cabinet on 8 September. Sir Percy Loraine recently appointed British Ambassador to Rome would work with Rodd in opening the negotiations. Other key players were to be Edward Playfair of HM Treasury and Richard Nosworthy, Commercial Counselor at the Embassy in Rome.
In October , the British delegation went to Rome and on 7 October, Rodd met with Giannini who was enthusiastic for the British plans. Rodd then spent ten days in Rome. It was somewhat of a homecoming for Rodd, whilst in Rome, he was able to say in the same wing of the British Embassy in Porta Pia that his family had lived in from 1908 onwards. On his return Rodd composed a Memorandum to the Foreign Secretary with his conclusions.
“Any purchase we can make of war material from the Italians, especially from existing stocks , even if we do not really want them , would be worth doing in order to ensure ourselves against the possibility of Italy coming in on the side of Germany”
Giannini suggested to Rodd the creation of an Anglo-Italian Standing Committee, to deal with commercial questions. A draft agreement submitted by the Italians authorized the setting up of a permanent Anglo-Italian Economic Committee within one month. The committee would consist of British and Italian government commissions having power to co-opt experts to supervise the working of existing economic agreements between the countries and to adapt them to existing circumstances. The committee's further function would be that of 'adopting whatever measures are necessary to facilitate and improve maritime and railway traffic between the two states and in general to adopt all measures which in any way may serve to improve economic collaboration. Initially Rodd chaired the commission , but given its importance in December 1939, the Master of the Rolls, Sir Wilfred Greene was appointed permanent chair . A man of formidable intellect , Greene was a Barrister-at-Law, graduate from Christ Church, Oxford and a Captain in the 2/1st Battalion, Oxfordshire and Buckinghamshire Light Infantry in the war, where had gained the Military Cross. He now began shuttle diplomacy between London and Rome.
Edward Playfair from HM Treasury was given a key role in sorting out difficulties over the Anglo-Italian clearing account. The coal sub-account was about six weeks in arrears and British coal exporters were threatening to stop delivery of coal to Italy unless the clearing continued to receive sufficient sterling, which had decreased since the outbreak of war. An immediate stoppage was only avoided when the Export Credits Guarantee Department guaranteed 100 per cent, of the shipments for one month instead of the normal seventy-five per cent. Worse the Italians were asking for payment for purchases then being negotiated (e.g. Isotta engines) to be made in US dollars and were refusing to allow payment through the Clearing. The difficulty regarding the coal situation was explained to Italy, who agreed on 26th September to accept payment for fifty per cent, of the engines through the clearing, but demanded the remainder in free sterling. To further complicate matters , the French were already negotiating the purchase of tanks, wagons, locomotives, mercury, and hemp in Italy. The French proposed that purchases in Italy should take place through the French Mission in London rather than in Rome, to prevent separate negotiations by Britain and France from turning into an auction.
On his return to Britain, Rodd reported back favorably to the Foreign Secretary, Lord Halifax. Rodd was conscious that in all these negotiations, the British were treading a fine line on Italian neutrality. If Italy were seen to side too much with the Allies it risked German reprisals, too far towards Germany and it risked Allied reprisals. It was therefore essential not to antagonize the Germans. Rodd also argued that the British press needed to start drawing a distinction between Italian Fascism and German Nazism , just in case an agreement was reached with Italy. The British purchasing program developed slowly.
On 12 October the British were asked to send experts to Rome at once to make arrangements for the purchase of hemp. Of the 50,000 tons available France wanted 20,000 tons and Germany was trying to purchase 42,000 tons. Italy was willing to sell to the United Kingdom and was studying the use of Italian ships sent for coal to carry hemp. An Italian offer of the aircraft material was also conveyed to the Air Ministry on 11 October. Unfortunately, the hemp experts did not arrive in Rome until 30 October, during the delay the Italians were persuaded by the German commercial mission, headed by Dr. Clodius, to sell most of the hemp surplus to Germany instead. On 22 October, Sir Percy Loraine was informed of the decision of the War Cabinet to send representatives of the Air Ministry and Ministry of Food to Rome to negotiate purchases, but they had still not arrived by 7 November. The French Government had already concluded a contract for the purchase of aircraft, and other contracts were under discussion for the purchase of aircraft by the Yugoslav, Finnish, and Netherlands Governments. The British risked missing the opportunity of purchasing planes they much needed and were losing a valuable bargaining weapon in the negotiations over contraband control. The Italians were also getting irritated by the British slowness in investigating complaints about contraband procedures.
If the British were represented by a collection of Eton and Oxford old boys, in Fascist Italy, the British found themselves dealing with some rather dubious interlocutors. Among them Raffaello Riccardi . president of the National Institute for Foreign Exchange and Commissioner of the Fascist National Institute for Foreign Trade. A war veteran, he joined the nascent Fascist movement, and had been a prominent leader of the Fascist "squads “in the Marche implicated in the torture and murder of Communist activist Giuseppe Valenti. Sentenced to four months and fifteen days in prison for the murder of Valenti, Riccardi was freed by an amnesty In 1939 he published a memoir Pagine Squadriste, in which he recalled numerous episodes of political violence of which he had been the protagonist, writing:
"Violence is the midwife of the revolution, in whose hands the new order is born (...) The great ascensional parables that peoples build and launch beyond their own destiny are illuminated by the blood that generated them. I believe in violence; and to it I attribute thaumaturgical faculties. Violence is, in the political life of a people, what the crisis is in its economic life: the corrective par excellence”.
Riccardi’s political rise was accompanied by considerable enrichment, and at the beginning of the 1930s he was involved in a series of government inquiries into a number of enterprises in Pesaro, executives of these companies exploited them for the purpose of personal enrichment, in a dense network of abuses and irregularities. In November 1939, at Riccardi’s instigation the Italians opened a Trade Office in London headed by Prospero Gianferrari : Gianferrari studied Engineering of the University of Padua and volunteered for the Alpine Arditi, during WW1 in which he was wounded and captured. Between 1924 and 1929 he held various Fascist party roles , before in 1928 becoming managing director and general manager of Alfa Romeo[ and from 1933 to 1945 technical general manager of the Isotta Fraschini. From 1931 to 1945 he was also president of the Gruppo Costruttori Aeronautici Italiani.
On 20 November the British finally advised the Italians in writing of the various categories and quantities of materials required. Since the activities of the French purchasing commission in Rome, were concerning the Germans it was decided that it might be safer to continue the negotiations through Gianferrari in London and the embassy staff in Rome. Italy was given an assurance that the British Government would be prepared to spend in Italy not less than £20 million (exclusive of freights) in the twelve months to 31 December 1940. An aide-memoire was handed to the Italian Foreign minister Count Ciano on 16 December outlining the British proposals. It said that the British Government desired to place large orders with Italy, but as the conclusion of individual contracts would take some time it was announcing its general plan for 1940 so the Italian authorities could forecast the purchases they wanted to make in the United Kingdom and the Commonwealth (excluding Canada) . This was, of course, on condition that the prices were reasonable; that the goods, and in particular the manufactured goods, corresponded to the British requirements; and that the dates of delivery were acceptable. The aide-memoire also referred to Italian coal supplies. Pending the conclusion of arrangements to make not less than eight million tons of British coal available to Italy, Great Britain would not seize sea-borne German coal exports to Italy. Ciano did not raise any objection to the proposal and with regard to the aide-memoire said that he would submit the matter to Mussolini.
Giangaleazzo Ciano, Mussolini's son in Law and Foreign minister
On 17 December, Ciano told Sir Percy Loraine that he had shown the document to the Duce, who accepted it as a basis for negotiation. As part of the overall trade deal , in December 1939, the Earl of Hardwicke informed Caproni that the British now intended to buy 200 Ca. 310s and 300 Ca,313s , even if the Ca313 was still in prototype form .The Earl returned to Italy with the long delayed Air Ministry mission, consisting of Wing Commander H N Thornton representing the Air Ministry , together with two test pilots Gray and Barnett . The latter was Squadron Leader Dennis Barnett of the RAF (his presence is confirmed in RAF records). This time the visit lasted two weeks, visiting the various Caproni plants to fly the Ca. 310 and Ca 311 .The were also interested in looking at the Re. 2000 fighter.
The Re. 2000 was another plane, which Caproni had failed to sell to the Regia Aeronautica. In 1938, the Ministero dell’ aeronautica in Rome launched Programme R, a comprehensive programme of improvements, both qualitative and qualitative, throughout the force- including the adoption of new fighter. Several aircraft under consideration had already reached the prototype phase of development, only one aircraft, designated as the Re 2000 by Reggiane, was intentionally designed with the intention of competing for orders under Programme R. Work commenced at Reggiane on the new fighter design in 1938; the company's design team, headed by Roberto Longhi and Antonio Alessio, set out to design an aircraft that would not only meet but exceed the requirements of Programme R. The company considered various options, including manufacturing an American-developed fighter aircraft under license, however, under the influence of Caproni, a completely new design was rapidly prepared. The design team were inspired by the American fighter Seversky P-35, which Re.2000 superficially resembled; Refinement of the Re 2000's aerodynamic characteristics greatly benefitted from a series of wind tunnel tests held at the Caproni facility in Taliedo.
The resemblance to the Seversky P-35 might have been more than coincidental . Roberto Longhi had spent time in the United States working in the aircraft industry. A native of Bergamo , Longhi obtained his degree in mechanical engineering at the Milan Polytechnic. in 1926 he moved to the USA., working at the Bellanca Aircraft Corporation and then the Curtiss-Wright Corporation where on aeronautical engines. He remained in the USA until December 1935, when he took a leave of absence for health reasons and returned to Bergamo , accepting a position at the technical office of the Caproni Aeronautica Bergamasca directed by the engineer Cesare Pallavicino. In April 1937, with his wife still living in New Jersey , Longhi resigned from Caproni and returned to the United States. . In July 1937 he suggested, to Caproni to purchase the production license for one of the two most advanced American fighters, the Curtiss P-36 Hawk or the Seversky P-35. In November 1937, engineer Antonio Alessio, deputy general manager of Reggiane, arrived in New York on the ocean liner Rex which was followed by Fidia Piattelli, deputy head of the Technical Studies Office and Caproni patents. They proposed that Longhi return to Italy and build a modern monoplane fighter aircraft entirely built in metal, guaranteeing him that he could form his own design office. There have been insinuations that there may have been some covert agreement with the Italians over the P35 . The Seversky aircraft corporation was struggling at the time and Seversky who , who held many of the innovative patents was removed from his position at the company after a controversial deal to sell P-35s to the Imperial Japanese Navy. In any case the Italians would have been able to access considerable technical information during their trip to the USA. Back in Italy again, Longhi assumed the position of Head of Experimental Workshop at the Reggiane plant in Reggio Emilia and began working on the project of for the Reggiane Re.2000 . The problems immediately began, as both Dural and Alclad two light alloys used for the P-35, were not available in Italy, and a self-sufficient derivative called Chitonal had to be made, at the Montecatini factories. For the engine, they chose the new Piaggio P.XI RC.40 which could deliver 1,000 hp.
The Re.2000 which the British Royal Air Force was interested in buying
On 24 May 1939, the prototype Re 2000 made its maiden flight at Reggio Emilia, flown by Caproni test pilot Mario De Bernardi. A World War 1 fighter ace, de Bernardi had raced seaplanes in international races winning the Schneider Trophy race at Hampton Roads in 1926 in a Macchi M.39 and setting a world record. In 1931, he became a consultant to Caproni and Chief Test Pilot. De Bernardi’s tests demonstrated the plane's favourable flying attitude, good speed and high manoeuvrability. Only minor modifications were required after the successful completion of the initial factory flight test programme; including changes to the exhaust, lengthening of the carburettor air intake, and the replacement of the round windshield with a framed counterpart. Following the completion of armament trials at Furbara, Santa Marinella, in August 1939, the prototype was delivered to the Experimental Establishment of the Regia Aeronautica at Guidonia Montecello to commence formal evaluation. During trials at Guidonia in late 1939, the prototype was able to attain a speed of 518 km/h at an altitude of 5,250m and demonstrated an 11,500 m altitude ceiling. Throughout the test flights, the aircraft showed excellent performance levels, on several occasions, demonstrating the ability to perform better than other fighters in production. In mock dogfights, it could successfully fight not only the slower Fiat CR 42 biplane, but even the more modern Macchi C 200 and Messerschmitt Bf 109E. However, an unfavourable technical report of the prototype was also produced by the Directorate of Aeronautical Construction of the Air Ministry criticising the integral fuel tanks within the wings as highly vulnerable and prone to leaks, as well as being difficult to manufacture. The negative conclusions of the technical report directly led to an initial order for 12 pre-production aircraft being cancelled. The Italian government authorised Reggiane to promote sales to international customers, the company decided to proceed with the production of the 188 fighters that had been cancelled as a private venture so that immediate delivery could be offered to foreign customers. A potential British order was an eyewatering opportunity. At the end of the British visit, Thornton told Conte Caproni that the Air Ministry would proceed with an order, inviting representatives of Caproni to visit Britain to finalize the details.
More of the Re.2000
During long negotiations, the British subsequently fixed on 100 Ca,311 and the same number of Ca,313s. On 26 January, the contract was approved by the British Air Ministry, with an order for 400 planes worth 26,375,000 dollars. The order was subject to satisfactory flight tests and Caproni agreeing to honour the supply of spare parts. The company had already sold 200 Ca313s to the French The British also expressed interest in purchasing 300 Reggiane Re2000 fighters from Caproni . A Caproni delegation led by Fronteras went to Harrogate in Yorkshire (where the Air Ministry had temporarily relocated) for a series of meetings led again by Squadron Leader Neville Raby Buckle.
Despite these positive signs, by the end of 1939 the only purchases which had been firmly concluded were the Admiralty purchase of Isotta engines and sulphur. and mercury purchases by the Ministry of Supply. The Germans were still competing for Italian hemp, and the Italians wanted assurance of compensating supplies of jute from India before coming to terms over hemp with Great Britain. By the beginning of January 1940 the British were prepared to increase the offer of guaranteed expenditure on purchases in Italy to £25 million, but this decision had not yet been communicated to the Italians. On 18 January 1940, Squadron Leader Buckle travelled to Italy as a civilian with his passport showing him as civil engineer, to put together the fine details of the deal and to seek assurances that the contract would be honoured whatever position the Germans took. He was also to study a way of getting the disassembled planes by rail across the border to Istres in France, where they could be reassembled and flown to Britain. Despite all the precautions, and the secrecy with which the negotiations between France, Britain and Italy were carried out, German intelligence found out and told their Italian counterparts. At that point the Ministero dell Aeronautica was forced to tell the Germans officially what was going on and asked whether they had any objection to the contracts being honoured. Initially the Germans did not object.
Sir Wilfred Greene, the Master of the Rolls, who negotiated with the Italians
In January 1940, Sir Wilfred Greene, went to Rome to carry on further negotiations The War cabinet noted ( CAB 65/5 19 January ) that “ our trade negotiations with the Italian Government had reached a difficult phase. The Master of the Rolls would arrive back in London later that day, and more information would then be available.” Sir Percy Loraine was advising that the situation arising out of these economic problems had now assumed a political aspect. The Italians were, in effect, asking for assurance in regard to the destinations of imports which we wished to control, and wanted to accept exports of vegetables and fruit in exchange for coal. Sir Percy Loraine advised that, if we did not accept their proposals, the result might be a general quarrel, with a Press campaign against this country, to the advantage to Germany. So the British ended up agreeing to purchase the agricultural produce that they did not really want. On 23 January , Greene returned to London and submitted his report on the position of trade negotiations with the Italian Government. He made it clear, in discussions with the Foreign Secretary and the Minister for Economic Warfare , that, in his view, the British ought to go some way further toward s meeting the Italian demands or risk a considerable deterioration in relations with Italy . The Cabinet's decided that it would authorize the sale of coal to Italy at prices equivalent to those paid by British consumers in the United Kingdom. In order to provide sterling to pay for this coal as well as for raw materials from the sterling areas for Italian use, it was prepared to place orders for the goods which had been under discussion for some months past, up to at least £20 million. It was prepared if necessary to purchase in addition up to £5 million worth of agricultural produce, although Greene should begin by offering £3 million; it would not, however (in deference to American feelings), buy apples. All these purchasing proposals were, however, dependent on the supply of aircraft, guns, and other equipment under discussion since November. So the whole range of problems with Italy — contraband control, purchases and sales, coal, shipping, and horticultural purchases — was covered by a single scheme. The financial problem was also involved, as the exchanges contemplated would have necessitated a new clearing agreement. At some point , the British also added guns to their shopping list. These are referred to as Breda guns or sometimes more specifically as Breda 47mm guns. In 1926 , the industrial conglomerate Ernesto Breda S.p.A. set up a factory in Brescia for the manufacture of automatic defence weapons as the sixth section of the Società Italiana Ernesto Breda per Costruzioni Meccaniche. The Brescia plant employed up to 5800 workers. The Breda Cannone da 47/32 mod. 1935 was both an infantry gun and an anti-tank gun at which it was effective against light to medium armoured tanks.
Loraine delivered the British proposals in a memorandum to Ciano on 3 February who received them favourably. He seemed anxious for a settlement; and promised to send the memorandum to Mussolini, who was absent from Rome, and even offered, if necessary, to visit the Duce by air. Ciano realized that the scheme must be taken as a whole, and would fall through unless Italy were willing to sell Great Britain armaments and aircraft; he also realized that, if the agreement failed, German shipments of coal to Italy would be stopped. After congratulating Caproni on the deal on 8 February Mussolini almost immediately reneged on it. It appears that the British might have overplayed their hand by requesting the purchase of guns Ciano told Sir Percy Loraine that Mussolini was not prepared to discuss the question of the sale of weapons of war to Great Britain for at least six months. The decision was, he said, due to fear of “'misunderstandings” with Germany' and Italy's own need of modern armaments. Ciano now seemed resigned to the imminent stoppage of German seaborne coal exports to Italy; he said that Mussolini had had fair warning. He admitted that the British contraband control 'was being operated in a friendly spirit towards Italy'. Strangely the veto was said to refer only to Great Britain and not to France, and there were mysterious reports from Rome that the veto would be lifted on 15 February. This coincided with the date on which the German mission was expected to leave. The dismay of Giannini, Pietromarchi and Masi at Mussolini's rejection of the scheme also led to the hope that he might be persuaded to reconsider his decision. His failure to bother himself about details or about expert opinion made it more or less clear from the start that his decision was due to political considerations alone. The situation remained confused , on 12 February . the War Cabinet heard that the Italians were unwilling to discuss the sale of arms to the UK and then from the Secretary of War that British tests of Italian planes in Italy were scheduled for that day. Pietromarchi revealed that the veto on the sale of war material to Britain included all aircraft, bombs, ammunition, guns, T.N.T., and scientific instruments, and also the Isotta Fraschini engines. It transpired later that Mussolini had been under the impression that the engines were aircraft engines, and he subsequently withdrew the veto on these. When the embassy completed its enquiries as to which purchases had or had not been disallowed , it found that the permissible purchases under negotiation would fall short by between £6 and £8 million of the sum required by Italy to cover purchases from the sterling area. This estimate assumed that the Italians would be allowed to purchase the 8-3 million tons of coal at the preferential price. The sum also provided for merchant shipbuilding contracts in Italy, which might not materialize. The net result was that there would not be enough sterling to pay for even 5.3 million tons of coal already contracted for and certainly not for he 8.3 million tons needed by Italy after stoppage of German exports. The coal sub-account would thus fall into still greater arrears. There was genuine disappointment among the (state-controlled) suppliers and the Italian Government departments at Mussolini's decision, not due only to economic considerations. The Italians (not excluding Mussolini) seem to have appreciated the candour and goodwill with which the British had conducted the negotiations and although there did not appear at this stage any positive Italian belief in a German victory, fear of Germany was obviously a dominating factor, with the additional consideration (in vetoing the armament sales) that Italy might need the armaments herself. This point was of particular importance in connection with the Breda guns, so short were the Italians of artillery that with the Spanish Civil War over , they had started asking the victorious Spanish Nationalists to give them some of their guns back. The aircraft were less problematic, having already been rejected by the Regia Aeronautica.
The mixed messages continued. Sir Wilfred Greene returned to Rome and on 14 February reported that prospects were still good for the Trade Agreement, while on 16 February Sir Percy Loraine was telegraphing that there seemed to be no prospect of Mussolini withdrawing his veto. On 17 February the War Cabinet was told that the Trade Agreement had collapsed, although Greene was still convinced that leading Italian industrialists might still be able to sway matters in Britain’s favour. Things took an ominous term when the Von Ribbentrop suddenly tuned up in Rome at the beginning of March 1940. Sources advised the British that the meetings had not gone to the German’s satisfaction and that Hitler had proposed a personal meeting with Mussolini, The War Cabinet was also receiving reports from the Ambassador to the Holy See that the Germans were now proposing to supply the Italians with coal overland through Austria ( and presumably Switzerland). On 19 March, Hitler and Mussolini met at the Brenner Pass and reports reaching London suggested that nothing had changed in the Anglo Italian relationship as a result.
Sir Percy Loraine remained optimistic thar things were still going well for the British in Italy and that there remained considerable pro-Allied sentiments, the Italians being well disposed to the British put fearing German strength. With the most to lose financially , Caproni had not given up on his lucrative British deal , he was still talking to the British and Sir Percy thought that Mussolini might be persuaded to ratify the aircraft deal if the contract for the sale of guns was removed and that he had always felt less strongly about the sale of the aircraft. The French were also still trying to make arrangements with the Italians and on 22 March the War Cabinet heard that these were being supplied through a Portuguese Company Sociedad Aeroportuguesa . While the Italians were not accepting new contracts , they seemed willing to honour existing ones . It might still be possible for the Ministry of Supply to make purchases from Italy through this route. The plan was to disassemble the planes , crate them up and ship them by rail to France, where they would be reassembled and flown to Portugal as Civil aircraft.
Sir Wilfred Greene returned to Rome on 20 May, with Playfair and J. W. Nicholls. On 23 May he issued a statement announcing an interim relaxation of the contraband control. The British had received an intimation from the Italian embassy that the Italia Line, which included almost all ships trading with the Americas, had given instructions that goods for which navicerts had been refused were not to be loaded in the company's ships, that every effort should be made to ensure that all goods loaded would be covered by navicerts, and that any goods not so covered by the time the ship left port should be held back on arrival in Italy while information about them was telegraphed by the company's agent at the port of loading and considered in London. Greene informed the Italians that, in the confident expectation that all other shipping lines who have not already concluded agreements will agree to follow suit, instructions had been issued that for the time being Italian ships entering the Mediterranean would not be stopped except for identification, and those plying within the Mediterranean would be subject to identification but not diversion. This did not, however, apply to ships calling voluntarily at Allied ports. Signor Alessandrini had already been appointed by Italy as head of a new office in New York to deal with applications for navicerts. Greene's announcement pleased the Italians, who declared it to be a 'great step forward', but that it 'did not sufficiently clarify the situation with regard to cargoes'. Pietromarchi complained about the working of the navicert system and wished to modify the arrangement made by the Italia Line, which was only an emergency measure. He then asserted that the arrangement had been made under a mistake.
Hugh Dalton, the British Minister for Economic Warfare
Meanwhile , following the British and French failure to prevent the German occupation of Norway, Winston Churchill had become Prime Minister and he appointed the Labor politician Hugh Dalton as Minister of Economic Warfare, so Dalton inherited responsibility for the Blockade and the ongoing negotiations with the Italians. Dalton had fought alongside the Italians with a British Artillery Battery in the Great War, he spoke Italian and had even back in 1932, met Mussolini. Dalton was by no means convinced on the former policy towards Italy, He started to wonder why the Trade Deal had broken down in February. He did not buy into the story about the whole dealing collapsing because of Mussolini’s passion for the Breda guns. Subsequently he says that Sir Percy Loraine told him that the reason was that as far back as February, Mussolini had refused to betray his German ally and that was that. Loraine also blamed the lack of Foreign Office Control over the various British ministries party to the arrangement.
Greene persevered with the Italians throughout May, but by then time was running out. Progress was not helped by Ciano’s disappearance on a trip to Albania between 22nd and 25th, where the Italians were stirring up Albanian nationalists to intervene in Kosovo. Apparently he was touched by the Albanians gratitude to the Italians for teaching them to have two meals a day and that the population was looking a lot better fed in those days. While Greene was still Rome, a substantial Japanese Trade Delegation arrived in Rome, to cement as deal which had stated with an Italian Trade delegation to Italy in 1938. The Japanese had given effusive welcome in Rome by Ciano, where they met the King-Emperor, Mussolini and the Pope. Thanks to the Italians recognising their puppet regime in Manchukuo, the Japanese were some of the few to recognise the Italian King as also Emperor of Ethiopia. On 30 March 1940, the Italians had endeared themselves further to the Japanese by recognising the Reorganised National Government of China in Nanjing. Even the Germans had not done that . As mentioned above , the Italians had previously had particularly warm relations with the Nationalist Government of China, who had by then been firmly ditched. The former Italian Allies Britain and France might have swapped notes with the Chinese. On 30 May, the Italians ceased all negotiations with the British. Ciano informed the ambassador that "the two young gentlemen from London ( Nicholls and Playfair) could go home as soon as they wished, as “ Signor Mussolini had no intention of concluding any further agreements with His Majesty's Government", Playfair and Nichols went to make their farewells to Giannini, Masi, and Pietromarchi. who seemed convinced that the breaking off of negotiations was on H.M.G’s instructions. They seemed surprised and genuinely upset than they were told that really it was the reverse. What few apart from Ciano, were party too was that on the same day, Mussolini had communicated to Hitler that the Italians would enter the war on 5 June ( it was later postponed to the 10th).
In London, Hugh Dalton summoned the Italian Ambassador, Bastianini to the Ministry of Economic Warfare to ask him what was going on. According to Dalton, Bastianini appeared stunned that negotiations had broken down. He had thought he was being summoned to be congratulated on their successful conclusion. In Dalton’s view, Bastianini was either a very good actor or had not a clue what was going on in Rome. It was possibly the latter since Mussolini and Ciano were playing pretty tight on their discussions with Hitler. On 2 June, Dalton started to get firm. Ships with war materiel were heading for Italy, either for the Italians or to go to Germany, by that time it did not really matter. Hoe ordered them stopped/ . The pretence of Contraband Control was no longer necessary. The Cabinet agreed however, Lord Halifax and the Foreign Office still equivocated. Halifax and Sir Wilfred Greene who by now was back in London, argued that stopping the Italy bound ships was unwise. Dalton’s separate legal opinion argued that stopping the ships was not an “act of war” but a reasonable measure “falling short of war” . Meanwhile four days had been lost and the ships were getting closer. The legal debate continued until on the morning of the 10th June , the British Attorney General . Lord Somervell of Harrow opined that if His Majesty’s Government expressed the view that Italy was likely to enter the war, ships carrying contraband could be treated as if Italy was already at war . At 4.45 in the afternoon in Rome, it all became academic when Ciano summoned Sir Percy Loraine to tell him that from midnight Italy would be at war with Britain and France. When the Italians declared war on France and the United Kingdom on 10 June , there was no longer any hope of pursuing even a covert deal through Portugal.
Of the 300, Re 2000 that the British would have purchased, the Italians managed to sell 60 to Sweden and 70 to Hungary, with a licence to produce 200 .Of the order for Ca.311/313 a mere five were delivered to France before hostilities started, another for 84 were delivered to Sweden. For both countries the purchase may have been more out of desperation than anything else, the Germans were convinced that the Hungarians were more like to use any planes against another German ally Romania and were refusing to sell them any, while the neutral Swedes had yet to develop their own aircraft industry and were in need of some air defence.
The British never got their Italian planes and Caproni never got his 26 million dollar order. Throughout the process, the British negotiators had failed to identify their actual buyer or decision maker. During the negotiations, they received information through the filters of Caproni , businessmen and officials with their own agendas. Caproni wanted to sell planes, the Government officials wanted foreign exchange to buy coal, or a more benign contraband regime. Ciano acted as a filter to Mussolini, putting his own spin on the proceedings. The Italian officials who negotiated were probably acting in good faith, in the dark about Mussolini’s real plan. Ciano has less excuse, he was so close to Mussolini’s intention to go to war, even if he had convinced himself otherwise. Regardless of what everybody said, Mussolini as the ultimate decision maker was committed to sticking with the Germans and when he made his mind up in February the whole deal was destined to fall apart. Dalton probably called it right that the Italians had been leading the British on , if not from the start but certainly for the last few months. In the end, the British side had its own problems , the Foreign Office Agenda was to keep Italy out of the war, the Air ministry needed planes, the Board of Trade wanted to sell coal and but food, the Ministry of Economic Warfare wanted to control contraband. Maybe there were just too many actors with different goals putting all their faith in one deal, that was almost certain to fail.
Perhaps it was all for the best, the Italian planes did not perform particularly well and the Italia entry into the war would have meant no spare parts or after sales service. Although the Hungarians used their Re2000s to quite good effect against the Soviets, they seemed to suffer a lot of technical problems and may of them seemed to have required extensive refitting and rebuilding before they could be used. Apparently the problem with the fuel tanks was never really resolved and many flew around leaking fuel. In the end the Germans gave them German aircraft instead. The British got Breda guns in the end, they captured large quantities in the Western Desert, which they and the Australians went on to use elsewhere.
On the upside when it came to bombing Italy later in the war, the RAF had pretty good knowledge of the location of all of Caproni’s factories, so those visits must have come in handy.