763.72/3578½

The Ambassador in Italy (Page) to the Secretary of State

My Dear Mr. Secretary: Mrs. Heiberg, the wife of our late Military Attaché, Major Elvin R. Heiberg, is leaving Rome this evening [Page 758] with her two children, returning to Washington, and will be escorted by Mr. Roger C. Tredwell, our Consul here, who goes home on leave. Accordingly I avail myself of this opportunity to write you a confidential letter.

The internal situation here seems about the same as for some time past, except that through apprehension or through the actual sinking of merchant ships by German and Austrian submarines, the lines have been much more closely drawn of late in every way, and this has caused pressure enough to make itself felt in many new directions; for example, bread tickets have just begun to be issued here, the sale of sweets and articles which require sugar are forbidden from the first of next month; the consumption of meat is regulated, etc.

All this has naturally an effect on the spirit and temper of the people at large. So far as appears on the surface, however, everything seems to be going along as smoothly as ever; the Government appears to have everything well in hand, and it is only from whispers caught here and there that one finds the existence of the feeling that lies underneath. I would say that the people at large, partly from necessity, but mainly I think because they are really hopeful of a favorable issue of the war, are willing to undergo any reasonable sacrifices to give the ruling authorities the opportunity to carry out their plans, and have steeled themselves to the sacrifices which may be entailed by the great struggle that is expected to take place now almost immediately.

The Government was, as I telegraphed you duly,72 sustained in the Chamber on Saturday evening by a vote of confidence of 369 to 43.

The fact still stands, however, that the majority is composed of elements held together rather by not knowing what better to do than by any desire to sustain this especial Government.

The situation in Russia and the situation in France are still involved in some mystery, and their effect on Italy will only be known hereafter. For one thing, unless the situation becomes too exigent, Italy will take much pride in being able to show the world that she has a more ordered policy and a more steadfast position than some of the other Allied countries. Baron Sonnino is undoubtedly the master spirit of the Government, and has strengthened himself greatly in the public esteem by his consistent and firm policy united with the moderation of his language as compared to that of some of the other Cabinet leaders.

I am struck by a certain influence which the memory and reputation of Cavour seem to have on the procedure here and indeed on the spirit in which matters are dealt with.

[Page 759]

One of the serious elements in the present situation is the depreciation in the currency here. The exchange at present has risen to about 7.86 as against 5.18—the normal exchange. The press is full of discussion about this and all sorts of nostrums are proposed to rectify this trouble, with certain suggestions which certainly are sound if they could be adopted. Naturally these last are related to the fundamental principle of supply and demand.

One trouble is that the rise in exchange is felt throughout Italy in every class and in every direction, and the entire economic situation is affected by it, and unless relieved it may affect disastrously in time even the prosecution of the war.

Out of this situation has arisen apparently a strong desire on the part of those responsible for the future conduct of the Government to get into new relations which may aid in relieving the press existing through the other old relations, and I have had several important people interested in finance come to me to ask if some assistance could not be rendered from America in solving this serious problem. The suggestion made is that it might be found of mutual interest if Italian financiers might be brought into direct relations with American financial circles. Among those who have come to me is the head of the Bank of Italy, greatest of the Italian banks. I have told him to give me a memorandum of the whole situation, and when this is done I will be able to inform you as to what is wanted, and to learn whether what they want will probably interest America sufficiently to justify my reporting the same to you.

One result of the present situation is that Italy finds herself almost completely in the power of England, who has been mainly financing her, and who not unnaturally perhaps has taken measures which many Italians consider far more for England’s interest, at least immediate interest, than for that of Italy. In fact, there is much grumbling over England’s control of matters, of great, if not of vital importance, to Italy. An example of this was England’s recent orders against the importation of articles from abroad, which include articles of Italian production whose exportation is of great importance to Italy. For example: fruits, wine, silk, carved stone, wood, etc.

England seems—on the insistence of the Italian Government, which in turn was pressed by Sicily and Calabria who live by the sale of their fruits, to have bought up the fruit crop of Italy for distribution in France, where a part of it is as I understand to be resold, and a part given to the British soldiers. But the problem of silk and other articles still remains and causes great dissatisfaction here, and I understand in France also. In this connection it seems not [Page 760] out of place to mention a fact that was told me the other day by General Ricciotti Garibaldi.

He says that he was in London a few months back and attended a dinner at which a number of important persons were invited to meet him, and in the course of the conversation he asked how the Allies were going to pay their debts when the war was over. On this point, an Englishman, whom he spoke of as a man of great importance and wealth, worth he said about forty million dollars, said: “Why, we will make America (The United States) pay for them”. “How will you do this?” asked General Garibaldi. “Why”, said the other, “England will at the close of the war control all of the markets of the world, and if necessary we will put an ad valorem tax of 100 per cent which will have the effect of making America pay the debts.”

This is chiefly of interest to me as showing a point of view which undoubtedly is very extensively held. Happily, as I said to General Garibaldi, we are pretty good at building tariff walls ourselves if occasion demands.

I am [etc.]

Thos. Nelson Page
  1. Telegram not printed.