File No. 865.51/200
The Italian Ambassador ( Macchi di Cellere) to the Secretary of State
Mr. Secretary of State: As yesterday I had the pleasure of handing you some data in reference to Italy’s transportation needs, [Page 523] I feel that it may be a convenience if I were to note some features of her financial affairs.
The Italian Government, as is only too evident, are under the necessity of arranging credits in this country for such supplies as they are obliged to purchase here. The excellent condition of Italy’s finances has enabled her to obtain at home, without difficulty, all the money needed there; but the rise in the rates of foreign exchange (at times causing the lira to be worth only a little more than one-half its normal value in this market) make it almost prohibitive to transfer money to this country.
In 1916 Italy borrowed $25,000,000 in the United States through the sale of Italian Treasury notes. This loan, which matures in October next, was really an experimental one as is indicated by the amount, Italy never before having borrowed through the sale of national securities in a foreign market.
Later on, in consequence of the success of the small loan, negotiations were opened for a very large transaction, but, when they were proceeding in a most encouraging way, a public statement from the Federal Reserve Board on local investing in unsecured loans of foreign nations, suddenly put an end to all hope of obtaining necessary aid in that form, as bankers then were unwilling to consider loans excepting such as were secured by collateral. Italy having always adopted a policy of investing her resources internally was unable to meet the suggestions to furnish as security governmental, railway, industrial or other obligations issued in neutral countries.
As I intimated in a private conversation I had the pleasure of having recently with the Secretary of the Treasury, Italy will require about $300,000,000 for her most urgent purchases in the United States until next autumn. But the figures contained in the memorandum I handed to you yesterday and which I herewith send you again with additional indications of the purchase prices implied,1 show that such amount must be very materially increased in order to meet Italy’s demand for supplies up to June 30, 1918.
In view of the generous assistance so liberally offered by the American Government to the Entente Allies towards the prosecution of the common cause to ultimate victory I have felt it my duty to acquaint you with the foregoing circumstances, so that the amount of the loan of which Italy is anxious to avail herself may be agreed to upon a knowledge of her urgent requirements.
Accept [etc.]
- Not printed.↩