800.51 W 89 Italy/41: Telegram

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

[Paraphrase]

101. (1) On August 4 the Italian Ambassador spoke with me regarding a note verbale which he had handed to me a short time ago1b and which detailed at considerable length Italian financial difficulties. He gave me at the same time the substance of messages received from Mussolini expressing a desire to borrow money in this country for industrial development and stabilization of the Italian exchange. Answering his inquiry about the attitude of the United States Government toward such loans, I stated that the position of this Government had not changed; that the informal Italian proposal of which an outline was supplied in the Department’s telegram No. 81, July l,2 did not contain a basis for negotiations, as I had already told him; and that we could not view financing of this sort with favor until the Italian Government made a suitable debt-funding proposal. The Ambassador intimated also that when he returned from Italy, possibly in September, an Italian commission would be able to undertake negotiations.

(2) The Department of State has been consulted about projected loans to the Italian State Railways and to the cities of Naples and Rome, and the reply has been that this financing could not be regarded favorably while the Government of Italy had not taken suitable steps toward a debt settlement.

(3) This material is strictly confidential and for your personal information only. It is not desired that you take any action in this regard at the present time.

Kellogg
  1. Note verbale dated July 27; not printed.
  2. Not printed.