Memorandum by the Assistant Secretary of State (Castle)

Mr. Secretary: The Italian Ambassador, who came to see me this morning, read me a very vigorous telegram from Mr. Grandi asking him what on earth was going on in the American press on the subject of American loans to Italy. The Ambassador asked if you would not be willing, at the press conference on Monday, to reiterate the fact very strongly and clearly that this Department has not been consulted as to any recent Italian loan and that it has not refused to O. K. such a loan. You made a denial last Monday which was not printed in many papers. The continued talk which goes on seems to be based on the fact that some of the correspondents felt that your denial was with reservations. I cannot see how it could be so taken, but as it was I think it would be only fair to the Italian Government very vigorously to make a statement that these various press reports are thoroughly misleading. Martino asked me whether he could tell Grandi that you would deny these reports at the next press conference. I said that, of course, he could not telegraph any such thing as I did not know what your reaction would be, but that I should be glad to put the matter up to you, advising that a further statement be made.

W. R. Castle, Jr.