711.00111 Armament Control/415
Memorandum by the Chief of the Division of Western European Affairs (Dunn)
The Italian Ambassador handed me this afternoon the attached memorandum30 regarding the shipment of fuel oil contracted for by the Italian Government to be shipped from a Gulf port to an Italian port by the tanker Ulysses. As the memorandum indicates, the Naval Attaché of the Embassy received a telegram from the David C. Reid [Page 820] Company of New York stating that this “Government refuses to permit the vessel to perform the voyage.”
I checked with Mr. Phillips31 with regard to this case and explained the situation to the Ambassador, as follows: That in cases where the American Government holds mortgages on ships, it has been decided by the Shipping Board that no one in the Government is authorized to take the responsibility for risking the Government funds and investment in such ships through subjecting these vessels to the risk of trade with the belligerents under the Government’s announced policy that all trade with the belligerents is carried on at the risk of those engaging in such trade.
The Ambassador said that before reporting the development in connection with the shipment on the Ulysses he wished to inquire whether this Government was withholding permission for shipments of oil to the Italian Government. I told the Ambassador that as far as the direct action of this Government was concerned only those ships upon which the Government held mortgages or liens were involved.
The Ambassador said that he understood the situation thoroughly as thus explained and would so report to his Government.