765.84/2606: Telegram
The Ambassador in Italy (Long) to the Secretary of State
[Received November 18—9:45 a.m.]
843. Your 195, November 5, 4 p.m. There has been apparent these last few days a different attitude on the part of the Italian Government and Italian people toward America and Americans. As yet it is not definite nor hostile but the reaction against America is apt to be strong.
The activity of the American Government preventing trade with either belligerent is being construed here as placing the United States in the same general category with sanctionist countries. It is quite possible there will be retaliatory action of some kind.
In that connection I suggest for your careful consideration that an inquiry be made into possible large scale dealings on the New York Stock Exchange and even on the Grain and Cotton Exchanges for the account of the Italian Government but disguised. According to the more likely estimates securities abroad owned by Italian citizens may reach in value $166,000,000. Control of these securities has been assumed by the Italian Government. Probably 70 per cent of them [Page 821] are physically in the United States. They could be used for marginal purposes on the rising market. The stocks so margined could be dumped, the securities themselves dumped and the whole account sold short in an attempt to upset the market in retaliation. Incidentally they might pay for their war.
I have no basis for this thought other than my knowledge of these leaders and their methods and a suggestion which appeared in an Italian newspaper that the Government’s holdings of French rentes might be thrown on the market as a counter sanction measure.