800.51W89 Italy/286: Telegram

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

107. My 106, April 14, 7 p.m. I discussed the subject with Mussolini this afternoon. He called in Suvich. The three of us discussed the general proposal that Italy pay an undetermined amount but less than the sum to be due June 15 including arrears. The general understanding was that Italy was considering an offer of an undetermined amount in lieu of the total amount, the payment of which would be accepted as settlement in full for the amount due up to the date mentioned. Thereafter, discussions would take place for a new settlement agreement. Upon payment of that amount, if it was accepted by the United States Government, Italy’s situation would be regularized and she would be able to enter into financial negotiations with private bankers in America with the idea of floating loans there. Mussolini expressed his intense interest and said he considered the subject of the matter of very great importance. He had not had time to give it proper attention because of affairs in Europe and Africa transpiring in the last few weeks. He now had time to consider it and thought the matter most important. He said it would be practically impossible for him to borrow money from either England or France because of the political conditions which those Governments would attempt to attach to any loan and that he would not compromise himself with political conditions. He hoped that his efforts to regularize his position with the United States would meet with the sympathetic understanding by the American Government [Page 594] and that they would realize that the transfer problem was one of his principal concerns. He realized that the purchase of the villa would help in a way but would not be a great help and wondered if there was any other way in which we could help him with the transfer problem. He made no definite commitment but I have little doubt that within the next 10 days or 2 weeks he will make, either through the Embassy here or through his Embassy in Washington, some kind of a proposal. He would like to regularize his position not only because it would establish better relations between Italy and America but because [it] would solve some of his problems. In my conversation with him, I emphasized the advantages that would accrue to Italy and definitely abstained from making any plea for payment. I placed the matter entirely upon the grounds of Italy’s just debts to the United States calling attention to the advantages that would accrue to Italy if they could arrange the matter.

I plan to leave Rome tomorrow but the state of my health is somewhat precarious and I may not be able to catch the Washington Thursday. There will be nothing more to report on this, however, in the immediate future.