Foreign Relations of the United States Diplomatic Papers, 1936, General, British Commonwealth, Volume I

800.51W89 Italy/299

Memorandum of Press Conference, November 13, 1936

November 13, 1936

[Extract]

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War Debts

A correspondent enquired whether the question has been brought up of the possible settlement of the Italian war debt, with a view toward lending by this Government or by private interests perhaps of additional sums to Italy. The Acting Secretary replied that off the record, so far as the State Department is concerned, it has been heard that the Italians may be trying to borrow money on short term loans privately in New York, but that the State Department has nothing to do with it. A correspondent enquired whether this is not forbidden by the Johnson Act. The Acting Secretary replied that the Johnson Act was a pretty broad act forbidding the floatation in this country of bonds of foreign governments, which defaulted on their payments to this Government, but that shortly after the Act was passed the Attorney General issued a lengthy opinion⁵¹ stating how far short term commercial credits might be considered not within the purview of that Act.

A correspondent said there was a story out at Geneva to the effect that Italy was hoping to agree to settle the war debt in return for a very favorable trade relationship. The Acting Secretary replied that he had heard nothing of that sort. With reference to lending money to the Italians, a correspondent asked whether the bankers did not first have to ask the advice of the State Department before making any decision. The Acting Secretary replied that in former times persons thinking of facilitating loans in this country or having financial transactions with other governments did come to the State Department and get information as to whether the Department objected or not. He said that the attitude of the Department was denounced in Congress and that since this Administration had taken office there had been nothing of the sort. The Department has not undertaken to say it does or does not object.

51. May 5, 1934; 37 Op. Atty. Gen. 506. See also letter of April 23, 1934, from the Secretary of State to the Attorney General, Foreign Relations, 1934, vol. i, p. 528.