865.4061 Motion Pictures/72: Telegram

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

424. My telegram No. 413, October 10, 4 p.m.33 While regulations to govern the importation of motion picture films and the exportation of film earnings are still not officially announced, the information of local representatives of American companies is that the regulations under contemplation by the Government are substantially as outlined in my telegram of October 10. The most important features of the plan, according to their information, are that only 16,000,000 lire in total can be exported during the coming year for imported pictures, that within this sum each company will be assigned a quota of the money it can export and of the number of films that it can import, and that earnings in excess of the allocations will not be allowed to be transferred nor will they be allowed to be credited to foreign producers. The previously proposed requirements, that the normal volume of film importations must be maintained and that the earnings in excess of amounts allocated for exportation must be invested in Italian film production, are abandoned.

American representatives, however, declare that even with the reported changes it will be difficult if not impossible for them to continue business in Italy; and Charles Pettijohn, representing Motion Picture [Page 368] Producers and Distributors of America, Incorporated, has informed me that the American companies in order to exist and further trade in Italy must insist

that the distributors be allowed to import the number of films they require for their individual needs in Italy,
that the amount of foreign currency set aside for motion pictures be carefully considered in view of the fact that they are not a luxury, in other words that the classification of luxury should not apply,
that the distributors cannot under any circumstances bind themselves on behalf of their producers not to establish credits for any monies owing to New York in excess of the sum finally allocated for exportation, and such funds should not be restricted in any way other than the normal currency restrictions which may apply to the exportation of such sums (see my despatch No. 31, October 15th).

L. L. Lawrence, Metro-Goldwyn-Mayer representative from Paris, has later added that all of the representatives of American films in Rome agree that to the foregoing requirements there should be added that funds allotted for exportation shall not be less than sums exported in 1934 and that companies should not be obliged individually or as an industry to commit themselves regarding their future policy.

These demands obviously go far beyond the scope of the Department’s protest contained in the Department’s memorandum dated August 31, and telegram No. 133 of October 10 [9].

Please instruct.

Inform Commerce.

  1. Not printed.