865.4061 Motion Pictures/84: Telegram

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

482. For Sayre. My 472, November 18, 8 p.m. Following a lengthy inter-Ministerial meeting yesterday on the film question Giannini sent me a confidential message last night to the effect that, unless we could make some definite offer of tariff compensation in return, the Italian Treasury would be unwilling to relax the restrictions it has imposed upon American films. He said that without some such corresponding compensation he could not persuade the exchange control authorities to release a larger sum for export and that no other arguments had prevailed. Will observe position taken is one of bargaining.

While I can, of course, explain that we can give no assurances in this respect it would be helpful if you would send me a statement which I could hand to Ciano and perhaps to the Duce repeating your hope of improved trade relations with Italy, the need of denunciation of the old treaty of 1871 and the negotiation of a new treaty of friendship and commerce along the lines of the draft already submitted38 and your hope of arriving at a trade agreement.

If the Department is willing to undertake preliminary exchanges for the trade agreement before the completion of the treaty it might be helpful to give this assurance.

In addition, please state why we cannot commit ourselves now to any particular tariff schedule in advance of trade agreement negotiations and conclude with a strong appeal to the Italians to dispose of the film problem in fairness and justice to American interests and thus clear the way for the cordial and cooperative relationship so necessary to place the commerce of the two countries on a mutually satisfactory basis. If, however, the authorities here maintain their position I propose to explain that negotiations for a trade agreement take months of labor and to urge a modus vivendi of 6 months or more based on their old regulations thus giving us time to negotiate the new treaty relationship.

As Mr. Will Hays is anxiously waiting for favorable action here it would be of the greatest help if the Department would send me instructions which I could use tomorrow Monday morning. There are other important reasons for quick action.39

  1. For correspondence regarding the denunciation of the Treaty of 1871 and negotiations for a new commercial treaty, see pp. 340 ff.
  2. For Department’s reply to this telegram, see telegram No. 156, November 22, 8 p.m., to the Ambassador in Italy, p. 353.