865.4061 Motion Pictures/93a: Telegram

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

186. The following message just received from Mr. Hays for the Ambassador:

“Replying your cable. Companies now in joint session and giving careful consideration to situation and your suggestions. As to point 1 we call your attention to the fact that in the resolution of Federation of August 1936 they provided for import of 250 American pictures. This would indicate their recognition of our need for some such number. We believe safe if number were fixed at 250 and might possibly scale that in trading to 200 pictures imported. If this were done believe possible to compromise on 20 million guaranteed export. As to point 3 would need right to use residue in manner of our choice with no restrictions as to what it is invested in there and only restricted by the normal currency restrictions which apply to the exportation of money. The 20 million guarantee should not be used as the basis for any allocation of the number of films to be imported as this amount actually bears no relation to the number of pictures imported. It would be very desirable if the allocation of pictures between the companies could be made here instead of there to insure larger satisfaction of all parties involved here, including American companies whose product is distributed by Italian licensee. Further, very desirable that the allocation of the 20 million be made here and not there between the companies as by that method larger satisfaction likewise obtained and this would be fairly done to all companies including the American [Page 374] licensors of the Italian companies. Quite desirable for this type of satisfaction be obtained to enable us here to bring greatest amount of cooperation with Italian industry which they desire and which will be useful in further negotiation with them on everything. All greatly appreciate your preferred attention this matter.”