865.4061 Motion Pictures/101: Telegram

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

549. Department’s 189, December 22, 2 p.m. Positive assurances were received from the Foreign Office last night to the effect that American companies would be free to make whatever disposal in Italy they desire of the funds subject only to the control of the National Institute of Foreign Exchange. It was explained that this meant that the companies would not be required to spend any amount in excess unless they so desire but would be free to deposit the funds in a bank in a strong box or invest them in any way in Italy.

With regard to the second assumption insofar as the Italian Government is concerned relations between the American companies and the Italian companies are a matter of concern to the companies themselves—in other words save for the authorization by the Government of the export of 20,000,000 lire the Government takes no cognizance of the arrangements entered into between the companies regarding the proceeds received from the sale of films. Nor does the Italian Government object to the funds being placed at the disposal of the American companies by the Italian companies according to arrangements worked out between American principals and their local agencies subject only to the necessary measure of control of the National Institute of Foreign Exchange.

Through an informal understanding between the Embassy and the Director of the Theatre Federation it was arranged that the representative of the American Motion Picture Producers and Distributors would be given an opportunity to discuss the allotment of the funds and quotas remaining unassigned and I am expecting him to arrive in Rome next week for this purpose.

May I consider the negotiations now terminated and so inform the Foreign Office.