711.652/110: Telegram

The Chargé in Italy (Reed) to the Secretary of State

425. Department’s instruction No. 163, August 9. At a full meeting of the Italian Commercial Treaty Commission yesterday, at which Commercial Attaché and I were present, Giannini handed me a memorandum replying to the Embassy’s memorandum which accompanied our counterproposals. The memorandum and Giannini’s explanatory comments thereon are in effect substantially as follows:

Article 1, paragraph 1. The Italian Government agrees to eliminate mention of agricultural and maritime work. With respect to Department’s inquiry regarding construction of words “local law”, it is stated that this term is intended to mean the law applicable territorially (that is, throughout Italy but not in the colonies) and consequently as far as concerns Italy the term refers to the Italian laws and in the United States to the laws in force in the individual states as well as the federal laws.

With respect to the professions which can be exercised in Italy, it is pointed out that Italian legislation prohibits foreigners from engaging in the professions of notary, lawyer, procurator and accountant. Italian legislation permits, but only on a reciprocal basis, the exercise by foreigners of medical and agricultural professions as well as those of engineer, architect, chemist, land surveyor and industrial expert.

No particular observations are made with regard to the other paragraphs of this article and the memorandum states in conclusion that “Italy accepts the draft of article 1 except for the limitation qualifying the most-favored-nation clause as Italy cannot admit that such clause apply only to favors subsequent to the conclusion of the treaty, and the phrase proposed by the United States is contrary to the application which has hitherto been made of the clause in question which, moreover, by its very nature does not permit of a different application”.

Articles 2 and 3 are accepted without change.

Article 4, paragraph 1. The word “procuratori” is the Italian equivalent of the English phrase “those acting for them”. Giannini explained that there was no other suitable equivalent of this phrase in the Italian language. This article and article 5 are accepted without change.

Article 6. The Italian observations regarding this article read textually as follows:

“The text proposed by the American Government cannot be accepted by the Italian Government because it adheres exclusively to the law of the United States. Respecting the previous Italian proposal [Page 457] it is observed that that proposal relates to the provision of the Italian law which in certain cases requires the citizen naturalized foreigner to perform military obligations. In case the American Government should not wish to accept the Italian proposal thus explained it is proposed to return to the provision in article 3 of the existing treaty to be revised to read as follows:

‘Italian citizens in the United States of America and citizens of the United States in Italy shall be exempt from any obligation of military service.

They shall likewise be exempt from any requisition or service (prestazione) such as forced loans and any special extraordinary contribution imposed in time of war or because of any other exceptional circumstances.

Exception is made of charges connected with the possessing and leasing of real property as well as military services (prestazioni) and requisitions to which the nationals and citizens of the most-favored-nation may be subjected as proprietors, tenants or lessors of real property.’

In case the foregoing is not acceptable it is suggested that the article be suppressed entirely.”

Article 7. The American formula is accepted. It is pointed out in every particular that “freedom” cannot refer to “territories” but can only refer to the “high contracting parties.”

While not insisting on the point Giannini said that the Italian Government would prefer to eliminate the words “the territories of” from the first line of this article.

Articles 8 to 13 (b) inclusive are accepted without change and the Italian Government agrees to withdraw articles 13 (c) and 13 (d).

Our proposed revision of article 13 (e) is accepted. Giannini, however, said he hoped that Italian fishing vessels complying with article 12 would not be considered as excluded from the benefits of this article by the provision contained in article 19.

The Italian Government withheld article 13 (f) and accepts our revision of article 13 (g).

Articles 14 to 18 inclusive are accepted without change.

Article 19. Italy insists upon the inclusion of provision reading: “The stipulations of this treaty do not extend to the advantages now accorded or which may hereafter be accorded by Italy to countries of the Danubian basin and to Albania”.

Otherwise our counter-draft of article 19 is accepted, Giannini stating that his Government would be glad to receive as soon as possible our suggestions for the revision of the first paragraph.

In response to our request for information concerning present preferences granted by Italy which Italy desires to exempt for the application of the treaty provisions the memorandum states “since negotiations are already in progress for suppressing the preferential regimes the Italian Government considers that it would be useless to furnish the explanations requested.” Enlarging on this statement Giannini said that it was expected that practically all of the existing preferential arrangements would be done away with by January 1, [Page 458] 1938 although it was possible that some would remain in effect thereafter either in their present form or with modifications. He added that as negotiations to this end were now going on, any information which Italy might submit in response to the Department’s inquiry would probably be out of date by the time it reached the Department.

Article 20. The Italian comment on this article reads as follows: “Up to the present there has been no discussion of the extension of the treaty to the colonies. If the question is raised by the American Government it will have to be subjected to study. In every particular it should be pointed out in a preliminary way that the extension of the treaty to the colonies would have to be governed by special regulations as a full extension of the treaty to the colonies is impossible.” In explanation of this statement Giannini observed that the provisions of no general commercial treaty could be extended to the Italian colonies until after certain measures had been determined upon and put into effect. He mentioned specifically in this connection the matter of fixing import contingents for the colonies and certain restrictions applying even to the activities of Italians in the colonies which were still being studied.

Articles 21 and 22 accepted without change.

Copy of memorandum will be forwarded by tomorrow’s pouch.28

  1. The memorandum was transmitted to the Department by The Chargé in his despatch No. 579, September 24; neither printed.