711.652/126: Telegram

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

180. Your 487 and 488, November 24, and 489, November 26. We are very much gratified that the Italian Government has stated that preferences heretofore accorded will be abolished in respect of all countries except Austria as of December 31, 1937, and has supplied full information with respect to preferences which will be granted after January 1, 1938. We suggest that all information made available to you regarding preferences be transmitted by cable.

In view of your telegrams above referred to and of the disposition of the Italian Government now to furnish the data on preferences, we see no reason why the discussions on the commercial treaty should not proceed with a view to signing the treaty at the earliest possible moment that full agreement on all points is obtained.

The following major points still require agreement or clarification:

The use of the Sovereign’s title in the preamble.
Article 6 relating to military service.
Article 8. For purposes of clarity and to ensure a common understanding we plan to submit to Italian Government a memorandum defining our understanding of the meaning of provisions of Article 8.
Article 19. The safeguarding clause to protect the right to act under neutrality legislation.
Article 20 relating to the territorial application of the treaty.

A further telegram of instructions upon all unsettled points will be sent you within a day or two.

Since it will be obviously impossible to exchange ratifications by December 15th, a provisional arrangement to provide for most-favored-nation treatment of commerce will be necessary. We hope to send you a telegram tomorrow proposing the text of such an arrangement.