611.6531/410
Memorandum of Conversation, by the Assistant Secretary of State (Sayre)
| Participants: | Fulvio de Suvich, Italian Ambassador and |
| Mr. Sayre | |
| Giuseppe Cosmelli, Italian Counselor and | |
| Mr. Hamlin of EU7 also present |
The Italian Ambassador called upon me at 11:30 a.m. today by appointment at his request.
After preliminary remarks, particularly on the favorable reaction of the American press to the Trade Agreement with Czechoslovakia,8 the Ambassador said he had heard that the Italian Government had [Page 561] suggested to us that the remaining articles of the proposed commercial treaty be put into effect by means of another modus vivendi, but that this had not been found possible.
I explained in detail that we could not do this because (1) it was questionable whether it would be constitutional and (2) it was inadvisable politically. I said the only sound procedure was to continue with the treaty negotiations, which I hoped could be done.
The Ambassador then inquired about the present status of the commercial treaty negotiations. I explained that we are practically in agreement except on the preamble and the article on military service. In regard to the preamble I said we proposed a compromise which we had hoped Italy would accept, but that it had not been found possible to do so. The Ambassador replied that the preamble was part of a larger question, which might be cleared up through conversations with the British after which it might be possible to find a solution satisfactory to both parties concerning the preamble.
I asked the Ambassador if he had any news about the British conversations9 to which he replied he knew nothing special, but he was optimistic over the outcome, because there was no fundamental problem with the British.
Next the Ambassador referred to Mr. Hull’s statement of March 7, 1938 in the press about trade relations with Germany and inquired about the present status. I told him that Mr. Hull had accurately stated the situation. I added that Germany has not seen its way to accept one of the cornerstones of our policy, that of equal treatment to all nations; Germany preferred bilateral treatment, for example, as in regard to foreign exchange. In reply to a direct inquiry, I stated that the door is still open, however, to go ahead with discussions when Germany is ready to negotiate on the basis of equal treatment.
The Ambassador then brought up the matter of trade agreement negotiations with Italy. I explained that we are quite convinced that the only sound procedure is to conclude the commercial treaty first—the only real obstacle in the commercial treaty negotiations has already been overcome through agreement on Article VIII—and then go ahead with the Trade Agreement.