611.6531/421: Telegram
The Ambassador in Italy (Phillips) to the Secretary of State
[Received August 8—5:40 p.m.]
196. The Acting Commercial Attaché21 called on the Minister of Foreign Trade and Exchange last Saturday to discuss difficulties encountered in obtaining permits to import United States merchandise under the provisions of the temporary commercial arrangement of December 16, 1937. Guarnieri22 took the occasion to make certain observations on the general subject of Italian-American trade stating that he was talking in a friendly and frank way and not attempting any diplomatic exchange of views. The more significant of his statements are reported by Hooper to be substantially as follows:
“You Americans and your Government must get it into your heads that either we mutually assist each other or there can be no talk of a commercial agreement. I repeat what I have said many times: either you make it possible for us to pay for imports from your country by importing from us, and your existing tariff system be handled with greater vision and comprehension of our difficulties—or there will be no importation. We refuse to import unless we can pay and we refuse to be placed in a position of inferiority.” (Professor Guarnieri repeated the phrase “we refuse to be placed in a position of inferiority” in an emphatic manner.) He said: “Italy is today a country whose loyalty cannot and shall not be questioned. We pay to the last cent for all we import and that is our system—but we must export. When that is made impossible there will be no issuance of import permits for any of the commodities listed which we have so carefully and [Page 573] painstakingly prepared. We can and we shall have to import from elsewhere. There is no other solution to this problem.”
Professor Guarnieri then referred to the visit of Mr. Grady of the Tariff Commission and stated that he had very plainly set forth Italy’s earnest and ardent desire to reach a fair and impartial commercial agreement with the United States. He said that evidently what he had said, and continues to say, is not taken at its face value. He again emphasized that Italy would stand by the hard and fast axiom: importation and exportation, not merely importation.
Continuing, Professor Guarnieri stated:
“We have had in our house the unwelcome presence of United States Treasury agents and other federal officials for more than 18 months. Knowing the American law in this connection I have had to house these representatives. I do not want them. We never dream of sending our treasury or customs officials to the United States, either requesting or making it a hard and fast rule that they be given access to all accounts and books of any company. We now have hats, tomato paste, and cheese the subject of an inquiry which should have lasted 15 days dragging on for a period of 18 months. It is unheard of. A condemned man is informed that he will meet his end in 24 hours; well and good, he could expect nothing more: but if that 24 hours is protracted over as many months the condemned man is no longer such—he is a tortured man. I do not mean to say that we are tortured but (with emphasis) we are in an unnecessary predicament caused by an unwelcome inquiry. It has ruinously affected some of our staple exports and manufacturers are asking us where to turn and what to do in connection with the United States. (Again with emphasis) That is a situation which cannot be permitted to continue. We would be the first to break down all barriers which impede friendly and fecund relations if others would do the same.”
When Guarnieri had finished speaking the Acting Commercial Attaché brought to his attention the fact that certain importers had reported that they had received no import permits for United States merchandise during the second quarter of this year. Guarnieri answered “that is perfectly true. I have refused to issue or cause to be issued, certain permits and I shall continue to hold up permits for all commodities unless a decision is reached in connection with the long drawn out customs inquiry which is being conducted in the United States.”
Hooper states that there was nothing in Guarnieri’s statements or manner to indicate whether he was in possession of the information furnished Suvich by the Department as mentioned in the Department’s telegram No. 73, July 26, 7 p.m.23