Memorandum of Conversation, by the Adviser on International Economic Affairs (Feis)

Participants: Signor Giuseppe Cosmelli, Counselor of the Italian Embassy
Mr. Feis
Mr. Stinebower22

Mr. Cosmelli, Counselor of the Italian Embassy, called upon me. He began this talk in a rather confused and embarrassed fashion, stating that his Ambassador had discussed the question of our proposed countervailing duty action with the Secretary of State yesterday afternoon, and that he wished to refer to that conversation. He stated that the Embassy here had prepared for the Ambassador a brief statement which it had considered solely for his own use and not for presentation to the Department, but that it apparently had been used as a memorandum. He said that he was under the impression that this memorandum may have given a somewhat over emphatic and blunt form to the ideas and thoughts of his Government, and that the Secretary of State may have received an unnecessarily unfavorable impression. At the same time, he stated there was no doubt but that his Government was very much moved by the report of the intended action.

I replied that I had not yet been informed by the Secretary of State of the conversation. The Counselor summarized it for me, particularly as regards the statements of his Government as to the way in which it would regard the imposition of countervailing duties and the possible retaliatory actions that it might take. He added that his Government denied that its practices were in contravention of Section 303.

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I said that the Treasury had informed us that after careful examination it had come to the inescapable conclusion that Italian practices would create a subsidy within the meaning of Section 303. Its ordinary practice, as provided in the law, would have been immediately to impose the necessary countervailing duties. I explained we had prevailed upon the Treasury to permit us to give the Italian Government this advance notification period. If nothing were agreed upon in the course of it I said I could see no alternative to the imposition of the duties in view of the mandatory character of the law.

I suggested, however, if the Italian Government was disposed to see whether some solution were not possible, the practicable thing to do would be for representatives of the Italian Embassy to enter into discussion with the proper Treasury officials. I presume that in such discussions the Italian representatives would lay before the Treasury their assertions that there is no basis for Treasury action. If Treasury officials were convinced, the matter would naturally come to an end; or, it might turn out in the course of such conversations the Treasury officials would be able to explain more fully to the representatives of the Italian Government the reasons and facts which in Treasury judgment made its findings necessary, in which case the Italian Government might be able to revise its procedures. I said that entering into such discussions seemed to me the only alternative to having the matter develop into immediate action.

Mr. Cosmelli agreed, saying at the same time he would naturally have to discuss the matter with the Ambassador before entering into such discussions. He also explained that ordinarily this work would be handled by the Commercial Attaché but since the Commercial Attaché was in New York, he had stepped into the breach. I stated that if the Italian representatives wish to enter into such discussions with the Treasury, the Department would be glad to arrange the initial meeting.

The discussion then turned back again upon the details of the procedures which were in question. Mr. Stinebower joined us and after explaining that this matter was one which Treasury officials could alone adequately explain to him, we had some talk as to the nature of the practices which the Treasury had given as the basis for their position. The Counselor said that as regards the products outside of silk goods, it seemed to him as though the Treasury were acting on assumption rather than on knowledge and that it was his judgment that before such action was taken, actual proof should be in hand. I again replied that the full knowledge of the details was a matter for the Treasury to explain and that I could not undertake to do so.

  1. Leroy D. Stinebower of the Office of the Adviser on International Economic Affairs.