611.653/101: Telegram

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

211. Department’s telegram No. 42, May 24, 7 p.m. I communicated substance of your telegram to Ciano on May 26. He did not appear to be interested in the least, admitting frankly that he knew nothing about the subject. I therefore instructed the Commercial Attaché to see the Minister of Foreign Trade and Exchange and to hand him a copy of the aide-mémoire which I had furnished Ciano. This Livengood did yesterday and has submitted the following report of his conversation with Guarnieri.27

“Professor Guarnieri after reading the paper carefully asked me to thank the Ambassador for his courtesy which he much appreciated. He characterized as ‘Very useful’ the exposition which showed that in connection with the question of possible countervailing duties no policy of singling out Italy was involved. He added that a telegram was being sent the Italian Embassy in Washington. Italy would have no objections to investigations being made by the United States Treasury Department regarding Italy’s aids to exportation.

Referring to silk he said that while Italy paid a guaranteed price on cocoons in order to sustain the industry, the Italian exporters sold abroad at world market prices not at dumping prices. He said that knowing thoroughly as he did Italy’s export practices he could declare from the depths of his own conscience that Italy was not exporting anything to the United States at dumping prices.

He said that he regretted that at a time when conditions were as difficult as they are at present new complications might be presented by the United States, a country which he remarked was understood to be either contemplating or practicing a policy of giving what amounted to export bounties on wheat and cotton.

Before any action is taken by the United States in the matter of imposing countervailing duties he said Italy’s situation and result which would have to follow should be thoughtfully considered. He continued in substantially the following words: ‘If it is made impossible for us to export to the United States I must say with all frankness that we shall not be able to admit American merchandise and our position will be such that we shall not be able to continue to pay credits due to the United States—credits which up to now we have been scrupulously paying, whatever the sacrifices involved’.

‘Italy values very highly its trade relations with the United States’ he said. He was the only person he added who knew the full extent of the sacrifices which had been made to meet Italy’s obligations to [Page 637] that country. It had been hoped that an accord for improving trade relations between the two countries would become possible.

Continuing, he said that if the American officials would put themselves in his position they would see that he could not import from the United States unless he had means for payment, and this he could not have without exporting—exporting at world prices; for, he repeated ‘Italy is not exporting at dumping prices’.

At the close of the conversation he said again that he was glad that the aide-mémoire had been furnished, that it was very useful and that there would be no objection to investigations of the Treasury Department.”

  1. Felice Guarnieri, Italian Under Secretary for Foreign Trade and Exchange.