800.6363/2–545: Telegram

The Acting Secretary of State to the Ambassador in Italy (Kirk)

263. The Department approves the procedure recommended in your 315 of 3 p.m. February 5,39 that the note be submitted direct to the Italian Government with information copy to the AC. We have agreed with the British representatives here the text quoted below, which they have referred to London with the recommendation that it be accepted and that the British Embassy Rome be instructed to take action parallel with yours. You are requested to coordinate your action with that of the British Embassy.

The change foreshadowed in the Department’s 151 of 4 p.m. January 26 concerned the following paragraph in the original statement contained in your 1021 of 4 p.m. December 22.39

“In addition it should be a matter of record that the cession of the direct holdings in the petroleum industry of the Italian Government may very probably be an integer among other claims for reparation.”

This paragraph was omitted from the revised text sent to you in the Department’s 108 of 2 p.m. January 19. Subsequently we learned that it was still included in the text as approved by the Foreign Office.

The Department considers that in a matter involving a question of policy such as is dealt with in this paragraph it is most desirable that no grounds be given to the Italian Government for believing that the American and British viewpoints might not be similar. We consider it desirable that the British and American notes should be as similar as possible. Accordingly the Department has prepared a substitute for the above paragraph, with which it is hoped that London will agree. The new paragraph is the fifth in the following text.

The note is quoted below in full. A few modifications have been made in the text as sent in our 108 in order to take account of verbal changes suggested by the British which you sent in your 99 of 6 p.m. January 12.39

“In connection with the decree giving legal status to CIP my Government desires to place on the record certain broad aims with respect to the petroleum policy of the Italian Government.

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It will be recognized by the Italian Government that the injuries done in petroleum operations in Italy to nationals of the United States and the United Kingdom constitute a general problem which will ultimately have to be dealt with. Before the war preferential treatment was received by AGIP and ANIC as compared with that given the petroleum enterprises controlled by Allied nationals, and during the war, serious injury has been inflicted on these enterprises. As the settlement of this problem may require a considerable period, it is the desire of the United States Government that in the meantime the conduct of petroleum affairs in Italy should be such that the interests of American nationals will not be further prejudiced.

Your Government must also recognize that American petroleum interests in Italy have suffered grave damages, and that at the proper time some satisfactory recompense must be made. Meanwhile, no actions which might tend to complicate further the position of American nationals in the petroleum industry in Italy should be taken or be permitted by the Italian Government.

In particular the petroleum properties and rights formerly belonging to American nationals, or to enterprises in which American nationals were interested, which were confiscated by the Italian Government should not be disposed of to private concerns or individuals. The policies and actions of the Italian Government should be such as to facilitate the return at the earliest possible moment of the properties to the companies from which they were confiscated, including the rights and other intangible assets of the companies and the competitive opportunities which they enjoyed.

In addition it should be a matter of record that in the ultimate settlement the Italian Government may be required to cede or liquidate various state-owned or controlled properties and assets in order to provide compensation to Allied nationals for damages suffered growing out of the war declared by Italy against the United States. As the petroleum properties and assets which belonged to the Italian Government prior to the confiscation of the American properties may be included among the holdings that will be required for this purpose, no action should be taken by the Italian Government pending the settlement which might result in dissipating these assets or in rendering more difficult their possible mobilization and transfer. This statement is made without prejudice to the claims of American nationals to just compensation for damage and injury suffered, whether sustained before or after the promulgation of the decree legalizing the CIP.

The points set forth above have little to do with petroleum operations currently conducted in Italy but in anticipation of the proper time for their consideration it is believed appropriate to place them upon the record now so as to avoid future misunderstandings.”

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