The Acting Secretary of State to the Ambassador in Italy (Kirk)
552. The Department refers to the statement made in your 425 of February 15, 3 p.m.,43 attributed to Petroleum Adviser West that the Italian Government has not abandoned notions of a strong government-controlled oil policy. It would be of considerable concern to [Page 1309] the Department if it were felt that the Italian Government were contemplating the pursuit after the war of policies with respect to the oil business similar to those which it followed during the decade preceding the war.
In the note contained in the Department’s 263 of February 10, 1 a.m. it was made clear that the Italian Government would be expected at the appropriate time to restore the petroleum properties that were taken from American nationals and Italian concerns owned by American nationals. It is obvious that the restitution of these properties will have little significance and will be of only limited value unless the companies are permitted to compete under fair conditions in the Italian market.
The Department believes that it would be useful if in the near future you would discuss with the Prime Minister44 and such other ministers as you see fit, the policies and actions outlined below. However, before you take this initiative, we would appreciate receiving your views regarding the contents of this telegram and the most appropriate time to raise them with the Italian Government. The points to be made are the following:
- —In producing, refining and distributing operations in Italian territory nationals should be granted treatment as favorable in all respects as that granted to the nationals of any other country.
- —If imports into Italian territory of either crude petroleum or refined products are licensed or restricted by quotas, or are otherwise limited, American nationals, and local companies owned or controlled by American nationals, should be granted a share of the total permitted to be imported proportionate to the share which they enjoyed in some representative base period.
- —The Italian Government’s right to enter directly into the oil business of course is recognized, but you should point out the disadvantages of that course particularly in the situation that will prevail in Italy after the war. The private oil industry, in production, refining and distribution, can offer to consumers benefits from extensive operations and long experience which it would appear doubtful that Italian enterprises could match without substantial protection. The participation of the Italian Government in the oil business would therefore create a competitive position which would offer a continuous temptation to the Government to resort to the arbitrary practices which characterized the operation of the Government’s petroleum enterprises under Fascism. A repetition of such a situation would be disadvantageous to Italian consumers and harmful to Italian-American commercial relations.
- —If the Italian Government should retain an interest in AGIP and ANIC after the war, these bodies should not be permitted to resort to the arbitrary practices in which they formerly indulged. [Page 1310] Concerns in which the Italian Government is interested should not be given preferred treatment in ordinary commercial transactions over enterprises owned or controlled by American nationals.
In general, you should point out that it would be to the long-term advantage of the Italian people as well as of the Italian Government for Italy to adopt as objectives the policies set forth above.