611.6531/130

The Italian Embassy to the Department of State11

[Translation]12

Memorandum

It has been noted with particular satisfaction, from the Aide-Mémoire of September 29 last, which the Government of the United [Page 596] States was good enough to transmit to the Royal Italian Ambassador at Washington, that the American Government is fully conscious of the difficulties to which Italy is subjected by the present unfavorable condition of her balance of trade and of the necessity which confronts the Italian Government of giving careful consideration to this condition in the adjustment of its commercial relations with foreign countries.

For its own part the Italian Government willingly concedes that the principles enunciated by the Government of the United States in points 1, 2 and 3 of the Aide-Mémoire hereinbefore mentioned are well grounded, and that in normal circumstances, or at least in circumstances not too far removed from normal, it would be proper to bear them always in mind. Unfortunately, however, the situation now existing in international commercial relations is quite abnormal and Italy, which until recently has exercised every possible effort to maintain unchanged her traditional trade policy, based on the greatest freedom in exchange of goods, is now obliged by necessity to attenuate this policy. In fact many of the countries with which Italy maintains commercial relations,—relations even of outstanding importance,—have followed a policy successively and with increasing frequency of adopting various measures such as direct restrictions on importations, currency measures, limitations on transfers, etc., which have resulted in a contraction in Italian exports, and hence have increased the burden of her unfavorable trade balance.

The natural consequence of such a situation is the intensification of the unfavorable Italian balance of trade as a whole, a lack of balance that can no longer be endured and has accordingly made it necessary for Italy to find means to relieve the situation by having recourse when necessary to measures from which, as a matter of fact, it would have very much preferred to refrain.

From this it follows that notwithstanding the best intentions Italy could in no case renounce her aim of seeking a better adjustment of her trade balance within such limits as are necessary for this purpose. Consequently she cannot abandon her idea of making an effort toward a proper adjustment in the interchange of goods, including interchange with the United States which, so far as Italy is concerned, shows the greatest unfavorable balance. This is all the more true since it is not possible, for considerations entirely independent of her own will, for Italy to give to those movements of trade that naturally would turn to certain countries all the development of which they might be susceptible, and seek thus to achieve a natural equilibrium. This does not mean, however, that the Italian Government is not giving consideration to the possibility of increasing Italian-American trade. On the [Page 597] contrary it would be very happy, as it has previously declared, if there were any possibility of accomplishing this result by the proposed negotiations without however departing from the premises set forth above.

The Royal Government agrees with the Government of the United States that, as regards tourist traffic ocean freights, remittances from emigrants, and the payment of pensions, the importance of these items should neither be over-estimated nor under-estimated. The Royal Government, however, must observe that items—and some of them in particular—that were of marked importance in the past have now been reduced, so far, at least, as Italy is concerned, to negligible figures and that to bring these factors into the discussions would seem to require an examination of other like questions;—for example, the purchase of goods in third countries, the equivalent of which is, to a greater or lesser extent, not destined to remain within those countries themselves (for example, purchases of copper in Chile).

In regard to the assurances desired by the United States Government that during the discussions the Italian Government will not adopt any measures that might constitute discrimination against American trade in comparison with the trade of other countries, the Italian Government believes it opportune to recall that it has never adopted measures that can be included in such a category, nor does it now apply regulations restricting importation except in cases of unavoidable national necessity, and for such cases it can not but reserve to itself that liberty of action that is necessary in these circumstances. It does not hesitate to declare, however, that in the application of such regulations it will always endeavor to give the greatest consideration in an effort to reconcile Italian interests with those of the United States.

Such being the case, the Italian Government holds itself in readiness to initiate trade negotiations with the United States and desires to observe that there is no objection on its part to an announcement that the two Governments are in agreement that the discussions may take place.

As to the date on which the discussions will be opened, it is understood that agreement will be reached by the two Governments.

  1. Transmitted to the Department by the Italian Ambassador as enclosure to his covering note of December 13, 1934.
  2. Notation on file translation: “Official translation as checked by Amb. Rosso. P[ierrepont] M[offat].”