865.4061 Motion Pictures/64a
The Secretary of State to
the Chargé in Italy (Kirk)
No. 736
Washington, August 31, 1936.
Sir: Reference is made to the Department’s
telegrams Nos. 78, July 2, 8 p.m. and 107, August 8, 2 p.m.; also your
Nos. 247, July 3, noon, 309, August 3, 7 p.m., 318, August 7, 11 a.m.,
and 325, August 11, 11 a.m.,30 relating to certain new regulations whereby the
transfer abroad of proceeds for the rental of films in Italy would be
limited and any remittances above the designated amount would have to be
deposited in Italy in blocked accounts to be drawn upon only with
official authority and for utilization in investment in Italian film
products.
You are requested to make preliminary informal representations to the
Italian authorities, pointing out to them that the effect of these
[Page 361]
regulations, if applied, would
be to render virtually impossible the continued export of American films
to Italy, thereby causing grave prejudice to an important American group
doing business with Italy and constituting a serious setback in the
trade relations between Italy and the United States.
You are requested, furthermore, unless you perceive objection, to leave
the enclosed Memorandum with the Italian authorities.
Very truly yours,
For the Secretary of State:
E.
Walton Moore
[Enclosure]
The Department of
State to the Italian Foreign
Office
Memorandum
On the afternoon of August 5, 1936, the representatives of American
film distributors in Italy were informed by the Italian Theatre
Federation of new regulations whereby the transfer abroad of
proceeds from the rental of films in Italy would be limited to the
global sum of ten million lire annually and any remittances above
this amount would have to be deposited in Italy in blocked accounts
to be drawn upon only under official authorization and for
investment in Italian film products. Moreover, the distributors were
notified that of the ten million lire only eight million lire would
be allotted to established film importers roughly in proportion to
their business for 1934–1935, and they would be allotted a global
import quota of 250 pictures. “Sporadic importers” would have
allotted to them two million lire for transfer abroad and 50
films.
In addition, as a prerequisite to continue the importation of foreign
films, the distributors were asked to obtain from the foreign parent
companies signed acquiescence to the new regulations and an
agreement to continue the supply of films to Italy in normal
amounts, based on the average of 1934–1935.
Frankly stated, since the normal earnings of foreign film companies
in Italy last year was between forty and fifty million lire, these
regulations would mean that as a price for remaining in the Italian
market American companies would be obliged to leave three-fourths of
their future profits in Italy to be used in financing a competing
industry. No option would be allowed for the supplying of films only
up to the amount of money allowed to be exported, for the privilege
of taking out the 25 percent would be conditioned on the leaving in
of 75 percent. In other words, these regulations would compel
American film companies should they wish to remain in the Italian
market, to continue their business in full normal value and to
accumulate in Italy three lire for every one taken out.
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In the view of this Government these regulations, if applied, would
virtually place a prohibition on the importation of American films
into Italy and would cause a grave prejudice to the trade relations
between Italy and the United States.
Washington,
August 31,
1936.
