711.652/136: Telegram
The Ambassador in Italy (Phillips) to the Secretary of State
[Received December 11—3:30 p.m.]
510. Embassy’s telegram No. 509, December 10, 7 p.m. In order that no possible misunderstanding might arise in connection with the wheat revaluation arrangement with Hungary the Italian Government has furnished the Embassy with the following oral explanation:
When Hungarian wheat is purchased by Italian importers the purchase price is set in relation to the price prevailing on the world market for that particular quality of wheat and an additional amount is paid by the importer who receives facilities from the Italian Government to that end. The example cited by the Italian authorities is that if wheat of a specified grade is purchased the price prevailing for the next higher grade is paid. It was further explained that the arrangement which is primarily of a political nature and does not [Page 488] constitute a formal agreement between the two governments does not require the purchase of any specified quantity of wheat but operates only when purchases are made. The existence of this arrangement is not made public but it is entered into between the Hungarian exporters and the Italian importers directly.
In the opinion of the Italian officials it does not constitute a preference but they desired frankly and confidentially to acquaint the Department with its terms.