711.652/139: Telegram
The Secretary of State to the Ambassador in Italy (Phillips)
194. Your 515 and 517, December 14 and 15. The statement of the Italian authorities with respect to the phrase “representative period” is satisfactory.
For the purposes of paragraph 5 of the Précis, this Government will not, during the continuance of the temporary arrangement consider that a discrepancy of less than 3 percent in the rates of dollar exchange as compared with the rates of compensation currencies would be materially prejudicial to American commerce. Hence, it appears that the two Governments are in agreement with respect to all of the language and contents of the Précis as it relates to the temporary arrangement.
It is noted that the amendments suggested by the Department with respect to the last two paragraphs of the temporary arrangement are satisfactory to Italy, and that the treaty between Italy and Austria accords only the advantages set forth in lists A and B.
Upon presentation of the foregoing to the appropriate authorities and upon the understanding that the text of Article VIII as enclosed with Department’s instruction No. 163 of August 9 remains as transmitted and the text of the Précis is as submitted in telegram No. 184 of November 30, except that within your discretion the second sentence of paragraph 5 may be omitted, you are authorized to effect the temporary arrangement by an exchange of notes. It is of course understood that the text of the Précis will be a part of the temporary [Page 494] arrangement. Immediately upon signature please report and state whether the notes were dated December 15.
We have noted with regret the statement of the Italian Government that neither of the Preambles proposed by this Government are acceptable and that therefore the proposed treaty can not be signed.
If you perceive no objection, please present the foregoing to the Foreign Office orally or in writing in your discretion.
[For text of Temporary Commercial Arrangement between the United States and Italy, signed December 16, 1937, together with Annex and Précis, see Department of State Executive Agreement Series No. 116, or 51 Stat. 361.]