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FRIDAY, APRIL 30, 1948


Washington, D. C. The subcommittee appointed to study the proposed treaty of friendship, commerce, and navigation between the United States and the Italian Republic met, pursuant to call, in room 312 of the Senate Office Building, Washington, D. C., at 10 o'clock a. m., Senator Elbert D. Thomas of Utah (chairman of the subcommittee) presiding.

Present: Senators Thomas of Utah and Lodge.

Also present: the Honorable Willard Thorp, Assistant Secretary of State for Economic Affairs; Mr. Winthrop G. Brown, Acting Deputy Director, Office of International Trade Policy and Chief, Division of Commercial Policy; Mr. Walworth Barbour, Chief, `Division of Southern European Affairs; and Mr. Vernon G. Setser, Acting Assistant Chief, Division of Commercial Policy, Department of State; Mr. Thomas C. Blaisdell, Jr., Director, Office of International Trade, Department of Commerce,

Senator Thomas of Utah. The committee will please be in order. The committee is meeting today to consider the proposed treaty of friendship, commerce, and navigation between the United States and the Italian Republic.

This is an important day in the development of our relations with Italy. We are opening hearings today on a treaty of friendship and commerce with Italy which is of significance for both our countries. For the United States, it is the first treaty of its kind negotiated with any European country since 1934.

The treaty, furthermore, marks another milestone in the traditionally cordial relations between the Italian and the American peoples. These relations have been marked by our extension of relief and other aid to Italy, our quick ratification of the treaty of peace with Italy, and our passage of the European recovery program in which Italy plays an important role.

For Italy, this treaty is a further development in the resumption of her customary responsible position in the family of nations—a position which, we hope, will soon be fully restored by her admission to the United Nations, a step which I have urged for a long time. Incidentally, there I might say that it became my honor and duty to make the motion and to deliver a speech inviting Italy into the International Labor Organization in 1945. In this treaty, the first of its kind negotiated by Italy since the return to normal relations, the Italian Government, moreover, has given evidences of support of the liberal principles of business and trade which the United States has advocated for many years.

Now that the Economic Cooperation Administration has begun its operation, it is of the highest importance that normal commercial relations with the participating countries be reestablished so that the greatest possible use can be made of private channels of trade, as specified by the provisions of the Economic Cooperation Act. The present treaty, therefore, provides a stable framework within which American businessmen, with assurances of protection and absolutely fair treatment, can make a great contribution to the success of the European recovery program and the revival of the Italian economy with the many mutual benefits which can be derived from these two important objectives.

Now I would like to ask some questions in a rather categorical manner dealing with the treaty and the background leading up to the treaty. Some of these questions we will ask Mr. Blaisdell to answer and some Mr. Brown, so that if they all will offer the answers when they have them I will appreciate it, because it is background and foundation that we need in dealing with the treaty.



Mr. Brozen, and of Utah able to us, and

First of all, how does this treaty affect our Alien Property Custodian's work in the United States?

Mr. BROWN. It does not affect it at all, sir.

Senator THOMAS of Utah. In other words, all that the Alien Property Custodian may have of Italian property will be administered and the property will be returned or adjudicated, or whatever it is they do with it, entirely independent of any provisions in this treaty.

Mr. BROWN. That is correct, sir, and after it goes back to the Italian national, then he is able to claim the rights under the treaty.

Senator THOMAS of Utah. Those, then, are the rights of an ordinary Italian citizen, and not a former alien enemy.

Mr. BROWN. Yes, sir.

Senator Thomas of Utah. Do we need any more information with regard to that, Mr. Brown? Can I say categorically that the treaty in no way affects any of the relationships which come about as a result of the administration of the Alien Property Custodian law?

Mr. BROWN. That is my understanding, Senator.

Senator THOMAS of Utah. One more of a general kind: Is there anything in this treaty which will in any way affect any cases which we may have under the Trading with the Enemy Act?

Mr. Brown. No, sir.

Senator THOMAS of Utah. Ordinarily, the Trading with the Enemy Act is a prohibition against American citizens; is it not? Still, as this is a mutual commercial treaty, we may have cases dealing with American citizens under that act which might in some way be related to this treaty. Can any of you think of anything that we should know about?

Mr. BROWN. It is my impression, Senator, that there is no possible conflict there, but I would like to check that specific question with our legal people and give you a firm memorandum by tomorrow.


It is the understanding of the Department of State that there is no conflict between the present proposed treaty and the Trading with the Enemy Act or regulations issued thereunder, and that the treaty will interfere in no way with the functions of the Alien Property Custodian. The provisions of the treaty relating to property are not intended to apply to situations in which the property of the nationals of Italy are. controlled in this country as a result of a state of war There are treaty commitments with respect to the protection and disposition of property in a number of treaties now in force between the United States and other countries, and these provisions have not been invoked with respect to situations resulting from a state of war. It is thought that, in most instances, measures taken under the Trading with the Ecnmy Act would be covered by an express exception in article XXIV, paragraph 1 (e) of the treaty with Italy for measures taken "for the protection of the essential interests of the country in time of national emergency.”

Senator Thomas of Utah. And if there is anything that should go in the record in relation to either the Alien Property or the Trading With the Enemy Act, I would like to know about those things in a rather substantial way; not long, but so that I can be positive in the answers I give.

Mr. BROWN. We will try to give it to you in one sentence.
Senator THOMAS of Utah. Fine.


In 1937 the 1871 Treaty of Commerce with Italy was terminated. Why was that treaty terminated?

Mr. SETSER. There were certain provisions in it which were not being applied by the Fascist Government wholly to the advantage of American interests, and for that reason it was mutually agreed to terminate the treaty.

Senator Thomas of Utah. The treaty was not renounced by the United States?

Mr. SETSER. No, sir. A new treaty was negotiated and agreement reached upon the provisions but it was not concluded for the reason that there was the question involved of the recognition by the United States of the conquest of Ethiopia, and the treaty fell for that reason.

Senator Thomas of Utah. Then the fact that Italy had moved into Ethiopia made the new treaty impossible, so that there were international political aspects when it came to writing a new treaty, is that correct?

Mr. SETSER. That is correct.

Senator THOMAS of Utah. But there were no international complications—that is, international political complications—aside from disagreement with Fascist theories, that caused us to renounce the treaty of '71, is that correct?

Mr. SETSER. No, sir. It was wholly considerations affecting the commercial provisions which were not adapted to the situation existing in 1937.

EXISTING TREATY RELATIONSHIPS Senator THOMAS of Utah. Since the termination in 1937 of the 1871 Treaty of Commerce with Italy what, if any, treaties are in effect between Italy and the United States, apart from the peace treaty of 1947?

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