363 Lt Col W. R. Hodgson, Secretary of Department of External Affairs, to Mr J. McEwen, Minister for External Affairs
Memorandum 12 June 1940,
ITALIAN CONSULS AND APOSTOLIC DELEGATE
I ITALIAN CONSULS
(1) On the outbreak of war with Germany, the Commonwealth Government decided that all accredited German Consuls and their staffs should be permitted to leave Australia by the first available boat and that other employees, such as clerks and typists, should be permitted to depart unless some special reason existed for their detention. At the request of the Swiss Consul , who had taken over German interests in the Commonwealth, the Government approved of one secretary of the German Consular staff being allowed to remain for a period of up to six weeks to assist the Swiss Consul. Following the receipt of further advice from the United Kingdom, it was decided at a later date that all Consular employees of German nationality should be permitted to leave without restraint.
(2) The Commonwealth Government also decided to permit enemy Consuls and their staffs to withdraw from Australia their private money, either taking it with them or having it transmitted to any given address before or after their departure from Australia.
(3) It was also decided that the personal property of Consuls and their staffs and employees should be treated as privileged and that the respective owners thereof should be permitted to deal therewith from time to time provided that appropriate search was made in each case to ensure that any papers contained therein were of a personal nature.
(4) Difficulty is being experienced in finalising arrangements in regard to Italian Consuls, owing to the fact that notification has not yet been received as to what country will represent Italy in Australia.
The Italian Government has requested Brazil to do this for the United Kingdom and Dominions, but in Australia the only consul for Brazil is Mr. Sheppard, sharebroker, an honorary Consul. In the meantime, the Italian Consul General  has requested the Consul General for Argentina  to act. The latter has cabled his Government for instruction.
So that there shall be no delay when this question of representation is settled, the following matters are submitted for decision (subject in every case to the principle of reciprocity in the treatment of British Consuls) :-
(i) that all accredited Italian Consuls and Consular staffs of Italian nationality be given their passports immediately to leave Australia by the first available boat. A list has been supplied by the External Affairs Department to the Military Intelligence;
(ii) that other employees of Italian nationality at Consular offices, a list of whom will be supplied by the External Affairs Department to the Military Intelligence, also be allowed to depart if the request is made, unless there is reason for their detention;
(iii) that if request is made authority be given to allow one or two Consular representatives to remain in Sydney for a period up to six weeks to assist the Consul charged with Italian interests, in the handing over of records and archives;
(iv) that Consuls and staffs who leave Australia receive permits to withdraw private money from banks and to take it with them or have it dealt with before or after their departure, in accordance with their instructions, subject to an appropriate search in each case to ensure only personal and not Governmental property is released. (In this connection the Investigation Branch has already been asked to institute inquiries through the Banks.) (v) that the personal property of Consuls be regarded as privileged, so that the respective owners thereof may deal with the same from time to time provided that appropriate steps for an adequate search be taken to ensure that only private papers are taken out of the country therewith. 
II APOSTOLIC DELEGATE (1) In March, 1940, following upon representations from the Vatican authorities through the United Kingdom Government, the Commonwealth Government decided that in practice the work of the Apostolic Delegate should not be subjected to greater control than was inevitable in time of war and that similar privileges would be accorded to those already given to the Consular representatives of foreign Governments in Australia for inward and outward mails and telegraphs in cypher and code for the duration of the war.
(2) Following the entry of Italy into the war the External Affairs Officer in London was asked for advice as to the policy being adopted by the United Kingdom in regard to the status of the Apostolic Delegate.  He replied that an interim decision had been reached that the Apostolic Delegate's correspondence should be allowed full censorship privileges, at any rate for the time being. It was pointed out that this was made easier by the fact that the Delegate in the United Kingdom was an Englishman. One of his secretaries, however, is an Italian and this aspect is being examined.
(3) Dr. Panico, the Apostolic Delegate in Australia, is an Italian but has no Italian staff.
(4) It is submitted for decision whether the Apostolic Delegate in Australia should continue to be accorded the privileges already granted by the Commonwealth Government in March as set out in paragraph (1) above.