Hopkins Papers

The President’s Special Assistant (Hopkins) to the President1

top secret

Memorandum for the President

Dear Mr. President: I have had several talks with General O’Dwyer, Crowley and the State Department relative to the Italian business. The attached memo supplements the statement which you have with you on Italy.2

It seems to me that there are great advantages to be accrued to us if you can take the initiative and get Churchill’s approval to a course of action which you would announce publicly.

The machinery for getting quick action relative to immediate relief and the purchase of material for economic rehabilitation is available. The Italians can pay for all of the goods to be bought in this country, other than emergency relief supplies, out of funds which would accrue to them from our soldiers’ pay.

The Prisoner of War business, I think, should be cleared up just as soon as possible and, of equal importance, is the obvious necessity of amending the Armistice terms.

H[arry] L. H[opkins]

Memorandum Prepared in the Department of State3

confidential and personal

Memorandum for Mr. Hopkins, The White House

I refer to Mr. Jones’ conversation with you Monday morning, September 11.

[Page 413]

American, policy toward Italy is based upon our desire to see that nation return to political and economic independence and stability as quickly as possible. We do not believe that Italy will contribute to an orderly and peaceful Europe if it is subject to any one of its more powerful neighbors. This Government has specifically assured the Italian people the right to choose the form of government they may desire when they are in a position to exercise that right. Political independence for Italy, free from foreign domination, would seem to be implicit in this pledge.

The economic well-being of a country is the prime factor in its internal stability and its peaceful relations with other states. The economic dependence of one state upon another is not conducive to such well-being and may ultimately have undesirable political implications. Furthermore, since the United States is bearing the major share of the civilian supply quota for Italy, it is sound American policy to help Italy again become self-supporting and to regain a measure of economic independence at an early date.

In the immediate future increased civilian supplies, principally foodstuffs, are essential to prevent further deterioration in Italian public health and morale in the ever-increasing portions of liberated Italy. The three principal problems to be solved are:

Available shipping to carry supplies from this country.
Internal transportation to distribute it to the various populated centers.
Method of payment.

A specific and sufficient allocation of shipping for civilian supplies should be obtained from the War Department or other United States agency.

Two thousand trucks are needed for the distribution of supplies for civilians in the present liberated area. Army trucks within the theater should be made available to the extent possible (not convenient) by the Supreme Allied Command. Once hostilities have ceased, a sufficient number of United States Army trucks and tractors in the theater could be made available for this purpose until the internal transportation system can be rehabilitated at least in a basic sense.

When the dollar equivalent of American troop pay spent in Italy, plus immigrant remittances and Italian exports to this country, is made available to the Italian Government, almost all the foreign exchange required for the purchase of civilian supplies in this country will be provided. (It is believed that this proposal is at present on the President’s desk, having received British concurrence, and could be put into effect immediately if approved.) Limited UNRRA participation in the medical field and in assistance to displaced persons of Italian nationality up to $50,000,000 is essential to supplement the civilian supply [Page 414] program mentioned above. Every effort therefore should be made to assure that agreement to this proposal is given at the UNRRA conference in Montreal this month.

As to the second phase of Italy’s economic problems, we should now make possible the primary rehabilitation of its agriculture and essential industries in order that the Italian nation can begin to be self-supporting again. Hence the Italian supply program should not be limited, as it has been so far, to consumers’ goods but should make available fertilizer, seeds, spare parts and essential raw materials to permit the resumption of Italian production for the nation’s basic consumers’ needs. This will require not only a sufficient shipping allocation but sufficient funds to finance such a program even on a limited scale. The United States’ funds to be made available to the Italian Government from troop pay, immigration remittances, et cetera, will probably not cover such an undertaking in addition to the consumers goods which must be purchased over the next year for immediate consumption by the population. The following additional methods of financing might prove feasible.

The War Department could continue its present practice of certifying Lend-Lease funds, on the basis of military necessity, to finance a civilian supply program of minimum subsistence. This would provide for the principal portion of the importation of consumers’, goods, and the foreign exchange available to the Italian Government from troop pay, et cetera, would then be sufficient to finance a basic rehabilitation program for Italian agriculture and industry.
Private Italian assets in this country, estimated roughly at $74,000,000, could be taken over by the Italian Government and used as security for an Italian Government loan from the Reconstruction Finance Corporation for the purchase of basic rehabilitation supplies.

On the political side it is desirable to clarify our relations with Italy, which has been a co-belligerent with the United Nations in the war against Germany for almost a year. During that time the Italian Government—Armed Forces and people—have cooperated sincerely and to the best of their limited resources in the common fight. They have “worked their passage” to a considerable extent. The United States and Great Britain could revise Italian Armistice terms which have been rendered largely obsolete by the course of events, or we could conclude a preliminary peace treaty with Italy, terminating the state of war existing between it and the United Nations, postponing for future settlement the more complicated issues of territorial dispositions and reparations.

Specific steps should meanwhile be undertaken immediately to support the representative and liberal Italian Government and to encourage the various democratic groups in Italy who are working for the regeneration of their country. These might include: [Page 415]

The removal from prisoner-of-war status of Italian soldiers in the British Empire, North Africa, Italy and this country and their return to regular military status under Italian Command with ultimate authority for their disposition and use resting in the Allied Theater Commander or respective British and American military authorities. It is an anomalous situation, to say the least, that while Italian divisions are fighting with the United Nations on the Italian front and Italian resources are being employed to the fullest extent in the common struggle against Germany, we continue to hold Italian prisoners of war not only abroad but in Italy itself. The non-combat services which they are now performing in these areas could be performed as effectively if they had the status of Italian soldiers under Italian command. A solution of this problem would be a concrete and important gesture of support to the present Italian Government.
The acceptance of Italian technical representatives by the various United Nations to handle financial and economic problems and to resume the protection of Italian interests in the various United Nations which is still being performed by third powers.
Italian participation in the various international organizations, such as the ILO, UNRRA, Food and Agricultural Organization, Financial and Monetary Conference, et cetera. Italy also desires to subscribe to the principles of the Atlantic Charter, this without reference to membership in the United Nations.
Resumption of United States’ participation in the International Institute of Agriculture in Rome until such time as it is superseded or absorbed by the proposed Food and Agricultural Organization.

A copy of a memorandum which was prepared in this office for the President’s use in Quebec4 is attached for your information.

  1. Sent to Quebec by pouch.
  2. Ante, p. 207.
  3. Neither the copy of this memorandum in the Hopkins Papers nor the Department of State record copy (863.50/9-1344) indicates who initialed this paper for transmittal to Hopkins. It was drafted on September 13, 1944, by J. Wesley Jones of the Division of Southern European Affairs.
  4. Ante, p. 207.