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.
[Attachment]
Memorandum Prepared in the Department of
State
3
confidential and
personal
[Undated.]
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:
- (1)
- Available shipping to carry supplies from this
country.
- (2)
- Internal transportation to distribute it to the
various populated centers.
- (3)
- 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.
- (1)
- 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.
- (2)
- 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]
- (1)
- 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.
- (2)
- 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.
- (3)
- 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.
- (4)
- 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.
