The Secretary of State to the Foreign Economic Administrator ( Crowley )

Dear Mr. Crowley: I have your letter of January 11, 1945, concerning the United States economic supply policy in regard to Italy [Page 1226] and I am in accord with you that agreement should be reached on the long-range responsibilities and interests of the United States as a whole.

I believe that the task of reconstructing Italy is primarily a responsibility of the Italians themselves. However it appears to be definitely in the interest of this government that Italy be assisted in reviving her economic life so that she can contribute to the winning of the war and attain that internal stability which is necessary if she is to play a constructive role in the establishment of world peace and security. Toward this end we can contribute essential supplies and technical advice.

The furnishing of essential supplies depends upon the provision of necessary shipping and finances. The State Department has taken an active interest in seeing that the maximum amount of shipping tonnage consistent with other war needs is currently made available, and it is our hope that this tonnage can be increased in the future.

At present two sources of funds appear to be available to finance the purchase of supplies insofar as the United States is concerned: (a) the dollar equivalent of the pay of United States troops in Italy together with the proceeds of private remittances to Italy and exports from Italy (b) funds appropriated to the War Department for military purposes, or funds or supplies transferred to the War Department by the Foreign Economic Administration upon certification by the War Department of their need for military purposes. The determination of what supplies are needed for military purposes is, of course, primarily for decision by military authorities in the light of the military aims set forth in the joint statement of the President and the British Prime Minister on September 26, 1944. The State Department is anxious that the military program of supplies be adequate to cover all reasonable military needs. The definition of military needs, with respect to civilian supply in Italy, now under discussion in the Combined Civil Affairs Committee appears to be considerably broader than that followed heretofore, in that it makes provision for the furnishing of supplies necessary for the restoration of power systems and transportation and communication facilities as well as for the shipment of supplies such as fertilizer, raw materials, machinery and equipment to permit the production in Italy of essential civilian supplies which would otherwise have to be imported. The State Department has been assured by military authorities that they recognize the fact that both the prevention of unrest and disorder and the attainment of production for war purposes may now require additional imports in the military program not needed in the beginning.

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It is clear, of course, that the military program will not provide imported supplies in sufficient quantity to permit a full restoration of the Italian economy. Although some of the additional items needed can be financed through the use of funds mentioned above in category ‘a’ it seems probable that additional funds will be needed if the policy of this government, to assist in further rehabilitation measures, is to be implemented. I should welcome from you any views you may have concerning the extent of our long-range economic interest in Italy and steps which this government may take to implement its policies. In view of the fact that the length of the period of military activity is unknown and may be of relatively short duration it seems important that urgent consideration be given to this problem.

Sincerely yours,

For the Secretary of State:
William Clayton