740.00119 Control (Italy)/1–2545: Telegram

The Acting Secretary of State to the Ambassador in Italy (Kirk)

137. When the United States members of the Combined Civil Affairs Committee agreed to approve the Italian directive without reference to a preliminary peace and without the desired financial clauses they introduced into the minutes of the CCAC meeting of January 22 the statement of their views along the following lines:

We feel strongly that greater political and economic freedom of action by the Italian Government is desirable and not only compatible with but to a large extent dictated by military considerations in the area. Macmillan’s proposals are a step in the right direction but the directive as now written is a relatively feeble effort. It gives merely the illusion, not the substance, of a new charter. We support it only because it provides certain minimum improvements in relationships between Italy and the Allies.
We have strongly urged the adoption at this time of other actions:
A preliminary peace treaty to replace the surrender terms,43 despite reservations and safeguards, would recognize Italian efforts to cooperate in the war and would have great psychological advantage in removing Italy from the status of a surrendered enemy, which would serve our objective of a better and especially more self-reliant spirit among the people behind the lines. Apart from any Allied commitments toward Italy, failure to take such steps is no less apt than inadequate rations to cause costly disturbances behind the lines. The surrender instrument is unrealistic and does not accurately describe the present relationship. The Italians as a whole have proved [Page 1228] willing to cooperate in the war and strive toward truly democratic government and their troops are now fighting alongside ours. Any major restatement of Allied policy must deal with this increasingly anomalous position. We agree to the provision requiring any new Italian government to confirm the surrender obligations only because British approval of the directive is conditioned upon its inclusion.
To give the Italians greater financial responsibility we proposed that the directive contain a financial section instructing SAC44 to take steps including (a) suspension of controls on Italian financial transactions abroad, (b) establishment of Italian Government lira account to be used by Allied forces to pay for supplies et cetera where recourse to Italian procurement agencies is impracticable, (c) transfer of lira issuance from AFA45 to Italian government, (d) arrangements with the Italians to supply lira currency and credits to meet Allied force needs and supplement Italian Government requisition procedures. While financial negotiations are intricate and might be lengthy, a specific statement of willingness to begin them should be made. The inadequate British counter-suggestion is accepted only because the British members feel they can go no further.

Inform AmPolAd;46 repeated to London and Moscow; sent to Rome.

  1. For discussions regarding revision of Armistice Agreement, see pp. 991 ff.
  2. Supreme Allied Commander.
  3. Allied Financial Agency.
  4. American Political Adviser; see footnote 25, p. 1219.