The Acting Secretary of State to the Ambassador in Italy ( Kirk )
1592. For your information it is expected that within the near future petroleum supplies may be generally freed from restrictions and allocation. It is therefore necessary to modify Supply Arrangement communicated to you by our A–99, Mar 3,53 and 1395, Aug 20.
Insofar as Italy is concerned petroleum imports will continue for some time to be governed by special arrangements. Oct, Nov and Dec arrivals from dollar sources will be procured and furnished through AFHQ54 Petroleum Section in accordance with FX 40688 of Sep 3 from Caserta to Agwar.55 We expect that AFHQ will procure POL56 from sterling sources under similar arrangements. After close of year it is anticipated that supplies should be procured through industry [Page 1317] channels and payment be made by UNRRA57 providing such supply is covered by UNRRA appropriation.
Within Italy position will be as follows: Programming, slating and control of distribution can be handled through AFHQ Petroleum Section until civilian machinery, which will center in CIP, is ready to assume full responsibility which must be before end of year. CIP should assume responsibility for slating by Oct 1 on which date it should submit slates for Dec and Jan. Slates should be submitted through Italian Govt to Amer and Brit Embs and should be transmitted in total to Washington and London where they will be divided between dollar and sterling sources. As regards responsibility for receiving and accounting for imported supplies, CIP should take over these functions from AFHQ Petroleum Section as soon as possible.
You are requested to communicate foregoing to Italian Govt,58
Important you make clear to Italian Govt that US Govt expects to receive satisfactory assurances from Italian Govt on three points mentioned Deptel 1395, Aug 20. In connection with point (b) the objective is to obtain assurances that Amer companies as a whole, for so long as Italian market is controlled, will receive fair share thereof based on previous experience. While 1933 is favored by Brit as base period, and is good year for Amer interests as a whole, selection of any single year might cause embarrassment as between individual companies. Therefore Dept suggests that you take position with Italian Govt a) that contract rights existing at outbreak of war be restored, and b) that Italian Govt should agree in principle that Amer interests be given fair share of market. If such agreement in principle can be obtained, companies can negotiate for themselves what their respective positions are to be.
You should point out this Govt, feels that Ital Govt, considering important contributions to welfare of Italian people being made by US, should give promptly assurances sought.