740.00119 Control (Italy)/5–2445: Telegram

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

1403. Liberation of northern Italy and end of organized fighting throughout Europe have confronted us with necessity of terminating unworkable and unrealistic Italian armistice regime, unless we are willing not only to discount potentialities of this portion of Europe in problem of general recuperation but actually to turn this country into a fertile hotbed of political and economic disruption.

[Page 1006]

In my considered opinion, without waiting for US or UK to implement history’s antiquated and discredited shiboleth that a definitive peace must follow close on a war, there should be negotiated immediately a simpler document which will terminate aforementioned armistice and give Italy sufficient freedom from control, especially as to its internal affairs, to enable it to prove whether it will develop into a going concern or remain as it is now, a kept nation with a government lacking strength, prestige, and even material elements necessary to develop a sound economic and social order.

Since speed is essential, if bad is not to grow worse, document terminating armistice should not pretend to settle long range peace problems, but should be drafted with a view to giving Italian Govt physical possibility of restoring its economy and developing its foreign trade, subject of course to restrictions essential to military requirements of Allies in this area.

Concurrent with termination of armistice regime and abolishment of AC which necessarily follows, there should be set up in Italy a Tripartite Economic Advisory Council with American, British and Italian representation. Council is essential as an interim advisory body to assist in evolution from Italy’s defective economic system, both past and present, to a status approaching normal, when regular procedures both in domestic affairs and foreign relations may be possible.

My suggestions concerning organization of proposed Tripartite Economic Advisory Council are:

Council to be headed by representatives from US, UK and Italian Governments. US and UK representatives to report to respective Ambassadors.
Council heads to be a policy making body and to act in an advisory capacity only.
Council personnel to be housed in one building, their activities to cover agriculture (including food), commerce, finance, industry, labor, shipping and transportation. Each of three heads to deal direct with his staff.
Personnel should be, at least initially, sufficiently numerous on Allied side to enable US and UK representatives to check data furnished by Italian Govt, make physical examinations of projects as proposed by Italian Govt, prepare documentation on which to base its opinions, et cetera.
Ital Govt FO present its problems to Council on a sufficiently complete state so that US and UK will be able to present cases to respective govts through respective ambassadors.
All personnel to be civilian; all members of US staff to be State Dept employees.
As an interim measure it is proposed that only a skeleton advisory Council staff will be located at Rome. Rome headquarters to initially contain three heads, their deputies and a strictly limited [Page 1007] staff remaining personnel to operate regionally regions to be gradually consolidated.
Each of three heads to have a deputy, either head or deputy to spend his entire time contacting regional heads in field.
Regional heads will from time to time be revolved dependent upon general conditions. From time to time it may be necessary to attach specialists to certain regions.
Personnel for US staff to be drawn from Rome Embassy, AC and AMG. Some additional specialized personnel will be required from US and from time to time experts will be drawn from US on a temporary basis.
As a result of gradual strengthening of Ital. Govt. Council personnel will be gradually decreased. It is hoped in due course it will be possible to disband Council and attach residual Allied personnel to their respective Embassies where they will take over normal duties and responsibilities of Embassy Attaches. Pending this however there will be a gradual shift of personnel from regions to Rome headquarters.

In connection with foregoing it may be unneccessary to point out that there are only two courses open to us. We can leave Italy to its own devices or we can provide advice and assistance so that Itals can rehabilitate themselves which is what they should do. Latter is only realistic approach but what I fear most is that due to Washington’s preoccupation with other important issues specifically Germany, Italy’s urgent need may escape attention. This cannot be permitted.

Italy’s problems if promptly and realistically approached are by no means unsolvable. Italy can be used as a test case. What is learned in Italy can be applied elsewhere. Certainly experience gained will be useful in connection with Germany. Any failure to appreciate properly and to take prompt and vigorous action insofar as concerns Italy’s economic aspects will have serious world repercussions. There is incipient anarchy in Italy now. This condition can rapidly become epidemic unless Italians can get back to work with a reasonable degree of promptness.

In conclusion and in summary urge that steps be immediately taken to terminate armistice regime and to provide tripartite Economic Advisory Council facilities as briefly outlined herein. It will of course be necessary to have these facilities set up prior to termination of AC, since necessary machinery must be ready to function concurrently with cessation of AC. With this end in view I also urge that a meeting or meetings be arranged in Washington during course of preparation of agreement which is destined to terminate armistice and establish interim modus vivendi with Italy. There should be representation from US, UK and Italian Govts including on US side Chiefs of Staff, [Page 1008] State Dept, Treasury Dept and FEA,97 etc., also representatives from US and UK Rome Embassies.

  1. Foreign Economic Administration.