Foreign Relations of the United States, 1946, Council of Foreign Ministers, Volume II

740.00119 EW/4–346

Rear Admiral Ellery W. Stone, Chief Commissioner of the Allied Commission for Italy, to President Truman⁹⁷

secret

[Washington,] 18 April, 1946.

Memorandum on Italy for the President

Italy has three major needs: (1) An adequate food supply; (2) Fuel and raw materials; (3) A just peace. These needs are immediate. The Italian national elections and referendum will be held on June 2nd. Their results will determine the future political orientation of Italy.

Food

During the period of military responsibility for food supply in Italy, the Allied Commission, beginning with the summer of 1944, was able to maintain the 300 gram daily bread ration first in the South, and finally throughout all of Italy. Beginning with September 1, 1945, largely for budgetary reasons, the United States War Department transferred the responsibility for financing purchases of food and other basic relief supplies to civilian agencies. A fund of $100,000,000 for the period from September 1, 1945, to December 31, 1945, was made available by F.E.A. and procurement was undertaken by the Treasury Department Procurement Section. For a number of reasons the procurement and shipment of food by the civilian agencies was not as effective as by the military. The result was that the Allied Commission was short 339,000 tons of wheat on December 31, 1945, which should have been delivered in the last four months of 1945. These “shortfalls” have been received in the first 3½ months of 1946. The failure of this wheat to arrive in the last quarter of 1945 compelled a reduction in the Italian ration from 300 grams to 225 grams of bread late in December. However, if this wheat had been received when due and not in early 1946 as it actually has been received, the U.N.R.R.A. distribution of food in Italy in 1946 would have been 339,000 tons less.

On January 1, 1946, UNRRA assumed the responsibility for food supply for Italy. The ration was continued at 225 grams but the U.N.R.R.A. food procurement is now in so desperate a plight that it is probable that the Italian bread ration will have to be cut (if this has not already taken place since my departure from Italy on April 4) to 150 grams. Such a bread ration particularly to Italy which depends so largely on a basic cereal diet, would be disastrous.

This is demonstrated by the fact that the present basic ration of bread, fats, and sugar provides about 695 calories daily. This is supplemented by other farm products in the agricultural areas and by purchases in the free (black) markets in urban areas so that the average calorific intake is about 1500 calories per day. If the bread ration is cut to 150 grams, the calorific intake will drop to probably less than 1200 calories per day.

Some way must be found to keep the bread ration at the present level of 225 grams and as soon as possible it should be increased to the 300 grams supplied by the Allied Commission.

Raw Materials

Because the industrial productive capacity of Italy, largely in the North, is relatively intact, the basic economic need for Italy, apart from her food supplies, is for fuel (coal and oil) and raw materials. With an adequate supply of coal, oil, and raw materials, Italy should not only be able to take care of the bulk of its own consumer goods requirements but can, for example, greatly alleviate textile shortages in other parts of Europe.

The basic U.N.R.R.A. program for 1946 provides for approximately $450,000,000 (including freight costs) of food, fuel, raw materials, and other rehabilitation necessities. But there is a further need for credits of the order of the $940,000,000 for which application has been made to the Export-Import Bank. $235,000,000 is needed immediately for the first quarter. While the full sum of $940,000,000 is desirable, it is believed that if a minimum of $400,000,000 could be made available for 1946, the economic situation, while not good, could at least be coped with.

Every effort should be made to make this minimum of $400,000,000 available from the Export-Import Bank or other loaning agencies together with certain other credits which the Treasury Department has already indicated will be available.

A Just Peace for Italy

On June 22 [23?], 1945, I addressed a memorandum to the Supreme Allied Commander, Mediterranean Theater of Operations, entitled “Future Policy Toward Italy.”⁹⁸ Copies were rather widely circulated and I believe this paper may have reached your notice.

In that paper I pointed out that if Italy were to be preserved as a “bastion of democracy” in the Mediterranean, it was necessary for the United States and British Governments to ensure that a harsh peace be not applied. Events since that date have only confirmed that recommendation.

Italy, since her declaration of war against Germany on October 13, 1943, has certainly “worked her passage”. Her Navy carried out 900 naval missions for us. Because all Allied transport planes were fully committed during the Italian campaign, we employed the Italian Air Force to drop supplies to Tito’s⁹⁹ Partisans. Without the loyal and effective collaboration of the Italian Air Force after Italy’s surrender, the results of Tito’s campaign against the Germans might have been quite different.

From the beginning, Marshal Badoglio¹ urged the use of Italian Alpini and other specialized troops against the Germans. Beginning in the spring of 1944, the first Italian troops were used in the line and gave a very creditable performance. In the summer of 1944 when Field Marshal Alexander’s² armies had been heavily depleted to mount the Normandy and Southern France invasions and the entry into Greece, the Field Marshal flew to London and obtained authority to raise and train six Italian divisions (Gruppi) for use in the line. Five of these divisions were actually trained and equipped by the British in time to be used at the front before the German surrender.

Immediately upon our entry into Italy in September 1943, we started the training at Brindisi of special Italian Army volunteers (officers and men) to be dropped in the North for the organization of the Partisan bands. After the liberation of Rome, the Partisans became increasingly effective with the final result that most of the productive capacity, power houses, etc., in the North were preserved, practically intact. Allied military authorities consider that the Italian Partisans’ contribution to the Allied war effort was not surpassed by any other Partisan movement in the war.

In short, following the armistice, Italy contributed to our joint war effort against Germany to the full extent that we permitted her to do so.

But even if Italy’s war effort on the side of the Allies should be discounted, the point is that no moderate government in Italy can or will sign a harsh peace treaty. It lies in the hands of the treaty makers, therefore, to determine whether we are to bring to Italy the state of affairs which exist today in Poland, Yugoslavia, Albania, and in Venezia Giulia east of the Morgan Line.^2a On the other hand, a just peace will preserve Italy as a democracy and will contribute greatly to peace and security in the Mediterranean.

There are four major factors, the handling of which will determine whether the peace treaty with Italy is just or harsh: (1) Reparations; (2) Treatment of the Italian Navy; (3) Disposition of the Italian colonies; (4) Italian frontiers.

Reparations. It is my understanding that the American and British Governments stand together against any claims for reparations. Equally, none of the Allies should be permitted to claim as war booty Italian property which came into Allied hands after Italy became a cobelligerent on our side. This applies as much to the British, who have claimed certain Italian submarine cables as war booty, as it does to Tito with his fantastic claims for war booty in Zone A of Venezia Giulia.

In the Teheran agreement between the United States, the United Kingdom, and Russia, certain specified ships of the Italian fleet or their equivalent were to be given to Russia for use in the war against Germany. To satisfy this commitment, the United Kingdom loaned certain naval vessels and the United States loaned the Milwaukee to Russia. If these British and United States vessels can be transferred to the Russians in satisfaction of their present claims on the Italian fleet, Italian morale will be spared a bitter blow and Italy can scrap the excess tonnage over her allowed postwar tonnage. Not only is scrapping excess tonnage in keeping with the practice of the Allied Powers, but Italy will have the use of the steel and other materials thus made available—all of which are essential to her depleted economy.

When I was in London in February of this year, the First Sea Lord, Admiral Sir Andrew Cunningham, assured me that he would be willing from the Royal Navy’s standpoint to transfer the loaned British naval vessels to Russia. Last week, Admiral Nimitz^2b expressed to me his own personal willingness to adopt the same course with respect to the Milwaukee. In the case of the United States, however, Congressional authorization is required for such a transfer and if this solution for meeting Russia’s claims is adopted, the State Department should introduce a bill to that effect. The Navy should not be required to sponsor this legislation but rather its senior officers could support it as witnesses.

The Italian Minister of Marine, Admiral De Courten, who has been in command of the Italian Navy continuously since her cobelligerency, has himself proposed a plan to the Council of Foreign Ministers in London, a copy of which I have furnished the Navy Department, for reducing his Navy’s tonnage to 100,000 tons. He does urge, however, that he be permitted to retain sufficient submarines to defend his coast line. With the Russians already active in Albania and with Fiume likely to go to Tito in any case, I strongly support his position.

Colonies. Perhaps the only effective countermove against the Russian claim for individual trusteeship of Tripolitania is for the American, British, and French Governments to urge that Italy be permitted to retain Tripolitania outright. I strongly favor this move. If the Italian Communist party should support Russia’s claim for Tripolitania against the western democracies’ proposal to restore it outright to Italy, its influence in Italy would be greatly weakened. Personally, I would favor the restoration of all of Italy’s pre-fascist colonies to her, but if prior commitments make this impossible and trusteeships must be established for other than Tripolitania, I would urge that Italy be appointed the administrator. Compared with other European powers, Italy has not an unfavorable colonial record. In the advance westward from Alexandria, the British, who pride themselves as colonial administrators, were more than impressed by the modern colonization efforts of the Italians. Moreover, this proposal would provide the necessary overflow for Italian emigration which is sorely needed to support her economy.

I do not favor the proposal for independence of the Italian colonies after ten years. Few of these colonies would be able to maintain an independent existence after ten years, with the result that they would undoubtedly fall either under British or, more probably, Russian influence or domination. Moreover, the work of any administrator would be more effective and lasting if he knows that his labors are not to be for the benefit of others after ten years.

Frontiers. The Province of Bolzano (the Alto Adige, or Southern Tyrol) should remain with Italy. Regardless of any past historical linkages, there is no reason for Austria’s profiting at the expense of Italy. Austria was never a cobelligerent on our side. No partisan movement was ever developed in Austria. The Austrian troops fought us even in Italy until the bitter end. The Nazi sympathizers in Bolzano greeted us not as liberators but as the enemy. Notwithstanding this, the present Italian Government has pledged itself not to repeat the fascist mistakes in the Alto Adige. Instead, a considerable degree of self-autonomy will be granted.

Moreover, much of Italy’s hydro-electric development, constructed at great expense, lies in this area and it would be a severe blow to her economy to separate her from it.

While I believe that there is now general agreement between the signatories that Bolzano should remain with Italy, I feel that the above arguments should be kept in mind.

I think it is clear that the drawing of the Morgan Line was a mistake. The Allied armies in Italy should have occupied all of Venezia Giulia in order that true interim trusteeship for this area could be maintained. The settlement with Tito which created Zone A under United States and United Kingdom control and Zone B under Tito’s control makes it difficult to bring about a truly just settlement of the Venezia Giulia question. But the proposal of the American delegation to adhere substantially to the Wilson Line^2c—extended eastward at the southern end of the Line so as to permit Italy to retain the Arsa coal mines and bauxite deposits and extended slightly westward in the north in favor of Yugoslavia as compensation—is a sound and realistic proposal and should be strongly supported.

For ethnic and economic considerations, there should be no question but that Trieste should be retained by Italy. The port of Trieste, as such, should be internationalized for the use of hinterland countries. But if Italy is to be given justice, there can be no compromise on Trieste and any subsequent efforts by Tito to seize it by force should be repelled by all necessary Allied military means.

The Dodecanese Islands should be demilitarized and returned to Greece. The Italians recognize the justice of this restoration.

Minor modifications of Italy’s northwestern frontier can be made, it is believed, by direct negotiation between the Italians and the French. In any case, I do not feel that the delineation of this frontier poses any serious problem.

We frequently say, and no doubt sincerely believe, that we favor a just peace with Italy. But the test of our pronouncements and our intentions lies in their implementation. If Italy is to be given justice, she cannot be treated as a defeated enemy but she should be treated as a junior partner in the Mediterranean, a role to which all Italians—with the exception of those under the domination of Moscow—sincerely aspire. We cannot hope to have Italy as a loyal partner of the democracies if we grievously injure her national pride, dismember her colonies and her frontier provinces, parcel out her naval vessels as spoils of war.

Finally, the rights of Allied armies and navies in Italy after the peace should be no greater than they hold in their own countries. The proposed British and American military agreements, to be executed with the Italian Government coincident with the peace treaty, do not reflect this approach.

Ellery W. Stone

Rear Admiral, USNR

97. Admiral Stone transmitted this memorandum to President Truman under cover of the following note dated April 18, 1946: “Pursuant to your request, I have pleasure in forwarding you herewith a memorandum on Italian needs as I see them. Thank you for your courtesy in receiving me today.”

    No records have been found of the substance of Admiral Stone’s conversation with the President on April 18.

    On April 30, 1946, Admiral Stone sent a copy of this memorandum to H. Freeman Matthews in Paris, under cover of a letter which read in part as follows:

    “Before my departure from Washington on April 24th, Red Dowling assured me that you had received from him a copy of the memorandum on Italy which, at his request, I sent to the President following my meeting with him on April 18th. For your information, the President seemed to be in general accord with the views expressed in my memorandum.

    “In particular, he definitely stated that should my proposal to satisfy Russian claims on the Italian Navy (transferring to the Russian Navy the American and British naval vessels loaned to Russia following the Italian surrender) be adopted, it should be the State Department’s responsibility, and not the Navy Department’s, to introduce the necessary bill in Congress for the transfer of the Milwaukee to the Russian Navy. In my memorandum, you will note that Fleet Admiral Nimitz, in the presence of Admiral Ramsey (Vice Chief of Naval Operations), saw no objection to leaving the Milwaukee with the Russians. Admiral Sherman (Deputy Chief of Naval Operations), in a subsequent meeting, also saw no objection.” (740.00119 EW/4–346)

98. Foreign Relations, The Conference of Berlin (Potsdam) 1945, vol. i, pp. 688–694.
99. Marshal Josip Broz-Tito, wartime Commander of the Yugoslav National Army of Liberation: subsequently, Yugoslav Prime Minister and Minister of Defense.
1. Marshal Pietro Badoglio, Italian Prime Minister. July 1943–June 1944.
2. Field Marshal Sir Harold Alexander, Supreme Allied Commander, Mediterranean Theater, 1944–1945.
3. The Morgan Line is shown on the map attached to the agreement between the United States, the United Kingdom, and Yugoslavia regarding the provisional administration of Venezia Giulia, which was signed at Belgrade on June 9, 1945. The line, which was named after British Lt. Gen. W. D. Morgan, Chief of Staff to the Supreme Allied Commander, Mediterranean Theater, defined the portions of the territory of Venezia Giulia to be under the command and control of the Supreme Allied Commander (Zone A) and those portions of territory under the control of Yugoslav forces (Zone B). For the text of the Belgrade Agreement and the attached map, see Executive Agreement Series No. 501. The map is also reproduced in 59 Stat. (pt. 2) (inside back cover). A map showing the Morgan Line in less detail is reproduced in Foreign Relations, 1945, vol. ii, facing p. 252.
4. Fleet Adm. Chester W. Nimitz, United States Chief of Naval Operations.
5. During the Paris Peace Conference in 1919, President Woodrow Wilson put forward a proposal for the demarcation of the Italo-Yugoslav frontier. The most detailed formulation of the line by the American Delegation at the Peace Conference appears in a memorandum by Douglas Johnson, dated May 8. 1919, printed in Rene Albrecht-Carrie, Italy at the Paris Peace Conference (New York, 1938), p. 93, and in Ray Stannard Baker, Woodrow Wilson and the World Settlement (New York, 1923), vol. iii, pp. 296–302. For President Wilson’s brief description of his proposal, made at a meeting of the Council of Four, May 13, 1919. see Foreign Relations, The Paris Peace Conference, 1919, vol. v, p. 579. The “Wilson Line” is also indicated on the map reproduced in Foreign Relations, 1945, vol. ii, facing p. 252.