Memorandum of Conversation, by Mr. Kingsley W. Hamilton, Assistant to the Assistant Secretary of State for Economic Affairs (Clayton)

Participants: Italian Ambassador
Mr. Clayton, A–C
Mr. Hamilton, A–C

The Ambassador called to express his concern over the action of the House Appropriations Committee in not approving funds for payment of non-troop pay accounts to Italy. The Italian Government has been counting greatly on receiving these funds. Not to receive them might have an unfortunate effect upon the forthcoming elections.

The Ambassador asked whether the amount of the expected Eximbank loan could be increased to offset the present loss of the non-troop pay payments. It was important to do something quickly because only 16 days remain before the elections.50 Action only a day or so before the elections or after them would have no effect.

Mr. Clayton said the Department sincerely regretted the action of the House Committee but there was nothing to do about it for the time being. He expected the Eximbank would approve a loan for $100,000,000 but it could not now increase the amount because it had committed almost its full resources. Congress was to be asked for increased lending authority and approval was expected by the end of June but this would not help the present situation.

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The Ambassador asked whether the Department could not issue a statement indicating what this Government would like to do and would do if the increased lending authority was obtained. He suggested that the psychological effect of any statement would be such that it might be worthwhile to exaggerate a little …

Mr. Clayton said that when the Eximbank loan is ready to be announced we would have to weigh our words most carefully in order to obtain as much advantage as possible from the announcement but it seemed a little doubtful whether we could properly say much about funds which we would not actually have at that time.

  1. Elections for the Constituent Assembly and the institutional referendum were scheduled for June 2. For documentation on the attitude of the United States regarding the form of government to be established in Italy, see pp. 874 ff.