865.5151/12–1046

Memorandum of Conversation, by the Under Secretary of State for Economic Affairs (Clayton)63

By appointment, Mr. Snyder and I met with Mr. Clarence Cannon, Chairman of the House Appropriations Committee, and other members [Page 927]of the Committee on July 25, 1946 to discuss with them as to whether it would be appropriate for the United States Treasury to transfer to the Government of Italy the dollar equivalent of lire expended by the United States Government in Italy for supplies and services rendered to the United States Army in Italy.

A full discussion of the subject was had, Mr. Snyder and I stressing the fact that Italy had declared war against the Axis powers on October 13, 1943, and thereafter was recognized by the United States, the United Kingdom and the USSR as a co-belligerent; that Italy became a base of operations for the United Nations in their prosecution of the war against the Axis and rendered very valuable services to the armies of the United Nations; that the armed forces of the United States exercised an over-riding priority of the utilization of Italian transport, public utilities, housing, and other facilities and goods.

Mr. Snyder and I also pointed out to Mr. Cannon and members of his committee that the transfer of these non-troop pay dollars had been approved by President Truman, the National Advisory Council, the Secretary of State, the Secretary of the Treasury and the Controller General.65

The matter was discussed at considerable length and Mr. Cannon, with the concurrence of other members of his committee present, stated that the committee felt it was in the interest of the United States Government to transfer these non-troop pay dollars to Italy. It was pointed out that the total might amount to 125 to 150 million dollars.

W. L. Clayton
  1. Mr. Clayton was appointed Under Secretary of State for Economic Affairs on August 17, 1946.
  2. In a memorandum dated November 29. Mr. Ness, Director of the Office of Financial and Development Policy, pointed out to Mr. Clayton that the files of the Department contained no record of the discussion of July 25 with members of the Sub-Committee of the House Committee on Appropriations and suggested that a brief record might be desirable (865.5151/12–1046).
  3. A memorandum for Congressman Cannon, which he had requested of Secretary Byrnes, was submitted to Mr. Clayton by Mr. Spiegel, Acting Chief of the Division of Financial Affairs, with a covering memorandum of July 23 (811.516-Export-Import Bank/6–2046). No copy of the memorandum to Congressman Cannon, however, has been found in Department files.