865.51/8–946

The Chargé in Italy (Key) to the Secretary of State

confidential
No. 3929

Subject: Proposed Note to Italian Foreign Office Concerning a Possible Loan from the United States.

Sir: I have the honor to enclose a draft of a note67 which the Embassy proposes, if it meets with the Department’s approval, to send to the Italian Foreign Office concerning a possible loan from the United States.

The Embassy feels that it is necessary to inform the Italian Government that, in the event the latter wishes to engage in loan negotiations with the Government of the United States, it will be essential for Italian negotiators to be well prepared with basic material in order to support their request for a loan. At the present time the Italian Government shows a tendency to rely upon the Embassy, and particularly upon UNRRA, to make known their needs. The Embassy is of the opinion that UNRRA is in a position to prepare studies on Italy’s import requirements and export possibilities in 1947 which may be most useful to the Department. In this connection, reference is made to this Embassy’s despatch No. 3924, dated August 7, 1946,67 regarding relations with UNRRA Italian Mission. However, the Embassy feels strongly that the tendency of the Italian Government at the present time is to rely too heavily on the good services of other organizations to present their case. For this reason, the Embassy would like to state emphatically to the Italian Government that it is [Page 929]urgent and important that any delegation which Italy may send to Washington to engage in loan negotiations should be most thoroughly prepared to discuss Italy’s needs and to substantiate them with supporting material which will be satisfactory and convincing to the American Government. The attached draft of a note has been prepared in the hopes that it will impress upon the Italians the necessity of serious advance preparation for loan negotiations.

The Embassy is also of the opinion that, if it meets with the Department’s approval, it would be most helpful if the Italian Ambassador could be called into the Department to discuss this matter, and that he be requested to inform his Government directly what kind of factual material an Italian delegation should carry to Washington.

If the Department approves of the proposed note to the Italian Foreign Office, the Embassy would appreciate being authorized by cable to present the note, since it is urgent that the Italian authorities begin at the earliest possible moment the preparation of the type of material which they will need to support any request for a loan from the United States.

Respectfully yours,

For the Chargé d’Affaires
Charles A. Livengood

Counselor for Economic Affairs
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