Memorandum by the Director of the Office of Financial and Development Policy ( Ness ) to the Under Secretary of State for Economic Affairs ( Clayton )

Subject: This Morning’s Meeting with Premier de Gasperi

You asked on Saturday1 that I inform you briefly of the status of the matters to be discussed with Premier de Gasperi during his visit here. There are six such major items:

Eximbank loan. When asked yesterday (Monday) morning whether this credit might be included in the NAC agenda for this afternoon, Mr. Martin said that he wished to think the matter over some more. Accordingly, it is not likely, unless there be a last minute change of thinking, that the application will appear specifically among the agenda items. I have asked the NAC staff to be prepared, however, to bring it up upon our request as “Other Business”. As you will recall, Mr. Thorp, Mr. Dunn and Mr. Dowling agreed that it would be better if this credit were not announced during the time the Premier is in this country but that it should be announced on the fifteenth of this month, by which time the Premier would have just returned to Italy.2
Post-UNRRA relief. Here, as you know, we can only assure the Premier of this Government’s intention to request funds for food relief from the Congress. The introduction of the legislation during his presence would be a reminder of this intention. We will not, of [Page 844] course, be able to talk to him about specific sums, but he may wish to have as much assurance as is possible within the foregoing limits.
Emergency revision of UNRRA. Mr. Wood is now thinking in terms of the second of the two alternatives presented to us last Saturday. This, if finally agreed upon, would involve a net reduction of the allotment to UNRRA on the score that Italy is presently able to finance its emergency needs. You may, at some time during the Premier’s visit here wish to acquaint him with this possibility. I would suggest, however, that this “bad news” be held for your meeting on Wednesday afternoon, by which time de Gasperi will have talked to the press.
Non-troop pay account. The certification of a second $50 million has been completed, and Treasury will be able to effect payment on Wednesday.3
Plan A waiver. Following conversations with the Canadians and British we are now free to announce to the Italians that we are prepared to cancel the American share of the Italian debt for civilian supplies (Plan A).4 This announcement should, however, be couched in terms which link such cancellation on our part to an over-all settlement with the Italians of war accounts which would be made in conjunction with or after the Italians had signed the peace treaty. This is necessary because, should the Italians fail to ratify the peace treaty, this Government might remain technically subject to claims on the score of requisition by the U.S. armed forces.
Italian assets in the United States. Italian assets in the United States have been in part vested by the Alien Property Custodian and in part blocked by the Treasury. In Paris Mr. Thorp announced that the United States would return to Italy all such property over and above that needed to meet certain relatively small American claims against Italy. While the Italians would welcome a public statement at this time promising the return of Italian assets in the very near future, it does not appear advisable to go beyond the statements made in Paris for the reason that certain technical difficulties remain to be worked out by the Treasury and also because we will not want to return Italian property until we have secured from the Italians certain commitments respecting our claims against them and possibly respecting Italian pre-war debts, these all to be taken care of in the over-all Italian settlement.

  1. January 4.
  2. See Foreign Relations, 1946, vol. v, p. 942 for the memorandum by the Staff Committee to the National Advisory Council on International Monetary and Financial Problems of November 15, 1946, recommending a loan of $100 million to Italy by the Export-Import Bank. See p. 859 for the approval of this recommendation on January 13, 1947.
  3. For previous documentation on this subject, see Foreign Relations, 1946, vol. v, pp. 899946 passim.
  4. Regarding Plan “A”, see p. 715, footnote 1.