865.00/5–347: Telegram
The Ambassador in Italy (Dunn) to the Secretary of State
urgent
1031. For the Secretary. In response to urtel 622, May 1, 8 p.m. regarding deterioration in Italian political and economic conditions, the lack of confidence in the Govt as present formed of Christian-Democrats, Communists, and Communist inclined Socialist groups has progressed to a point which results in a psychological impediment to effective action by the Govt to correct present economic and financial [Page 890] conditions. I am convinced that no improvement in conditions here can take place under Govt as at present composed. Communists who are represented in Cabinet by second-string team are doing everything possible outside and within the Govt to bring about inflation and chaotic economic conditions. Population generally and particularly more responsible banking and industrial leaders have lost confidence entirely in the Govt and are afraid to venture upon new or expanded enterprises. A flight from the lira is beginning; rise in spiral inflation is unchecked. The pity is that there exists all over Italy a real will to work and there could easily be a general confidence in the future if it were not for the political agitation of the Communists and I doubt if there can be any real effective measures taken to improve the situation as long as the Communists participate in the Government. The Communist Party would, of course, fight hard against any effort to form a Govt without its participation but I do not believe it is too late for a govt to be formed without their participation and there appears to be a growing realization that the Communist Party is not really trying to bring about the restoration of economic stability.
Within the next few days the recently announced program of the Govt in the financial field will be discussed in the Constituent Assembly. We have had reports that strong efforts will be made to pose the question of confidence in the Govt as an underlying factor in the present difficulties. The Prime Minister indicated in a radio address a few days ago his desire that the basis of the Govt be broadened to include representation of more parties and there are many reports current of a possible crisis which will result either in a new composition of the present Government or a different grouping of the Parliamentary representation.
With regard to what political or economic steps we could take in the circumstances I question very much whether any assistance to Italy other than in the form of direct food relief and coal would be advisable at the present time while the Govt is in the hands of the present Cabinet. I do believe that direct relief and coal are of real importance as hunger and unemployment are fertile soil for Communism. There is such a real need of food in the country that responsible men are extremely concerned over the possibilities of a starvation situation arising some time during the next six months, if not all over the country, at least in important sections.
Dept will recall recent indications we have received concerning design on part of Communist leaders to thwart our program to ensure post-UNRRA relief from US to Italy.
There is an important element in the Italian situation which does not manifest itself very sharply when studying the problem. That is [Page 891] that one of the greatest obstacles to the spread of Communism here has been the action of the United States in assisting the economy of the country with food and raw materials and fuel which has provided employment. But we have not accompanied our action with adequate propaganda.
The smooth and deceptive program of the Communist Party has seemed reasonable to a large mass of Italian workers, but if those same people had any idea that adoption of Communism in Italy would cut them off from relations with the US, I feel sure the vast majority would reject the Communist advances. Our practice of holding back from expressing themselves [ourselves] on ideological views has given all the advantage to the other side and they have not hesitated to use it and abuse it. With all the efforts which have been made here since the war very little presentation of US policies and position has appeared in the Italian press. (That is why I have been making speeches recently on visits to the important cities and the press has carried them with a good spread.)
We have assumed in the eyes of Italians a passive role as regards the growth of Italian Communism. The vigor and energy of the Communist movement in Italy in particular the efficiency of its organization and propaganda and its penetration of local administrative government ensuring a powerful influence in considerable areas in the distribution of work has contributed to a growing belief among Italians and in many cases fear that the Italian Communist bandwagon is not seriously opposed by the US and it is the one to board. The Embassy is constantly receiving letters from individuals begging the US to take a stand in Italy against this drive towards a totalitarian Communist Italy. All the indications we receive and particularly the trend of local elections throughout Italy show that the Communists are consistently gaining ground and that our policy to assist the development of a free and democratic Italy is losing ground rather than making progress.
In order to bring to the attention of the Italian people therefore a clear indication of what might be the result of their going over to the Communist line and in order to build up a sound resistance to the siren call of the insidious propaganda now being pushed around here, it has occurred to me that perhaps you or the President might consider something along the following lines:
Either voluntarily or in response to a question by a correspondent regarding conditions in Italy and the US attitude toward this country to say that the US has deep and friendly interest in the growth of real democracy in Italy; that we have been happy to assist in the reestablishment of economic stability and will be happy to continue [Page 892] to lend our support to those elements here who have deep and abiding faith in the democratic processes and the preservation of the freedom and liberty of the Italian people and who are opposed to government in Italy by totalitarian regimes either of the extreme right or the extreme left. That we are watching with interest the progress of the Italian nation in solving her difficult economic and political problems and we are ready to lend our assistance to the development of an economic life based upon the liberty of the individual and the protection of his individual rights; and that we are confident that the Italian people will not desire a totalitarian regime which would inevitably break down the close ties that bind together the Italian and American people.