865.24/6–1847: Telegram
The Ambassador in Italy (Dunn) to the Secretary of State
1618. For Dowling and Labouisse.1 We should like to call your attention to the OFLC telegram going out today as Embassy’s 1617,2 proposing in substance that the re-equipment of Italian Ground and Air Forces be brought within the close-out residual surplus negotiations for which Taff, OFLC Field Commissioner Paris,3 has come to Rome (see our telegram 1398 of June 4 and Department’s reply 898, June 12).4
As explained in the accompanying OFLC message deliveries under the 160 million dollar credit of the bulk deal of last September,5 and under surplus contracts entered into before the bulk agreement, will run short a total of 28 million dollars, transfer value. The political advantage of putting into the residual deal (in effect an amendment to the bulk agreement), both non-combat items and all items belonging to the Italian Army and Aviation re-equipment programs are obvious. For example it could prove embarrassing, in fact it might be impossible, to negotiate at a later date an agreement covering only the re-equipment program. Furthermore, it would be easier at this time, considering the present composition of the Italian Government, to reach an agreement which would include the re-equipment (a few weeks ago the Prime Minister said to us P–51 proposal would meet opposition from extreme left in the government). A deal covering solely re-equipment which followed a general formula like that for P–51’s would be apt to attract attention and provide a convenient point of attack against friendly government.
We are putting Taff in touch tomorrow with Einaudi to discuss the general purposes of the close-out surplus negotiations, to indicate who the end users should be of certain specific items (this being one of the main reasons for avoiding ARAR at least at this stage), and to suggest to him the setting up of an Italian negotiating group of his and the Prime Minister’s confidence. However, the substantive negotiations will necessarily await OFLC’s reply to the accompanying telegram and the Department’s concurring instructions to us. You will [Page 926] accordingly understand how useful it will be for us here if you can help expedite the Washington decision.
- Walter Cecil Dowling of the Division of Southern European Affairs, and Henry Richardson Labouisse, Jr., Special Assistant to the Director, Office of European Affairs.↩
- Not printed.↩
- A. Erich Taff, Deputy Central Field Commissioner for Europe, O.F.L.C. ↩
- See footnote 4, p. 917.↩
- See Foreign Relations, 1946, vol. v, p. 932.↩