840.50 Recovery/7–647
Memorandum of Conversation, by the Director of the Office of European Affairs (Matthews)
The Italian Ambassador called this morning at his request and left with me the attached telegram from Count Sforza to the Italian Embassies at Paris and London, dated July 6, containing the Italian acceptance of the Anglo-French invitation.1 In connection with the last paragraph, he said that he hoped the pertinent commission of the Italian Constituent Assembly would recommend ratification of the treaty today but seemed a little doubtful.… Tarchiani said that he himself feels that it is important that Italy should ratify and I heartily agreed. I pointed out that this would strengthen Italy’s case for admission to membership in the United Nations and her position during the forthcoming Paris discussions.
As to news from Italy, he said he felt more encouraged on the political side. There are signs, he said, that the Communists are losing ground. This was in part due to lack of money as well as to lack of patronage and the ability to do favors which comes from participation in the government. I gather that the Italian Government has been weeding out the Communists from positions in the Ministries and the fact that there are no more Communists in high office has strengthened the morale of the police and of government officials. He said it was quite clear that the Communists had been taking considerable sums of money from public funds for their own party purposes and the lack of this money was handicapping their efforts to increase their popularity. He told me a fact which I had not before heard, namely, that through their control of the Government Printing Office the Communists [Page 934] had been printing large quantities of lire for their own use without accounting for it. This scandalous state of affairs had, however, been discovered and ended, he said.
He said also that the improved atmosphere following the elimination of the Communists from the Government had resulted in an improvement of the lire rate from some 900 to 600 to the dollar on the open market. He said that unlike France where the peasants apparently have lost confidence in the franc the Government estimates that Italian peasants have salted away some 150 billion lire in their socks. He said this was very fortunate as the inflationary pressure of such a sum if the peasants attempted to dispose of it would be considerable. He emphasized the importance of doing everything possible to continue the improvement and of the vital necessity of American financial aid.
I referred to the suggestion in the attached Italian acceptance telegram for the establishment of a Committee on Emigration and Labor and asked what progress the Italians were making in their negotiations with the French. (There is an agreement that France will import 200,000 Italian laborers.) He said that progress was very slow because of the French unwillingness to grant any economic concessions. I said that we understood that on both the Italian side and the French side all prospective Italian emigrants to France were being carefully screened by the French CGT and the Italian CGIL which labor organizations are Communist controlled. I said that we understood that only militant Communists were being accepted under this arrangement. The Ambassador said he had no knowledge of this and laughingly added it might be good for his country if it could ship its Communists to France. He said that they had tried to send Communists to Argentina but Peron wouldn’t have them and wanted only Christian-Democrats. He laughed again and said this would be taking away De Gasperi’s voters. More seriously he said that shipping was the bottleneck in getting Italian emigrants off to the Argentine. With an annual excess of births over deaths in Italy of between 400,000 and 500,000, outlets for Italian surplus labor were of great importance.
He asked me the status of the Fortezza gold2 and I said I understood that we had approached the British suggesting that it be turned over to Italy. He said that this was important as it would give the Bank of Italy at least some gold reserve and strengthen confidence in the lira. He asked again if any progress had been made on the possible sale of Italian fruits and vegetables in Germany and I told him that I understood Italian negotiators were now discussing this in Berlin.
[Page 935]He said that he understood that the Ex–Im Bank’s Commission report on Italy was now in and that it was “a good report”.3 I said that I had just received it today and had not had time to read it but that I understood that it was favorable to Italy. He urged that prompt action be taken so that Italy could begin to draw on its earmarked credit.
Mr. Tarchiani said he had heard excellent reports with regard to Ambassador Dunn’s trip to Sicily. He thought the visit had been genuinely helpful and that his speeches there had had a real effect. I said I was delighted to hear it and mentioned the Communist article bitterly attacking President Truman which I understood Mr. Dunn had properly objected to. The Ambassador said he was glad Mr. Dunn had spoken of this slanderous article but that the paper itself was of no real importance in Italy. He said that Togliatti’s mild and reluctant support for the “Marshall Plan” was rather clear evidence that the enthusiasm for the “Plan” in Italy made it difficult for the Communists to oppose it openly.
In conclusion he expressed the hope, in case Italy now ratifies the treaty, that our Senate would reply to the message on this subject from the Italian Constituent Assembly of last winter. He thought this would have a helpful psychological effect. I told him I would look into the matter and see what could be done.