865.51/8–2847
Memorandum of Conversation, by the Acting Secretary of State
| Participants: | Ambassador Tarchiani |
| Mr. Lovett, Acting Secretary | |
| Mr. Dowling, SE |
The Italian Ambassador called at his request this afternoon to express the thanks of the Italian Government for US support during the Security Council’s discussion of Italy’s application for membership in the United Nations.1 In this connection the Ambassador expressed the hope that when Italy’s application is discussed in the General Assembly the American representative would stress Italy’s ratification [Page 958] of the peace treaty as a factor in the US decision to support Italy.2 He explained that the Government expected criticism when the Constituent Assembly again meets, especially from the extreme right, since it had urged ratification as necessary to obtain Italy’s entry into the United Nations and that it would be helpful if the Government could point out that this action on its part had been of value in obtaining the support of a majority of the Security Council.
I told Tarchiani I was not sure how much stress it would be advisable to place on this factor in any expression of support the US representative might make in the General Assembly but that consideration would certainly be given to it.
Tarchiani then referred to Italy’s financial difficulties which he said had been made even more grave by the decision of the British Government to suspend the conversion of sterling funds into dollars. Tarchiani added that he wished to leave with me a telegram from Rome which set forth the Italian position.3 He pointed out that while the Italian Government realized the difficulties facing the British Government, it felt that its own problems were no less severe. At British insistence the Italian Government had refrained from converting its sterling funds during recent months but had always counted upon the availability of these resources for essential purchases during the final quarter of this year. He showed me another telegram from Rome suspending further purchases of cereals, coal and petroleum pending a reply from the British Government of an Italian request to make available some $10–$15 million monthly from sterling funds.3 The Ambassador said this action was necessary in view of the fact that present dollar resources were almost exhausted and some months must elapse before additional dollar funds from the troop pay account, POW payments and the return of Italian assets could be expected.
Tarchiani went on to say that it was in this situation that the Italian Government had decided upon an immediate approach to the Export-Import Bank for an additional $100 million loan and to the International Bank for a $250 million loan. He said he had spoken to Mr. McCloy about the International Bank loan and that Mr. McCloy would talk with Italian officials at the London meeting of the Bank and perhaps then go on to Italy for further discussions. He hoped that the Department’s support would be forthcoming for both these loans at the proper time.
I told Tarchiani I understood that the British Government would license conversion transactions to the extent possible in the next few [Page 959] months and that I therefore hoped the Italian Government could in this manner obtain at least some of its dollar requirements. I added that we would do what we could to make funds from the American sources he had mentioned available at the earliest possible date. As regards the Export-Import Bank and International Bank loans, I said that as the Ambassador knew, we would give every consideration to the Italian proposals.