840.50 Recovery/1–2448: Telegram
The Acting Secretary of State to the Embassy in Italy
202. As there is considerable doubt that Congressional action on ERP will be taken in time to make assistance under that program to CEEC countries possible during period Apr–June 1948, it is important that we know what economic and political consequences of delay may be. Dept therefore requesting missions in countries where economic outlook particularly difficult to appraise situation and telegraph comments.1 If absence of US assistance during 3-month period would, in your opinion, result in reduction of rations, serious decline in production or other setback to recovery, or unrest prejudicial to political stability, pls indicate extent and timing of assistance needed to avoid such consequences. Your appraisal should be premised on hypothesis that assistance under ERP will not be available until July 1, 1948, but will be available thereafter, and that in period preceding July no new assistance is to be expected from US other than from sources already committed. Appraisal on these premises required to prepare for such eventuality but impression should not be given that this is expectation US Govt.
Pls review supply and foreign exchange position to ascertain Italy’s ability to maintain indispensable import program through 3 month period. Can Italy, with prospect of recovery program assistance after July, find sufficient resources in gold, foreign dollar assets of its nationals, prospective credits, Interim Aid residual or other resources, to carry through period? Pls report situation as promptly as possible [Page 377] and in any case no later than Thursday, Jan 29. Suggest you use as guide type Info required for Interim Aid Congressional hearings.2