Office of the Historian

865.61311/5–2148: Telegram

The Acting Secretary of State to the Embassy in Italy

top secret
urgent
Washington, May 27, 1948—noon.

1485. Dept fully appreciates desirability June allocation 50,000 tons to aid Ital Govt in program abolish political prices and subsidies [Page 879] (reurtels 2320, May 211 and 2321, May 21).2 US Govt unable on export supply grounds to meet Ital request (Dept’s 1374 May 14).3 Already appears some of US May program will slip over into June and June schedule does not permit of proposed addition. However ECA officials have suggested possibility Italy may try secure, against later repayment from allocations made to Italy, diversions of wheat going to Britain from Australia in order insure desired stock position beginning July. Emb might wish suggest Itals bring this up in OEEC.4 Such arrangement if it could be effected, would constitute notable instance cooperation among ERP countries.

Lovett
  1. In this telegram, not printed, Dunn reviewed the cereal position of Italy, stating that “If no additional wheat imports forthcoming Italians will meet deficit either by delaying issue pasta ration or by rapid amassing 1948 wheat crop thus compromising success ‘grain price policy’.” An essential part of this policy was the abolition of political prices, the consumer subsidies on all cereal products except rice. Dunn added that “Embassy believes abolition political prices indispensable for sound fiscal policy and economic recovery.” (800.48 FAA/5–2148)↩
  2. In this telegram, not printed, Dunn continued with the argument, and urged the allocation of an additional 50,000 tons of wheat to Italy for June so that the Italian Government might carry through with the policy of abolishing political prices of grain (865.61311/5–2148).↩
  3. In this telegram, not printed, the Department commented rather critically on the data supplied by the Italian Government to the Embassy in Rome and indicated there was no elasticity in the export program of the U.S. for May and June permitting additional shipments to Italy in view of allocations already made (840.50 Recovery/5–748).↩
  4. In this telegram, not printed, Dunn reported that the Italian Government would immediately make the proposal to the OEEC for diversion of Australian grain from Britain to meet the June needs in Italy, and he suggested that the Department support this proposal in Paris (865.61311/5–2848).

    This action was taken in the Department’s telegram 1882 to Paris, May 29, 1948, not printed (865.61311/5–2948).

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