840.50 Recovery/11–1248: Telegram
The Ambassador in Italy (Dunn) to the Secretary of State
urgent
4312. I fully concur that reduction overall first year ECA allotment would be inadvisable both economically and politically (reurtel 2765, November 10).1
ECA mission fully expects Italy can and should utilize the full 601 million dollars. However, in the interest of balanced stocks and regularity of flow of raw materials, adjustments in commodity programming are necessary because industry has not been able to alter amounts forecast for first six months. Recommendations have already been made for certain shifts and others will follow. Italian Government is being urged to step up its industrial programs.
Increase of about $30 million have already been made for larger cereals imports to permit raising pasta ration from 2 to 3 kilos monthly, thereby combatting price increase free market cereals and at same [Page 889] time contributing to general price stability. (Toeca 303, October 11).2 This was regarded as recovery measure as well as restoration prewar cereal consumption and as useful political move. Free market price bread dropped three percent and pasta seven percent as result government measures October 15 to 25.
I believe and ECA agrees other useful shifts in programming possible as industrial activity increases and internal financial problems solved.
ECA mission replying Ecato 290 today.2
Any decrease in allotment not only would elicit unfavorable publicity from opponents of program but would lessen confidence of all classes in ERP and in US “promise” and might accordingly slow down productive efforts.
Sent Department 4312; repeated Paris 678.
- In this telegram, not printed, it was explained that the Department was reviewing the annual program for ERP and weighing suggestions for substantial cuts in individual commodities; it asked for the Ambassador’s views (840.50 Recovery/11–1048).↩
- Not found in Department of State files.↩
- Not found in Department of State files.↩