The Ambassador in Italy (Dunn) to the Secretary of State 1
2938. Tomap. This is joint Embassy–ECA message. Further reference Toeca 1371 repeated Torep 1500, London 313, December 30.2
Pella informs us Treasury prepared proceed financing 250 billion supplementary defense program prior to any commitment amount US aid. Also informed this decision taken at Cabinet level after statement by Prime Minister that for both moral and political reasons, defense needs must be met now whether US aid forthcoming or not. We have impression Pella has reconciled himself to necessary risks, but that both he and Prime Minister banking on protection available US aid will give their economy. We were informed Cabinet has taken decision immediately submit legislation on rearmament program to Parliament and concurrently request emergency powers which will permit establishment necessary economic and security controls including allocation raw materials, establishment investment priorities, etc.
Would appreciate receiving your preliminary reaction reference telegram. In light above action by Government, believe approval recommendations paragraph 6 justified.
Following was confidentially given by Ferrari-Agradi as breakdown 250 billion defense expenditure as it will be presented in rearmament legislation to be submitted to Parliament (figures in billions lire):
Breakdown by forces: Army 138; Navy 40; Air Force 55; Carabinieri 7; anti-aircraft 9; reserve 1; total 250.
Breakdown by purposes:
New constructions 38.5 Navy 25 (Air Force 13.5); personnel 10.4; Quartermaster Corps 54.3; Ordnance 92.0 (artillery and ammunition 53.0) (motor transport 39.0); medical service 1.6; telecommunications 15.0 (radar and air navigation aids) defense construction and bases 27.9 (Army 7) (Navy 2) (Air Force 18) (AA 0.9); Engineer Corps 7.0; research 1.0; reserve and miscellaneous 2.3 (veterinarian service 0.4) (Transport 0.9) (reserve 1.0); total 250.
Will cable separately our impressions this breakdown when confirmed.