Foreign Relations of the United States, 1955–1957, Western Europe and Canada, Volume XXVII

104. Memorandum of a Conversation, White House, Washington, March 1, 1956, 9 a.m.¹

Washington, March 1, 1956, 9 a.m.

PARTICIPANTS

• President Eisenhower
• President Gronchi
• Secretary Dulles
• Foreign Minister Martino
• Minister Luciolli
• Ambassador Brosio
• Ambassador Luce
• C. Burke Elbrick

President Gronchi opened the conversation by expressing his satisfaction over President Eisenhower’s announcement the day before that he would be available to run again for the Presidency. He said that this is a most important announcement for the entire world. He said he would like to continue the talk which he had had with the President on Tuesday,² particularly in connection with the proposal that the NATO alliance be deepened and strengthened in the non-military fields. It is difficult to foresee now whether the Soviet economic offensive in the Middle East and elsewhere will develop along constructive lines or will result merely in an empty propaganda exercise. It would appear that the Soviet Union lacks the means to carry through such an ambitious program. In any event, we should give attention to the need to counteract it and it is important that the NATO countries coordinate their activities and bring their combined influence to bear. President Gronchi felt that the Middle East was one area in which Italy might act most effectively on behalf of the alliance since no “suspicion” attaches to Italy in that area at present. While Italy cannot solve all the problems in the area, it could, as in the case of the Johnston plan for the use of the Jordan waters, make the contacts necessary for a political settlement.

President Eisenhower said that the Middle East and South Asian countries had been presented by the Soviets with an “economic dream” and we must be prepared to shatter that dream. The U.S. is carrying on a very expensive economic assistance program in many parts of the world and it must be obvious to all that combating the Communist influence in these areas requires tremendous resources. He said it was not clear to him how any country could exercise influence in the areas unless it is prepared to provide a substitute for what the Soviet professes to offer. While, as he had emphasized in their previous conversation, the spiritual basis and values of the alliance were important, and a lot of missionary work would have to be done in the Arab and Asian countries, it remains true that in countries where living conditions are sub-standard, we must find a way to help the people materially if we are to expect them to side with us.

President Gronchi felt it was unfair to expect the U.S. to carry the entire burden in the economic field. He felt it was important to coordinate the efforts of all the NATO countries and he believed Italy could help. Coordination of our combined economic efforts would serve to make them more effective. He referred in this connection to possible coordination of strategic exports.

The President, supported by Secretary Dulles, pointed out that we did not feel NATO should take over the tasks and responsibilities of the OEEC, although he agreed that it is good for NATO to take an interest in all matters affecting the security of the alliance. He felt that the North Atlantic Council might study such problems and advise the various governments of its conclusions but if President Gronchi had in mind enlarging the NATO charter he felt that we should proceed very cautiously and slowly. Secretary Dulles said that this underlined the importance of such problems to all member countries of NATO but he observed that the NATO members were not always anxious or eager to take on such difficult problems as North Africa, Cyprus, etc. He felt that the Council was not always able to deal with such complicated matters despite its interest. President Eisenhower said he would greatly appreciate it if President Gronchi could suggest a way of proceeding to arrive at a firm NATO position with respect to the Middle East and related problems, and that any practical suggestions for accomplishing this would receive our earnest and sympathetic attention.

President Gronchi then turned to the question of economic cooperation. He said that in the speech he had made before Congress he had emphasized the fact that Italy no longer requires American aid— that Italy no longer has to “dip its hand in the pockets of the American taxpayer”. He said that he understood the attitude of Congress on such matters at this time but that no legislative action is necessary for what Italy now requires—namely, a series of long term loans under favorable conditions for public works programs in southern Italy which would in turn attract private investments in the area. If the U.S. Government would demonstrate its faith in the economic and political stability of Italy by taking the lead in making public works and investment funds available, it would encourage private investors to follow suit.

Secretary Dulles at this point said that, since he had to leave in a few minutes to appear before a Congressional committee at the Capitol, he would like to revert to a previous topic. He said we were not negative to Gronchi’s approach, as he had outlined it to us, and that we all seemed to be groping for something to create a new solidarity which would strengthen the Western alliance. The Department of State is in sympathy with this approach and would welcome practical suggestions from the European countries themselves. He said Minister Martino’s resolution at the December meeting of the North Atlantic Council called for consideration of concrete ways in which NATO could be revitalized but this has not yet produced the desired results. He felt it vitally important that the momentum which was characteristic of NATO at the time President Eisenhower occupied the post of SACEUR should be maintained. He welcomed this “prodding” from Italy and he expressed the hope that President Gronchi’s plea for greater solidarity can be realized.

President Gronchi said that yesterday he had stressed to the Secretary the usefulness of the demonstration by the U.S. of its faith and trust in the Italian nation. He said that if such a demonstration had to be predicated upon renewed assurances as to Italy’s political stability, he felt that this would be a case of “dog chasing its tail”. President Eisenhower interrupted at this point to say that he was at a loss to understand just what President Gronchi meant. We had been demonstrating our faith and trust in Italy for years and have shown by our sizeable help to that country that we consider Italy to be a great and valuable member of the North Atlantic alliance. He said that did not exclude the possibility of doing something further but he wondered in what way we had failed in the past and how we could possibly show more support of Italy than we already have. President Gronchi said he was not criticizing the American attitude toward Italy and that his country had always sincerely appreciated American assistance and the confidence shown in his country. Now, looking toward the future, his Government envisaged a policy which would encourage public works investments and such a policy could only be successful if the U.S. showed its sustained faith in Italy. Certain recent American decisions do not exactly reflect this faith and he cited the recent refusal of a contract of the Ansaldo Company on the grounds that labor in the Ansaldo plant was Communist-dominated. An official communication has been received in Italy which stated that this contract had been refused as a matter of U.S. Government policy.³ President Eisenhower pointed out that MSA legislation forbids the letting of contracts under conditions such as those described by President Gronchi. In any event, he said he would have this matter looked into. President Gronchi said he had not raised this particular matter for action now but merely as an example of what he had meant by failure to demonstrate faith in Italy’s political stability. He said that the fact that 60% of the workers of the plant in question are Communist-controlled was not public knowledge and he failed to understand why the U.S. Government chose to publicize it.

President Eisenhower said that this presented a dilemma and he did not know, frankly, what other action we could have taken. It seemed to him that it would be inconsistent for us on the one hand to devote all our energies to combating Communism and on the other hand to support a Communist trade union. He asked what President Gronchi would have us do.

President Gronchi replied that the essence of the problem is whether the operation of these plants, of which Ansaldo is one, is contributing toward our common goal. He said in this particular case Ansaldo belongs to the Government. President Eisenhower said that when he was in command at SHAPE headquarters there were representatives of the two great American labor unions who kept a very careful watch on the plants involved in manufacturing defense equipment and they were very quick to complain if contracts for such equipment went to Communist-dominated plants. The President said that we must consider public opinion in the U.S. and that the people in this country are wholeheartedly opposed to supporting in any way Communist-dominated trade unions. President Gronchi said he understood the public opinion and political difficulties in the U.S. but as he had remarked yesterday he wanted to modify what he described as this negative attitude. He declared rather bluntly that the best judge of a political situation within a given country is the government and administration of that country. President Eisenhower replied that we must proceed in accordance with the terms of our legislation. It may be that the law is too rigid on this point and he promised to look into the matter.

President Gronchi said he was very grateful for this exchange of views with President Eisenhower and he asked, in concluding the interview, whether the latter thought it possible that the U.S. Government would encourage public investments within Italy and thus give evidence of our faith in that country. The President said that he would be in touch with financial circles on this matter and that the State Department would also consider sympathetically how we can help Italy. President Eisenhower said that the U.S. has financial dealings all around the free world. He particularly referred to the case of Korea, where we have been spending hundreds of millions of dollars in economic aid. He said that the American people feel that the people of Korea, in resisting Communist aggression, have done something worthwhile. We have only one aim in this country and that is to defeat Communism and if Italy takes action to stir the imagination of the American people, President Gronchi would find that the American pocketbook would be open.

President Gronchi said that he would like to agree with President Eisenhower to a joint statement to be made following their conversation. The President agreed in principle to the draft which President Gronchi read and asked that the actual drafting be negotiated with the State Department.⁴

1. Source: Department of State, Secretary’s Memoranda of Conversation: Lot 64 D 199. Confidential. Drafted by Elbrick.
2. See Document 101.
3. On February 1, 1954, the Director of the Foreign Operations Administration directed that offshore procurement contracts be denied to firms that were clearly Communist-dominated.
4. For text of the joint statement issued on March 1, see Department of State Bulletin, March 12, 1956, p. 418.