65. Memorandum of Discussion at the 237th Meeting of the National Security Council, Washington February 17, 19551
[Here follow a paragraph listing the participants at the meeting and items 1–3.]
4. United States Policy Toward Italy (Progress Report, dated January 28, 1955, by the Operations Coordinating Board on NSC 5411/2)2
Mr. Cutler summarized the major points in the Progress Report. He called special attention to an economic development program which Ambassador Luce had recommended3 and which is now being studied by the OCB.
In response to Mr. Cutler’s request for his views on the Luce program, Secretary Dulles said the program could not be considered as an isolated case. Consideration of economic programs must be worldwide, rather than one country after another. Secretary Dulles said he did not know whether the size of the program could be accepted within present budget limitations, or whether other programs would have to be reduced if the Italian program was financed. He called attention to the $700 to $800 million which the U.S. is spending in Southeast Asia. Mrs. Luce, he continued, believed that the U.S. should spend its money where it has the best chance of achieving its objectives. Secretary Dulles said that this rule cannot be applied generally. For example, in Indochina our chances of achieving our objectives are not good, but the effect of the loss of the area to the Communists would be so great that we have to take the risk of losing the money spent for programs in the area. He concluded by saying that the Luce program looked very good when one considered only Italy, but that the Italian program could only be judged when it was put alongside all other aid programs.
Governor Stassen stated his belief that the Council would have to decide how high a priority to place on Italy. If it was believed essential to support Premier Scelba’s program, then it might be necessary to scale down other Italian aid programs, such as the amount of military end items scheduled for Italy. Governor Stassen called attention to the fact that the present Italian program is within budget figures. No economic assistance program is being carried out this year and none is planned for next year. He said that FOA is now engaged in deciding [Page 221] how much of the Luce program could be financed by using (1) hard loans, (2) funds made available from sale of U.S. surplus agricultural commodities, and (3) funds taken out of other Italian programs. [8 lines of source text not declassified]
[2 paragraphs (5½ lines of source text) not declassified]
Secretary Wilson reported that there were approximately two million unemployed in Italy, even though there was no present inflation. In his opinion, the “trickle down” process was too slow in Italy, and the rich were getting richer and the poor were getting poorer.
The President related to the Council a recent conversation with the new Italian Ambassador, [1 line of source text not declassified]. Natural gas has been discovered in the Po Valley, according to the Ambassador. The President said that if fuel, gas or oil, were discovered in Italy, he believed the country would boom, because Italians are good workers. The Ambassador told him that conditions in Italy were hopeful, and that now that the birth rate was actually going down, there was prospect of developing a sound situation in Italy.
Governor Stassen called attention to the rapid rise in the labor force in Italy despite the falling birth rate. He added that the economic situation in Italy was not unhealthy. The Scelba program, in his opinion, consisted of obtaining more U.S. aid, of providing a larger number of jobs, and of breaking up Communism. [4 lines of source text not declassified]
The National Security Council:
Noted and discussed the reference Progress Report on the subject by the Operations Coordinating Board.
[Here follow the remaining agenda items.]
- Source: Eisenhower Library, Whitman File, NSC Records. Top Secret. Drafted by S. Everett Gleason on February 18.↩
- NSC 5411/2, April 15, 1954, is printed in Foreign Relations, 1952–1954, vol. VI, Part 2, p. 1677. The Progress Report was dated January 26 and covered the period April 15–November 1, 1954; it was concurred in by the OCB on January 26 and forwarded to the National Security Council.↩
- See Document 61.↩