Foreign Relations of the United States, 1947, The British Commonwealth; Europe, Volume III

865.00/5–2847: Telegram

The Ambassador in Italy (Dunn) to the Secretary of State

top secret
us urgent

Rome, May 28, 1947—8 p.m.

1322. Mr. De Gasperi arranged yesterday for a confidential meeting with me. He said that he was giving serious consideration to the formation of a government by his own party, the Christian Democrats, alone, with the inclusion perhaps of some experts who would not be considered as politically representing any of the other parties. He said he was considerably concerned in making this decision as to whether such a government would be successful in dealing with the economic situation because if it failed, in his opinion the next step would be a government of the extreme Left. He knew that every effort would be made to undermine and discredit the new government by the extreme Left although he felt he could count on sufficient votes in the Assembly to give him parliamentary support.

I took occasion to give him the substance of urtel 726, of May 20, 8 p.m. as no opportunity had presented itself to convey this information because of the discussions regarding formation of a new government. He made very careful notes of each point and discussed them in detail with me. He then said that we could dispense with discussion of the attitude of the US toward Italian situation as he was fully conversant with and fully appreciative of what we had done and the favorable attitude manifested by our government as indicated in the information I had just given him and in conversation which Tarchiani had had with the President and you and R. L. [J. W.] Snyder.¹ He said, however, that what he needed for the survival of the new single party government, if he undertook it, was some new and substantial evidence of economic aid which could be applied to the support of the lira and the financial position of the government. He said that in order to provide the basis for economic and financial stability the new government would have to undertake many unpopular measures and it was only by presenting the picture of having the financial strength to effect economic recovery that he could have the necessary program accepted by the country. He said that if he had this new substantial support he was ready to take up the battle against the parties of the extreme Left. He felt that this winning of such a battle was of primary importance to the country because if his party were politically discredited the effort toward preservation of real democracy in Italy would be eclipsed.

My own judgement of the present situation here is that a Democratic Christian government headed by De Gasperi and given economic and financial support by the United States in addition to the matters mentioned in your 726 can turn the tide now strongly favoring the Communists and bring about an increase in the parliamentary representation of the center and left of center, thus strengthening the democratic forces in their development here in Italy. I am fearful however, if the proposed government does not receive some additional financial support that it will not be able to resist the undermining efforts of the extreme Left.

Of course, everyone here has their eyes upon the forthcoming elections which are now expected to be held in October or November and almost every step taken in connection with the formation or actions of the national government is with a view to the representation of the parties which will result from these elections. As the efforts of the other Democratic leaders to form a government have now apparently failed, I believe we have come to the point right now where we should, if possible, give assistance to a Democratic Christian effort should they succeed in forming a government.²

In addition to the measures referred to in urtel 726, May 20, 8 p.m. suggested as support for a new government of the kind referred to after consultation with Tasca, strongly urge that consideration be given to additional aid to Italy from the following sources: (a) credit to the Italian Government of a sum of 20 million dollars involved in the prisoner of war credit certificates irregularly taken up by the Italian Government and the elimination of this item from claims by Italy to be cancelled under the financing agreement presently being negotiated; (b) immediate return to the Italian Government of some 20 tons of gold held at Bank of Italy under USFA [US–UK?] custody; (c) transfer of some part of gold pot share ultimately to be transferred to Italian Government at as early a date as possible; (d) modification in administration of Export Import Bank loan to make available the 100 million dollar loan for basic requirements of last six months of 1947; (e) possible addition of further sum to 100 million dollars loan, to be taken from funds allocated to China.

I realize that latter two suggestions involve matters of very high policy, the realization of which may encounter serious difficulties. It should be emphasized, however, that this is the opportunity for the US Government to indicate in bold relief its political support for the first post war Italian Government formed without the Communists.³

At the same time I was talking to the Prime Minister, Tasca was meeting with Minister of Treasury Campilli with the consent of De Gasperi and myself. Tasca’s report of that conversation is contained in next following telegram.⁴

Dunn

1. Records of Tarchiani’s conversations with the President and with the Secretary of the Treasury, not found.
2. In telegram 1364, June 1, from Rome, not printed, Dunn reported that a government had been formed by Christian Democrats and outside experts, but without Communists (865.00/6–147).
3. The endorsement of this telegram by the Division of Financial Affairs has the notation: “Memo drafted to Secretary 6–3–47 FN H[enry] R. S[piegel]”. See infra.
4. Not printed.