73. Record of a Meeting, Washington, March 29, 1955, 11 a.m.1
PARTICIPANTS
- Prime Minister Scelba
- Foreign Minister Martino
- Ambassador Brosio
- Count Magistrati
- Minister Canali (Acts as interpreter for Scelba)
- Counselor Ortona
- Secretary Humphrey
- Ambassador Luce
- W. Randolph Burgess, Under Secretary of the Treasury for Monetary Affairs
- A.N. Overby, Assistant Secretary of the Treasury
- C. Burke Elbrick, Deputy Assistant Secretary of State
- Francis Deak, U.S. Embassy, Rome
Prime Minister Scelba stated he had had the opportunity to present to President Eisenhower, Secretary Dulles and others a review of Italy’s political, economic and financial problems and he would not repeat them at this meeting. He understood that Secretary Humphrey had the final say on all financial matters and he was therefore grateful for the opportunity to see him. Secretary Humphrey disclaimed that he had the final say and referred to the Congress as the ultimate authority on appropriations and financial assistance. The Prime Minister expressed the hope that, as always, we would consider their problems sympathetically, which Secretary Humphrey assured him we would. Mr. Scelba expressed the hope that economic problems would be considered with the political problems of Italy in mind. He reported a bill had just been presented to the Italian Parliament favoring private investment and he left Secretary Humphrey a copy of the bill.2 This bill takes full account of past experience and its purpose is to induce private investment and he hopes for prompt approval by the Parliament. He also referred to the double taxation agreements with the United States which are to be signed March 30.3 Secretary Humphrey assured the Prime Minister of our sympathetic approach to their problems and our hope that economic and political progress will continue. When we get to the details of the problems, we will approach them in as liberal spirit as we can. Secretary Humphrey stated we, too, have problems in the United States, but, keeping these problems in mind, we are anxious to see Italy progress both economically and politically and we hope to take a constructive approach in our cooperation.
Prime Minister Scelba indicated he had seen Mr. Black of the World Bank last night and was exploring the possibility of raising the ceiling on the International Bank loan. He asked about Export-Import Bank loans and the problems of coordination of the two Bank’s lending. Secretary Humphrey said the lending depends on the total borrowing and indicated that the lending of one bank must not interfere with that of the other. The total borrowing of a country must be within its debt payment capacity. Coordination is required. Responding to the Prime Minister’s question, Secretary Humphrey said that it was proper to approach both banks but that they would check with each other. Secretary Humphrey said it might be desirable to have all the borrowing [Page 256] with one bank and if a substantial amount was required for development, it should be perhaps with the International Bank. In any event, there could not be any doubling up on borrowing between the two banks and it would depend on the types of loans involved. Prime Minister Scelba thanked the Secretary and said he understood there must be coordination of borrowing activities.
With regard to private investment, Secretary Humphrey asked when the private investment laws might pass the Italian Parliament. Mr. Scelba indicated that it might be about six months; the budget, which is time-consuming, comes first. Secretary Humphrey emphasized that the financial and political climate has a great bearing on private investment and loans. This depends on real progress, not just on hope, in order to open the doors for private investment for economic development. The Prime Minister said the policy of his government was aimed at monetary stability and at maintaining the purchasing power of the lira. As regards political conditions, the Prime Minister said we must not confuse sensational stories with the reality of the situation which he thinks is sound. Secretary Humphrey responded that other people must feel that the situation is sound, so that Italians will repatriate funds which they hold abroad and outside investors will also be induced to make investments in Italy.
In conclusion, Secretary Humphrey said as they make progress we are anxious to work along with them as we appropriately can. As they create greater confidence, there will be a greater stimulation of private investment for the acceleration of economic development of Italy. Secretary Humphrey wished the Prime Minister well and the Prime Minister expressed his appreciation for the opportunity of having this talk.
- Source: Department of State, Italian Desk Files: Lot 58 D 357, Scelba 1955. For Official Use Only. Drafted by Andrew N. Overby.↩
- Not with the source text. An analysis of the investment bill by Ralph V. Korp, Acting Treasury Attaché, was sent to the Department of State as an enclosure to despatch 1654 from Rome, February 11. (Ibid., 800.05165/2–1155)↩
- The press release issued at the signing and the statements made by Dulles and Martino are printed in Department of State Bulletin, April 11, 1955, p. 614.↩