865.51/9–2646: Telegram
The Chargé in Italy (Key) to the Secretary of State
[Received September 27—2:20 p.m.]
3903. Urtel 1586, August 9. Fiscal director MTOUSA77 states War Dept agreeable dollar payment for military export direct to official agency Italian Govt in line procedures we have suggested78 but desires delay initiating new system (except for exports to OMGUS) for several weeks in order avoid possible ill effect on negotiations with Netherlands Govt for return about $21,000,000 which USFET apparently holds in guilders excess to needs.
It is therefore planned to institute new dollar payment procedure here effective about October 20 and fiscal director will so inform War Dept in early October trusting no objection.
Embassy should appreciate Dept’s effort assure War’s definitive approval dollar payments under new procedure without further delay beyond October 20.
[On October 3, 1946, D. P. Caulkins, Field Commissioner, Mediterranean Theater of Operations, Office of the Foreign Liquidation Commissioner, and Emilio Demarchi, Managing Director of ARAR (Azienda Rilievo Alienazione Residuati, Agency of the Italian Government to Receive Surplus Property) agreed to the sale for $152,560.34 of 35,405 tons of aircraft bombs, 15,505 tons of artillery projectiles with cases, 14,717 tons of artillery projectiles without cases, and 14,603 tons of small arms ammunition. ARAR, on behalf of the Italian Government, agreed that the material, destined for civilian use, would be demilitarized within 6 months after delivery. (865.24 FLC/10–346)]