Foreign Relations of the United States, 1952–1954, Western Europe and Canada, Volume VI, Part 2

Italian Desk files, lot 57 D 56, “435—Aid to Italy”

No. 793
The Director of the Office of Western European Affairs (Jones) to the Counselor of Embassy in Italy (Durbrow)¹

confidential
official–informal

Washington, December 8, 1954.

Dear Durby: We have read with great interest your letter of November 17² and together with S/MSA, we have considered the Ambassador’s attractive idea of a special fund to be made to the President.

I understand that a “contingency fund”, which may be used for the same purpose, is now being considered in a somewhat different form. In fact I am told that the Secretary and Governor Stassen agreed a few days ago to submit to the Bureau of the Budget a request for a $150 million reserve fund to be included in the FY ’56 presentation. This fund would be for contingencies which might develop on a worldwide basis during FY ’56, and it is specifically understood that Italy would be one of the likely claimants to be considered in the utilization of the fund. Obviously, there cannot be drawn up at this time a list of priorities among possible claimants against the fund, claimants which, I understand, might represent a much higher total.

I need not stress at this point that the agreement between the Secretary and Stassen to ask for such a reserve is obviously only the first step of a long bureaucratic and constitutional chain of necessary approvals, from the Bureau of the Budget to the President to the various Congressional committees, etc., before the actual appropriation is made. Since, therefore, the proposal will still be in the formative stage for quite a while, the Ambassador might wish to discuss it during her forthcoming visit to the States.³ Any support she could give to it while here would, of course, be most desirable and undoubtedly effective.

We quite agree with you that the current tendency on the utilization of the Title I of PL 480 funds is disturbing. Under the $453 million ceiling for the funds to be used in FY ’55 (a ceiling which was established by the White House) it is very difficult to make plans for a sizable program for Italy, after the commitments made prior to the placing of the ceiling are fulfilled and after all the programs which Agriculture wants on other than foreign policy grounds are carried out. The figure of $46 million which was mentioned in previous informal letters to you and Deak has been considerably pared down, in spite of our strenuous efforts, because of competitive programs strongly and successfuly supported by agriculture. As of today it seems that it will be impossible to have more than $30 million earmarked for Italy out of Title I funds for FY ’55, and I understand that a negotiating instruction on the subject is going to be drafted shortly.

Sincerely yours,

John Wesley Jones

1. Drafted by Tesoro.
2. Document 790.
3. In telegram 1781 to Rome, Nov. 30, Luce was informed that the Secretary of State desired her return to the United States for consultations any time prior to Jan. 14. (123 Luce, Clare Boothe) She left Italy on Dec. 28, arriving in New York by air the following day. She planned to be in Washington Jan. 3–8.