Office of the Historian

277. Telegram From the Department of State to the Embassy in Italy1

Washington, November 22, 1957—5:08 p.m.

2171. Ambassador Brosio received by Dillon November 19 to discuss Pella Plan. Following is summary Dillon’s remarks (memorandum of conversation follows)2 which you may use in replying to Italians (Rome telegram 1774):3

1)
We desired clarification certain points Italian memorandum.4 We assume from US contribution not major factor (Brosio indicated Italians believed use Marshall Plan funds had particular political appeal).
2)
We suggested one possibility for Marshall Plan repayments which had been considered by Department as source financing for variety projects was their payment into Development Loan Fund which could then make loans to provide US contribution.
3)
It was pointed out Congress had asked Department study possibility having Marshall Plan repayments paid into U.S. Development Loan Fund.
4)
It was noted problem created whenever, as in SUNFED, it was proposed US make large contributions to organizations with large group of members where US voice in determining use funds not consonant with US contribution.
5)
Dillon pointed out same problem not created when we entered into bilateral arrangements. Multilateral projects this type somewhat complicated though we admitted political appeal this idea.
6)
We were interested in Pella Plan and would certainly pursue our study thereof. We agreed NATO was not forum for such project. OEEC might also have disadvantage including nations who were not concerned this type problem. Special Middle East fund was also possibility.
7)
Italian idea of European contribution in Pella Plan fitted in with Congressional desire for burden–sharing.
8)
Dillon concluded plan required more study and our definitive answer might well be delayed until after December NATO meeting in which we were heavily engaged now.

FYI. Brosio indicated Pella Plan not yet presented to Italian Government as whole. He added it would be unpopular because it involved expenditures. He thought they would delay submitting it until there was definitive reply from us. End FYI.

Dulles
  1. Source: Department of State, Central Files, 880.0000/11–2857. Confidential.↩
  2. The memorandum of conversation is ibid., 880.0000/1–1957.↩
  3. In telegram 1774 from Rome, November 18, Ambassador James Zellerbach informed the Department: “I expect to have discussions later this week re his plan and would be grateful for any comments and/or guidance Dept can give at this time.” (Ibid., 880.0000/11–1857)↩
  4. See footnote 2, Document 263.↩