NOTICE
This is a transcript of a tape-recorded interview conducted for the Harry S. Truman Library. A draft of this transcript was edited by the interviewee but only minor emendations were made; therefore, the reader should remember that this is essentially a transcript of the spoken, rather than the written word.

Numbers appearing in square brackets (ex. [45]) within the transcript indicate the pagination in the original, hardcopy version of the oral history interview.

RESTRICTIONS
This oral history transcript may be read, quoted from, cited, and reproduced for purposes of research. It may not be published in full except by permission of the Harry S. Truman Library.

Opened 1987
Harry S. Truman Library
Independence, Missouri

[1]

WILSON: Perhaps the way to begin would be to express to you the regards of Dr. Brooks who remembers his visit here.

LOMBARDO: Thank you. Will you reciprocate as much as possible and as cordially as possible?

WILSON: I certainly will. Not that I would plan to go down the list, but perhaps you might be interested in beginning by talking about your mission to the United States, a very important mission.

LOMBARDO: Yes. Let's see. I will concentrate as much as possible. What would you like to know, incidentally?

[2]

WILSON: Well, how did it happen that you were appointed, and what expectations did you have when you left for the United States about American aid?

LOMBARDO: In a way, I have to say that my mission was merely concerned in discussing various financial and economic questions which were related to the peace treaty. As you know, the peace treaty imposed some obligations which were very hard for us in our situation, the Italian financial and economic situation. Therefore, we discussed matters at length with an American delegation, which was headed by Under Secretary of State Professor Willard Thorp. He had an excellent staff. There was a Mr. Rubin, a Dr. Sterling, a Dr. Surienta, and a few others who were absolutely extremely helpful. Nevertheless, negotiations took four months. The document, the memoranda of understanding, was signed on the 14th of August.

The discussions resulted in certain conclusions. We signed with Mr. [Robert A.] Lovett, who was Acting Secretary of State at that time, two memoranda of

[3]

understanding, and quite a number of supplementary notes. I had a very small delegation, and that was a great advantage because seven men could do much more than if there had been one of those numerous groups which eventually impede the good cause of negotiations.

The results which were contained in the memoranda were practically alleviating a considerable number of burdens to our economy and to our financial status. And it has been, practically, a substantial assistance to the Italian economy.

In a way, I would even say it has been fundamentally political, because some of the topics which were discussed and then carried in the memoranda, have practically come to be a revision of the peace treaty in some of its clauses. The United States Government, or the American delegation, proved to be extremely generous with plenty of understanding about the Italian plight. So, I was able to obtain the waiver by the United States of some governmental claims which aggregated an amount of one billion dollars at that time. Of that total, 523 million

[4]

dollars were the Italian portion for civilian supplies furnished under military relief programs, and 305 million dollars represented claims for certain types of occupation costs. These were under the proviso of Article 79 of the peace treaty.

Then, we were able to obtain the return to Italy of a block of properties belonging to Italian nationals. These were in the aggregate amount of 60 million dollars. Also, we were able to obtain the transfer of eight Italian ships which had been seized during the war. Some of them had been eventually transferred to the belligerent nations. Moreover, 15 Liberty ships were transferred to Italy in order to replace those which had been lost during the war.

They had been seized by the United States Government, used for war necessities, and some of them had been lost. Incidentally, among those returned were two of our important passenger ships. There also were two other passenger ships, but for those two we had agreed that the American Line would, for a certain time to come, practically manage them until they were replaced by their own. Then came The

[5]

Independence and The Constitution, and then they gave them back.

Then we have one of the great achievements, incidentally. We received a very definite promise that as many Victory ships and Liberty ships as we would eventually need to purchase would be offered at a very special price in order to rebuild our merchant fleet. Our requests would be welcome. As a matter of fact, we did that. The Italian Government, in the subsequent two or three or four years, applied to that facility.

There was another element of great importance, concerning Italian credit. Credit, in the sense of prestige and credit in the financial quarters of the United States, was practically achieved because we arranged a settlement of Italian prewar bonds. Between the principal and the arrears, because we have been in default on account of the payments of interest, they aggregated around 136 million dollars. The settlement was that we declared we would start again to service such bonds, with an interest rate of 1 percent for the years 1947, '48, '49; 2 percent for

[6]

1950 and '51; and 3 percent from '52 on, plus starting from 1952 a sinking fund of 1 percent for the years 1952-56, and 2 percent from 1957 on. This has been practically putting back Italy on its feet again, in the financial markets in the United States.

Another advantage we have obtained has been the waiver of the salaries and the cost of the prisoners of war. Incidentally, there was an agreement by which the Italian agreed to pay in Italian lira such amounts, and the United States Government practically covered it with dollars. The total amount I wouldn't be able to indicate because it started with 20 million dollars which had been practically handed by Ambassador [James C.] Dunn, a few months later. But then, in the long run, other new lists of such salaries and costs came on and every time they were practically paid in dollars, while we paid in lira.

According to the clause of the peace treaty, we should have had to pay for that. Of course, there was also, for the benefit of the American nationals, the provision that Italy would return to the American owners any property which had been seized by the

[7]

Fascist regime. Then we agreed to pay five million dollars as a settlement of further claims which could not have been listed because it would have taken quite a few years to do that investigation. So, a general amount of five million dollars was arranged as being the amount we would put at the disposal of the United States Government and they would do what they would deem necessary to settle the claims existing.

That was the start of a moral engagement on the side of the Italian people. We have offered, and the offer was gladly accepted, to maintain in good order into perpetuity the United States military cemeteries, of the boys who had fallen here in Italy.

In the notes covering various topics, some of them refer in detail to the procedures of war, such agreements that we had reached in the memoranda of understanding. Besides that, as I told you, there were some notes added. One of them dealt with the problem of a draft for a treaty of friendship, commerce, and navigation, which was subsequently discussed and negotiated and signed. I was, incidentally, the chief of the Italian delegation here in Rome. That

[8]

treaty, as a matter of fact, seems to have been practically the outline of other treaties of friendship, commerce, and navigation, which the United States arranged subsequently with other countries.

Then I signed an agreement by which Italy agreed to participate in the discussions for the proposed charter of the International Trade organization, and further discussions were started about the problem which subsequently had been settled by other people for the double tax convention.

Finally, I would like to point out that one important thing we had been doing there was to sketch the balance of payments of Italy, because nothing of that kind had been done. We worked with the American experts, and with my people, in order to outline it and have it as a basis for future reference.

WILSON: If I may interrupt for a moment, you did this with what expectations? As you said, just for future reference, or were you given any idea that there would be the kind of massive engagement of aid by the United States, when you were discussing these problems?

[9]

LOMBARDO: No, not at that time. We had the feeling that we were treated in an extremely generous way. I was very interested in being able to obtain the settlement of the war bonds, because I anticipated that we would need to refer to the United States for future loans. That is, incidentally, why the problem of the balance of payments came in. But we did not have the least idea about a special effort which would have been practical to provide for the fundamental necessities. You see, some negotiations took most of four months. We had information about General Marshall's speech, but we could not anticipate all that would ensue from that.

WILSON: At least at the beginning of the negotiations, did you have the feeling that on the American side, that people such as Thorp and Acting Secretary Lovett were not prepared, were not aware of what they themselves were going to be doing in the next couple of months?

LOMBARDO: No. Mr. Lovett -- I met him like two or three times at official meetings, that took place when we had to sign all the papers. Willard Thorp was very

[10]

active, or was most of the time present, or was giving directives, and we were exchanging opinions about our common work. But I did not get the impression that Willard Thorp either knew or wished eventually to share with somebody else, the information about something that was on the way of being planned. No.

WILSON: Very good. Very interesting.

What you've described was most important, obviously, and it did in effect involve a revision of the treaty of peace. What was the response in Italy to your endeavors?

LOMBARDO: Oh, it has been rather interesting, because when I came back I understood that-a tremendous fuss had been made in Italy about the results of our negotiations. Most of the people hailed such results, and eventually even anticipated--probably in the way of wishful thinking--future advantages. So the general response was extremely gratifying. But right away there was opposition, too. Mr. [Palmiro] Togliatti, for the Communist Party, started a campaign pretending that this was practically a cover to some special

[11]

understanding in the political and military field, and that in a way I had sold Italy down the river. So a polemic has come out of that. There is something I wish to tell you that in a way explains the nature of the bitter reaction by Mr. Togliatti.

The first weeks I was in Washington for negotiations, we learned that in answering an editorial written by Sumner Welles, Mr. Togliatti answered with an editorial in the Communist paper with the title "American Cretini." In English, "cretini" could be translated "morons or idiots," but they don't have the same nasty expression that the Italian language gives to that word "cretini." And it was an article attacking the Government of the United States, and the American people, and so forth and so on. of course, it caused a wide reaction in the United States. After all, here was a delegation of Italians, who more or less, on account of their Fascist government, had been at war with the United States. Here was a situation in which it was evident that the American Government was trying to find a way to help, a little bit, the Italian people. And here comes that

[12]

man with that editorial, trying evidently to play havoc on the negotiations. Well, there had been a certain coolness between the two delegations and I sent a telegram to [Alcide] de Gasperi. At that time, Premier de Gasperi was heading a coalition government, including many Socialists and some Communists. My telegrams were very harsh, and I understand that de Gasperi called Togliatti and [Pietro] Nenni, and showed them my telegrams. He asked for an immediate -- if not atonement -- at least a more civil way of political discussion. Togliatti did not want to yield. Many who were practically in his shadow, in a way, tried to do some tightrope walking. De Gasperi lost his patience and decided to resign. And this was how it happened that the Communists and the Socialists were practically booted out of the government in 1947. In a way, this is connected with the telegrams, which incidentally, for your files, I will send you. They are extra.

WILSON: Yes, very good. That's fascinating.

LOMBARDO: This is a bit of history, which from time to

[13]

time has been referred to, but not exactly. It is worthwhile seeing the telegrams.

WILSON: Yes, very good.

I see that my first question got you well into your responses; perhaps you would like to suggest how we go.

LOMBARDO: Oh, no, it's up to you, Mr. Wilson. I've tried here and there to put down some notes about the values and problems, but it's up to you which one you prefer.

WILSON: Why don't you go ahead with what you have at the beginning there.

LOMBARDO: Well, the first question: What was the political, economic and social climate into which the United States aid has been introduced? Well, politically, we had unrest, disorder, instability, and a feeling of utter insecurity. That describes the social and political situation.

Under the economic point of view, we were undergoing periods of strikes, low production -- a very low

[14]

productivity ratio.. We had tremendous problems involving reconstruction, rehabilitation, conversion of industries, which had been supplying armaments -- that is, war production which had to be practically converted. Furthermore, we were, as you know, practically destitute of everything; of the little coal we could afford to have, 50 percent was coming from the States. Then we needed cotton, wool, hides, timber, any sort of raw material, because we did not have any. Besides, we had a very difficult situation about our foreign currency and the balance of payments. The former exporting trade of Italy had been entirely upset and practically wiped out, because in continental Europe there was more or less the same vacuum and the same consequences of war. We used to have, before the war, quite some trade with the Eastern European countries, which had been going behind the Iron Curtain. The Balkans generally had furnished 9 percent of the totality of our imports, and they have dropped in those years to less than half of 1 percent.

WILSON: If I may interrupt there. The revival of the

[15]

trade with the Eastern European countries was hoped for for some years, but it never materialized.

LOMBARDO: That is right. I had exerted quite some efforts myself when I was Minister for Foreign Trade, but it was practically impossible, because first of all, they did not want to give us materials corresponding to such materials and equipment as they wanted to import from us.

Secondly, there was always the trend of quoting for their materials, extravagant prices, which impeded our importers. Very often, the two lists of exchange were imbalanced because we made efforts to supply as regularly as possible. On the other side, they did not meet the requirements that they had agreed to during the negotiations on such problems, in regard to the revival of an import and export trade.

So, the efforts on our side were earnest and well-meaning. On their side it was generally the opposite. Very often, for evident reasons, they were ready to supply to us the pretended goods which they did not have.

[16]

WILSON: Did the American policy of restricting export of what were called strategic materials hinder your trade at all?

LOMBARDO: Oh, I would say no, Mr. Wilson. Yes, we have had sometimes complaints -- at that time I was Minister for Industry and Commerce -- from some firms. For instance, the ball bearings producers complained. Those were special cases of complaining which I handled in, if I should say so, a "rude way." I remember always the man of RIV; that was a factory which produces ball bearings and which was insisting on exporting them. I said to him, "Well, you see this one, this sort of elongated ball bearing? This one is used for armored cars and tanks. Are you expecting to supply them with these in order that they may overrun us with the tanks having your ball bearings?"

The man answered, incidentally, "Oh, it won't happen; it's all nonsense."

I said, "Please, this is the door. Go out because you know better than I do that it's not nonsense at all; it's a reality. This is what we have to be afraid of."

[17]

Such cases were of very limited number, of traders opposing the lists of strategic materials. Some of the other complaints were coming from speculators who were ready eventually to get the copper we were importing from the United States that we needed so badly, to be reexported over there. It has eventually taught the lesson that it's true that everything can be a strategic material, but yet, at least some of them are so vehemently evident in their strategic value that it should not be done. I would never say that in those years it had any hindering effect at all.

WILSON: I am aware that Italy was perhaps the most cooperative with the United States.

LOMBARDO: Yes. Yes, I was sort of a watchdog on those details.

WILSON: Yes, and documents demonstrate that. In some of the Scandinavian countries, in contrast, there was considerable difficulty.

LOMBARDO: Yes. Oh, yes.

WILSON: Might you respond to a leading question, a

[18]

question which I know isn't true, but I would like your reaction to it? There has been some investigation in the United States, among historians, in recent years in which they suggest that all of this was a great American conspiracy to dominate Europe. You are familiar with some of that rhetoric at the time. They say that Americans made an effort to stop trade with the East in order to insure European dependence on the United States, on the Western Hemisphere. Was there talk of this kind at the time and then what…

LOMBARDO: Well, the Communists had that line of conduct. Of course, that was their slogans, but it was very easy to react from a political angle. It is not true that this means Europe has to be dependent on the United States. These were necessities for enabling Europe to be independent of Soviet Russia.

WILSON: Very good. A good way of putting it.

LOMBARDO: What economic problems were considered most serious and urgent?

WILSON: You pointed out I think that the two most important

[19]

at the time, at least at the time you came back, were fuel and food.

LOMBARDO: Fuel and food, and essential raw materials.

WILSON: Yes. There had been, I gather, considerable industrial recovery in '45 to '47 but it had not been based on necessary supplies for the consumer.

LOMBARDO: Yes, of course, we had been doing an effort of reconstruction, sort of a scattered effort of trying to rebuild what was necessary with what we still had, to rehabilitate communications which was essential. They had been practically depleted by the war events. At that time we could count upon some sort of help, UNRRA, and some lend-lease for something had been used in supplying us with some material. But it was absolutely a few drops in the desert as a matter of fact. After all, there was not the feeling of how we could come out from that situation. The havoc played by war was so tremendous it was hard to start to think how we could have an overall plan for rehabilitating, for reconstructing -- well, to reach recovery. It was quite impossible to envisage. As a matter of fact,

[20]

I feel that we could envisage it, not only in Italy, but also in the other countries, only when the Marshall plan was enacted, and not before. Incidentally, the Marshall plan had that extraordinary philosophy behind it, asking the Europeans to get together themselves in order to indicate what would be their needs, and compare these values among the various countries involved.

Until that time, every country did as much as possible in its own interest, not being concerned at what happened to the others, forgetting that after all they were in the same boat. The Marshall plan has compelled the Europeans, probably for the first time in their history, to understand that they were in the same boat and that they had to row together, and consequently to share in the most logical way what would be the rations on board on the boat. This they have been doing on account of the Marshall plan.

WILSON: It's a remarkable time. You suggested, as others have, that until just weeks before Secretary Marshall made this speech there was not this kind of understanding,

[21]

this appreciation in Europe, or the United States, and then suddenly, it flowered.

LOMBARDO: It bloomed into an extraordinary thing.

WILSON: Yes. Did you, as part of your informal negotiations at the time you were in Washington, did you try to put across, get across to the Americans, how serious Italy's situation was, as I assume others were, too?

LOMBARDO: There is no doubt. And they realized it.

WILSON: They did?

LOMBARDO: Yes, they did realize it; there is no doubt. Now, many years afterward, I feel that most probably after the trip made in Europe by General Marshall, and subsequently his speech, probably his staff was fed with some practical information about the situation and especially about the feeling of how bleak the future would have been. Evidently, when General Marshall ended his tour in Europe, he had the feeling on his fingertips about the whole situation and how unrest would be

[22]

brewing, and he realized most probably that the situation was practically falling into the general scheme of the Kremlin for getting Europe by the belly and by the throat. There is a sentence, I don't know whether I recorded it correctly, in General Marshall's speech, how actually the offer of aid was not directed against any country; it's directed against misery, chaos, and famine, something of that kind.

WILSON: Yes.

LOMBARDO: And that was really the factor. There was condensed, practically in a nutshell, the situation of Europe, of course, of Italy, and of the menace which was impending on Western Europe.

WILSON: Some people have suggested that Under Secretary [William] Clayton also brought back, particularly from the ITO Conference...

LOMBARDO: Oh, yes, most probably yes, because Clayton was very active. One of the great Americans I have met was, undoubtedly, Mr. Clayton.

I have been associated in other situations with

[23]

Clayton, because we have been together in the Atlantic Institute in Paris. Then I had many chances when I was Minister for Industry and Commerce and Foreign Trade to meet him. This is why I was always highly impressed by his qualities and knowledge. And another man who in my mind has been extremely proficient in participating, in the general work was Dean Acheson. Incidentally, if I remember correctly, Dean Acheson in a previous speech of his at an American university, if I am correct...

WILSON: At Cleveland, Mississippi.

LOMBARDO: Oh, yes. He just outlined the difficulties of the situation in Europe.

WILSON: Yes, that's quite correct. Because of the complexities of the situation we're not still sure exactly what the connection between those two speeches was. It's a matter of the administration, clearly, reaching out, trying to feel its way toward...

LOMBARDO: Exactly. In order to find the best way to create the general feeling.

[24]

WILSON: Perhaps it might be best to go in some chronological order. When the Marshall plan then was announced and there were these first steps toward cooperation, your position was what? You were in Italy as Minister of...

LOMBARDO: No, in 1946 I was Secretary General of the Socialist Party. In 1947 I was just a man in whom Premier de Gasperi had great confidence. And he decided on this mission. My mission took place after a very short trip made by Premier de Gasperi to the United States, and he probably discussed the problems from a general political point of view. Then, evidently, he decided that it was time to send a delegation to try to settle some of the pending problems. But at that time, I was just a parliamentarian. I was a man who had been heading a certain number of delegations. In the first discussion with the French, for instance, I was the head of the delegation. Then I had to go to England, to the United Kingdom, for some matters pertaining always to Italian necessities. That was 1945 and 1946. For instance, I was at the Cotton Conference in the United States where I obtained the liberalization

[25]

of Italian textiles, of which we had some inventory and which according to the armistice clauses we could not dispose of. Then I went there some other times on the problem of wheat. We needed it badly. I was there for discussions with [Fiorello] LaGuardia, then chief of UNRRA. That's all.

WILSON: What impression did you have about the American commitment to UNRRA? LaGuardia was a colorful character and there is some question about whether he had the confidence of...

LOMBARDO: Well, it's difficult, you know, to assess such a thing, post-fact.

WILSON: Yes.

LOMBARDO: And it's extremely difficult to assess them at the time, you know. Gossip, hearsay, and so forth, can become confusing. At times hearsay becomes a fact and then the fact becomes a hearsay. But I have the feeling that there was quite some confusion. But from some of that confusion and in a way through my friendship with LaGuardia, I was able eventually to

[26]

help Italy get a little more of the eye of UNRRA, than sometimes others got. I haven't forgotten that in a few occasions I was able to obtain the re-routing of shipments which were intended for another country, and instead to send them to Italy. Sometimes we were practically on the verge of collapse, because we had no more than three or four days of wheat for the necessities of consumption. So, therefore, this had happened. I am not only still grateful for that, but at that time I was really elated to have been able to do that. But at the same time, with cold reasoning, I had to admit that it was sometimes a cavalier way to get through these situations. The needs were so tremendous throughout the world, that although UNRRA was doing its best, the confusion was incredible.

WILSON: I see the point of your statement that it's now after Marshall's speech; it's now time for all of the persons in the lifeboat to decide how to...

LOMBARDO: How to assess, and how to share.

WILSON: From your point of view, in Italy, in these first

[27]

discussions, were you hopeful that this could be done? Or would some people throw others -- attempt to throw others -- out of the lifeboat?

LOMBARDO: Exactly. Because this is practically the game.

WILSON: Yes, but it did happen; and it's an amazing achievement.

LOMBARDO: It certainly was a tremendous achievement. The tremendous achievement of the Marshall plan in my opinion has been exactly this. When we take into consideration the amount involved, you may say, "Oh, I remember that; there have been discussions. This amounted to something between 5 and 7 percent of the overall trade and necessities of all the sixteen countries involved." But it's exactly what you need because you couldn't otherwise start the carburetor which is needed to feed the engine. Otherwise, you would never have had that percentage of gasoline ready for the country of Italy in order to have the engine "rev up."

WILSON: That's a good image; that's very good.

[28]

LOMBARDO: This was a tremendous achievement. Secondly, it gave hope and confidence in the future to all the Europeans. Third, it gave the feeling that after all they should not be so scared because the United States was there, as tutors practically, for the tutelage of Europe. Besides, it created all sorts of other important things. It gave back -- and this was especially important to my country -- the feeling of the advantages of competition and the sense of interdependence, the feeling of how absurd autarky and self-sufficiency can be in modern times. This entirely new philosophy had to clear the ground of the previous prevailing philosophy of economics and nationalism, not to mention the political one of the necessity of self-sufficiency, of abhoring competition because after all competition is like having sometimes a draft of coldish winter when you are in a very cozy warm room. But it offers a possibility of showing what you can do, of aiming at doing better, of being able eventually to introduce your goods because they are of a better quality and of a lower cost. All these ideas were practically forgotten during twenty

[29]

years of the so-called corporative state, and the ten years of autarky. Then there was the discovery, that was essentially Italian, that we were at least between 15 to 20 years behind the technological developments in the West, on account of the so-called self-sufficiency and autarkian philosophy. All these Marshall plan benefits have been extremely important for the rehabilitation, but especially for the final recovery, of Italy.

WILSON: These points, that you have mentioned, are very important. The Italians embraced them more, from the documents I've seen, than any of the large countries of Europe, and perhaps more than any other. Italy's commitment to the OEEC as an instrument for achieving these sorts of things was stronger than certainly France's, certainly Great Britain's, the Belgian's, perhaps. How is it explained that you were able to reverse what had been your philosophy? Was it the contrast...

LOMBARDO: Well, in a way there was evidence that that philosophy had brought us to disaster. This was a good point. Secondly, this new philosophy was appealing to the vision of a certain number of men, and enhanced

[30]

the hopes of the possibility of a better future. In the wasteland, practically, that we were in, that was a psychological motivation of extreme importance. Besides, looking beyond our borders, even if France and the United Kingdom had been badly hurt by the war, nevertheless, we realized that they were in many ways far ahead of us. Therefore, for us it was a matter of a sprint, to run as quickly as possible, and eventually to understand that the only way to serve our future was exactly to embrace this new concept, or this new philosophy. Probably, the United Kingdom and France, just to mention the two most important ones, still had the hope of being able to recover on the old status of countries having an imperial destiny, probably counting still too much on the other sister territories or on the Commonwealth members, and therefore, there were evidently two different levels of evaluation. We were too destitute and too hopeless to be able just to do some kibitzing or "bushbeating" as sometimes the others have been doing.

WILSON: Very good. You've expressed the chief elements

[31]

of this shift in attitude very succinctly. Did the Americans who participated, whom you talked to, understand the situation in these terms as clearly as you've put it? Was this the American policy in that sense?

LOMBARDO: American -- you mean in the States? You mean Congress, public opinion, or what?

WILSON: No, that's another question. The Americans who came to Italy in the ECA mission, the Embassy people, those people. Did they -- say the economists who came from the United States -- they see the problem in this...

LOMBARDO: Oh, some of them did. For instance, if I recall correctly, Harlan Cleveland and two others more or less felt that way, yes. Of course, maybe there were many others who understood, but I wouldn't be able to say because some of them probably I have never met and some others I couldn't recall today. But there is no doubt that some of them felt that way. Some of them learned to feel that way. Incidentally, at that time I was a commuter between Washington and

[32]

New York, and I remember every time I used to arrive there, at the State Department, they wanted to have a long quiet talk at the Italian desk. There was a Mr. [Edward E.] Hunt with whom I used to have long conversations about the situation. But there is no doubt that little pieces are going together, one after the other, and so forth and so on, and these little pebbles at the moment made a little mound. And so this helped, too.

WILSON: Some people with whom I've talked have suggested that the one difference between many of the Americans and people in Italy and in other countries was that many of the Americans were Keynesian, and that some of you people were not.

LOMBARDO: Oh, yes, some clashes of that kind. I experienced them myself, some disagreements. Incidentally, in the problem of the new setup of Italian steel and iron industry, I had a clash with some of the experts. Some of them were absolutely against the idea that Italy should create a steel and iron industry worth that name, based on considerations of international costs,

[33]

because costs and prices were practically political. For instance, there was a clash of sorts among ourselves between those who wanted most of the iron and steel to be produced only from scrap iron, and those -- whom incidentally I supported strongly -- that felt that in special localities where iron ore could be brought and fuel, coal, coke, and so forth and so on, could be supplied at international prices, we'd be able to produce iron and steel at international prices. And that is what happened. I was Minister of Industry and Commerce at the time, and reorganized the industry. But I remember there was opposition. If I am correct, a certain Mr. [Ben T.] Moore, an expert in that field, was entirely against it. But then, after lengthy discussion with experts, I decided, with Ambassador [J. David] Zellerbach, to clear the situation and I have to say that Ambassador Zellerbach, after having studied the problem, agreed with me.

WILSON: Did you have satisfactory arrangements with the people in Italy who went to the OEEC, for example? Was there coordination there?

LOMBARDO: Oh, I think there was enough coordination.

[34]

First of all, as far as I was concerned, Mr. Wilson, I was able to weigh my functionaires and my men, and so therefore, if they did not share my philosophy, since I was politically responsible, well, I didn't use them. I remember one thing, for instance, that in a way is connected with that -- the Torquay and Annecy discussions on tariffs. At that time I was minister for Foreign Trade, and it was evident to me that we were supposed to contribute to the effort of reducing tariffs. We had a tremendously high tariff, and the orders to my high functionaires were in the sense of reducing tariffs. I was watching them very carefully, because some of them, excellent though they were, were coming from a former period of activity in which the philosophy was exactly the opposite.

Consequently, when I realized they were pussy-footing a little too much in following their minister's advice, I used to ring them up, call them over the phone, and just start to argue about a certain attitude they had taken and so forth and so on. Then there were frequent meetings. After awhile, we made out of them the excellent elements who would represent

[35]

us in the interests of Italy and the success of the ERP.

WILSON: This is probably not a very correct question since you had information from various sources, but from what sources did you get most of your information about what was happening in Paris? Through your delegation? Did you get much information also from the ECA mission here in the Embassy in Rome?

LOMBARDO: From the three.

WILSON: From all three.

LOMBARDO: Yes. Trying in a way, to get various information, reports and so forth, and so on. There were discussions sometimes. And we asked for information when there was evidence of things that could become dangerous discrepancies. I had good sources in order to be able eventually to correct, to steer a different way, or invite my people, or our people, to do what they should do in order to obtain that goal.

WILSON: How should I interpret the relationship between the office, Harriman's office, in Paris, the office of

[36]

the special representative, and the ECA mission in Rome? Did the mission in Rome have considerable latitude? Was it reasonably independent in working with you in deciding on programs on the allocation of funds?

LOMBARDO: I had the feeling, maybe it was not entirely correct, that they had wide latitude. When there was, if not a stumbling block but some disagreement about procedures, and means, or on general problems such as the one of the steel industry I just mentioned, well, the final reaction on the American side was very prompt. From our knowledge of the red tape it takes, at least in Italy, I would never have suspected it would not require a special okay or negation from a top level. It gave me the impression at the time that they had quite some latitude.

WILSON: Ambassador Zellerbach was apparently very successful. I've heard this from a number of people.

LOMBARDO: Yes, very successful. At that time you had also Ambassador Dunn who was excellent, absolutely.

[37]

WILSON: Yes.

LOMBARDO: This is, of course, off-the-record, sir, but in my opinion, the two great United States Ambassadors that we have had from 1945 on, have been a man and a woman.

WILSON: Oh?

LOMBARDO: Yes. Dunn and Mrs. [Clare Boothe] Luce.

WILSON: She's had a remarkable career.

LOMBARDO: She had tremendous courage, too, and she knew plenty of things. In my mind, they have been the two best Ambassadors we have ever had. Besides, I would have to say that in those times, Ambassador Dunn's staff, and later on also Mrs. Luce's staff, included some A-1 elements.

WILSON: Very good.

I wonder if I might ask you about this matter of trade? Some people have suggested that if there was any distinction, or difference, between the Department of State and the ECA people, it was on how one should

[38]

approach liberalization of trade. The Department of State, of course, under Cordell Hull, had been committed to global liberalization, the GATT approach. What happened in Europe was that the ECA accepted a regional liberalization as a first step. Did you recognize any conflict between these two approaches?

LOMBARDO: No, at that time I did not recognize any conflict. As a matter of fact, liberalization which had derived from the procedures set by the OEEC had shown its fundamental necessity. In a way, I think either directly from the State Department, or by the Ambassadors, or through the ECA officers especially the top ones, there has been a definite trend to favor as much liberalization as possible and especially taking into consideration the necessity of convincing the Europeans that it was something essential for their future. Incidentally, there were matters pertaining to the monetary problem and to the currencies being involved through the multilateral movements, which was something unheard of and unthought of at that time, because it was practically the reverse of what had been happening many

[39]

and many years before, when every country practically hoarded its own little riches, or big riches. Eventually the policies were extremely severe in matter of multi-lateral settlements of the ledger. Consequently, this has been evidently the fruit of an effort of indoctrination in a new philosophy which has eventually contributed a lot to the recovery of Europe.

WILSON: There were some difficulties with the American position on tariffs, particularly on the import of agricultural goods, problems of the complexity of the customs arrangements, and this sort of thing. Did you have discussions at the time you were Minister of Foreign Trade about...

LOMBARDO: Did you say export of Italian agricultural products?

WILSON: Yes.

LOMBARDO: Well, we had the old story of the cheese and of the cherries, things of that kind. Naturally, for our producers and exporters that was a way chosen by the Americans for trying to avoid importation from Italy of certain products we were told were upsetting the market there. But I explained that it wasn't true.

[40]

I, myself, once went in one of your stores and had been following the procedure through the labs of the Food and Drug Administration. It was absolutely untrue because the same mentality for the protection of the consumer was referring to products imported, or to products made at home. Consequently, I remember that I explained this to the Chambers of Commerce in Genoa, Milan, Rome, explaining that they were not restrictive practices pointed toward Italian products, but we should have to behave in a different way.

Incidentally, it was not only the Americans, but also the Britishers. For instance, about tomato paste, there were the same troubles. So what happened was that the best Italian industries in that field changed their obsolete equipment, and therefore they could produce a product which was no longer subjected to the previous remarks and contentions. I generally enjoyed considerable credit from industrialists and the businessmen and so forth and so on -- they finally realized that it was not an issue of trying to bar some Italian exports, but that there were obvious reasons for the requirements and they had to comply with them.

[41]

WILSON: Very good.

You were involved with former Ambassador Zellerbach in this Marketing Council, the Italian-American Marketing Council.

LOMBARDO: Yes.

WILSON: Was that involved with the productivity drive?

LOMBARDO: No, before.

WILSON: Before.

LOMBARDO: Before, in a way, because I was still a Minister and we decided with Zellerbach -- we had become very friendly -- that there were many things which were negative for Italian exports. First of all, there was the lack of knowledge about the certain products we could make in Italy.

Secondly, most of our people ignored the ways trade was being handled in the United States. Therefore, for instance, there were problems of quality, problems of identity of the bulk of the shipment to be sampled according to the original sample, or

[42]

problems about delivering at the proper time the goods which had been ordered by either resident buyers or traveling buyers. Besides, there was the factor that very often in the States they did not know that Italy, for instance, would be able to produce certain goods which would be appealing to the market. On our side, people who were used to producing some goods, and eventually high quality goods, did not realize that some of the traditional factors and designs had become obsolete in the States. Consequently, there was a necessity for marketing research of merchandising knowledge on both sides. That was the idea behind the Italian-American Council for Marketing, being helpful to exporters, Italian exporters, Italian importers, buyers here and buyers on the other side. We were concerned with things which could be made in a better quality, of products which were unknown and which could eventually be channeled on the American market, and especially with how to deal with the American importers. On this side, I have to say, they'd be considering the market of the United States as they had been considering the market of Belgium or

[43]

Netherlands, which were absolutely entirely different. We had been doing some very effective work in our meetings, in opening channels of commerce, and dealing with agencies on both sides, but it didn't last much longer.

We had two Secretaries, one in the United States and one in Italy. We had counsel from groups in the States and here -- from experts on imports and exports, from businessmen on both sides, and from some good technical people. We did our best, but at a certain moment we had to wind up the whole thing because there was evidence of antagonism from the bureaucratic setup, in a way, and we had the impression that ICE was feeling that there was an invasion of its own field. Also, I have to admit that some of the traveling and resident buyers of American importers, especially department stores, were in a way resisting the intrusion of somebody they felt would one day hamper their plans for their usual seasonal visits. There were jealousies of small vested interests and an entire lack of understanding from the Government that caused Ambassador Zellerbach and myself to decide to wind up the whole thing.

[44]

WILSON: I can assume from what you said though that the American Government did recognize the need for you to develop that and was sympathetic to it.

LOMBARDO: Oh, yes, more than entirely sympathetic. I have to say that such sympathy was expressed also in favoring as much as possible some endeavors which have been done with other bodies and agencies, for instance, with the National Handicrafts Development Company, a nonprofit organization, which I had been president of for ten years. It handled Italian handicrafts. We obtained a special loan of around five million dollars from the Export-Import Bank, for developing and modernizing handicrafts. But this was again sort of an okay from the American administration. Then, in a way, the effort made with the Italian-American Council for Marketing bloomed subsequently, after we had been winding up the endeavor with an extraordinary thrust of promotion. There have been a few promotions, for instance, one at Filene’s in Boston. I was able to arrange a tremendous promotion of Italian industrial design and handicrafts with things which had been studied anew for the American

[45]

market. This was a private enterprise, but there is no doubt that it had the encouragement even from the administration. No, in terms of helping us to find the way, up to the point of decent, honest competition, I have to say that the United States administration has always been extremely helpful.

WILSON: Very interesting.

I mention this question of productivity.

LOMBARDO: Yes.

WILSON: There seems to have been for a time, in ’49, ’50, and ’51, something of a mania -- maybe that’s too strong a word -- but this was very strongly pushed by the United States. What was your reaction? It wasn’t the only solution to your problem, it…

LOMBARDO: It was an extremely important solution. There was a strong action from the United States administration from the ECA. There was a great reluctance in Italy. There were things, novelties, that they couldn’t understand.

From 1955 to 1969, for most of 14 years, I was

[46]

in charge of the Italian Productivity Council. I have to say that we don't realize it. Probably, it will require a good researcher and a good historian, or economist, to dig out all that. There is no doubt that the concepts about productivity, the ways and means, in terms of industrial relations, public relations, budgeting, marketing, and merchandising, and so forth and so on, derive exactly from that drive. As I told you, the Italians were reluctant at every level, from the bureaucratic level down to the immediate, private initiative. Not only that, the public area was being even more reluctant.

So, things which today are common, or could be more diffused -- for instance in terms of distribution channels like the self services and the supermarkets -- derive from the productivity drive. It involves things like the revision of procedures in administration offices for organizing, or following matters of organization, and the method derived from that. Even the words which have been sometimes acquired, like that about marketing, merchandising, the necessity of finding the ways for higher productivity in the factories, in the

[47]

farms, in trade, which today have been practically incorporated in our way of thinking, all derived from that drive. It has been extremely beneficial even if people were reluctant, even if people were skeptical, and even if people were inimical against that. Little by little, it has crept in and practically is bearing fruit.

WILSON: That sort of attitude, and the change of attitude that was required, implies something very much more basic than just the giving of aid. Did you feel at the time that the Americans who were pushing the productivity drive fully understood what would be implied in changing the attitudes of the worker towards his position in productivity, changing the attitudes of the government agency; that they were fully cognizant, understanding, of what they were pushing for Italy, or for Europe?

LOMBARDO: Yes, to a point. I wish to say that sometimes they have been even explicit in saying, "After all we are trying to help you to be able to compete against us." They were very candid about that. This is one of the

[48]

things which in a country, by nature as skeptical as mine, three thousand years of Latin civilization and so forth, was not understandable. They felt that there must be something, somewhere, against them, and for the benefit of others. I remember that very often a very plain statement was the way to overcome difficulties and reluctance. At a certain moment, they had that reasoning, some of my countrymen. They concluded, "These Americans are strange people; they are not like the others. Look here, they are preparing competition against themselves." After all, it's a new way of thinking. "Maybe there is something else left, something attached we can't know, but decidedly they are unselfish. Decidedly, they have a great vision." That was, in a nutshell, probably the reaction of a certain number of people. Because of that point of view, the American experts and people pushing for productivity have been explicit. They were saying, "We wish to have you Europeans on your feet again, have a modern vision of what production and trade, and technological development means, in order to be able to produce better, at lower costs, and in better quality for

[49]

mass consumption even if it is going to hurt us in the future."

WILSON: A vague sort of question occurs to me at this point. Were people concerned that the acceptance, the adoption, of these attitudes would make Italy less Italian and more American? I am referring to this notion of the "Americanization of Europe."

LOMBARDO: Yes, how right you are. One of the reasons for reluctance was the feeling, "No, we are not American. Oh, no, we have Italian ways, that are different. They don't know anything about our setup," and so forth and so on. That was the general statement or conclusion that very often was made. Nevertheless, little by little, grinding one idea after the other, and seeing with the pilot plants that we had that the productivity drive showed results, they had to realize that this was the way.

I won't forget. For instance, in the agricultural field, I recall farmers who would say, "No," when we tried means for higher productivity. So we had to start painfully to find a few ones who would agree to try it. The moment the first crop came, and

[50]

they could make an evaluation, boy, everybody rushed for it, I recall, every one of them. But it took the experience of seeing how it worked. Probably, today, with the special rice strains, or the special wheat strains, it happens the same way.

WILSON: You were not concerned, though, personally about it?

LOMBARDO: When I was the chief of the Council for Productivity, yes, and also for the agriculture. I had always limitations from the Ministry of Agriculture, but nevertheless we planned pilot farms and the dissemination of information.

WILSON: What I meant to say was that you were not worried about becoming Americanized through this?

LOMBARDO: No; from this point of view, not a bit. First of all, in a way, I have always thought that the attitude of Europe towards America is an entirely wrong concept, because America is practically a unified Europe with a common language. It's a young projection of old Europe with less previous scenes and probably

[51]

a few more new ones, but, nevertheless, it was a projection of Europe. I do not agree with the idea that America is something entirely different from Europe. Well, in a way, in the standards of living, the way of life and so forth and so on, the difference from one continent to another -- maybe they account for something. But essentially it's not the same differences that may exist between Europe and Asia. They are two worlds apart.

The northern shores of America have been settled by Europeans who were in search of a freedom of conscience, of religion, and of freedom. And they had to work hard and they were able to obtain the extraordinary results that have been obtained there. These results came from those acquired freedoms and especially the feeling that the immigrants had to work hard. Fortunately, your thirteen colonies did not run the risk of becoming another Europe, subdivided.

Another thing that Europeans have never learned, in my way of thinking, is that the French Revolution, which has struck the minds of the people because it had plenty of bloodshed, was far less beneficial to the freedom and dignity of humanity than has been the

[52]

American Revolution. The American Revolution has taught us about human rights and about the concepts of self-rule of a community of men and women.

In my mind, the real great revolution is the American Revolution, not the French one.

WILSON: Very interesting.

If I may shift to another matter for a moment, I would appreciate any comments you would have to make on the Italian political situation, particularly at the time when you played a very important role, in 1948. What, in your view, was the American understanding and reaction to this crisis? From the documents I've seen, there was considerable concern among Americans about what might happen in Italy in '48. It was a concern about a possible Communist takeover. Would you comment on that?

LOMBARDO: Yes. On the one side of this political battle were the Christian Democrats under the leadership of President de Gasperi, the Social Democrats under the leadership of [Giuseppe] Saragat, and my own group, Socialist Unity. The electioneering campaign in 1948 was practically based on the fact that the Communists

[53]

and the Socialists -- who incidentally formed the "popular front" and that was why I quit the party, and formed my own -- had as their intention to wreck the Marshall plan. And this was upon the orders of the Cominform, which was following the dictates of Stalin, who since 1946 had declared an end to the wartime alliance. He indicated that that was a temporary and expedient factor, and that the world was divided into two camps. The speech by [Andrei] Zhdanov of the Cominform and the statement put it very neatly; "two camps." From that moment on, it was evident that this Manicheistic attitude would influence the European countries on decisions to be taken. Their trying to kick "the pan in which the European eggs were frying" gave the Europeans, and manly the Italians, the feeling that something very important was at stake.

In 1948 we had two events which show how the two roads were diverging. One was the victory of the democratic parties in Italy in 1948. The other one -- and incidentally, it helped cause the Italian democratic victory -- was the coup d' etat in Prague, in February. Consequently, there was evidence also

[54]

for the man in the street who doesn't understand too much about the situation. Of course, there were the Communists and Socialists and their henchmen who were entirely against the Marshall plan, opposing, fighting it bitterly, and this, of course, got a reaction from the other side. The catalyst of this reaction was the fact that the Communists and the Socialists and their extremist followers were against the Marshall plan. Politically, I have the feeling that in 1948 the Marshall plan, the idea of the Marshall plan, and the start of aid had a tremendous impact.

WILSON: There were statements on the part of the United States Congress and on the part of some administrative spokesmen, that if there was a Communist victory, aid would be cut off to Italy. What was the reaction to such statements in Italy? That's in a way an implied threat. Did such statements play much of a role?

LOMBARDO: I don't remember exactly what were the warnings, and by which channels. Therefore, I don't know whether we were deliberating upon a warning or a threat, if you wish, or if it was a plank chosen by us. Certainly,

[55]

in my speeches, in my meetings, I always tried to convey to their attention the fact that the Russians, and the other Communist regimes upon orders from the Kremlin, had disassociated themselves from the advantages of that solidaristic design which was the Marshall plan. I noted that evidently there were two worlds, two camps, and if we were falling into the other camp, we couldn't expect any longer to rehabilitate and to gain recovery by American aid. We tried to convey to the attention of the people that we couldn't expect any Russian aid for this, and this, and this reason. But I have the feeling that it was more a political elaboration of ours, rather than a very definite warning or threat coming from the administration.

WILSON: There was a great deal of attention in the United States and particularly in the press about the Italian elections of 1948. Some people were urging Italo-Americans to write and to urge that...

LOMBARDO: Yes, that was part of the campaign.

WILSON: Did it play a role?

[56]

LOMBARDO: Yes. It had evidently full results. The Italo-Americans mostly came from the central and southern part of Italy, and they advised their relatives that eventually a Communist takeover would practically sever existing ties, and impede even some of them from receiving the monies they were to receive from their relatives. This factor was an electoral help. But as propaganda, it was absolutely minor if compared to the tremendous propaganda machinery of the Communists and of their allies, which was supported strongly and evidently financed by the Russians. They were pouring out every day such a tremendous amount of lies and generalities and slogans, all of them anti-American. After all, that was something that we had to fight against. Any decent means for doing it had to be accepted.

WILSON: Perhaps I shouldn't tax you too much. As the last question, surely there were some difficulties with the programs. The one that's come up most often has been the restrictions placed on the European Recovery Program by the United States Congress -- the yearly allocation and the anti-Socialist bias which often was

[57]

reflected. I wonder if you might comment on these, particularly as a Socialist leader. Was there a manifestation of a confusion between legitimate Socialist approaches and Communist approaches on the part of the Americans?

LOMBARDO: The first efforts were made on some of our American friends in Congress and among some of the leaders of your public opinion. I remember once I was just astounded by some Americans when I was trying to explain what was socialism and what was communism. They discovered, through my indication, that the word "socialism" was coined in the United States by a man called [Robert] Owen, when on the banks of the Wabash, he tried to create Harmony first, and then New Harmony. That was quite a discovery for them and, therefore, I generally used it to quiet them down. There was that sort of bias. But I explained what it was all about, letting them understand that the word "socialism" had been robbed by the Communists, who were absolutely something entirely different from democratic socialism. I also remember another slogan of mine with some of the Americans

[58]

was that there was enormously more socialism in the United States than they have even dared in Russia to imagine for one moment, in their own country and regime.

Here in Italy, as a matter of fact, one of the arguments was generally lifted by the Socialists. Well, there are anti-Socialists, and there are Capitalists, and so forth. Our reaction was, "You are a Socialist party but you are a complement of the Communist Party; you are not Socialists at all. You are absolutely cryto-Communists; therefore, you are not entitled to talk about it."

Secondly, "Capitalism, yes, capitalism. But state capitalism -- the worst of it exists exactly in the regimes you are hoping for and fighting for, and this is a cruel, inflexible, relentless form of slavery, while the so-called private capitalism can evidently do plenty of harm, but in democratic societies its nails can be eventually cut." "Look," we used to say, "see what happens even in the United States, what happens in the United Kingdom," and so forth and so on. Therefore, there is no doubt that

[59]

the bias, the anti-Socialist bias, of some of the people in your Congress had some echoes here and there.

But then there was another argument. Look at the other Social Democratic or Socialist parties of Europe. They are in favor of the Marshall plan, and they are in favor of an alliance with the United States. Don’t forget that while the Marshall plan was being carried out, in the meantime, in ’49 the Atlantic Alliance was signed. The efforts toward building an integrated Europe had started at that time, and so there were, therefore, three fundamental issues: a future United Europe; the current recovery of the countries which would form that United Europe, and which we cannot eventually reach without this massive aid; and, finally the alliance which may safeguard us from the Soviet Union.

WILSON: Very good. You were not worried that the aid, which did come, would benefit one sector of Italian society, the big business portion? This did not happen in your view?

[60]

LOMBARDO: No. That was one of the polemics. I remember in Parliament I came always with figures. "Oh, you said this; now look how things are. There is so much for this; and. this and this, which are big industries, but there is so much that involve these small and medium-sized industries." Of course, in that case, the effort of grabbing as much as possible was being made by everybody. Incidentally, the problem of selecting and studying the various projects was practically centered upon my ministry because there was a committee called CERPI which means "ERP Committee for Industry," and second subsection -- machinery and equipment. Its purpose was to study those projects to make sure that there would be no vested interests trying to grab -- to "catch as you catch can." On the other side, they were always accusing us about this, and they were always regularly defeated by substantial denials and demonstrations that it was not true.

WILSON: Very good. Very good.

List of Subjects Discussed

Acheson, Dean, 23

Clayton, William,. 22-23
Cleveland, Harland, 31

DeGasperi, Alcide, 12, 24
Dunn, Ambassador James, 36

Hunt, Edward E., 32

Italy:

and "Americanization," 49, 50
Communism in, 10-12, 52, 54-57
and East-West trade, 17, 18
election of 1948 in, 52-56
and export restrictions, 16-17
foreign trade of, 39-45
productivity campaign in, 45-52
and reconstruction, postwar, 4-6, 14
Socialist party in, 12, 52, 56-59
and U.S. aid, 2

LaGuardia, Fiorello, 25
Lombardo, Ivan M., and role in economic missions, 24-25
Lovett, Robert A., 2
Luce, Clare Booth, 37

Marshall plan, and Italy, 20-24, 27-30, 35-36, 53-55, 60
Moore, Ben T., 33

Nenni, Pietro, 12

Organization for European Economic Cooperation, and Italy, 33-34, 38-39

Tariffs, and Italy, 34, 39
Thorp, Willard, 2, 10
Togliatti, Palmiro, 10-12

United Nations Relief and Rehabilitation Administration (PNNRA), and Italy, 25-26

Zellerbach, J. David, 33, 36, 41
Zhdanov, Andrei, 53

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