STATEMENT OF FRANCIS T. WILLIAMSON, DEPUTY DIRECTOR, OFFICE OF WESTERN EUROPEAN AFFAIRS, STATE DEPARTMENT; ACCOMPANIED BY ALLEN MORELAND, CONGRESSIONAL LIAISON OFFICER, STATE DEPARTMENT; AND THOMAS BEALE, OFFICE OF BRITISH COMMONWEALTH AND NORTHERN EUROPEAN AFFAIRS, STATE DEPARTMENT Mr. WILLIAMSON. Mr. Chairman, my name is Francis T. Williamson, deputy director of the Office of Western European Affairs, Department of State. I have with me Mr. Beale of the Office of British Commonwealth and Northern European Affairs. He is also here to deal with any question regarding the United Kingdom. Then, of course, there is also Mr. Moreland present. Mr. LANTAFF. Proceed. Mr. WILLIAMSON. I understand that your subcommittee is going to Italy, Trieste, Paris, and probably to Vienna. Mr. LANTAFF. Are you going to include Germany? Mr. WILLIAMSON. No; I will take those four, sir: Trieste, Italy, Austria, and France. Mr. LANTAFF. And you do not go down to North Africa, either? Mr. LANTAFF. Then suppose you go ahead with Italy and Trieste. Mr. WILLIAMSON. As far as Italy is concerned, I would like to make a highly general statement which would follow from a successful visit that Prime Minister De Gasperi has just made to Washington. In our office of the Department of State we are impressed with the rate of progress which the Italian Government and the Italian people have made in postwar reconstruction. As you well know, the country was a battleground and there was great destruction of physical property and the destruction of the morale of the local population. STABILITY OF ITALIAN GOVERNMENT The Italian Government, which is a coalition of center parties, is one of the most stable in Europe and they are to be congratulated upon the way in which they have attacked the political and economic problems in Italy and the achievements that they have made in all fields. One of the encouraging signs about modern Europe is that such people as De Gasperi do appear after a war and are able to take charge and rebuild their country. The Italian Government has since 1945 shown great enthusiasm for the whole general process of reorganization and reconstruction of Europe as well as that of their own country. It has cooperated in all fields of international organization. It has participated in as many fields of international organization as its treaty permits it to do. In 1949 we urged that Italy be brought into the North Atlantic Treaty and it was and is a fact that it proved to be, in the North Atlantic Treaty Conference and the council, one of the most enthusiastic of its members. It supports the various efforts for the common defense of Europe. It supports such efforts as the Schuman plan and others, to bring about a closer economic integration of Europe. It now participates in the European Defense Conference and it is very much interested in building up, under General Eisenhower, a common European army for the defense of Western Europe. The Communist Party in Italy has been nullified insofar as the National Government is concerned, and it is so well isolated in the National Assembly that it no longer is able to obstruct general Italian policy. The Communist Party, however, is strong in various localities in Italy, particularly in the cities and particularly in the cities of the industrial area of northern Italy. However, the Italian Government is capable and has proved to be capable of dealing with that situation. In its economic life there has been a promising expansion of Italian economic life, in plants which would be required for the manufacture of goods not only designed for European defense but also for Italian consumption. Machinery is in existence in those plants, and the skilled labor force is also in existence. POVERTY OF RESOURCES IN ITALY Italy is, however, extremely poor in terms of resources, and it is forced to import the major part of its raw materials, particularly in such fields as coal, metals, wool, and cotton. Therefore, Italy is in a bad position internationally, insofar as it has to compete in the international market for raw materials against other countries of the world. The Italian Government has attacked the economic problem with great vigor, and it has drawn up a schedule of priorities in the economic fields which it now attempts to follow. It has tried to husband its economic resources, to collect and to stockpile its raw materials and to provide for such controls over those raw materials as will contribute to the avowed aim of the Italian Government, namely, that of rearmament. At the same time it is necessary for the Italian Government to carry out, for reasons of internal politics, measures of reform within Italy, particularly in the field of land reform. A start has been made in that direction. Other reforms, such as tax reforms, are in progress, they are being made, and we hope will be carried out. Nevertheless, the progress in such things is slow. PROBLEMS FACING ITALY The chief difficulties, faced by Italy-and I speak only in very general terms-are, first, the revision of the treaty. In 1947 Italy signed the treaty which had been negotiated by the big powers and ratified by 21 other countries. For some time we have been working on the diplomatic field to bring about the revision of the Italian Treaty. As the result of the recent meeting at Ottawa and as the result of De Gasperi's meeting with the officials in Washington, agreement has been reached among the United States, United Kingdom, and France to revise the Italian Treaty which would enable Italy first to increase her armed forces over the limit prescribed and secondly to produce goods in the field of armaments which have heretofore been prohibited. That will take a great deal of time, simply because there are 21 countries signatory to the treaty. We do not wish or did not wish to embark upon a policy which would amount to a scrapping of the Italian Treaty, for obvious reasons. The second general problem facing the Italians is as I say, this problem will be solved during the course of the fall-the second general problem faced in Italy is to use its available resources in such a way it will contribute both to the internal stability of the country and to the common effort for Western Europe rearmament. The skill exists for that; the enthusiasm of the people exists. It remains for the Italian Government and the Western powers including the United States to utilize and to channel those efforts in such a way that the Italians can carry out this expansion of their economic machinery and enable them to make a substantial subsequent contribution to Western Europe's rearmament. Intimately involved in the Italian problem is also the Trieste question. There is very little that need be said about Trieste, except you recall, perhaps, that it is under a joint-Anglo-American military occupation. It is divided into two zones (a) under the British and ourselves and (b) controlled by the Yugoslavs. TRIESTE CONTROVERSY In March March 20, 1948, Great Britain, France, and the United States, issued a declaration saying that the terms of the Italian Treaty which affect Trieste could not be carried out, and that TriesteI mean, the whole territory-would be returned to Italy. There has been considerable discussion since that time of how the Trieste question should be settled. The importance of settling it was called to the attention of the Italians recently in Mr. De Gasperi's visit and we hope and think that it is more than a pious hope, that Italy and Yugoslavia will negotiate a bilateral settlement of the Trieste question which will then remove it as one of the causes of friction in Europe. The British commander, General Winterton, in Trieste worked very closely with our political adviser and with our ECA representatives and I know offhand of no administrative or political difficulties which have been encountered there. Now, do you want me to go on, sir, to Austria and France? Mr. LANTAFF. I would like to ask you a few questions with reference to the zones in Trieste. I did not know that the area had been divided into two zones. About how much of the area is divided into a zone occupied by the British and the Americans and how much is in the zone occupied by the Yugoslavs? Mr. WILLIAMSON. Well, the territory of Trieste is a limited territory, and it is pretty well cut off from the rest of Italy and the rest of Yugoslavia by mountains. Zone (a) consists of the city of Trieste and the outlying area. Zone (b) is the rural part of the territory and a good many towns stretching down, oh, I should say 30 or 40 miles down the Adriatic-but the city itself is zone (a). Any negotiations are complicated by the fact that zone (b) which is under Yugoslav control contains many Italians. Many of the towns are predominantly Italian. At the same time, the border area in zone (a) is predominantly Yugoslav. In trying to Mr. CURTIS. How big an area are we discussing? Mr. WILLIAMSON. Well, the area of Trieste is roughly from 320 to 350 square miles. Mr. CURTIS. That large? Mr. WILLIAMSON. Yes, and the population is roughly around 330,000 people. Mr. LANTAFF. Is that in the whole area? Mr. WILLIAMSON. The whole area, yes. Mr. LANTAFF. Well, in our mission which is in Trieste, I assume that we have the general military mission and as component parts of that we have the Air, the Navy, and the Army, is that correct? Mr. WILLIAMSON. Well, could I go back just a little? Mr. LANTAFF. Yes. Mr. WILLIAMSON. To say that there are two elements in the occupation of zone (a) of Trieste, the British which is distinct from ours, and the commander in charge of the territory, of the occupied territory that is zone (a) is a British general. AMERICAN ACTIVITIES IN TRIESTE We have in Trieste a garrison of troops which is limited by the treaty to 5,000. We have a political adviser and his immediate staff and we have an ECA Mission. The general in charge of our garrison is in charge of all the military components there and that represents the Army, the Navy, and the Air Force. Mr. LANTAFF. And the ECA is sending economic aid? Mr. WILLIAMSON. In the last fiscal year we had a small program for Trieste. Mr. LANTAFF. But no military aid program? Mr. WILLIAMSON. No military aid program because that has been prohibited by the treaty. Mr. CURTIS. Just general economic aid. What area does Trieste serve as a port for? They would serve Austria, I would imagine, of course, would it? Mr. WILLIAMSON. Well, historically Trieste has served in the Mediterranean as an outlet for Austria and up until 1918 it was an Austrian city and it had one of the palaces of one of the archdukes which now, I think, is the headquarters, our headquarters. Mr. CURTIS. So its economic position is still in connection with Austria, would you say Mr. WILLIAMSON. Unfortunately-well, yes and no. Historically it served as the outlet for the whole upper Danube area. There is very little need for any outlet for that area right now and we have utilized Trieste exclusively for shipping in ECA goods into Austria, and that has been one of the chief sources of income and employment in Trieste. It is also utilized for the shipment of goods, goods which are imported into Yugoslavia, but that is of small importance. If it were returned to Italy, it would fit very well into the Italian transportation and shipping pattern. Mr. CURTIS. But it is not used so much for that now, is it? Mr. WILLIAMSON. No, because of the many administrative restrictions that exist; as far as Italy is concerned, it is not subject to Italian sovereignty. Mr. LANTAFF. When did Yugoslavia get into this area? Mr. WILLIAMSON. As the result of the first war-1919. Did you ask how Yugoslavia got into this? Mr. LANTAFF. Yes; that was the last war? Mr. LANTAFF. As the result of this last war? Mr. WILLIAMSON. Yes, the last war. Mr. LANTAFF. Primarily, from the subcommittee's standpoint, what we are interested in is the integration of supply services for the Army, the Navy, and the Air Force, about which I presume you would know very little. Mr. WILLIAMSON. Well, I might even add to that and say I know nothing. Mr. CURTIS. Do we have any installation there in Trieste? Mr. WILLIAMSON. There is a small airfield in Trieste. Mr. CURTIS. Which is operated by our Air Force? Mr. WILLIAMSON. Which is utilized by our Army. Mr. LANTAFF. Are we doing anything at that airfield, such as expanding it? Mr. WILLIAMSON. Not to my knowledge. Mr. LANTAFF. Mr. Brownson? SCRAP SITUATION IN ITALY Mr. BROWNSON. I would like to ask a question, getting back to Italy. Some time ago an American businessman told me that, after the close of World War II, a group of United States scrap dealers went into Italy and contracted for 50,000 tons of scrap. It was all ready for shipment, it was on the docks, but then they were refused permission to ship any of that scrap by the State Department. Mr. WILLIAMSON. When was this? Mr. BROWNSON. At the end of World War II. Mr. WILLIAMSON. Well, I was not in the Italian work at that time, but I daresay that is true. Mr. BROWNSON. Off the record. (Discussion off the record.) Mr. WILLIAMSON. Italy is an importer of scrap and not an exporter of scrap. Our policy is to rebuild the Italian industries to such an extent that they can produce for the Italian needs. Particularly if the Army is expanded as the result of our action on the treaty, we consider it highly desirable to provide that Italian factories and some of them, after all, had long experience in making those items could provide the items which are now provided under our assistance program, from the United States. Mr. BROWNSON. Well, just how far does that policy go? |