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80th Congress, Ist Session - - - House Document, No. 90-481, Vol. IV

 

Foreign Relations
of the

United States
1946

Volume IV

Paris Peace Conference:
Documents

 

United States
Government Printing Office
Washington : 1970

					
				
				
INTERNATIONAL Atv cuted

DEPARTMENT OF STATE PUBLICATION 8492

HISTORICAL OFFICE

BUREAU OF PUBLIC AFFAIRS

For sale by the
Superintendent of Documents, U.S. Government Printing Office
Washington, D.C. 20402 - Price $5.50 (Buckram)

				
      
      
				
				









                          PREFACE

  This volume, comprising, documents generated by the Paris Peace
Conference, was compiled and edited under the direct supervision of
S. Everett Gleason, Chief of the Foreign Relations Division.
  The compiler of the volume wXs Neal H. Petersen who was assisted
by William Slany.
  A companion volume, covering the p)roceedings of the Conference,
appears as Volume III in the "Foreign Relations" series for 1946.
  The Publication and Reproduction Services Division (Jerome H.
Perlmutter, Chief) was responsible for the technical editing of this
volume.
                                           WILLIAM 'M. FRANKLIN
                                           Director, Historical Office,
                                           Bareau of Public Ajfairs
  JANUARY 2, 1970


         PRINCIPLES FOR THE COMPILATION AND EDITING OF
                       "FOREIGN RELATIONS"

  The principles which guide the compilation and editing of Foreign
Relations are stated in Department of State Regulation 2 FAM 1350
of June 15, 1961, a revision of the order approved on March 26, 1925,
by Mr. Frank B. Kellogg, then Secretary of State. The text of the
regulation, as further amended, is printed below:
1350 DOCUMENTARY RECORD OF AMERICAN DIPLOMACY
1351 Scope of Docamentation
  The publication Foreign Relations of the United States constitutes
the official record of the foreign policy of the United States. These
volumes include, subject to necessary security considerations, all doctu-
ments needed to give a comprehensive record of the major foreign
policy decisions within the range of the Department of State's
responsibilities, together with appropriate materials concerning the
facts which contributed to the formulation of policies. When further
material is needed to supplement the documentation in the Depart-
ment's files for a proper understanding of the relevant policies of the
United States, such papers should be obtained from other Government
agencies.
                                                            III


 

					
				
				




1352 Editorial Preparation
  The basic documentary diplomatic record to be printed in Foreign
Relations of the United States is edited by the Historical Office.
Bureau of Public Affairs of the Department of State. The editing of
the record is guided by the principles of historical objectivity.
There may be no alteration of the text, no deletions without indicating
where in the text the deletion is made, and no omission of facts which
were of major importance in reaching a decision. Nothing may be
omitted for the purpose of concealing or glossing over what might
be regarded by some as a defect of policy. However, certain omissions
of documents are permissible for the following reasons:
    a. To avoid publication of matters which would tend to impede
       current diplomatic negotiations or other business.
    b. To condense the record and avoid repetition of needless details.
    c. To preserve the confidence reposed in the Department by indi-
       viduals and by foreign governments.
    d. To avoid giving needless offense to other nationalities or
       individuals.
    e. To eliminate personal opinions presented in despatches and not
       acted upon by the Department. To this consideration there is
       one qualification in connection with major decisions it is
       desirable, where possible, to show the alternatives presented to
       the Department before the decision was made.
1353 Clearance
  To obtain appropriate clearances of material to be published in
Foreign Relations of the United States, the Historical Office:
    a. Refers to the appropriate policy offices of the Department and
       of other agencies of the Government such papers as appear to
       require policy clearance.
    b. Refers to the appropriate foreign governments requests for per-
       mission to print as part of the diplomatic correspondence of
       the United States those previously unpublished documents
       which were originated by the foreign governments.



IV



PREFACE


 

				
      
      
				
				









INTRODUCTION



  The Paris eonference of twenty-one nations, which met froin
July 29 to October 1Q3 1946, convened in accordance with the decision
                   G of Foreign Ministers at Moscow, December 16-
lDeember 26, 1945,..:;to provide the other Allied nations with an
opportunity^-to--express their views on the draft peace treaties for
Italy, Rumania, Bulgaria, Hungary and Finland. The Conference
was charged with considering and recommending chaines in the draft
treaties which had been prepared by the Council of Foreign Ministers
during its sessions at London and Paris, January 18-July 12, 1946.
  Volumes III and IV of Foreign Relation& for 1946 contain docu-
mentation on the Paris Peace Conference. Volume III, "Proceedings,"
includes accounts of the various bodies of the Conference, of the
Council of Foreign Ministers and their Deputies during the period of
the Conference, and memoranda of conversation. The present volume
contains the draft treaties submitted to the Conference by the Council
of Foreign Ministers, amendments proposed by delegations, written
observations by ex-enemy states, administrative and procedural
documentation, United States diplomatic correspondence and memo-
randa, commission reports on Trieste by a special CFM\ commission
and by the Conference Subcommission on Trieste, and final
Conference recommendations.
  For a more detailed description of the scope and organization of
the coverage of the Paris Peace Conference provided in Foreign Re-
lations, see the introduction to volume III. That introduction also
contains information regarding documentation previously published
on the Conference. Volume III also includes the following introductory
items which are of interest in connection with volume IV: a list of the
United States Delegation, a list of persons mentioned in volumes III
and IV, a list of abbreviations, and a key to document symbols.
                                                           V


 

					
				
				
				
				
CONTENTS

Page
PREFACE 2... ww ee ee ee ee III
INTRODUCTION 2... 6 ee ee ee ee ee Vv
I. Drarr PEAcE TREATIES WitTH ITaLty, RumMania, BuLtGaRIA, HUNGARY,
AND FINLAND
Draft Peace Treaty With Italy, Prepared by the Council of Foreign
Ministers .. . 1
Draft Peace Treaty With Rumania, Prepared by the Council of Foreign
Ministers .. . 63
Draft Peace Treaty With Bulgaria, Prepared by the Council of Foreign
Ministers ... 95
Draft Peace Treaty W ith Hungary, Prepared by the Council of Foreign
Ministers .. . 102
Draft Peace Treaty With Finland, Prepared by the Council of Foreign
Ministers . 2... 2. ee ee ee ee eee ee eee ee) «OO
Il. OBSERVATIONS ON THE DRart PEACE TREATIES BY THE EX-ENEMY
STATES
Observations on the Draft Peace Treaty With Italy by the Italian
Government... 117
Observations on the Draft Peace Treaty With Rumania by the Rumanian
Government .. . 217
Observations on the Draft Peace Treaty With Bulgaria by the Bulgarian
Government ... 238
Observations on the Draft Peace Treaty With Hungary by the Hungarian
Government... 249
Observations on the Draft Peace ‘Treaty With Finland by the Finnish
Government .......... tok ee ee re 282
III. Reports OF THE COMMISSIONS
Reports on the Draft Peace Treaty With Italy... ........ £4299
Reports on the Draft Peace Treaty With Rumania ......... 480
Reports on the Draft Peace Treaty With Bulgaria. ......... £478
Reports on the Draft Peace Treaty With Hungary ......... 526
Reports on the Draft Peace Treaty With Finland. ......... 568
TV. RePORTS ON THE TRIESTE STATUTE 21 1 1 wc SQ Sree
V. AMENDMENTS
Amendments Proposed in C.P.(GEN)Doc.1.......2.2.2.422. 654
Certain Amendments Proposed in Other Documents ........ 780

VII

					
				
				
Vill CONTENTS

VI. MISCELLANEOUS CONFERENCE DOCUMENTS .
VII. UnrITED STATES DELEGATION PAPERS .
VIII. CoNFERENCE RECOMMENDATIONS

NNRecord of Recommendations by the Conference
Treaty With Italy.

Record of Recommendations by the Conference

Treaty With Rumania.

“Record of Recommendations by the Conference

Treaty With Bulgaria .

Record of Recommendations by ‘the Conference

Treaty With Hungary .

Record of Recommendations by the Conference

Treaty With Finland

The index for this volume and volume III is printed in volume III.

on the Draft Peace
on the Draft Peace
on the Draft Peace
on the Draft Peace

on the Draft Peace

Page
796

813

889

918

927

937

949

				
      
      
				
				








I. DRAFT PEACE TREATIES WITH ITALY, RUMANIA,
          BULGARIA, HUNGARY, AND FINLAND

DRAFT PEACE TREATY WITH ITALY, PREPARED BY THE COUNCIL
OF FOREIGN MINISTERS, PALAIS DU LUXEMBOURG, PARISs JULY 18,
1946
CFM Files
                Draft Peace Treaty WFith Italy

                           PREAM3I1LE

  The U.S.S.R., U.K., U.S.A., China, France., Australia, Belgium,
lyelorussian S.S.R., Brazil, Canada, Czechoslovakia, Ethiopia, Greece,
India, the Netherlands, New Zealand, Poland, Ukrainian S.S.R., Union
of South Africa and Yugoslavia., hereinafter referred to as the Allied
and Associated Powers of the one part,
and Italy of the other part:
  Whereas Italy under the Fascist regime became a party to the Tri-
partite Pact with Germany and Japan, declared a war of aggression
and entered into war with all the Allied and Associated Powers and
with other United Nations, and bears her share of responsibility for
the war; and
  Whereas, under the pressure of military events, the Fascist regime
in Italy was overthrown on July 25, 1943, and Italy surrendered un-
conditionally and accepted terms of Armistice signed on September 3
and 29 of the same year; 2 and
  Whereas after the said Armistice Italian armed forces took an ac-
tive part in the war against Germany and Italy declared war on Ger-
many as from October 13, 1943, and thereby became a co-belligrerent
against Germany; and
  Whereas the Allied and Associated Powers and Italy are respectively
desirous of concluding a treaty of peace which will form the basis of
friendly re]ations between them and settle questions still outstanding
as a result of the events hereinbefore recited, thereby enabling the
Allied and Associated Powers to support Italy's application to be-
comne a member of the ITnited Nations and also to adhere to any
convention concluded under the auspices of the United Nations;

' The table of contents and the list of annexes in the source text are not
printed
here.
2Department of State Treaties and Other International Acts Series (TIAS)
No. 1604.
                                                          1


 

					
				
				


FOREIGN RELATIONS, 1946, VOLUME IV



  Have therefore agreed to declare the cessation of the state of war
and for this purpose to conclude the present Peace Treaty, <and have
accordingly appointed as their Plenipotentiaries.................

who, after presentation of their full powers, found in good and due
form, have agreed on the following provisions.

                   PART I. TERRITORIAL CLA uSES

                       S1'CTION I. Fiotiers

                            ARTICLE 1

  The frontiers of Italy shall be those existing on Janulary 1, 19)-38.
subject to the modifications set out in articles 2, 3 ...
  These frontiers are traced on the maps attached to the present
treaty.
                            ARTICLE 2
  The frontier between France and Itaily, as it existed on Januairy 1.
1938, shall be modified as follows:

                    1. Laf tle St. Bernard Pass

  The frontier shall follow the watershed, leaving the present fron-
tier at a point about 2 kilometers Northwest of the Hospice, crossing
the road about 1 kilometer Northwest of the Hospice and rejoining
the lpresent frontier about 2 kilometers Southeast of the H-ospice.

                      2. i1lont Cenis Plateau

  The frontier shall leave the present frontier about 3 kn6ilometers
Northwest of the summn-it of Rochemelon, cross the road about 4 kilome-
ters Southeast of the Hospice and rejoin the present frontier about
4 kilometers Northeast of Mont. d"Anmbin.

                    3. AIout-Thatbor-Chaberton
  1. In the Mont-Thabor area, the frontier shall leave the present
frontier about 5 kilometers to the East of Mont-Thabor and run soutlh-
eastward to rejoin the presemit frontier about 2 kilomieters WYest of the
Pointe cle Charra.
  2. In tlhe Chabertoi area, tle frontier slhalll leave tle present fronitier
about 3 kilometers North of Clhalberton, which it skirts on the East,
crosses the road about 1 kilometer from the present frontier, which it
rejoins about 2 kilometers Southeast of iollntgenevre.

  2 M'arks of ellipsis throughout this document occur in the source text.



2


 

					
				
				



DRAFT PEACE TREATIES



            4. Upper li/ee. 1¾'sabib and Zloya -allceys
  Trhe frontier shall leave the present frontier at Colla Lunga, shall
follow along the watershed by way of Mont Clapier, Col de Tenda,
Mont Ma'lrguareis whence it shall r-un sonthward(l bw -y of Mont Sac-
carello, Mont Vacchli, Mont Pietra-vechliia, Mont Le(gaIt and shall reach
a point approximately 100 meters from the present frontier near Colla
Pegairolle, about 5 kilometers to the Northeast, of Breil; it then shall
run in a southwesterly direction, and shall rejoin the present frontier
at the Pas de Strafourche, at about. 6 kilometers Southeast of Sospel.

                            ARTICLE 3

             Frontier Between Italy and Yugoslavia
  1. TlJe Council of Foreign Mfinisters agreed theat all territory east
of the line known as the French line shall be ceded by Italy to Yugo-
slavia and that the Free Territory of Trieste shall. be constituted with-
in the French line bounded on the north by a line drawn from Duino
to the French line.
  U.S 17.. proposal (not yet discussed by the Council of Foreign
AMinisters):
  The boundary betweeen Yugoslavia and Italy shal1l follow, a line that
extends from, the junction of the boundaries of Austria., Italy and
Yugoslavia as they existed on January 1, 1,938, southward along the
boundary of 1938 between Yugoslavia and Italy to the junction of that
b5oundary with, the boundary between the Italian provinces of Friuli
(Udine) and Gorizia;
  The line follows the boundary between the Italian provinces of
F'riuli and Gorizia in a southwesterly direct on7. passing Monte Man-
gart (2678) Predil Iass. to Monte Canin (2685);
  Fronm lMonte Canin, the line continues along the boundary behtween
the Italian provinces of Friuli and Gorizia to a point appr(-,oximately
0.,5 kiloineter North of the village of Mernico in the valley of the
ludrio;
  Leaving the provincial bouxndary at thirs poinft the line extends ea-st-
warId to a point applroximnately 0.5 kilometer West of the village of
Verceglia di Cosbana. a(nd thence esoulth wand between the valleys of the
Qiuarnizzo anl the (Iosb.bana to a point approximately 1 kilometer
Southwtest of the vRillage of Fleana, leaving w(nithin Yugoslavia the
road fromn Cosbana, via Nebola to Ca.stel Dobra;
  The line then continues to the Southeast pa.ssing approximately 0.7
Z7loqneter South of the towen of Vipumlzano, leaving the village-s of
ilJeda'na and Cero di sotto w"vithin Yugoslavia;



3


 

					
				
				


FOREIGN RELATIONS, 1946, VOLUME IV



  Passing about 0.5 kilomneter North of the town of San Floriano. the
line extends to Monte Sabotino (610), leaving the town of Poggio San
Valentino within Yugoslavcia;
  The line then extends southward across the Isonzo River, leaving
the town of S'alcano within Yugoslavia. and passes approximiiately 2.2
kilometers Fast of the centre of the city of Gorizia. leaving the high-
way f romt Salcaino to Aisocvisa within Yugoslavia and the tow?.vn of San
Piefro within Italy;
  From?, a point immediately southeast of the town of San Pietro the
line extends southwest ward to a point between the town of Merna and
High way No. 55, from  Gorizia to Trieste, leaving the towitns of
Veitoiba and Merna within Yugoslacia;
  Thence the line continues in a southerly direction across the karst
upland approximately 1 kilometer East of Highway No. 55, leaving
the village of Opacchiasella in Yugoslavia and the village of Lain iano
nuovo in Italy; and from, a point approximately 1.3 kilometer 'ast of
Iamniano nu-ovo the line follows the boundary between the Italian
proovinces of Gorizia and Trieste to its junction with the boundary of
the Free Territory of Trie-ste appro.cimately 2 kilometers Northeast o f
the village of San Giovanni.

                            ARTICLE 4
    Frontier Between Italy and the Free Territory of Trieste
  1. The Council of Foreign Ministers agreed that all territory East
of the line known as the French line shall. be ceded by Italy to Yugo-
slavi-a and that the Free Territory of Trieste shall be constituted
within the French line bounded on the North by a line drawn from
Duino to the French line.
  2. U.S. proposal (not yet discussed by the Council of Foreign
Ailnisters)
  The boundary between the FS'ree Territory of Trieste and Italy
shall follow a line that extends from? a point on the bou'ndary between
the Italian provinces of Gorizia and Trieste approximately 2 kilomne-
ters Northeast of the village of San Gio?.anni. southweestwrard to a
point adjacent to highoway No. 14 and approximately I kilometer
N'orth west of the junction behteen Highways Nos. 55 and 1-4 from
Gorizia and Monfalcone. respectictely, to Trieste;
  The line then extends in a southerly direction to a, point, in the Gulf
of Panzano, equidistant from Punta Sdobba at the mouth of the Isonzo
Rier and Castello Vecchio at Duino, departing from the coastline
ap)p)roximately 2 kilometer.s TWest of tAe town of Dati1no;
  The line thenreachees the hi~ghsea.s by following a line placed equidis-
tant from the coastlines of Italy (and the Free Territory of Trie.ste.



4


 

					
				
				


DRAFT PEACE TREATIES



5



  The exact line of the new frontiers laid down in Articles 2, 3, 4 . . .
of the present TreLaty shall be determined on the spot by Bound(lary
Commissions composed of the representatives of the two Govern-
ments concerned.
  The Commissions will commence their duties immediately on the
coming into force of the present Treaty, and shall complete them as
soon (Is possible and in any case within a period of six months.
  A.ny questions which the Commissions are unable to agree upon
will be referred to the four Ambassadors acting as provided in Article
75 for final settlement by such methods as they may determine,
including, where necessary, the appointment of an impartial third
Commissioner.
  The expenses of the Boundary Commissions will be borne in equal
charges by the two Governments concerned.
  U.S. proposal (not yet discussed by the Council of Foreign
tMiniisters).
  1. Addition to first p7aragraph:
  For the purposes of demarcating on the spot the boundary of the
Free Territory of Trieste w ith Italy on the one hand an-d wiith Yugo-
.s1aria on the other hand, a third Comm2issionrer shall be a)p)o/ntled to
the Boundary Comzm-ission by the Security Council of the United
Nations to represent that body.
  2. Revision of third paragraph:
  * . .appointm.ent of an impartial additional Commnssioner.
  3. Addition to the fourth paragraph:
  . . . and, in regard to the Commission to determine the boundary
for the Free Territory of Trieste. by the two Governments concerned
and by the Security Council of the United Nations.
  4. Additional paragraph:
  For the purpose of determining on the spot the boundaries of Italy
w!)ith Yugolsavia and with, the Free Territory of Trieste and of the
Free Territory of Trieste waith, Yugoslavia. the Commissioners shall
bie allowed to depart 0.5 kiloveter fron, the line laid down in the
present Treaty in order to adjust the boundary to local geographical
and economic conditions, except where the line follows Italian pro-
. incial boundaries and pro cided that no village or town of more 500
inhabitants, no important railroads or highways, and no major power
or water supply are placed under a sovereignty contrary to the delini-
tations laid dowtn ;n th e present Treaty.


 

					
				
				


FOREIGN RELATIONS, 1946, VOLUME IV



               SECTION II. Firance (Special Clauses)

                             ARTICLE 6
  Italy hereby cedes to Frlance ill full sovereignty the former Italian
territory situated on the French side of the Franco-Italian frontier
dlefined in Article 2.
                            ARTICLE 7
  The Italian Government undertakes to hand over to the French
Governments all archives, historical or administrative, prior to 1860
and which concern the territory ceded to France under the Treaty of
March 24, 1860, and the convention of August 23), 1860.

                            ARTICLE 8
  The Italian Government undertakes to co-operate with the French
Government in the possible establishment of a railway connection
between Brianqon and Modane, via Bardonneche. The necessary
arran(rements shall be concluded in due time between the two
Governments.
  The Italian Government undertakes to authorize, free of customs
duty and inspection, passport and other such formalities, the passenger
and freight railway traffic travelling on the connection thus estab-
lished, through Italian territory, from one point to another in France,
in both directions; furthermore, to take all necessary measures to en-
sure that the French trains using the said connections are allowed to
pass, under the same conditions, duty free and without injustifiable
delay.
                            ARTICLE 9

                    1. Plateau of Mont Cenis
  In order to secure to Italy the same facilities as Italy enjoyed in
respect of hydro electric power and water supply from the Lake of
Mont Cenis before cession of the district to France, the latter shall give
Italy under a bilateral agreement the technical guarantees set out in
Annex 2.
                   2. The Tenda-Briga District
  In order that Italy should not suffer any diminution in the supplies
of electic power which Italy has drawn from sources existing in the
Tenda district before its cession to France, the latter shall give Italy
under a bilateral agreement the technical guarantees set out
in Annex 2.



6


 

					
				
				


DRAFT PEACE TREATIES



             SECTON II1.-Awstria (Special Clause)

                           ARTICiLE 10
  Italy shall enter into or confirin arrangemients with Austria to
guarantee free movement of passenger and freight traffic between the
North and East Tyrol.

            SECTION IV. Yugoslalv a (Special Clause)

                           ARTICLE 1 1
  1. Italy hereby cedes to Yugoslavia in full sovereignty the territory
situated between the new frontiers of Yugoslavia as defined in Articles
3 and 16 and the Italo-Yugoslav frontier as it existed on January 1,
1938, as well as the commune of Zara and all islands and adjacent islets
lying within the following areas:
      a. The area bounded:
    On the North by the parallel of 42o50' N.;
    Onl the South by the parallel of 42°42' N.;
    On the East by the Meridian of 17010' E.;
    On the West by the Meridian of 16'25' E.
      b. The area bounded:
    On the North by the parallel 45012' N.;
    On the South by the parallel 44023' N.;
    On the West by a line joining the following points:
    (i) 45012' N., 14017'30" E.;
    (ii) 44040' N., 1409'10" E.;
    (iii) 44023' N., 14018'30" E.
    On the East by the islands and mainland of Yugoslavia.
  2. Italy hereby cedes to Yugoslavia in full sovereignty the island of
Pelagosa and the adjacent islets.
  The island of Pelagosa shall remain demilitarized.
  Italian fisherman shall enjoy the same rights in Pelagosa and the
surrounding waters as were enjoyed by Yugoslav fishermen prior to
April 6, 1941.
               SECTON V.-Greece (Special Clause)

                           ARTICLE 12
  Italy hereby cedes to Greece in full sovereignty the Dodecanese
Islands. These Islands shall be and shall remain demilitarized.
  The procedure and the technical conditions governing the transfer



7


 

					
				
				



FOREIGN RELATIONS, 1946, VOLUME IV



of these islands to Greece will be determined by agreemyient between the
Governments of the United Kingdom and Greece anld arrangements
shall be made for the withdrawal of foreign troops not later than 90
days from tlhe date of coming into force of tile present Treaty.

SECTION VI.-N'a'tiovality [and Cicic Rights]t2b in Ceded Te) rttories

                             ARTICLE 13
  1. Italiall citizens wilo were domiciled on June 10, 1940 ill territory
transferred by Italy to anotiler State under the present Treaty shall,
except as provided in tile following paragraph, become citizens with
full civil and political rights of the State to which the territory is
transferred in accordance withl legislation to be iltroduced to that
effect by that State witilin three montils of the comillg illtO force of
the present Treaty. Upon becoming citizens of the State concerned,
tiley shlall lose tileir Italiall citizenship.
  2. Thle Government of the State to wilicil tile territory is trallsferred
shiall by appropriate legislatioll within tilree molnths of the comino'h
illtO force of the present Treaty provide that all persons mentioned in
paragrapil I over tile age of eigilteell years (or married persons
wiletiler under or over that age) wilose customary language is Italian,
shiall be entitled to opt for Italian citizeilsilip witilin a period of one
year from the coilling illto force of the preseilt Treaty. Any person so
opting slhall retain Italiall citizensilip and shall not be considered to
laslve acquired the citizensilip of tile State to wilich the territory is
t rallsferred.
  Tlhe optioll of the husband shall llot constitute all option onl the part
of the wife. Option Oll the part of the father, or, if the father is
lot alive, Onl thie part of the mother, shall, however, automatically
include all unmarried children under the age of eighteen. ears.
  3. The State to which the territory is transferred may require tilose
who take advantage of tile option to move to Italy witilill a year from
the date whlenl the optioll was exercised.
  U.S. proposal:
  4. The State to which the territory is transferred shall take all
measures necessary to secure to alh persons qnithlin the territory, with-
out distinction as to race. sex, language or religion, the en'joyent
of hunian rights and of the fundamental freedoms, including freedoml
of expression, of pgress and publication, of religious wIvorshi/p of
political opinion and of public mneeting.

  2b Bracketed addition appears in the source text.



8


 

					
				
				
DRAFT PEACE TREATIES 9

Part II. PourricaL CLAUSES

Srecrion I.—General Clauses

ARTICLE 14

Italy shall take all measures necessary to secure to all persons under
Italian jurisdiction, without distinction as to race, sex, language or
religion, the enjoyment of human rights and of the fundamental free-
doms, including freedom of expression, of press and publication, of
religious worship, of political opinion and of public meeting.

ARTICLE 15

Italy undertakes to recognise the full force of the Treaties of Peace
with Roumania, Bulgaria, Hungary and Finland and other agree-
ments or arrangements which have been or will be reached by the
Allied and Associated Powers in respect of Austria, Germany and
Japan for the restoration of Peace.

Section I].—F ree Territory of Trieste

ARTICLE 16
I.

The Council of Foreign Ministers agreed:

1. That all territory East of the line known as the French line
shall be ceded by Italy to Yugoslavia and that the Free Territory of
Trieste shall be constituted within the French line bounded on the
North by a line drawn from Duino to the French line.

9. The integrity and independence of this Free Territory shall be
assured by the Security Council of the United Nations.

3. A special Commission, representing the Four Powers of the
Council, shall be immediately appointed to consult with representa-
tives of Yugoslavia and Italy, and to examine the whole subject and
present preliminary suggestions to the Peace Conference.

4. The permanent Statute shall be submitted to the approval of the
Security Council which will report to the General Assembly of the
United Nations in accordance with Article 15 of the United Nations
Charter.

5. Recommendations for a provisional government and for the
formation of a permanent statute shall be made by the Peace Con-
ference of the 21 nations, in accordance with the procedure adopted
at the Moscow Conference.

219-115—70-——2

					
				
				
10 FOREIGN RELATIONS, 1946, VOLUME IV

6. The provisional government and the permanent Statute shall
preserve the following general principles:

1. The Governor shall be appointed by the Security Council
after consultation with Yugoslavia and Italy

2. Legislative and executive authority shall be established on
democratic lines including universal suffrage ;

3. Rights of citizens shall be protected in respect to human
rights and fundamental freedoms, particularly including rell-
gin, language, press, schools and access to public services;

4, Annual reports shall be submitted by the Governor to the
Security Council.

II.

Note.—The following proposals have not yet been discussed and
should be considered only as suggestions of individual delegations:

A. United Kingdom proposal:

Italy renounces her sovereignty over the territory lying between the
Adriatic coast and the boundaries defined in Article 4 and... as
being the boundaries between the Free Territory of Trieste and Italy
and Yugoslavia respectively. This territory is hereby constituted the
Free Territory of Trieste and shall be governed in accordance with the
terms of the Statute in. Annex ... after it has been approved by the
Security Council of the United Nations. Upon such approval this
statute shall be considered as an integral part of the present Treaty.

B. United States proposal:

1. Boundary between the Free Territory of Trieste and Italy

 

 

The boundary between the Free Territory of Trieste and Italy shall
follow a line that extends from a point on the boundary between the
[talian provinces of Gorizia and Trieste approximately 2 kilometers
Northeast of the village of San Giovanni, southwestward to a point
adjacent to Highway No. 14 and approximately 1 kilometer Northwest
of the junction between Highways Nos. 55 and 14 from Gorizia and
Monfalcone, respectively, to Trieste:

The line then extends in a southerly direction to a point, in the Gulf
of Panzano, equidistant from Punta Sdobba at the mouth of the Isonzo
Liver and Castello Vecchio at Duino, departing from the coastline ap-
proximately 2 kilometers West of the town of Duino;

The line then reaches the high seas by following a line placed equi-
distant from the coastlines of Italy and the Free Territory of Trieste.

2. Boundary between the Free Territory of Trieste and Yugoslavia

The boundary between the Free Territory of Trieste and Yugoslavia
shall follow a line that extends from a point on the boundary between
the Italian provinces of Gorizia and Trieste, approximately 2 kilo-

					
				
				
DRAFT PEACE TREATIES 11

meters Northeast of the village of Sun Giovanni, southeastward along
this boundary to Monte Lanaro (546) and thence in a southeasterly
direction to Monte Cocusso (667), crossing Highway No. 58 from the
city of Trieste to Sesana approximately 3.3 kilometers West of the
town of Sesana and leaving the villages of Vegliano and Orle within
Yugoslavia;

Crossing the railroad from Trieste to Cosina, the line extends to
Monte Carso (456), and continues in a southerly direction following
the boundary between the Italian provinces of Trieste and Istria to a
point approximately 0.7 kilometer southwest of the town of San
Servola;

Thence the line continues southward to Monte San Antonio (355),
crossing the Risano River approximately 0.3 kilometer West of the
village of Risano and leaving the towns of Ospo and Rosario within
Yugoslavia;

The line then extends to a point approximately 0.6 kilometer East of
the village of Cernova, crossing the Gragogna River approximately 1
kilometer North of that village and leaving the villages of Bucciant
and Truscola within Italy and the village of Terseco within Yugo-
slavia, and thence it continues in a southwesterly direction Southeast of
the road between the villages of Cernova and Chervoi leaving this road
approximately 08 kilometer East of the village of Cucciani and thence
in a south-southwesterly direction passing about 0.5 kilometer East of
Monte Braico and about 0.4 kilometer West of the village of Sterna
Filaria, reaching the Quieto River at a point approximately 1.6 kilo-
meter South of the town of Castagna, passing about 0.4 kilometer West
of the town of Piemente and about 0.5 kilometer East of the town of
Castagna;

Lhence the line follows the principal and improved channel of the
Quieto to its mouth and extends through the Porto del Quieto to the
high seas by following a line placed equidistant from the coastlines of
the Free Territory of Trieste and Yugoslavia.

The United States Delegation proposes the following texts as an
alternatwe to the two paragraphs beginning “thence the line continues
southward to Monte San Antonio (355) .. .” in its previous proposal
for the definition of the boundary between the Free Territory of
Trieste and Yugoslavia:

Following the crests of westward facing escarpments southeastward
to a point approximately 0.5 kilometer East of Besovizza, the line then
bears westward to a point 05 kilometer North of Monte San Antonio
(395), leaving the village of Santa Maria del Risano about 0.5 kilo-
meter to the North of the line within Italy and the town of Covedo
about 0.5 kilometer to the South of the line within Yugoslavia;

					
				
				
12 FOREIGN RELATIONS, 1946, VOLUME IV

The line then continues southwestward to a point approximately 0.6
kilometer Northwest of the village of Chermi, roughly paralleling and
lying about 0.6 kilometer Northwest of the road from Maresego
through Duori and thence extends Southeast to a point 0.5 East of the
town of Cernova, leaving the town of Boste within Italy and the town
of Truscolo with [within] Yugoslavia;

Thence the line continues in a southwesterly direction Southeast of
the road between the villages of Cernova and Chervoi leaving this road
approximately 0.8 kilometer Last of the village of Cucciani and thence
in a South-southwesterly direction passing about 0.5 kilometer East
of Monte Braico and about 0.4 kilometer West of the village of Sterna
Filaria, reaching the Quieto River at a point approximately 1.6 kilo-
meter South of the town of Castagna, passing about 0.4 kilometer
West of the town of Piedmonte and about 0.4 kilometer East of the
town of Castagna.

3. Guarantees

Italy and Yugoslavia undertake to give to the Free Territory of
Trieste the guarantees set out in Annex 9.

Section II1.—J/talian Colonies
ARTICLE 17

1. Italy renounces all right and title to the Itahan territorial pos-
sessions in Africa, 1.e. Libya, Eritrea and Italian Somaliland.

2. Pending their final disposal, the said possessions shall continue
under their present administration.

3. The final disposal of these possessions shall be determined jointly
by the Governments of the U.S.S.R., U.K., U.S.A. and France within
one year of the coming into force of the present Treaty, in the man-
ner laid down in the joint declaration of (date) issued by the said
Governments.

Section IV.—Special Interests of China
ARTICLE 18

Italy renounces in favour of China all benefits and privileges re-
sulting from the provisions of the final Protocol signed at Pekin on
September 7, 1901,3 and all annexes, notes and documents supple-
mentary thereto, and agrees that the said protocol, annexes, notes and
documents shall be abrogated in respect of Italy. Italy likewise re-
nounces any claim thereunder to an indemnity.

> Department of State Treaty Series No. 397.

					
				
				
DRAFT PEACE TREATIES 13

ARTICLE 19

Italy agrees to the abrogation of the lease from the Chinese Gov-
ernment under which the Italian concession at Tientsin is now held,
and to the transfer to the Chinese Government of any documents be-
longing to the Archives of the Concession which are still in Italian
possession.

ARTICLE 20

Italy renounces in favour of China the rights accorded to Italy in
relation to the International Settlements at Shanghai and Amoy, and
agrees that the said Settlements shall revert to the administration and
control of the Chinese Government.

Section V.—Albania
ARTICLE 21

Italy recognises and undertakes to respect the sovereignty and
independence of the State of Albania.

ARTICLE 22

Italy recognises that the Island of Saseno 1s part of the territory
of Albania and renounces all claims thereto.

ARTICLE 23

Italy formally renounces in favour of Albania all property (apart
from normal diplomatic and consular premises), rights, interests and
advantages of all kinds in Albania acquired by the Italian State,
whether before or after 1939. Italy also renounces all claims to spe-
cial interests or influence in Albania.

ARTICLE 24

Italian nationals in Albania will enjoy the same juridical status as
other foreign nationals, but Italy recognises the legality of all Albanian
measures annulling or modifying concessions or special rights granted
to Italian nationals provided that such measures are taken within a
year from the coming into force of the present Treaty.

ARTICLE 25

Italy recognises that all agreements and arrangements made be-
tween Italy and the authorities in Albania installed by Italy from
April 1939 to September 19438 are null and void.

					
				
				



FOREIGN RELATIONS, 1946, VOLUME IV



                            ARTICLE 26

  Italy recognises the legality of any measures which Albania miay
consider it necessary to take to confirm or give effect to the precedingcy
provisions.

                      SECTION VI.-Et Mopia
                            ARTICLE 27

  Italy recognises and undertakes to respect the sovereignty and in-
dependence of the State of Ethiopia.

                            ARTICLE 28

  Italy formally renounces in favour of Ethiopia all property (apart
from normal diplomatic or consular premises), rights, interests and
advantages of all kinds acquired at any time in Ethiopia by the
Italian State.
  Italy also renounces all claim to special interests or influence in
Ethiopia.
                            ARTICLE 29

  Italy recognises the legality of all measures which the Government
of Ethiopia has taken or may thereafter take in order to annul Italian
measures respecting Ethiopia taken after October 3, 1935 and the
effects of such measures.

                           ARTICLE 30
  Italian nationals in Ethiopia will enjoy the same juridical status as
other foreign nationals, but Italy recognises the legality of all meas-
ures of the Ethiopian Government annulling or modifying concessions
or special rights granted to Italian nationals, provided such measures
are taken within a year from the coming into force of the present
Treaty.
                            ARTICLE 31
  Italy will restore all Ethiopian works of art, religious objects and
objects of historical value removed from Ethiopia to Italy since Octo-
ber 3, 1935.

             SECTION VII.-Intenatiownal Agwieeidents

                            ARTICLE 32

  Italy undertakes to accept any arrangements which have been or
may be agreed for the liquidation of the Leagrue of Nations and the
Permanent Court of International Justice.



14


 

					
				
				
DRAFT PEACE TREATIES 15

Italy also undertakes to accept any arrangements which have been
or may be agreed for the liquidation of the International Institute of
Agriculture at Rome.

ARTICLE 83

Italy hereby renounces all rights, titles and claims deriving from the
mandate system, or from any undertakings given therewith, and all
special rights of the Italian State in respect of any mandated territory.

ARTICLE 34

Italy recognises the provisions of the Final Act of August 31, 19-45 *
and of the Franco-British Agreement of the same date ® on the Statute
of Tangier, as well as all provisions which may be adopted by the
Signatory Powers for carrying out these instruments.

ARTICLE 35

Italy undertakes to accept and recognises any arrangements which
may be made by the Allied and Associated Powers concerned for the
modification of the Congo Basin Treaties with a view to bringing them
into accord with the Charter of the United Nations.

ARTICLE 36

Italy hereby renounces any rights and interests she may possess by
virtue of Article 16 of the Treaty of Lausanne signed on July 24, 1923.°

Secrion VIII.—Ailateral Treaties

ARTICLE 37

1. Each Alhed or Associated Power will notify Italy, within a
period of six months of the coming into force of the present Treaty,
which pre-war bilateral treaties it desires to keep in force or revive.
Any provisions not in conformity with the present Treaty shall how-
ever be deleted from the above-mentioned Treaties.

2. All Treaties so notified will be registered with the Secretariat of
the United Nations in accordance with Article 102 of the United
Nations Charter.

3. All Treaties not so notified are to be regarded as abrogated.

* Department of State Bulletin, October 21, 1945, p. 613.
* bid., p. 616 or 98 United Nations Treaty Series 250.
* For text, see British and Foreign State Papers, vol. cxvtt, p. 543.

					
				
				
16 FOREIGN RELATIONS, 1946, VOLUME IV

Part III. War CrimMINnaALs

ARTICLE 38

1. Italy shall take the necessary steps to ensure the apprehension and
surrender for trial of:

a. Persons accused of having committed, ordered, or abetted war
crimes and crimes against peace or humanity;

6. Nationals of the Allied and Associated Powers accused of having
violated their national law by treason or collaboration with the enemy
during the war.

2. At the request of the United Nations Government concerned, Italy
will likewise make available as witnesses persons within its jurisdic-
tion, whose evidence is required for the trial of the persons referred to
in paragraph 1 of this Article.

3. Any disagreement concerning the application of the provisions of
paragraphs 1 and 2 of this Article shall be referred by any of the Gov-
ernments concerned to the Ambassadors in Rome of the U.S.S.R.,

ULKK., U.S.A. and France, who will reach agreement with regard to
the difficulty.

Part IV. Navau, Minirary anp Arr CLAUSES
Section I.—Duration

ARTICLE 39

Each of the military, naval and air clauses of the present Treaty
will remain in force until modified in whole or in part by agreement
between the Allied and Associated Powers and Italy or, after Italy
becomes a member of the United Nations, by agreement. between the
Security Council and Italy.

Srecrion I].—General Limitations
ARTICLE 40

1. a. The system of permanent Italian fortifications and military
installations along the Franco-Italian frontier, and their armaments,
shall be destroyed or removed.

6. This system is deemed to comprise only artillery and infantry
fortifications whether in groups or separated, pillboxes of any type,
shelters, observation posts and military cableways, whatever may be
their importance and actual condition of maintenance or state of con-
struction and which are constructed of metal, masonry or concrete
or excavated in the rock.

					
				
				



DRAFT PEACE TREATIES



  c. The destruction or removal, mentioned in sub-paragraphs a( and
b, is limited to a distance of 20 kilometers from any point on the fron-
tier as defined by this treaty, and shall be completed within one year
from the coming into force of the present treaty.
  2. Any reconstruction of the above-mentioned fortifications and
installations is prohibited.
  3. a. The following construction to the east of the Franco-Italian
frontier is prohibited: permanent fortifications where weapons capable
of firing into French territory or territorial waters can be emplaced;
permanent military installations capable of being used to conduct or
direct fire into French territory or territorial waters; and permanent
supply and storage facilities emplaced solely for the use of the above
mentioned fortifications and installations.
  b. This prohibition does not include the other types of non-perma-
nent fortifications or surface accommodations and installations which
,Ire designed to meet only requirements of an internal character and
of local defence of the frontiers.
  4. In a coastal area 15 kilometers deep, stretching from the Franco-
Italian frontier to the meridian of 9°30' East, Italy shall not be au-
thorised to establish any new, or to expand any existing, naval bases
or permanent naval installations. This does not prohibit minor al-
terations in and the maintenance in good repair of existing naval
installations provided that their overall capacity will not thereby be
increased.
                             ARTICLE 41
  1. a. Any permanent Italian fortifications and military installa-
tions along the Italo-Yugoslav frontier, and their armaments, shall
be destroyed or removed.
  b. These fortifications and installations are deemed to comprise
only artillery and infantry fortifications whether in groups or sepa-
rated, pillboxes of any type, shelters, observation posts and military
cableways, whatever may be their importance and actual condition of
maintenance or state of construction, and which are constructed of
metal, masonry or concrete or excavated in the rock.
  c. The destruction or removal, mentioned in sub-paragraphs a and
b. is limited to a distance of 20 kilometers from any point, on the fron-
tier, as defined by this Treaty, and shall be completed within one year
from the coining into force of the present Treaty.
  2. Any reconstruction of the above-mentioned fortifications and
installations is prohibited.
  3. a. The following construction to the west of the Italo-Yugoslav
frontier is prohibited; permanent fortifications where weapons capable



17


 

					
				
				


FOREIGN RELATIONS, 19 4 6, VOLUME IV



of firing into Yugoslav territory or territorial waters can be emiplace;d
l)ermanent military installations capable of being used to conduct or
direct fire into Yugoslav territory or territorial waters: and perma-
nent supply and storage facilities emplaced solely for the use of the
above-mentioned fortifications and installations.
  b. This prohibition does not include the other types of non-pernma-
nent fortifications or surface accommodations and installations which
are designed to meet only requirements of an internal character and of
local defense of the frontiers.
  4. In a coastal area 15 kilometers deep, stretching from the frontier
between Italy and Yugoslavia [and between Italy and the Free Terri-
tory of Trieste] to the latitude of 44'50' North, and in the islands ad-
jacent to this coast, Italy shall not be authorised to establish any new
nor to expand any existing naval bases or permanent naval installa-
tions. This does not prohibit minor alterations in and the mainte-
nance in good repair of existing naval installations and bases provided
that their overall capacity will not thereby be increased.
  5. In the Apulian Peninsula east of Longitude 17°45' East, Italy
shall not be allowed to construct any new permanent military, naval
or military air installations nor to expand the existing installations.
This does not prohibit minor alterations in and the maintenance in
good repair of existing installations provided that their overall
capacity will not thereby be increased. Accommodation for such
security forces as may be required for tasks of an internal character
and local defense of frontiers will, however, be permitted.

                            ARTICLE 42
  1. Pantellaria, the Pelagian Islands (Iampedusa, Lcaampione and
Linosa), and Pianosa (in the Adriatic) shall be and shall remain
completely demilitarised.
  2. Such demilitarization shall be completed within one year of the
coming into force of the present Treaty.

                            ARTICLE 43
  1. In Sardinia all permanent coast defense artillery emplacements,
alld their armaments and all naval installations which are located
w-ithin a distance of 30 kilometers from French territorial waters
shall be removed to the mainland of Italy or demolished within one
year from the coming into force of the present Treaty.
  2. In Sicily and Sardinia all permanent installations and equipment
for the maintenance and storage of torpedoes, sea-mines and bombs
shall be demolished or removed to the mainland of Italy within one
year from the coming into force of the present Treaty.



18


 

					
				
				
DRAFT PEACE TREATIES 19

8. No improvements to, reconstruction, or extensions of existing in-
stallations or permanent. fortifications in Sicily and Sardinia will be
permitted ; however, with the exception of the Northern Sardinia areas
described in paragraph 1, normal maintenance of such installations or
permanent fortifications and weapons already installed in them may be
carried out.

4. In Sicily and Sardinia Italy shall be prohibited from constructing
any naval, military and air-force installations or fortifications except
for such accommodation for security forces as may be required for
tasks of an internal character.

ARTICLE 44

Italy shall not possess, construct or experiment with (1) any self-
propelled or guided missiles or apparatus connected with their dis-
charge (11) any guns with a range of over 30 kilometers (ii1) sea mines
of non-contact types actuated by influence mechanisms (iv) any tor-
pedoes capable of being manned.

ARTICLE 45

The acquisition of war material of German or Japanese origin or
design, either from inside or outside Italy, or its manufacture, is
prohibited.

ARTICLE 46

Italy shall not manufacture or possess, either publicly or privately,
any war material different in type from, or exceeding in quantity that
required for the forces permitted in Sections III, IV and V below.

Section III.—Limitations To Be Imposed on the Italian Navy

ARTICLE 47

1. The present Italian Navy shall be reduced to the following num-

ber of units:
a. Major War Vessels:

DPW 0 eens Battleships;

Pour 20.0... eee Cruisers ;

Four 20.0.0... een Fleet Destroyers;
sixteen 00.0... Torpedo Boats;
Twenty ..0. 0.0.0.0... cee Corvettes.

6b. Minor War and Auwiliary Vessels:

Such number as can be manned and maintained in full commission by
a maximum of 2,500 officers and men.

					
				
				
?20 FOREIGN RELATIONS, 1946, VOLUME IV

2. The names of the vessels to be retained by Italy under paragraph
1 are given in Annex 4A.
ARTICLE 48

Italy shall effect the following disposal of excess units of the Italian
Navy:

a. The units of the Italian Navy specified in Annex 4B shall be
placed at the disposal of the Governments of the U.S.S.R., U.K.,
U.S.A. and France.

6. Ships required to be transferred in compliance with sub-para-
graph a above shall be fully equipped, in operational condition includ-
ing a full outfit of armament stores, and complete with on-board spare
parts and all necessary technical data.

c. The transfer of ships specified above shall be effected within
three months of the coming into force of the present Treaty, except
that, in the case of ships that cannot be refitted within three months,
the time limit for the transfer may be extended by the Four Govern-
ments.

d. Reserve allowances of spare parts and armament stores for ships
specified in Annex 4B shall, as far as possible, be supplied with the
ships.

The balance of reserve spare parts and armament stores shall be
supplied to an extent and at dates to be decided by the Four Govern-
ments, in any case within a maximum of one year after the coming
into force of the present Treaty. |

é. Details relating to the above transfers will be arranged by a Four
Power Commission to be established under a separate protocol.

ARTICLE 49

1. Italy shall effect the following disposal of submarines and non-
operational ships. Time-limits specified below should be taken as
commencing with the coming into force of the present Treaty.

a. Surface ships afloat not listed in Annex 4 including ships under
construction afloat, shall be sunk in a depth of over fifty fathoms with-
In six months.

6. Ships under construction on slips shall be destroyed or scrapped
for metal within six months.

c. Submarines afloat and not. listed in Annex 4B shall be sunk in
the open sea in a depth of over a hundred fathoms within three months.

d. Ships sunk in Italian harbors and approach channels, in obstruc-
tion of normal shipping, shall be destroyed by demolition or may be
salvaged and subsequently sunk ina depth of over fifty fathoms within
two years.

					
				
				


DRAFT PEACE TREATIES



  e. Ships sunk in shallow Italian waters, not in obstruction of normal
shipping, shall, within one year, be rendered incapable of salvage.
  f. Ships capable of reconversion, which do not come within the
definition of war material and which are not listed in Annex 4, may be
reconverted to civilian uses or are to be demolished within two years.
  2. Italy undertakes, prior to the sinking or destruction of ships
and submarines as provided for in the preceding paragraph, to sal-
vage such equipment and spare parts as may be useful in completing
the on-board and reserve allowances of spare parts and equipment to
be supplied, in accordance with Article 48d, for all operational ships
specified in Annex 4B.
                            ARTICLE 50
  1. No battleship shall be constructed or acquired by Italy.
  2. No aircraft carrier, submarine or other submersible craft, M.T.B.
or specialised types of assault craft shall be constructed, acquired,
employed or experimented with, by Italy.
  3. The total standard displacement of the war vessels other than
battle-ships of the Italian Navy, including ships under construction
as from the date of the launching, shall not exceed 67,500 tons.
  4. Any replacement of war vessels by Italy shall be effected within
the limit of tonnage given in paragraph 3. There shall be no restric-
tion on the replacement of auxiliary vessels.
  5. Italy undertakes not to acquire or lay down any war vessels be-
fore January 1, 1950, except as necessary to replace any ship ac-
cidentally lost, in which case the displacement of the new ship is not
to exceed by more than 10% the displacement of the ship lost.
  6. The terms used in this Article are, so far as necessary, defined
in Annex 5A.
                            ARTICLE 51
  1. The total personnel of the Italian Navy, excluding any naval
air personnel, shall not exceed 22,500 officers and men.
  2. During the period of minesweeping due to the war, Italy shall
be authorised to employ for this purpose an additional number of
officers and men not to exceed 2,500, such period to be determined by
the International Control Board for Mine Clearance of European
'Waters.
  3. Permanent naval personnel in excess of that permitted under
paragraph 1 shall be progressively reduced as follows, time-limits be-
ing taken as conmuencing with the coming into force of the present
Treaty.
  a. To 27,500 within 6 months.
  b. To 22,500 within 9 months.



21


 

					
				
				


FOREIGN RELATIONS, 1946, VOLUME IV



  Two months after the completion of minesweeping by the Italian
Navy, the excess personnel authorised by paragraph 2 is to be dis-
banded or absorbed within the above numbers.
  4. Personnel, other than those authorised under paragraph 1 and 2,
and any naval air personnel authorised under Article 56, shall not
receive any form of naval training as defined in Annex 5B.

SECTION IV.-Limitations To Be Zrnposed on the Italian Awty
                            ARTICLE 52
  1. The Italian Army, including the Frontier Guards, shall be limited
to a force of 185,000 combat, service and overhead personnel and 65,000
Carabinieri, though either of the above elements may be varied by
10,000 as long as the total ceiling does not exceed 250,000. The or-
ganisation and armament of the Italian ground forces, as well as their
deployment throughout Italy, shall be designed to meet only tasks of
internal character, local defence of Italian frontiers and anti-aircraft
defence.
  2. The armament of the Italian Army will not include more than
200 tanks, medium and heavy.

                            ARTICLE 53
  The Italian Army, in excess of that permitted under Article 52,
shall be disbanded within six months of the coming into force of the
present Treaty.
                            ARTICLE 54
  Personnel other than those forming part of the Italian Army or
Carabinieri shall not receive any form of military training as defined
in Annex 5B.

SECTION V.-Limitations To Bie Imposed on the Italian Abiu Force
                            ARTICLE 55
  1. The Italian Air Force, including any Naval Air Arm, shall be
limited to a force of 200 fighter and reconnaissance types and 150
transport, air-sea rescue, training (school type) and liaison types of
aircraft. These totals include reserve aircraft. All aircraft except
for fighter and reconnaissance aircraft will be unarmed. The organi-
sation and armament of the Italian Air Force as well as their deploy-
ment throughout Italy will be designed to meet only tasks of internal
clharacter, local defence of Italian frontiers and defence against enemy
air attacks.
  2. Italy shall not possess or acquire any aircraft designed primarily
as bombers with internal bomb-carrying facilities.



22


 

					
				
				


DRAFT PEACE TREATIES



                            ARTICLE 56
  1. The personnel of the Italian Air Force, including any Naval Air
personnel, shall be limited to a total of 25,0()0 effectives, which weill
include combat, service and overhead personnel.
  2. Personnel other than those forming part of the Italian Air Force
shall not receive any form of military air training as defined in
.AXnnex 5B.
                            ARTICLE 57
  The Italian Air Force, in excess of that permitted under Article 36
above, shall be disbanded within six months of the coming into force
of the present Treaty.

SECTION VI.-Disposal of War iaterial (as defined in Annex 5C.)
                            ARTICLE 58
  1. All Italian war material in excess of that permitted for the AVrmiied
Forces specified in Sections III, IV and V shall be placed at the dis-
posal of the Governments of the U.S.S.R., U.K., U.S.A. and Franice
according to such instructions as they may give to Italy.
  2. All Allied war material in excess of that permitted for the Armned
Forces specified in Sections III, IV and V shall be placed at the dis-
posal of the Allied or Associated Power concerned according to the
instructions to be given to Italy by the Allied or Associated Power
concerned.
  3. All German and Japanese war material in excess of that per-
mitted for the Armed Forces specified in Sections III, IV and V and
all German or Japanese drawings, including existing blueprints, pro-
totypes, experimental models and plans, shall be placed at the disposal
of the Governments of the U.S.S.R., U.K., U.S.A. and France in
accordance with such instructions as they may give to Italy.
  4. Italy shall renounce all rights to the above-mentioned war mate-
rial and shall comply with the provisions of this Article within one
year from the coming into force of the present treaty except as pro-
vided for in Articles 47 to 51 thereof.
  Italy shall furnish the Governments of the U.S.S.R., U.K., U.S.A.
and France lists of all excess war material within six months from
the coming into force of the present treaty.

  SECTION VII.-Pre lention of German and Japanese Rearmament
                            ARTICLE 59
  Italy undertakes to co-operate fully with the Allied and Associated
Powers with a view to ensuring that Germany and Japan are unable



23


 

					
				
				


FOREIGN RELATIONS, 1946, VOLUME IV



to take steps outside German and Japanese territories towards
rearnamient.
                           ARTICLE 60
  Italy undertakes not to permit the employment or training in Italy
of any technicians (including military or civil aviation personnel)
who are or have been nationals of Germany or Japan.

                           ARTICLE 61
  Italy undertakes not to acquire or manufacture civil aircraft, which
are of German or Japanese design or which embody major assemblies
of German or Japanese manufacture or design.

                 SECTION VIII.-Prisoners of War
                           ARTICLE 62
  1. Italian prisoners of war shall be repatriated as soon as possible
in accordance with arrangements mutually agreed upon by the in-
dividual Powers detaining them and Italy.
  2. All costs (including maintenance costs) incurred in moving Ital-
ian prisoners of war from their respective assembly points as chosen by
the Government of the Allied or Associated Power concerned, to the
point of their entry into Italian territory, shall be borne by the Italian
Governmnent.

             PART V. WITHDRAWAL OF ALLIED FORCES
                           ARTICLE 63
  1. All armed forces of the Allied and Associated Powers shall be
withdrawn from Italy as soon as possible and in any case not later
than 90 days from the coming into force of the present Treaty.
  2. All Italian goods for which compensation has not been made and
which are in possession of the armed forces of the Allied and Associ-
ated Powers in Italy at the time of the coming into force of the pres-
ent Treaty shall be refunded to the Italian Government within the
same period of 90 days or due compensation shall be made.
  3. All bank and cash balances in the hands of the forces of the Allied
and Associated Powers at the time of the coming into force of the
present Treaty which have been supplied free of cost by the Italian
Government shall similarly be returned or a corresponding credit
given the Italian Government.



24


 

					
				
				


DRAFT PEACE TREATIES



             PART VI. CLAIM ARISING OUT OF THE WAAR

                      SECTION I.-Reparation

                            ARTICLE 64

                  A. Reparation for the U.S.S.R.

  1. Italy shall pay the Soviet Union reparation in the amount of
$100,000,000 over a period of seven years from the date of the coming
into force of the present Treaty. Deliveries from current industrial
jroduction shall not be made during the first two years.
  2. Reparation shall be made from the following sources:
  a. A share of the Italian factory and tool equipment designed for
the manufacture of war implements which is not required by the per-
mitted military establishments and is not readily susceptible of con-
version to civilian purposes and which is removed from Italy pursuant
to Article 58 of the present Treaty.
  b. Italian assets in Roumania, Bulgaria and Hungary, subject
to the exceptions specified in paragraph 5 of Article 69.
  c. Italian current industrial production.
  3. The quantities and types of goods to be delivered shall be the
subject of agreements between the Italian Government and the Gov-
ernment of the U.S.S.R. and shall be selected and deliveries sched-
uled in such a way as to avoid interference with the economic recon-
struction of Italy and the imposition of additional liabilities on other
Allied or Associated Powers. Agreements concluded under this para-
graph shall be communicated to the four Ambassadors in Rome of the
U.S.S.R., U.K., U.S.A. and France.
  4. The U.S.S.R. shall furnish to Italy on commercial terms the ma-
terials which are normally imported into Italy and which are needed
for the production of these goods. Payments for these materials
shall be made by deducting the value of the materials furnished from
the value of the goods delivered to the U.S.S.R.
  5. The four Ambassadors shall determine the value of the Italian
assets to be transferred to the U.S.S.R.

                B. Reparation for Other Powers
  NOTE.-The claims put forward by other Powers, in particular
France, Yugoslavia, Greece, Albania and Ethiopia, will be considered
at the Peace Conference together with the means whereby and the
extent to which they shall be met.



219-115-70-3



25


 

					
				
				


FOREIGN RELATIONS, 1946, VOLUME IV



                      SECTION IJ.-RestdtWiOn
                            ARTICLE 65
  1. Italy accepts the principles of the United Nations Declaration
of January 5, 1943,7 and will return property removed from United
Nations territories.
  2. The obligation to make restitution applies to all identifiable
property at present in Italy which was removed by force or duress by
any of the Axis Powers from the territory of any of the United Na-
tions, irrespective of any subsequent transactions by which the present
holder of any such property has secured possession.
  3. The Italian Government undertakes to return the property re-
ferred to in the present Article in good order and, in this connection,
to bear all costs in Italy relating to labour, materials and transport.
  4. The Italian Government will cooperate with the United Nations
in, and will provide at its own expense all necessary facilities for,
the search for and restitution of property liable to restitution under
the present Article.
  5. The Italian Government shall take the necessary measures to
effect the return of property covered by this Article held in any third
country by persons subject to Italian jurisdiction.
  6. Claims for the restitution of property shall be presented to the
Italian Government by the Government of the country from whose
territory the property was removed, it being understood that rolling
stock shall be regarded as having been removed from the territory to
which it originally belonged. The period during which such claims
may be presented shall be six months from the date of coming into
force of the present Treaty.
  7. The burden of identifying the property and of proving owner-
ship shall rest on the claimant Government, and the burden of prov-
ing that the property was not removed by force or duress shall rest
on the Italian Government.
  8*. The Italian Government accepts the obligation to restore to the
Government of the United Nation concerned all monetary gold looted
by or wrongfully removed to Italy or to transfer to the Government of
the United Nation concerned an amount of gold equal in weight and
fineness to that looted or wrongfully removed. This obligation is
recognised by the Italian Government to exist irrespective of any
transfers or removals of gold from Italy to any other Axis Power or
a neutral country.

7'Foreign Relations, 1943, vol. I, p. 443.
  *Paragraph 8 is agreed by the U.S. Delegation subject to the question of
the
settlement of disputes. [Footnote in source text.]



26


 

					
				
				


DRAFT PEACE TREATIES



27



         SECTION III.-Renunciation of Claimts by Italy
                           ARTICLE 66
  1. Italy waives all claims of any description against the Allied and
Associated Powers on behalf of the Italian Government or Italian
nationals arising directly out of the war or out of actions taken be-
cause of the existence of a state of war in Europe after September I,.
1939, whether or not the Allied or Associated Poawer was at war with
Italy at the time, including the following:
  a. Claims for losses or damages sustained as a consequence of acts of
forces or authorities of the Allied or Associated Powers.
  b. Claims arising from the presence, operations, or actions of forces
or authorities of the Allied or Associated Powers in Italian territory.
  c. Claims with respect to the decrees and orders of Prize Courts of
the Allied or Associated Powers, Italy agreeing to accept as valid and
binding all decrees or orders of such Prize Courts on or after Sep-
tember 1, 1939 concerning Italian ships or Italian goods or the pay-
ment of costs.
  d. Claims arising out of the exercise or purported exercise of bel-
ligerent rights.
  2. The provisions of this Article will bar, completely and finally,
all claims of the nature referred to herein, which will be henceforward
extinguished, whoever may be the parties in interest.. The Italian
Government agrees to make equitable compensation in lire to persons
who furnished supplies or services on requisition to the forces of the
Allied or Associated Powers in Italian territory and in satisfaction of
non-combat damage claims against the forces of the Allied and As-
sociated Powers arising in Italian territory.
  3. Italy likewise waives all claims of the nature covered by para-
graph 1 of this Article on behalf of the Italian Government or Italian
nationals against any of the United Nations which severed diplo-
matic relations with Italy and took action in cooperation with the
Allied or Associated Powers.
  4. The Italian Government will assume full responsibility for all
Allied military currency issued in Italy by the Allied military au-
thorities, including all such currency in circulation on the date of the
coming into force of the present Treaty.
  5. The waiver of claims by Italy under paragraph 1 of this Article
includes any claims arising out of actions taken by any of the Allied or
Associated Powers with respect to Italian ships between September 1,
1939 and the date of the coming into force of the present Treaty, as
well as any claims and debts arising out of the Conventions on prison-
ers of war now in force.


 

					
				
				


FOREIGN RELATIONS, 1946, VOLUME IV



  6. The provisions of the present Article shall not be deemed to affect
the ownership of submarine cables which at the outbreak of the war
were owned by the Italian Government or Italian nationals.
  NOTE.-The U.S. and U.S.S.R. Delegations reserve the right to
propose changes with regard to the treatment in the present Treaty
of submarine cables after f urther study of the legal aspects of the
subject.
                            ARTICLE 67
  Italy hereby renounces on its own behalf and on behalf of Italian
nationals all claims, including debts, against Germany and German
nationals outstanding on May 8, 1945, except those arising out of
contracts and other obligations entered into, and rights acquired, be-
fore September 1, 1939. This renunciation by Italy on its own be-
half shall be deemed to include not only all inter-governmental claims
in respect of arrangements entered into in the course of the war, but
also all claims for loss or damage arising during the war. This re-
nunciation shall be without prejudice to any dispositions in favour of
Italy or Italian nationals made by the Powers in occupation of
Germiany.

           PART VII. PROPERTY RIGHTS AND INTERESTS

           SECTION I.-United Nations' Property in Italy

                            ARTICLE 68
  1. Insofar as Italy has not already done so, Italy shall restore all
-the legal rights and interests in Italy of the United Nations and their
nationals as they existed on June 10, 1940, and shall return all prop-
erty in Italy of the United Nations and their nationals as it now exists.
  2. The Italian Government undertakes that all property, rights and
interests passing under this Article shall be restored free of all en-
cumbrances and charges of any kind to which they may have become
subject as a result of the war and without the imposition of any
charges by the Italian Government in connection with their return.
The Italian Government will nullify all measures, including seizures,
sequestration or control, taken by it against United Nations property
between June 10, 1940 and the coming into force of the present Treaty.
In cases where the property has not been returned within 6 months
of the coming into force of the present Treaty, application shall be
made to the Italian authorities not later than 12 months from the
coming into force of the present Treaty, except in cases in which the
claimant is able to show that he could not file his application within
this period.



28


 

					
				
				


DRAFT PEACE TREATIES



  3. The Italian Government undertakes to invalidate transfers in-
volving property, rights and interests of any description belonging to
United Nations nationals, where such transfers resulted from force
or duress exerted by Axis Governments or their agencies during the
war.
  4. IT.S. proposal:
  a. Where, as a result of the war, the property cannot be returned
or the United Nations national has suffered a loss because of injury to
the property, the Italian Government shall compensate the owner by
the payment of a sunm in lire suffieient at the date of payment to en-
able the recipient to purchase similar property or to make good the
loss or damage suffered.
  b. Sutms in lire paid by the Italian Government under this Article
shall be freely usable in Italy but shall be subject to the foreign ex-
change control regulations which may be in force in Italy from time
to time.
  c. In cases where a corporation or association of any nationality
other than that of one of the United Nations has suffered a loss of its
property in Italy as a result of the war, compensation in lire shall be
paid by the Italian Goverrnment to United Nations nationals vwho hare
directly, or indirectly through intermediate corporations or associ-
ations of any nationality other than that of one of the United Nations.
an ownership interest in the corporation or association which has suf-
fered the loss. This compensation shall be that fractional part of
the amount which would be required to enable the corporation or
association to make good the loss or damage suffered, whieh the in-
terest of the United Nations nationals constitutes of the totality of
ownmership interests in the corporation. Such compensation, however.
shall not be required in case the Italian Government shall provide
to the corporation or the association itself such full compensation or
restoration as would be due under this Article if it were a corporation
or association of one of the United Nations. In cases where the cor-
poration or association receires from the Italian Governme7nt partial
conmpensation for the damage or loss sustained, the United Nations
nationals shall be paid by the Italian Government compensation in
lire in an amount equal to their respective proportionate shares of
the loss or damage for which the corporation or association does not
itself receive compensation from the Italian Government. For pur-
poses of this paragraph the extent of interest of a United Nations
national shall be determined as of June 10, 1940, or the outbreak of
war between the United Nation concerned and Italy, as may be the
more favourable to the United Nations national.



29


 

					
				
				


FOREIGN RELATIONS, 1946, VOLUME IV



  d. As usecl in thLis Article, the phrase "as a result of the mar"
in-
dluded the consequences of any action taken by the Italian Govern-
2n.ent, any action taken by any of the belligerents, any action taken
qtnder the Armistice of September 3, 1943, and any action or failure
to act caused by the existence of a state of war.
  U.S.S.R. proposal:
  Italy recognises the necessity for compensation for the property of
United Nations and their nationals in Italy, lost or damaged during
the war. In view of the fact, however, that Italy was the first of the
-Axis Powers to break with Germany and come over to the side of
the United Nations, and in consideration of the losses sustained by
Italy in the course of military operations against Germany on Italian
territory, it is agreed that such compensation will be made in part to
the extent of one third of the loss and will be paid in Italian lire.
  The U.K. and French Delegations approved the U.S. proposal subject to reserva-
tion as to the drafting.
  5. All reasonable expenses incurred in Italy in establishing claims,
including the assessment of loss or damage, shall be borne by the
Italian Government.
  6. United Nations nationals and their property shall be exempted
from any exceptional taxes, levies or imposts, imposed on their capital
assets in Italy by the Italian Government, or any Italian authority
between the date of Armistice and the coming into force of the present
Treaty for the specific purpose of meeting charges arising out of the
war or of meeting the costs of occupying forces or of reparation pay-
able to any of the United Nations. Any sums which have been so
paid shall be refunded.
  7. The owner of the property concerned and the Italian Government
may agree upon arrangements in lieu of the provisions of this Article.
  8. As used in this Article:
  a. "United Nations nationals" means individuals who are nationals
of any of the United Nations or corporations or associations organised
under the laws of any of the United Nations at the date of the coming
into force of the present Treaty, provided that they also had this status
at the date of the Armistice with Italy.
  The term "United Nations nationals" also includes all individuals,
corporations or associations which under the laws in force in Italy
during the war, have been treated as enemy.
  b. "Owner" means the United Nations national, as defined in sub-
paragraph a above, who is entitled to the property in question, and
includes a successor of the owner, provided that the successor is also
a United Nations national as defined in sub-paragraph a. If the suc-
cessor has purchased the property in its damaged state, the transferor



30


 

					
				
				


DRAFT PEACE TREATIES



shall retain his rights to compensation under this Article, without
prejudice to obligations between the transferor and the purchaser
under domestic law.
  c. "Property" means all movable or immovable property, whether
tangible or intangible, including industrial, literary and artistic prop-
erty, as well as all rights, estates or interests in property of any kind.

  SECTION II.-Italian Property in the Territory of Allied and
                        Associated Powers

                            ARTICLE 69
  1. Each of the Allied and Associated Powers shall have the right
to seize, retain, liquidate or take any other action with respect to all
property, rights and interests within its territory which on the date of
coming into force of the present Treaty belong to Italy or to Italian
nationals, and to apply such property or the proceeds thereof to such
purposes as it may desire, within the limits of its claims and those of
its nationals against Italy or its nationals, including debts, other than
claims fully satisfied under other Articles of the present Treaty. All
Italian property, or the proceeds thereof, in excess of the amount of
such claims, shall be returned.
  2. The liquidation and disposition of Italian property shall be
carried out in accordance with the law of the Allied or Associated
Power concerned. The Italian owner shall have no rights with re-
spect to such property except those which may be given him by that
law.
  3. The Italian Government undertakes to compensate Italian na-
tionals whose property is taken under this Article and not returned to
them.
  4. No obligation is created by this Article on any Allied or Asso-
ciated Power to return industrial, literary or artistic property to the
Italian Government or Italian nationals, or to include such property
in determining the amounts which may be retained under paragraph
1 of this Article. The Government of each of the Allied and Asso-
ciated Powers shall have the right to impose such limitations, condi-
tions and restrictions on rights or interests with respect to industrial,
literary and artistic property acquired prior to the coming into force
of the present Treaty in the territory of that Allied or Associated
Power by the Government of nationals of Italy, as may be deemed by
the Government of the Allied and Associated Power to be necessary
in the national interest.
  5. The property covered by paragraph 1 of this Article shall be
deemed to include Italian property which has been subject to control



31


 

					
				
				


FOREIGN RELATIONS, 1946, VOLUME IV



by reason of a state of war existing between Italy and the Allied or
Associated Power having jurisdiction over the property, but shall not
include:
  a. Property of the Italian Government used for consular or diplo-
matic purposes.
  b. Property belonging to religious bodies or private charitable in-
stitutions and used for religious or charitable purposes.
  c. Property of natural persons who are Italian nationals permitted
to reside within the territory of the country in which the property is
located or to reside elsewhere in United Nations territory, other than
Italian property which at any time during the war was subjected to
measures not generally applicable to the property of Italian nationals
resident in the same territory.
  d. Property rights arising since the resumption of trade and finan-
cial relations between Italy and the Allied and Associated Powers, or
arising out of transactions between Italy and the Government of any
Allied or Associated Power since September 3, 1943.
  e. Property in ceded territories of Italian nationals, to which the
provisions of Annex 3 shall apply.
  f. Property of natural persoms residing in ceded territories or in the
Free Territory of Trieste who do not opt for Italian nationality under
this Treaty, and property of corporations or associations having siege
social in ceded territories or in the Free Territory of Trieste, provided
that such corporations or associations are not owned or controlled by
persons in Italy.
                       SECTION III.-Debts

                            ARTICLE 70
  1. The Contracting Parties agree that the existence of the state of
war shall not, in itself, be regarded as affecting the obligation to pay
pecuniary debts arising out of obligations and contracts which ex-
isted, and rights acquired, before the existence of a state of war, which
became payable prior to the coming into force of the present Treaty,
and which are due by the Government or nationals of Italy to the
Government or nationals of one of the Allied and Associated Powers
or are due by the Government or nationals of one of the Allied and
Associated Powers to the Government or nationals of Italy.
  2. Except as otherwise expressly provided in the present Treaty,
nothing therein shall be construed as impairing debtor-creditor rela-
tionships arising out of pre-war contracts concluded either by the
Government or nationals of Italy.



32


 

					
				
				


DRAFT PEACE TREATIES



            PART VIII. GENERAL ECoNoMIc RELATIONS
                            ARTICLE 71
  Pending the conclusion of commercial treaties or agreements between
Italy and the United Nations, the Italian Government shall, during
the 18 months following the coming into force of the present Treaty,
grant the following treatment to each of the United Nations which,
in fact, reciprocally grants similar treatment in like matters to Italy:
  a. In all that concerns duties and charges on importation or ex-
portation, the internal taxation of imported goods and all regulations
)ertaining thereto, the United Nations shall be granted unconditional
most-favoured-nation treatment.
  b. In all other respects, Italy shall make no arbitrary discrimina-
tion against goods originating in or destined for any territory of any
of the United Nations as compared with like goods originating in or
destined for any other territory of the United Nations or of any other
foreign country.
  c. Natural and legal persons who are nationals of any of the United
Nations shall be granted national and most-favoured-nation treatment
in all matters pertaining to commerce, industry, shipping and other
forms of business activity within Italy .
  The U.S.S.R. Delegation proposes the following text as an integral
part of the paragraph:
  . . .excding certain branches where, in accordance with the
internal legislation of the country, private enterprise does not take
place.
  The U.K., U.S. and French Delegations propose the following
alternative to the U.S.S.R. proposal:
  This paragraph shall not be deemed to confer on the United Nations,
or their nationals, rights to engage in any branch of commerce, in-
dustry, shipping or other form of business activity which under
Italian law is a monopoly of the Italian State. Nevertheless, the
most-favoured-nation principle shall be observed in any such cases
in which foreign participation is allowed.
  Proposed further addition to this paragraph by the U.S. Delegation
supported by the U.K. Delegation.
  It is further understood that this paragraph shall not apply to
civil aviation, but that Italy will grant no exclusive or discriminatory
right to any country with regard to the operation of civil aircraft in
international traffic and will afford all the United Nations equality
of opportunity in obtaining international commercial aviation rights
in Italian territory.



33


 

					
				
				
34 FOREIGN RELATIONS, 1946, VOLUME IV

The U.S.S.2. Delegation sees no reason for inclusion of this addi-
tion in the Treaty.

2. The foregoing undertakings by Italy shall be understood to be
subject to the exceptions customarily included in commercial treaties
concluded by Italy before the war; and the provisions with respect
to reciprocity granted by each of the United Nations shall be under-
stood to be subject to the exceptions customarily included in the com-
mercial treaties concluded by that Power.

Part LX. SErruEMENT or DIsPurtsEs
ARTICLE 72

U.K. proposal:

 

Any disputes which may arise in connection with Articles 65 and 68
[and Annexes 6,7 and 8| of the present Treaty shall be referred to a
Conciliation Commission composed of an equal number of representa-
teves of the United Nations Government concerned and of the Italian
Government. If agreement has not been reached within three months
of the dispute having been referred to the Conciliation Commission,
ether Government may require the addition of a third member to the
Commission, and failing agreement between the two Governments on
the selection of this member, the President of the International Court
of Justice shall be requested to make the appointment. The decisions
of the Commassion, as so constituted, shall be taken by the same proce-
dure as is provided for decisions of the International Court itself in
Articles 48 and 55-57 of the Statute of the Court and shall be final
and binding on all parties.

U.S.S.R. proposal :

Any disputes which may arise in giving effect to the present Articles
G5 and 68 of the present Treaty shall be referred to a Conciliation
Commission consisting of Representatives of the Government of the
United Nations concerned and the Government of Ltaly, appointed
on an equal footing. If within 3 months after the dispute has been
referred to the Conciliation Commission no agreement has been
reached, either Government may ask for the addition to the Commis-
sion of a third member selected by mutual agreement of the two Gov-
ernments from nationals of third countries. Should the two
Governments fail to agree on the selection of a third member of the
Commission, the Governments shall apply to the Ambassadors in
Rome of the USSR. U.K., USA. and France, who will appoint
the third member of the Commission.

 

					
				
				
DRAFT PEACE TREATIES 35

Note.—The U.S. Delegation can accept either the U.K. proposal or
the U.S.S.R. proposal provided the following sentence is added at the
end of the latter:

If the Ambassadors are unable to agree within a period of one
month upon the appointment of the third member, the Secretary Gen-
eral of the United Nations shall be requested by either party to make
the appointment.

The French Delegation has the same position as the U.S. Delegation
provided Annexes 6, 7 and 8 also covered by the article.

Part X. MIsScELLANEOUS EcCoNomiIc PROVISIONS

ARTICLE 73

Articles 65, 68, 71 and Annex 8 of the present Treaty shall apply
to the Allied and Associated Powers and to those of the United Na-
tions which have broken diplomatic relations with Italy.

ARTICLE 74

The provisions of Annexes 3, 6, 7 and 8 shall, as in the case of the
other Annexes, have force and effect as integral parts of the present

Treaty.
Part XI. Frnat CLauseEs

ARTICLE 75

For a period not to exceed 18 months from the coming into force
of the present Treaty the Ambassadors in Rome of the U.S.S.R., the
U.K., the U.S.A., and France, acting in concert, will represent the
Allied and Associated Powers in dealing with the Italian Govern-
ment in all matters concerning the execution and interpretation of the
present ‘Treaty.

The four Ambassadors will give the Italian Government such guid-
ance, technical advice and clarification as may be necessary to ensure
rapid and efficient compliance with the spirit and terms of the present
Treaty.

The Italian Government undertakes to afford the said four Ambas-
sadors all necessary information and any assistance they may require
in the fulfilment of the tasks devolving on them under the present
Treaty.

ARTICLE 76

U.K., U.S. and French proposal :—

Except where any other procedure is specifically provided under
any article of the present Treaty, disputes concerning the interpreta-

 

					
				
				


FOREIGN RELATIONS, 1946, VOLUME IV



tion or execution of the Treaty shtall be referred to the four Ambas-
sadors acting as provided under Article 75 and. if not resolved by
them within a period of two months shall, at the request of any party
to any dispute, be referred to the International Court of Justice.
Any dispute still pending at, or arising after, the date when the Am-
bassadors terminate their functions wnder Article 75 and which i's not
settled by direct diplomnatic negotiations, shall equally at the request
of any party to the dispute, be referred to the International Court of
Justice.
  U.S.S.R. proposal:
  Save where any other procedure is specifically provided under any
Article of the present Treaty di.dsputbes concerning the interpretation
or execution of the Treaty shall be settled by direct diplomatic nego-
tidtionv; if the disputes are not settled in this way. they shall be re-
ferred to the four Ambassadors acting as provided under Article 75
of the Treaty, except that in this case the Ambassadors will not be re-
stricted by the time-limit provided in that Article.

                           ARTICLE 77
* Any other member of the United Nations not a signatory to the
present Treaty which is at war with Italy may accede to the Treaty
and upon accession will be deemed to be an Associated Power for the
purposes of the Treaty.
  Instruments of accession will be deposited with the Government of
the French Republic and shall take effect upon deposit.
                           ARTICLE 78
  The present Treaty of which the French, English and Russian texts
are authentic, shall be ratified by the Allied and Associated Powers.
It shall also be ratified by Italy. It will come into force immediately
upon the deposit of ratifications by France, U.K., U.S.A. and U.S.S.R.
The instruments of ratification will, in the shortest time possible, be
deposited with the Government of the French Republic.
  With respect to each Allied or Associated Power whose instrument
of ratification is thereafter deposited, the Treaty shall come into force
upon the date of deposit. The present Treaty will be deposited in the
archives of the Government of the French Republic, which shall fur-
nish certified copies to each of the signatory States.
  Done 11 the city of.......               .....................
in the French, English, Russian and Italian languages.



36


 

					
				
				


DRAFT PEACE TREATIES



                             ANNEX 1

                    Maps of Italian Frontiers 8

                          (See Article 1)

                             ANNEX 2

  Guarantees in Connection With Mont Cenis and Tendal-Brigw

                          (See Article 9)

GUARANTEES To BE GIVEN BY FRANCE TO ITALY IN CONNECTION WITH?
          THE CESSION OF T-HE PLATEAU OF MONT CENIS

I. In respect of water supplied front the lake of Mont Cenis for
    hydro-electric purposes
  a. France shall so control the supply of water from the Lake of
Mont Cenis to the underground conduits supplying the Gran Scala
Venaus and Monpantero hydro-electric plants, as to supply for those
plants such quantities of water at such rates of flow as Italy may
require.
  b. France shall repair and maintain in good and substantial con-
dition and, as may be necessary, shall renew all the works required for
the purposes of controlling and supplying the water in accordance
with paragraph a insofar as these works are within French territory.
  c. France shall inform Italy, as and when required by Italy, of the
amount of water in the Lake of Mont Cenis and of any other informa-
tion pertaining thereto so as to enable Italy to determine the quantities
of water and rates of flow to be supplied to the said underground
conduits.
  d. France shall carry out the foregoing provisions with due regard
for economy and shall charge Italy the actual cost incurred in so
doing.
II. In respect of electricity produced at the Gran Scala hydro-electric
     plant
  a. France shall operate the Gran Scala hydro-electric plant so as to
generate (subject to the control of the supply of water as provided in
Guarantee I) such quantities of electricity at such rates of output as
Italy may require, after the local requirements (which shall not stih-
stantially exceed the present requirements) in the vicinity of Gran
Scala within French territory have been met.

8 No maps accompanied the English text of the treaty.



37


 

					
				
				


FOREIGN RELATIONS, 19 4 6, VOLUME IV



   b. France shall operate the pumping plant adjacent to the Gran
 Scala plant so as to pump water to the Lake of Mont Cenis as and
 when required by Italy.
   c. France shall repair and maintain in good and substantial condi-
 tion and, as may be necessary, shall renew all the works comprising the
 Gran Scala hydro-electric plant and pumping plant together with the
 transmission line and equipment from the Gran Scala plant to the
 Fr'anco-Italian boundary.
   d. France shall transmit over the transmission line from Gran
 Scala to the Franco-Italian boundary the electricity required by Italy
 as aforesaid, and shall deliver that electricity to Italy at the point at
 which that transmission line crosses the Franco-Italian boundary into
 Italian territory.
   e. France shall maintain the voltage and periodicity of the elec-
 tricity supplied as aforesaid at such values as Italy may reasonably
 require.
   f. France shall arrange with Italy for telephone communication
'between Gran Scala and Italy and shall communicate with Italy in
order to ensure that the Gran Scala plant, the pumping plant and
transmission line are operated in such a manner as to comply with the
foregoing guarantees.
   g. The price to be charged by France and paid by Italy for the
electricity available to Italy from the Gran Scala plant (after the
local requirements as aforesaid have been met) shall be the same as the
price charged in France for the supply of similar quantities of hydro-
electricity in French territory in the neighbourhood of Mont Cenis
or in other regions where conditions are comparable.
III. Dultration of guarantees.
   Unless otherwise agreed between France and Italy these guarantees
will remain in force in perpetuity.
IV. Supervisory Technical Comniision.
   A Franco-Italian Supervisory Technical Commission comprising
an equal number of French and Italian members shall be established
to supervise and facilitate the execution of the foregoing guarantees
which are designed to secure the same facilities as Italy enjoyed in
respect of hydro-electric and water supplies from the Lake of Mont
.Cenis before the cession of this region to France.

GUARANTEES To BE GIVEN BY FRANCE TO ITALY IN CONNECTION WITH
        THE CESSION OF THE TENDA-BRIGA DISTRICT TO FRANCE

   1. Guarantees to ensure to Italy the supply of electricity generated
by the two 162/3 period generators of the hydro-electric plant at San



38


 

					
				
				


                      DRAFT PEACE TREATIES                      39

Dalmazzo; and the supply of electricity generated at 50 periods at
the hydro-electric plants at Le Mesce, San Dalmazzo and Confine in
excess of such amount thereof as may be required by France for sup-
ply to the Sospel, Menton and Nice areas until the complete recon-
struction of the wrecked hydro-electric plants at Breil and Fontan,
it being understood that such amount will decrease as reconstruction
of these plants proceeds, will not exceed 5,000 KW in power and
3,000,000 KWH per month and that, if no special difficulties are en-
countered in the reconstruction, the work should be completed not
later than the end of 1947.
  a. France shall operate the said plants so as to generate (subject to
such limitations as may be imposed by the amount of water available
and taking into account as far as reasonably practicable the needs
of the plants downstream) such quantities of electricity at such rates
of output as Italy may require, firstly, at 162/3 cycles for the Italian
railways in Liguria and South Piedmont, and secondly, at 50 cycles
for general purposes, after the requirements by France for Sospel,
Menton and Nice, as aforesaid, and of the local requirements in the
vicinity of San Dalmazzo, have been met.
  b. France shall repair and maintain in good and substantial condi-
tion and, as may be necessary, shall renew all the works comprising
the Le Mesce, San Dalmazzo and Confine hydro-electric plants to-
gether with the transmission lines and equipment from the Le Mesce
and Confine plants to the San Dalmazzo plant and also the main
transmission lines and equipment from the San Dalmazzo plants to
the Franco-Italian boundary.
  c. France shall inform Italy, as and when required by Italy, of the
rate of flow of water at Le Mesce and Confine and of the amount of
water stored at San Dalmazzo and of any other information pertain-
ing thereto so as to enable Italy to determine her electricity require-
ments as indicated in paragraph a.
  d. France shall transmit over the main transmission lines from
San Dalmazzo to the Franco-Italian boundary the electricity required
by Italy as aforesaid, and shall deliver that electricity to Italy at the
points at which those main transmission lines cross the Franco-Italian
boundary into Italian territory.
  e. France shall maintain the voltage and periodicity of the elec-
tricity supplied as aforesaid at such values as Italy may actually
require.
  f. France shall arrange with Italy for telephone communications
between San Dalmazzo and Italy and shall communicate with Italy
in order to ensure that the said hydro-electric plants and transmission
lines are operated in such a manner as to comply with the foregoing
guarantees.
  2. Guarantee concerning the price to be charged by France to Italy
for the electricity made available to Italy under paragraph 1 above
until terminated in accordance with paragraph 3 below.
  The price to be charged by France and paid by Italy for the elec-


 

					
				
				


FOREIGN RELATIONS, 1946, VOLUME IV



tricity made available to Italy from the Le Mesce, San Dalmazzo and
Confine hydro-electric plants after the requirements by France for
Sospel, Menton and Nice and the local requirements in the vicinity
of San Dalmazzo have been met as provided in paragraph 1 a, shall
be the same as the price charged in France for the supply of similar
quantities of hydro-electricity in French territory in the neighbour-
hood of the Upper Roya Valley or in other regions where conditions
are comparable.
  3. Guarantee of a reasonable period of time for the supply of the
electricity by France to Italy.
  Unless otherwise mutually agreed between France and Italy, para-
graphs 1 and 2 shall remain in force until December 31, 1961 and shall
terminate then or on any subsequent December 31 if either country
shall have given to the other at least two years' notice in writing of
its intention to terminate.
  4. Guarantee of full and equitable utilization by France and Italy
of the waters of the Roya and its tributaries for hydro-electric
production.
  a. France shall operate the hydro-electric plants in the French ter-
ritory of the Roya, taking into account as far as reasonably practicable
the needs of the plants downstream. France shall inform Italy in
advance of the amount of water which it is expected will be available
each day, and shall furnish any other information pertaining thereto.
  b. Through bilateral negotiations France and Italy shall develop
a mutually agreeable, co-ordinated plant for the exploitation of the
water resources of the Roya.
  5. A commission or such other similar body as may be agreed shall
oe established to supervise the carrying out of the plan mentioned in
paragraph 4b and to facilitate the execution of the guarantees con-
tained in paragraphs 1-4.

                              ANNEX 3
  Economic and Financial Provisions Relating to Ceded Territories

  1. t The Successor State shall receive, without payment, Italian State
and para-statal property within territory ceded to it under the present
Treaty, as well as all relevant archives concerning the territory in
question.
  The following are considered as State or para-statal property for
the purposes of this article: movable and immovable property of
the Italian State, of local authorities and of public institutions and

  fThe U.S. and U.K. Delegations accepted this paragraph without prejudice
to
any question of reparation. [Footnote in source text.]



40


 

					
				
				


DRAFT PEACE TREATIES



publicly owned companies and associations, as well as movable and
immovable property formerly belonging to the Fascist Party or its
auxiliary organizations.
  2. The Successor State shall make arrangements for the conver-
sion into its own currency of Italian currency held within the Ceded
Territory by persons continuing to reside on the said territory or
juridical persons continuing to carry on business there, Full proof
of the source of the funds to be converted may be required from their
holders.
  3. U.K. proposal:
  The Successor Government shall not be required to make any con-
tribution to the service of the Italian public debt but it shall assume
the obligations of the Italian Government to holders of the Italian
publwc debt who continue to reside in the said territory or who, being
juridical persons, retain their head offiee or principal place of busi-
ness there. Full proof of the source of such holdings may be re-
required from the holders.
  French and U.S.S.R. proposal:
  The State to which a territory is ceded shall be exempt from any part
whatever in the payment of the Italian public debt. Nevertheless, the
State to which a territory is ceded shall be liable for that part of the
public debt specifieally incurred for the purpose of construction of
public works on the ceded territory, and shall respect all privileges
guaranteeing the servicing thereof.
  The U.S. Delegation supports the U.K. draft but is prepared to
consider other arrangements which would be equitable.
  4. Special arrangements shall be concluded between Italy and the
Successor State to govern the conditions under which the obligations
of Italian public or private social insurance organizations towards
the inhabitants of the Ceded Territory and a proportionate part of
the reserves accumulated by the said organizations shall be trans-
ferred to similar organizations of the Successor State.
  5. The property, rights and interests of Italian nationals perma-
rnently resident in the Ceded Territories at the date of the coming into
force of the present Treaty shall, provided they have been lawfully
acquired, be respected on a basis of equality with the rights of nationals
of the Successor State.
  The property, rights and interests within the Ceded Territory of
other Italian nationals and also of Italian juridical persons, provided
they have been lawfully acquired, shall be subject only to such legis-



219-115-70-4



41


 

					
				
				


FOREIGN RELATIONS, 1946, VOLUME IV



lation as may be enforced from time to time regarding the property
of foreign nationals and juridical persons generally.t
  U.S. proposal supported by U.K.:
  Such property, rights and interests shall not be subject to retention
or liquidation under the provisions of Article 69 of the present Treaty
but shall be restored to their owners freed of any mteasures of this
kind, or fronm any other measure of transfer, compulsory administra-
tion or sequestration taken between September 8, 1943 and the date
of the coming into force of the present Treaty, in the condition in
which they were before the application of the measures in question.
  The U.S.S.R. Delegation does not consider this provision necessary.
  6. Persons who opt for Italian nationality and move to Italy shall
be permitted, after the settlement of any debts or taxes due from them
in Ceded Territory, to take with them their movable property and
transfer their funds, provided such property and funds were lawfully
acquired. No export or import duties will be imposed in connection
with the moving of such property. Further they shall be permitted
to sell their movable and immovable property under the same condi-
tions as nationals of the Successor State.
  The removal of property to Italy will be effected under conditions
and within the limits agreed upon between Italy and the Successor
State.
  The conditions and time-periods of the transfer of the funds, in-
cluding the proceeds of sales. shall likewise be agreed.
  7. U.S. and U.K. proposal:
  Companies incorporated under Italian law and having sieZge social
in the Ceded Territory, which wish to remove siege social to Italy,
shall likewise be dealt with under the provisions of paragraph 6 of
this Article, provided that more than fifty per cent of the capital of
the company is owned by persons wmually resident outside the Ceded
Territory, or by persons who have opted under the present Treaty
to move to Italy.
  The French Delegation is not opposed to the inclusion of this para-
graph, under the condition that not only a majority of the capital, but
also the greater part of the activity of the company should lie outside
the Ceded Territory

  tThe first two sub-paragraphs are accepted without prejudice to any question
of reparation.
The French Delegation proposed that the Successor State may take over free
of
charge, the property, rights and interests of all Italian concessionary companies
or public utility services such as water, gas, electricity and transport
and that in
such cases the Italian Government should pay fair compensation to the parties
concerned. [Footnote in source text.]



42


 

					
				
				


DRAFT PEACE TREATIES



  The U.S.S.R. Delegation considers that there is no reason for inclu-
sion of such a provision in the Peace Treaty.
  8. Debts owed by persons in Italy to persons in the Ceded Territory
or by persons in the Ceded Territory to persons in Italy shall not be
affected by the cession. Italy and the Successor State undertake to
facilitate the settlement of such obligations. As used in this para-
graph, the term "persons" includes juridical persons.
  9 §. The property in Ceded Territory of the United Nations and
their nationals, if not already freed from Italian measures of sequestra-
tion or control and returned to its owner, shall be returned in the con-
dition in which it now exists.
  10. French proposal supported by U.K. and U.S. subject to drafting
  A new agreement shall be negotiated between the Danube-Sava-
Adriatica Railway Company, the Governments concerned, and the
Comnmittee of Bondholders of the Company. in order to determine the
method of applying the provisions of the Romne Agreement of March
29, 1923, laying down the Company's Articles of Association, and the
modifications required to adapt them to the changes which have fol-
lowed on the redistribution of the lines over the territories of various
States. This Agreement shall contain all the provisions necessary to
ensure satisfactory seqrvicing of the bonds and payments of amoaunts in
arrears.
  The U.S.S.R. Delegation considers that there is no reason for the
inclusion in the Peace Treaty of the French Delegation's proposal,
because a Peace Treaty should not contain provisions dealing with
particular private Companies.
  11.11 The provisions of this Annex shall not apply to the former
Italian Colonies.
  NoTE.-Pending agreement on the Statute of the Free Territory of
Trieste, the U.S. Delegation does not consider that this Annece applies
to the Free Territory of Trieste and is of the opinion that special pro-
visions may be required.

  § It is agreed that the question of compensation by Italy in case
restoration of
property is impossible should be studied in relation to other appropriate
provi-
sions of the Treaty. [Footnote in source text.]
I| When a decision is reached on Italian colonies, the question has to be
recon-
sidered. [Footnote in source text.]



43


 

					
				
				

FOREIGN RELATIONS, 19 4 6, VOLUME IV



                                ANNEX 4

                           (See Article 47)

  The names in this Annex are those which were used in the Italian
Navy on June 1, 1946.

            Part A. List of Ships To Be Left to Italy

                        MAJOR WAR VESSELS



Battleships .

Cruisers.



Destroyers .



Torpedo-Boats



Doria.
Duilio.
Abruzzi.
Garibaldi.
Montecuccoli.
Cadorna.
Carabiniere.
Grana tiere.
Grecale.
Do IRecco.
Abba.
Aretusa.
Calliope.
Carini.
Cassiopea.
Clio.
Fabrizi.
Giovannini.
Libra.
Monzambano.
Mosto.
Orione.
Orsa.
Pilo.
Sagittario.



Torpedo-Boats
('orvettes.



Sirio.
Ape.
Baionetta.
Chimera.
Cormorano.
Danaide.
Driade.
Fenice.
Flora.
Folaga.
Gabbiano.
Gru.
Ibis.
Minerva.
Pellicano.
Pomona.
Scimittara.
Sfinge.
Sibilla.
Urania.
Plus one vessel
  to be salvaged,
  completed   or
  constructed.



MINOR WAR VESSELS



Minesweepers .



Vedettes.



. R.D. Nos. 20, 32, 34, 38, 40, 41, 102, 103, 104, 105, 113, 114,
   129, 131, 132, 133, 134, 148, 149.
. Nos. 201, 204, 211, 218, 222, 224, 233, 235.



44


 

					
				
				

DRAFT PEACE TREATIES



AUxILIARY NAVAL VESSELS



Fleets Tankers . . Nettuno.
                  Lete.
Water Carriers . . Arno.
                  Frigido.
                  Mincio.
                  Ofanto.
                  Oristano.
                  Pescara.
                  Po.
                  Sesia.
                  Simeto.
                  Stura.
                  Tron to.
                  Vipacco.
Tugs (Large) ... Abbazia.
                  Asinara.
                  Atlante.
                  Capraia.
                  Chioggia.
                  Ernilio.
                  Gagliardo.
                  Gorgona.
                  Licosa.
                  Lilibeo.
                  Linosa.
                  Mestra.
                  Piombino.
                  Porto Empedocle.
                  Porto Fossone.
                  Porto Pisano.
                  Porto Rose.
                  Porto Recanati.
                  San Pietro.



Training Ship ...
Transports.


Supply Ship....
Repair Ship ....
Surveying Ships .

ILighthouse-



San Vito.
Ventimiglia.
Argentario.
Astico.
Cordevole.
Generale Pozzi.
Irene.
Passero.
L. 10.
N. 1.
N. 4.
N. 5.
N. 9.
N. 22.
N. 26.
N. 27.
N. 32.
N. 47.
Porto Rosso.
Porto Vecchio.
San Bartolomco.
San Benedetto.
Tagliamento.
N. 52.
N. 53.
N. 78.
N. 96.
N. 104.
RLN. 1.
RLN. S.
RLN. 9.
RLN. 10.



Vespucci.
Amnalia Messina.
Montegrap pa.
Tarantola.
Miraglia.
Paoinotti (after conversion from S/H Depot Ship).
A zio (after conversion from minelayer).
Cherso.
Buffoluto.



service vessel.
C.ible Ship . . . . . Ram pino.



45



Tugs (Large)

Tugs (Small) ...


 

					
				
				

46             FOREIGN RELATIONS, 19 4 6, VOLUME IV

Part B. List of Ships To Be Placed at the Di8po8al of the Governrment8
              of the U.S.S.R., U.K., U.S.A. and France

                         MAJOR WAR VESSELS



Battleships . . . . Cesare.
                 Italia.



Cruisers.





Sloop. .. .. .
Destroyers . .



Vittorio Veneto.
Aosta.
Pompeo.
Regolo.
Savoia.
Scipione.
Eritrea.
Artigliere.
Fuciliere.
Legionario.
Mitragliere.
Oriani.
Riboty.



Destroyers . .
Torpedo-Boats






Submarines .



                         MINOR WAR VESSELS

M. T. B ....... M.S. Nos. 11, 24, 31, 35, 52, 53, 54, 55, 56, 61, 64, 65,
72, 73, 74,
                   75.



Minesweepers .
Gunboat.
Vedettes.
Landing Craft. .



MAS. Nos. 433, 434, 510, 5141, 516, 519, 520, 521, 523, 538, 540,
543, 545, 547, 562.
M.E. Nos. 38, 39, 40, 41.
RD Nos. 6,16, 21, 25, 27, 28, 29.
Illyria (ex Albania).
Nos. 237, 240, 241, 245, 246, 248.
Nos. 713, 717, 722, 726, 728, 729, 737, 744, 758, 776, 778, 780,
  781, 784, 800, 831.



Velite.
Aliseo.
Animoso.
Ardinmentoso.
A riete.
Fortunale.
Indomito.
Alagi.
Atropo.
Dandolo.
Giada.
Marea.
Nichelio.
Platino.
Vortice.


 

					
				
				

DRAFT PEACE TREATIES



AUXILIARY NAVAL VESSELS



Tankers.



Water Carriers. .
















Tugs (Large) ...



Prometeo.
Stige.
Tarvisio.
Urano.
Anapo.
Aterno.
Basento.
Bisagno.
Dalmazia.
Idria.
Isarco.
Istria.
Liri.
Metauro.
Polcevera.
Sprugola.
Timavo.
Tirso.
Vas 226.
Arsachen~i.
Basiluzzo.
Capo d'Istria.
Carbonara.
Cefalu.
Ercole.
Gaeta.
Lam pedusa.
Lipari.
Liscanera.
Marechiaro.
Mesco.
Molara.
Nereo.
Porto Conte.
Porto Adriano.
Porto Quieto.



Tugs (Large)
















Tugs (Small) ..















Depot Ship....
Training Ship ...
Auxiliary-Mine-
layer.
Transports ....



Porto Torres.
Porto Tricare.
Procida.
Promontore.
Rapallo.
Salvore.
San Angelo.
San Antioco.
San Remno.
Talamone.
Taormina.
Toulado.
Tifeo.
Vado.
Vigoroso.
Generale Valfre.
Licata.
Noli.
Velosca.
N. 2.
N. 3.
N. 23.
N. 24.
N. 28.
N. 35.
N. 36.
N. 37.
N. 80.
N. 94.
Anteo.
Colombo.
Fasana.

Giuseppe Messina.
Montecucco.
Panigaglia.



                             ANNEX 5 (A)

                          Naval Defdnitions

                      STANDARD DISPLACEM1ENT

  The standard displacement of a surface vessel is the displacement of
the vessel, complete, fully manned, engined and equipped ready for
sea, including all armament and ammunition, equipment, outfit, pro-
visions and fresh water for crew, miscellaneous stores and implements
of every description that are intended to be carried in war, but with-
out fuel or reserve feed water on board.



47


 

					
				
				


FOREIGN RELATIONS, 19 4 6, VOLUME IV



  The standard displacement is expressed in tons of 2240 lb. (1,016
kgs.).
                          WAR VESSEL
 A war vessel, whatever its displacement, is:
 a. A vessel specifically built or adapted as a filgting unit for naval,
amphibious or naval air warfare;
  b. Or a vessel which has one of the following characteristics:
    1. Mount a gun with a calibre exceeding 4.7 inches (120 mm.);
    2. Mount more than four guns with a calibre exceeding 3 inches
         (76 mm.) ;
    3. Is designed or fitted to launch torpedoes or to lay mines;
    4. Is designed or fitted to launch self-propelled or guided
        missiles;
    5. Is designed for protection by armour plating exceeding 1 inch
        (25 mm.) ;
    6. Is designed or adapted primarily for operating aircraft. at sea;
    7. Mount more than two aircraft launching apparatus;
    8. Is designed for a speed greater than twenty knots if fitted with
        a gun of a calibre exceeding 3 inches (76 mm.).
  A war vessel belonging to sub-category a is no longer to be con-
sidered as such after the twentieth year since completion if all
weapons are removed.
                           BATTLESHIP
  A battleship is a war vessel, other than an aircraft carrier, the
standard displacement of which exceeds 10,000 tons, or which carries
a gun with a calibre exceeding 8 inches (203 mm.).

                       AIRCRAFT CARRIER
  An aircraft carrier is a war vessel whatever her displacement, de-
signed or adapted primarily for the purpose of carrying and operat-
ing aircraft.
                           SUBMARINE
  A submarine is a vessel designed to operate below the surface of the
sea.
              SPECIALISED TYPES OF ASSAULT CRAFT
  a. All types of craft specially designed or adapted for amphibious
operations.
  b. All types of small craft specially designed or adapted to carry an
explosive or incendiary charge for attacks on ships or harbours.



48


 

					
				
				


DRAFT PEACE TREATIES



                      MOTOR TORPEDO BOAT
  A vessel of a displacement less than 200 tons, capable of a speed of
over 25 knots and of operating torpedoes.

                            ANNEX 5(B)

         Definitions of Military, Air and Naval Training
  Military training is defined as: the study of and practice in the use
of war material specially designed or adapted for army purposes, and
training devices relative thereto; the study and carrying out of all
drill or movements which teach or practice evolutions performed by
fighting forces in battle; and the organised study of tactics, strategy
and staff work.
  Military air training is defined as: the study of and practice in the
use of war material specially designed or adapted for air force pur-
poses, and training devices relative thereto; the study and practice of
all specialised evolutions, including formation flying, performed by
aircraft in the accomplishment, of an air force mission, and the
organised study of air tactics, strategy and staff work.
  Naval training is defined as: the study, administration or practice
in the use of warships or naval establishments as well as the study or
employment of all apparatus and training devices relative thereto,
which are used in the prosecution of naval warfare except for those
which are also normally used for civilian purposes; also the teaching,
practice or organised study of naval tactics, strategy and staff work
including the execution of all operations and manoeuvres not required
in the peaceful employment of ships.

                            ANNEX 5(C)

               Definition and List of lWar Material
  The term "War Material" as used in the present Treaty shall in-
clude all arms, ammunition and implements specially designed or
adapted for use in war as listed below:
  The Signatory Powers reserve the right to amend, by modification
or addition, the list, periodically, in the. light of subsequent scientific
development.
Category I.
  1. Military rifles, carbines, revolvers and pistols; barrels for these
weapons and other spare parts not readily adaptable for civilian use;



49


 

					
				
				


FOREIGN RELATIONS, 1946, VOLUME IV



  2. Machine-guns, military automatic or autoloading rifles, and
machine pistols; barrels for these weapons and other spare parts not
readily adaptable for civilian use; machine-gun mounts.
  3. Guns, howitzers, mortars, caimon special to aircraft; breechless
or recoilless guns and flame-throwers; barrels and other spare parts
not readily adaptable for civilian use, carriages and mountings for
the foregoing.
  4. Rocket projectors; launching and control mechanisms for self-
propelling and guided missiles; mountings for same.
  5. Self-propelling and guided missiles, projectiles, rockets, fixed
ammunition and cartridges, filled or unfilled, for the arms listed in
1-4 inclusive above and fuses, tubes or contrivances to explode or
operate them. Fuses required for civilian use are not included.
  6. Grenades, bombs, torpedoes, mines, depth charges and incendiary
materials or charges, filled or unfilled; all means for exploding or
operating them. Fuses required for civilian use are not included.
  7. Bayonets.
Category II.
  1. Armoured fighting vehicles; armoured trains, not technically
convertible to civilian use.
  2. Mechanical and self-propelled carriages for any of the weapons
listed in Category I; special type military chassis or bodies other than
those enumerated in 1. above.
  3. Armour plate, greater than three inches in thickness, used for
lrotective purposes in warfare.
Category III.
  1. Aiming computing devices, including predictors and plotting
apparatus, for fire control; direction of fire instruments; gun sights;
bomb sights; fuse setters; calibration equipment for the calibration
of guns and fire control instruments.
  2. Assault bridging, assault boats and storm boats.
  3. Deceptive warfare, dazzle and decoy devices.
  4. Personal war equipment of a specialised nature not readily
adaptable to civilian use.
Category IV.
  1. Warships of all kinds, including converted vessels and craft de-
signed or intended for their attendance or support, which cannot be
technically reconverted to civilian use, as well as weapons, armour,
ammunition, aircraft and all other equipment, material, machines, and
installations not used in peace time on ships other than warships.



50


 

					
				
				


DRAFT PEACE TREATIES



  2. Landing craft and amphibious vehicles or equipment of any
kind; assault boats or devices of any type as well as catapults or other
apparatus for launching or throwing aircraft, rockets, propelled
weapons or any other missile, instrument or device whether manned
or unmanned, guided or uncontrolled.
  3. Submersible or semi-submersible ships, craft, weapons, devices or
apparatus of any kind, including specially designed harbour defence
booms, except as required by salvage, rescue or other civilian uses,
as well as all equipment, accessories, spare parts, experimental or
training aids, instruments or installations as may be especially de-
signed for the construction, testing, maintenance or housing of the
same.
Category V.
  1. Aircraft, assembled or unassembled, both heavier and lighter
than air, which are designed or adapted for aerial combat by the use
of machine-guns, rockets, projectors, or artillery or for the carrying
and dropping of bombs, or which are equipped with, or which by
reason of design or construction are prepared for, any of the appli-
ances referred to in paragraph 2 below.
  2. Aerial gun mounts and frames, bomb racks, torpedo carriers and
bomb release or torpedo release mechanisms; gun turrets and blisters.
  3. Equipment specially designed for and used solely by airborne
troops.
  4. Catapults or launching apparatus for ship-borne, land or sea-
based aircraft; apparatus for launching aircraft weapons.
  5. Barrage balloons.
Category VI.
  Asphyxiating, lethal, toxic, incapacitating substances intended for
war purposes, or manufactured in excess of civilian requirements.
Category V11.
  Propellants, explosives, pyrotechnics, liquefied gases destined for
the propulsion, explosion, charging, filling of, or use in connection
with the war material in the present categories, not capable of civilian
use or manufactured in excess of civilian requirements.
Category VIII.
  Factory and tool equipment specially designed for the production
and maintenance of the products enumerated above and not technically
reconvertible to civilian uses.



51


 

					
				
				


FOREIGN RELATIONS, 1946, VOLUME IV



                             ANNEX N6
     Special Provisions Relating to Certain Kinds of Property

         A. INDUISTRIAL, LITERARY AND ARTISTIC PROPERTY

  1. a. A period of one year from the coming into force of the present
Treaty shall be accorded to the Allied and Associated Powers or their
nationals without extension fees or other penalty of any sort in order
to enable such persons to accomplish all necessary acts for the obtain-
ing or preserving in Italy of rights in industrial, literary and artistic
property which were not capable of accomplishment owing to the
existence of a state of war.
  b. Allied and Associated Powers or their nationals who had duly
applied in any Allied or Associated Power for a patent or registration
of a utility model not earlier than 12 months before the outbreak of
the war with Italy or during the war, or for the registration of an
industrial design or model or trade mark not earlier than 6 months be-
fore the outbreak of the war with Italy or during the war, shall be
entitled within 12 months after the coming into force of the present
Treaty to apply for corresponding rights in Italy with a right of
priority based upon the previous filing, of the application in that Allied
and Associated Power.
  c. Each of the Allied and Associated Powers or its nationals shall
be accorded a period of one year from the coming into force of the
present Treaty during which they may institute proceedings against.
those persons who are alleged illegally to have infringed their rights
in industrial, literary or artistic property between the date of the out-
break of the war and the coming into force of the Present Treaty.
  2. A period from the outbreak of the war until a date 18 months
after the coming into force of the present Treaty shlall be excluded in
considering the time witiin which a patent should be worked or a
design or trade mark used.
  3. The period from the outbreak of the war until the coming into
force of the present Treaty shall be excluded from the normal term
of rights in industrial, literary and artistic property which were in
force in Italy at the outbreak of the war or which are recognised or
established under this Anilex and belonging to any of the Allied and
Associated Powers, or their nationals. Consequently, the normal
duration of such rights shall be deemed automatically extended in
Italy for a further term corresponding to the period so excluded.
  4. The foregoing provisions concerning the rights of the Allied and
Associated Powers or their nationals shall apply equally to Italy and
its nationals, but nothing in these prov isions shall operate so acs to



52


 

					
				
				


DRAFT PEACE TREATIES



give to Italy or any of its nationals greater rights than are accorded
in like cases by any of the Allied or Associated Powers to any other
of the United Nations.
  The U.S.S.R. Delegation considers it unnecessary to include the
passage in italics.
  The U.S. Delegation would not agree to this Annex unless para-
graph 4 were included in its entirety.
  5. Third parties in the territories of any the Allied and Associated
Powers or Italy who before the coming into force of the present
Treaty have bona fide acquired industrial property rights conflicting
with rights restored under this Article or with rights obtained with
priority claimed thereunder, or have bona fide manufactured, used or
sold the subject-matter of such rights, shall be permitted, without any
liability for infringement, to continue to exercise such rights and to
continue or to resume such manufacture, use or sale which had been
bona fide acquired or commenced. In Italy, such permission shall
take the form of a non-exclusive license granted on terms and con-
ditions to be mutually agreed by the parties thereto or in default of
agreement to be fixed by the Conciliation Commission established
under Article 72 of the present Treaty. In the territories of the
Allied and Associated Powers, however, bona fide third parties shall
receive such protection as is accorded under similar circumstances to
bona fide third parties whose rights are in conflict with those of the
nationals of other Allied and Associated Powers.
  6. Nothing in this Annex shall be construed to entitle Italy or its
nationals to any patent or utility model rights in the territory of any
of the Allied and Associated Powers with respect to inventions relat-
ing to any article listed by name in the definition of war material con-
tained in Annex 5 of present Treaty made or upon which applications
were filed by Italy or any of its nationals in Italy or in the territory
of any other of the Axis Powers or in any territory occupied by the
Axis forces, during the time when the place in question was under
the control of enemy forces or authorities.
  7. Italy shall extend the benefits of this Article to any United Na-
tion other than an Allied or Associated Power which undertakes to
extend to Italy the benefits accorded to Italy under this Article.
  The U.S.S.R. Delegation does not see the reason for inclusion of
paragraph 7 of the present Treaty.
  8. Nothing in this Annex shall be understood to conflict with Arti-
cles 68, 69 and 70 of the present Treaty.



53


 

					
				
				


FOREIGN RELATIONS, 1946, VOLUME IV



                          B. INSURANCE
  U.K. proposal:
  1. United Nations insurers shall be granted full facilities by the
Italian Government to recover their former portfolios of business in
Italy and they shall not be required to conform to any legislative en-
actments more onerous than those which 'were applicable to them be-
fore the outbreak of war.
  2. Insofar as the guarantee deposits and reserves of United Nations
insurers have been reduced by reason of the payment of insurance
claims arising out of the war, they shall be entitled to compensation
from the Italian Government by way of the reinstatement of such
deposits or reserves to the amount of the claims.
  3. The Italian Government undertakes that if any United Nations
insurer desires to resume business in Italy and it is found that the
value of any guarantee depositor reserves required to be held as a con-
dition of carrying on business in Italy have been diminished by reason
of disappearance or depreciation of the securities in which they were
constituted, Italy shall either:
  a. itself reconstitute the deposits or reserves except in so far as the
diminution or disappearance was caused by payment of losses already
compensated for under paragraph 2 above; or
  b. accept the securities at the value at the outbreak of war for the
purpose of compliance with the legal requirements relating to such
deposits and reserves.
  The U.S.S.R. Delegation considers that this subject is also covered
by Article 68 on United Nations property in Italy and sees no reason
to include any special provisions relating to insurance.
  The U.S. Delegation is not opposed in principle to treaty provisions
on special problems relating to insurance but is unable to accept the
draft as a whole.

                             ANNEX 7

        Contracts, Prescriptions and Negotiable Instruments
  U.K. proposals:
                           I. CONTRACTS
  1. Any contract concluded between enemies shall be deemed to have
been dissolved as from the time when any of the parties became an
enemy, except in respect of any debt accrued or money paid or other
pecuniary obligation arising out of any act done thereunder, and sub-
ject to the exceptions set out in the following paragraph. The pro-
vi'sions of this paragraph shall be without prejudice to contracts of



54


 

					
				
				


DRAFT PEACE TREATIES



insurance and reinsurance, which shall be subject to a separate agree-
mnent. (Alternatively a special annex can be included.)
  2. The following classes of contracts notwithstanding the provisions
of paragraph 1 are excepted from dissolution and without prejudice
to the rights contained in Article 69, remain in force subject to the
application of municipal laws, orders or regulations made since the
outbreak of war by any member of the United Nations and subject to
the proper law and terim's of the contracts:
  a. Contracts for the transfer of estates or of movable or immovable
property where the property therein has passed or delivery been made
before the parties became enemies;
  b. Leases or agreements for leases of land, houses or parts thereof;
  c. Contracts of mortgages or lien;
  d. Concessions of mines, quarries or deposits;
  e. Contracts between individuals or associations and states, munici-
palities or other similar juridical persons charged with administrative
functions, and concessions granted by states, municipalities or other
similar juridical persons charged with administrative functions.
  f. Any contract of which the execution shall be required in the gen-
eral interest within six months front the date of the coming into force
of the present treaty by a government of one of the United Nations of
which one of the parties to such a contract is a national; when the
execution of the contract thus kept alive would, owing to the altera-
tion of particular conditions, cause one of the parties substantial
prejudice, the Conciliation Commission established under Article 72
shall be empowered to award fair coinpensation to the prejudiced
parties.
  3. If a contract is dissolced in part under paragraph 1, the remain-
ing provisions of that contract shall, subject to the same application of
municipal laws as is pro vided for in paragraph 2, continue in force if
they are severable, but where they are not severable the contract shall
be deemed to have been dissolved in its entirety.
  4. Nothing in the present Annex shall be deemed to invalidate the
transactions lawfully carried out in accordance with a contract be-
tween enemies if it has been carried out with the authority of the Gov-
ernnment of one of the United Nations.
  5. For the purposes of Parts I, II and III of the present Annex the
parties to a contract shall be regarded as enemies when trading be-
tween them shall hace been proh;bited by or otherwise become unlaw-
ful under laws, orders or regulations to which one of these parties or
the contract was subject. They shall be deemned to have become
enemIes from the date when such trading was prohibited or otherwise
become unlawful.



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FOREIGN RELATIONS, 19 4 6, VOLUME IV



                   II. PERIODS OF PRESCRIPItON
  1. All periods of prescription, or limitation of right of action,
whether they began to run before or after the outbreak of War, shall
be treated in the territory of the High Contracting Parties, as far as
regards relations between enemies, as having been suspended for the
duration of the war. They shall begin to run again at earliest three
months after the coming into force of the present Treaty. This pro-
vision shall apply to the period prescribed for the presentation of
interest or dividend coupons or for the presentation for repayment of
securities drawn for repayment or repayable on any other ground.
  2. Where, on account of failure to perform any act or comply with
any formality during the war, measures of execution have been taken
in Italian territory to the prejudice of a national of one of the United
Nations, the claim of such national shall, if the matter does not fall
within the competence of the Courts of one of the United Nations, be
heard by the Conciliation Commission established under Article 72.
  3. Upon the application of any interested person who is a national
of one of the United Nations the Conciliation Commission shall order
the restoration of the rights which have been prejudiced by the mea-
sures of execution referred to in paragraph 2 wherever such restora-
tion is equitable and possible. If sunch restoration is inequitable or
impossible the Conciliation Commission may award compensation to
the prejudiced party to be paid by the Italian Government.
  4. Where a contract between enemies ha8 been dissolved by reason
either of failure on the part of either party to carry out its provisions
or of the exercise of a right stipulated in the contract itself the party
prejudiced may apply to the Conciliation Commission for relief. The
Commission will have the powers provided for in paragraph 3.
  5. The provisions of the preceding paragraphs of this Article shall
apply to United Nations nationals who have been prejudiced by reason
of measures referred to above taken by Italy on invaded or occupied
territory, if they have not been otherwise satisfactorily compensated.
  6. Italy shall compensate any third party who may be prejudiced
by any restitution or restoration ordered by the Conciliation Comnmis-
sion under the provisions of the preceding paragraphs of this Part.
  7. As regards negotiable instruments, the period of three months
provided under paragraph I shall corn mence as from the date on which
any exceptional regulations applied in the territories of the interested
Power with regard to negotiable instruments shall have definitely
ceased to have force.



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DRAFT PEACE TREATIES



                  III. NEGOTIABLE INSTRUMENTS
  1. As between enemies no negotiable instrument made before the
war shall be deemed to have become invalid by reason only of failure
within the required time to present the instrument for acceptance or
payment or to give notice of non-acceptance or non-payment to draw-
ers or endorsers or to protest the instrument, nor by reason of failure
to complete any formality during the war.
  2. Where the period within which a negotiable instrument should
have been presented for acceptance or for payment, or within which
notice of non-acceptance or non-payment should have been given to
the drawer or endorser, or within which the instrument should have
been protested, has elapsed during the war, and the party who should
have presented or protested the instrument or have given notice of
non-acceptance or non-payment, has failed to do so during the war,
a period of not less than three months from the coming into force of
the present Treaty shall be allowed within which presentation, notice
of non-acceptance or non-payment or protest may be made.
  3. If a person has either before or during the war become liable
upon a negotiable instrument in accordance with an undertaking given
to him by a person who has subsequently become an enemy, the latter
shall remain liable to indemnify the former in respect of his liability
notwithstanding the outbreak of war.

                       IV. MISCELLANEOUS
  1. Stock Exchange and Commercial Exchange Contracts.
  a. Rules made during the war by any recognised Exchange or
Commercial Association providing for the closure of contracts en-
tered into before the war by an enemy are confirmed by the High
Contracting Parties, as also any action taken thereunder, provided:
  i. That the contract was expressed to be made subject to the rules of
the Exchange or Association in question;
  ii. That the rules applied to all persons concerned;
  iii. That the conditions attaching to the closure were fair and
reasonable.
  b. The preceding paragraph shall not apply to rules made during
the occupation by Exchanges or Commercial Associations in the dis-
tricts occupied by the enemy.
  2. Security.
  The sale of a security held for an unpaid debt owing by an enemy
shall be deemed to have been valid irrespective of notice to the owner
if the creditor acted in good faith and with reasonable care and
prudence, and no claim, by the debtor on the ground of sucah sale shall
be admitted.
     219-115-70  5



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FOREIGN RELATIONS, 1946, VOLUME IV



  This stuipulation shall not apply to any sale of seuritres eff ectel by
an enemy during the occupation in regions invaded or occupied by
the enemy.
  In view of the constitutional position of the Federal Government,
the U.S. Delegation would be unable to accept any obligations on the
matters covered by this Annex. The U.S. would not object to the
inclusion of provisions on these subjects in the treaty but would wish
to have a clause included making them, inapplicable as between the
United States and Italy.
  The U.S.S.R. Delegation sees no reason for inclusion in the Peace
Treaty of the matters covered by this Annex.
  The French Delegation supports the U.K. proposal with regard to
Prescriptions and Negotiable Instruments.


                             ANNEX 8
                   Prize Courts and Judgments

                        A. PRIZE COURTS

  Each of the Allied and Associated Powers reserves the right to
examine, according to a procedure to be established by it, all decisions
and orders of the Italian Prize Courts involving ownership rights
of its nationals, and to recommend to the Italian Government that re-
vision shall be undertaken of these decisions or orders which may not
be in conformity with international law.
  Italy undertakes to supply copies of all documents comprising the
records of these cases, including the decisions taken and orders issued,
and to accept all recommendations made, subsequent to the examina-
tion of the said cases, and to give effect to such recommendations.

                          B. JUDGMENTS

U.S. proposal supported by U.S.S.R.:
  The Italian Government shall take the necessary measures to enable
nationals of any of the United Nations at any time within one year
after the coming into force of the present Treaty to submit to the
appropriate Italian authorities for review any judgment given by an
Italian Court between June 10, 1940, and the coming into force of
the present Treaty in any proceeding in which the United Nations
national was unable to make adequate presentation of his case asl
plaintiff or defendant. The Italian Government shall provide that,
where the United Nations national has suffered injury by reason of
any such judgment, he shall be restored in the position in which he was



58


 

					
				
				
DRAFT PEACE TREATIES 59

before the judgment was given or shall be afforded such relief as may
be just and equitable in the circumstances. The term “United Na-
tions nationals” includes corporations or associations organised or
constituted under the laws of any of the United Nations.

French proposal:

The Iialian Government undertakes to adopt appropriate measures
in order that nationals of any of the United Nations may obtain during
a period of one year from the coming into force of the present Treaty,
revision of the judgments rendered by the Italian courts and tribunals
between June 10, 1940, and the date of coming into force of the present
Treaty, either in the absence of such nationals, or on account of their
inability as a result of circumstances to have defended their cause
satisfactorily.

The Italian Government shall indemnify nationals of the United
Nations for the prejudice caused through the mitial judgment and
shall award compensation, if revision of such judgment did not con-
clude by re-establishing them de facto in the situation where they were
when the procedure was instituted.

Should dispute arise either as regards the ability of nationals of any
of the United Nations to have defended their cause satisfactorily, or
the adequacy of the compensation to be awarded by the Italian Gov-
ernment, the said dispute shall be submitted to the Conciliation Com-
mission established under Article 72 of the present Treaty.

 

U.K. proposal :

1. Judgments given by the Courts of a member of the United Na-
tions in all cases which, under the present Treaty, they are competent
to decide, shall be recognised in Italy as final, and shall be enforced
without ut being necessary to have them declared executory.

2. If a judgment in respect of any dispute which may have arisen
has been given during the war by an Italian Court against a United
Nations national in a case in which he was not able adequately to
present his case whether as plaintiff or defendant, the United Nations
national who has suffered prejudice thereby shall be entitled to recover,
compensation to be fixed by the Conciliation Commission under the
procedure laid down in Article 72 for settlement of disputes.

3. At the instance of United Nations nationals and where it is pos-
sible the Conciliation Commission may in lieu of compensation by
order replace the parties in the situation which they occupied before
the judgment was given by the Italian Court.

4. Such compensation or replacement may likewise be obtained
before the Conciliation Commission by the United Nations nationals
who have suffered prejudice by judicial measures taken in invaded
or occupied territories if they have not been otherwise compensated.

 

					
				
				


FOREIGN RELATIONS, 1946, VOLUME IV



                            ANNEX 9
                         (See Article 16)

                    Free Territory of Trieste

 U.S. proposals: (Not yet discussed by the Council of Foreign
 Ministers).
 A. Water supply for Gorizia and vicinity.
 Under a permanent concession from the Government of Yugoslavia
 the com'mrune of Gorizia shall continue to own and operate the springs
and water supply installations at Fonte Fredda and Moncorona and
the conduits carrying the water to the consuming area. The commune
of Gorizia shall operate these springs, installations and conduits in
such manner that the water systems shall continue to satisfy the needs
for water of the area which has been cmetomarily supplied by these
water systems, including those communities which, upon the coming
into force of the present treaty, will lie within the territory of Yugo-
slavia. The communities lying in Yugoslavia shall be supplied with
such quantities of water, at such rates of flow and at such reasonable
rate of payment by the communities to the commune of Gorizia, as
shall be agreed between the commune of Gorizia and the communities
in Yugoslavia. Unless otherwise agreed, the water supplies shall be
allocated between the users in Italy and in Yugoslavia in approxi-
mately the same proportions as have been customary.
  The above-mentioned water system shall be operated by the com-
mune of Gorizia without interference by Yugoslavia and the latter
shall not require the payment of taxes or charges of any kind in respect
of the water systems. The commune of Gorizia shall be permitted
freely to make the necessary repairs or additions to the water systems
to maintain a water supply adequate to satisfy the requirements of
the commune of Gorizia and of the above-mentioned communities in
-Yugoslavia.
  B. Water supply to Northwestern Istria, within the Free Territory
of Trieste.
  Yugoslavia shall continue to supply water to the region of North-
western Istria within the boundaries of the Free Territory of Trieste
from the spring of San Giovanni de Pinguente through the Quieto
water supply system (and from the spring of Santa Maria del Risano
through the Rieano system). The water so supplied shall be in such
amounts, not substantially exceeding those amounts which have been
customarily supplied to the region, and at such rates of flow, as the



60


 

					
				
				


DRAFT PEACE TREATIES



61



Free Territory of Trieste may request, but within limits imposed by
natural conditions. Yugoslavia shall maintain the water conduits,
reservoirs, pumps, purifying systems and such other works within
Yugoslav territory as may be required to fulf,11 this obligation. Tem-
porary allowance must be made in respect of the foregoing obligations
on Yugoslavia for necessary repair of war damage to water supply
installations. The Free Territory of Trieste shall pay a reasonable
phrice for the water thus supplied, which price shall represent a pro-
portionate share, based on the quantity of water consumed within the
Free Territory, of the total cost of operation and maintenance of the
Quieto (and the Risano) water supply system (s). Should in the
future, additional supplies of water be required by the Free Territory
of Trieste, Yugoslavia undertakes to examine the matter jointly with
the authorities of the Free Territory and by agreement to take such
measures as are reasonable to meet these requirements.

  C. Electricity supplies under the new Italian-Yugoslav-Free Ter-
ritory of Trieste frontiers.
  1. Yugoslavia and Italy shall maintain the existing supply of elec-
tricity to the Free Territory of Trieste, furnishing to the Free Ter-
ritory such quantities of electricity at such rates of output as the latter
may require. The quantities furnished need not at first substantially
exceed those which, have been customarily supplied to the area comn-
prised in the Free Territory, but Italy and Yugoslavia shall, on re-
quest of the Free Territory, furnish increasing amounts as the
requiirements of the Free Territory grow.
  2. The price to be charged by Yugoslavia or by Italy and to be
paid by the Free Territory of Trieste for the electricity furnished to
it shall be no higher than the price charged in Yugoslavia or in Italy
for the supply of similar quantities of hydro-electricity from the same
soarces in Yugoslavia or Italian territory.
  3. Yugoslavia, Italy and the Free Territory of Trieste shall ex-
change information continuously concerning the flow and storage of
water and the output of electricity in respect of stations supplying
the former Italian compartimento of Venezia Giulia so that each of
the three parties will be in a position to determine its requirements.
  4. Yugoslavia, Italy, and the Free Territory of Trieste shall main-
tain in good and substantial condition all of the electrical plants,
transmission lines, sub-stations and other installations which are re-
quired for the continued supply of electricity to the former Italian.
compartimento of Venezia Giulia.
  5. Yugoslavia shall ensure that the existing and any future power
installations on the Isonzo are operated so as to provide that stch stp-


 

					
				
				


FOREIGN RELATIONS, 19 4 6, VOLUME IV



plies of water as Italy may from time to time request may be diverted
from the Isonzo for irrigation in the region from Gorizia southwest-
ward to the Adriatic.  Yugoslavia shall be obliged to pro vide Italy
only with such amounts of water for this purpose as do not substan-
tially exceed past requirements.
  6. Yugoslavia, Italy, and the Free Territory of Trieste shall,
through joint negotiation, adopt a mutually agreeable convention in
conformity with the foregoing provisions for the continuing opera-
tion of the electricity system which serves the former Italian comn-
partimento of Venezia Giulia. This convention shall be so drawn as
to allow for the possible expansion of the aforesaid electricity system
by further hydro-electric developments in the Upper Isonzo, by the
furnishing of additional supplies of electricity from Northern Italy,
or by other means.
  7. Under the aforesaid convention, a Commission, or such other
instrumentality as may be jointly agreed, shall be established, with
headquarters in Trieste and with equal representation for Yugoslavia,
Italy and the Free Territory of Trieste. The Commission shall
facilitate the execution of the provisions in paragraphs 1 to 5 above
and shall supervise and coordinate the operation and future develop-
ment of the electricity system.
  D. Provisions to facilitate local trade between the Free Territory
of Trieste and Yugoslavia and betwceen the Free Territory of Trieste
and Italy.
  Yugoslavia and the Free Territory of Trieste, and Italy and the
Free Territory of Trieste, shall, within one month of the coming into
force of the present treaty, undertake negotiations to provide arrange-
m-ents which shall facilitate the movement across the frontiers between
the Free Territory of Trieste and the adjacent areas of Yiugoslavia
and Italy of foodstuffs and other categories of commodities which
have customarily moved between those areas in local trade. This
qnmoement may be facilitated by appropriate mteasures, including the
exemption of such commodities, up to agreed quantities or values, from
tariffs, customs charges, and export or import taxes of any kind when
such commodities are moving in local trade.



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DRAFT PEACE TREATIES



DRAFT PEACE TREATY WITH RUMANIA, PREPARED BY THE COUNCIL
OF FOREIGN MINISTERS, PALAIS DU LUXEMBOURG, PARIS, JULY 18,
1946
CFM Files
              Draft Peace Treaty With Rumania 9

                           PREAMBLE
  The Union of Soviet Socialist Republics, the United Kingdom, the
United States of America, Australia, the Byelorussian Soviet So-
cialist Republic, Canada, Czechoslovakia, India, New Zealand, the
Ukrainian Soviet Socialist Republic, and the Union of South Africa,
as the States which are at war with Roumania and actively waged war
against the European enemy states with substantial military force,
hereinafter called the Allied and Associated Powers, of the one part,
and Roumania, of the other part;
  'Whereas Roumania, having become an ally of Hitlerite Germany
and participating on her side in the war against the Union of Soviet
Socialist Republics, the United Kingdom, the United States of Amer-
ica, and other United Nations, bears her share of responsibility for
this war;
  'Whereas, however, Roumania, on August 24, 1944, entirely ceased
military operations against the U.S.S.R., withdrew from the war
against the United Nations, broke ofi relations with Germany and
her satellites, and having concluded on September 12, 1944, an Arm-
istice with the Governments of the Union of Soviet Socialist Repub-
lics, the United Kingdom and the United States of America,'0 acting
in the interests of all the United -Nations, took an active part in the
war against Germany, and
  Whereas the Allied and Associated Powers and Roumania are re-
spectively desirous of concluding a treaty of peace which will form the
basis of friendly relations between thlem and settle questions still out-
standing as a result of the events hereinbefore recited, thereby en-
abling the Allied and Associated Powners to support Roumania's ap-
plication to become a member of the United Nations and also to adhere
to any convention concluded under the auspices of the United Nations;
  Have therefore agreed to declare the cessation of the state of war
and for this purpose to conclude the present Peace Treaty, and have
accordingly appointed as their Plenipotentiaries .
                                                               10a
...................... ........................ ............. .
who, after presentation of their full powers, found in good and due
form, have agreed on the following provisions:

9 The table of contents and the list of annexes in the source text are not
printed
here.
  1 Department of State, Executive Agreement Series 490.
  Oa Marks of ellipsis throughout this document occur in the source text.



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FOREIGN RELATIONS, 19 4 6, VOLUME IV



                       PART I. FRONTIERS

                           ARTICLE 1
  The frontiers of Roumania, shown on the map annexed to the
present Treaty (Annex 1) shall be those which existed on January 1,
1941, with the exception of the Roumanian-Hungarian frontier, which
is defined in Article 2 of the present Treaty.
  The Soviet-Roumanian frontier is thus fixed in accordance with the
Soviet-Roumanian Agreement of June 28, 1940, and the Soviet-Czech-
oslovak Agreement of June 29, 1945.

                           ARTICLE 2
  The decision of the Vienna Award of August 30, 1940, is declared
null and void. The frontier between Roumania and Hungary exist-
ing on January 1, 1938, is hereby restored.

                   PART II. POLITICAL CLAUSES
                            SECTION I
                            ARTICLE 3
  Roumania shall take all measures necessary to secure to all persons
under Roumanian jurisdiction, without distinction as to race, sex,
language or religion, the enjoyment of human rights and of the funda-
mental freedoms including freedom of expression, of press and pub-
lication, of religious worship, of political opinion and of public
meeting.
                            ARTICLE 4
  Roumania, which in accordance with the Armistice Agreement has
taken measures to set free, irrespective of citizenship and nationality,
all persons held in confinement on account of their activities in favour
of the United Nations or because of their sympathies with the United
Nations, or because of their racial origin, and to repeal discriminatory
legislation and restrictions imposed hereunder, undertakes to com-
plete these measures and in future not to take any measures or enact
any laws which would be incompatible with the objects and purposes
mentioned in this Article.
                            ARTICLE 5
  Roumania, which in accordance with the Armistice Agreement has
taken measures for dissolving all organizations of a Fascist type on
Roumanian territory, whether political, military or paramilitary, as
well as other organizations conducting propaganda hostile to the



64


 

					
				
				


DRAFT PEACE TREATIES



Soviet Union or to any of the other United Nations, undertakes not
to permit in future the existence and activities of. organizations of
that nature which have as their aim denial to the people of their
democratic rights.
                            ARTICLE 6
  1. Roumania shall take the necessary steps to ensure the apprehen-
sion and surrender for trial of:
  a. Persons accused of having committed, ordered or abetted war
crimes and crimes against peace or humanity;
  b. Nationals of the Allied and Associated Powers accused of having
violated their national law by treason or collaboration with the enemy
during the war.
  2. At the request of the United Nations Government concerned,
Roumania will likewise make available as witnesses persons within
its jurisdiction, whose evidence is required for the trial of the persons
referred to in paragraph 1 of this Article.
  3. Any disagreement concerning the application of the provisions
of paragraphs 1 and 2 shall be referred by any of the Governments
concerned to the Heads of the Diplomatic Missions in Bucharest of
the U.S.S.R., U.K. and U.S.A. who will reach agreement with regard
to the difficulty.
                           SECTION II
                           ARTICLE 7
  Roumania undertakes to recognize the full force of the Peace
Treaties concluded with Italy, Hungary, Bulgaria and Finland, and
the agreements or arrangements which have been or will be reached
by the Allied and Associated Powers in relation to Austria, Germany
and Japan for the restoration of Peace.
                           ARTICLE 8
  The state of war between Roumania and Hungary will terminate
upon the coming into force both of the present Treaty of Peace and
the Treaty of Peace between U.S.S.R., U.K., U.S.A., Australia,
Byelorussian S.S.R., Canada, Czechoslovakia, India, New Zealand,
Ukrainian S.S.R., Union of South Africa and Yugoslavia, of the one
part and Hungary of the other part.
                           ARTICLE 9
  Roumania undertakes to accept any arrangements which have been
or may be agreed for the liquidation of the League of Nations and the
Permanent Court of International Justice.



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FOREIGN RELATIONS, 1946, VOLUME IV



  Roumania also undertakes to accept any arrangements which have
been or may be agreed for the liquidation of the International In-
stitute of Agriculture at Rome.
                           ARTICLE 10
  1. Each Allied or Associated Power will notify Roumania, within
a period of six months of the coming into force of the present Treaty,
which pre-war bilateral treaties it desires to keep in force or revive.
Any provisions not in conformity with the present Treaty shall how-
ever be deleted from the above-mentioned Treaties.
  2. All treaties so notified will be registered with the Secretariat of
the United Nations in accordance with Article 102 of the United Na-
tions Charter.
  3. All treaties not so notified are to be regarded as abrogated.

           PART III. NAVAL, MILITARY AND AIR CLA-USES
                           ARTICLE 11
  The maintenance of land, sea and air armaments and fortifications
will be closely restricted to meeting tasks of an internal character and
local defence of frontiers. In accordance with the foregoing, Rou-
mania is authorised to have armed forces consisting of not more than:
  a. A land Army, including frontier troops, with a total strength of
120,000 personnel.
  b. Anti-aircraft artillery with a strength of 5,000 personnel.
  c. A Navy with a personnel strength of 5,000 and a total tonnage
of 15,000 tons.
  d. An airforce, including any naval air arm, of 150 aircraft, includ-
ing reserves, of which not more than 100 may be combat types of
aircraft, with a total personnel strength of 8,000. Roumania shall
not possess or acquire aircraft designed primarily as bombers with
internal bomb-carrying facilities.
  These strengths will in each case include combat, service and over-
head personnel.
                           ARTICLE 12
  The Roumanian Army, Air Force and Navy in excess of the above
strength shall be disbanded within six months from the date of the
coming into force of the present Treaty.

                           ARTICLE 13
  Personnel not included in the Roumanian Army, Air Force and
Navy respectively, will not receive any form of military training,
military air training or naval training as defined in Annex 2.



66


 

					
				
				


                     DRAFT PEACE TREATIES                     67

                           ARTICLE 14
  Roumania shall not possess, construct or experiment with any self-
propelled or guided missiles or apparatus connected with their dis-
charge, sea-mines of non-contact types a-ctuated by influence mecha-
nisms, torpedoes capable of being manned, submarines or other sub-
mersible craft, or specialised types of assault craft.

                           ARTICLE 15
  Roumania shall not retain, produce, otherwise acquire, or maintain
facilities for the manufacture of war material in excess of that re-
quired for the maintenance of the armed forces permitted under
Article 11 of the present Treaty.

                           ARTICLE 16
  1. Excess war material of Allied origin shall be placed at the dis-
posial of the Allied or Associated Power concerned according to the
instructions given by that Power. Excess Roumanian war material
will be placed at the disposal of the Government of the U.S.S.R., U.K.
and U.S.A. Roumania will renounce all rights to this material.
  2. War material of German origin or design in excess of that re-
quired for the armed forces permitted under the present Treaty will
be placed at the disposal of the Governments of the U.S.S.R, U.K.
and U.S.A. Roumania will not acquire or manufacture any war
material of German origin or design, or employ or train any tech-
nicians, including military and civil aviation personnel, who are or
have been nationals of Germany.
  3. Excess war material mentioned in paragraphs 1 and 2, will be
handed over or destroyed within one year from the coming into force
of the Present Treaty.
  4. A definition and list of war material for the purposes of the
present Treaty are set out in Annex 3.
                           ARTICLE 17
  Roumania undertakes to co-operate fully with the United Nations
in order to ensure that Germany may not be able to take any action
outside German territory in the direction of rearmament.
                           ARTICLE 18
  Roumania undertakes not to acquire or manufacture civil aircraft
which are of German or Japanese design or which embody major
assemblies of German or Japanese manufacture or design.


 

					
				
				


FOREIGN RELATIONS, 1946, VOLUME IV



                          ARTICLE 19
  Each of the military, naval and air clauses of the present Treaty
will remain in force until modified in whole or in part by agreement
between the Allied and Associated Powers and Roumania, or after
Roumania becomes a member of the United Nations, by agreement
between the Security Council and Roumania.
                          ARTICLE 20
  1. Roumanian prisoners of war will be repatriated as soon as pos-
sible in accordance with arrangements to be agreed upon with Rou-
mania by the individual powers detaining them.
  2. All costs, including maintenance costs, incurred in moving Rou-
manian prisoners of war from their respective assembly points, as
chosen by the Government of the Allied or Associated Power con-
cerned to the point of entry into Roumanian territory shall be borne
by the Roumanian Government.
                          War Graves
  NoTE.-The U.S. Delegation wishes to reserve its position with re-
spect to an Article covering War Graves until the Peace Conference.
  The U.S.S.R. Delegation considers such an article unnecessary.

  PART IV. WITHDRAWAL OF ALLIED TROOPS FROM ROUMANIA

                          ARTICLE 21
  Upon the coming into force of the present Treaty, all Allied Forces
will, within a period of 90 days, be withdrawn from Roumania, sub-
ject to the right of the Soviet Union to keep on Roumanian territory
such armed forces as it may need for the maintenance of the lines of
communication of the Red Army with the Soviet zone of occupation
in Austria. All unused Roumanian currency and all Roumanian
goods in possession of the Allied forces in IRoumania, acquired pur-
suant to Article 10 of the Armistice, will be returned to the Rou-
manian Government within the same period of 90 days. Roumania,
however, undertakes to make available such maintenance and facilities
as may specifically be required for the maintenance of the lines of
communication with the Soviet zone of occupation in Austria, for
which due compensation will be made to the Roumanian Government.



68


 

					
				
				


DRAFT PEACE TREATIES



             PART V. REPARATION AND RESTITUTION

                           ARTICLE 22
  Losses caused to the Soviet Union by military operations and by the
occupation by Roumania of Soviet territory will be made good by
Roumania to the Soviet Union, but taking into consideration that
Roumania has not only withdrawn from the war against the United
Nations, but has declared and, in fact, waged war against Germany it
is agreed that compensation for the above losses will be made by
Roumania not in full but only in part, namely to the amount of 300
million United States dollars payable over 8 years from Septem-
ber 12, 1944, in commodities (oil-products, grain, timber, seagoing and
river craft, sundry machinery, etc.).
  The basis for calculating the settlement provided for in this Article
will be the United States dollar at its gold parity on the day of the
signing of the Armistice Agreement, i. e. 35 dollars for one ounce of
gold.
                           ARTICLE 23
  1. Roumania accepts the principles of the United Nations Decla-
ration of January 5, 1943,1" and will return property removed from
United Nations territories.
  2. The obligation to make restitution applies to all identifiable
property at present in Roumania which was removed by force or
duress by any of the Axis Powers from the territory of any of the
United Nations, irrespective of any subsequent transactions by which
the present holder of any such property has secured possession.
  3. The Roumanian Government and the Government entitled to
restitution may conclude agreements which will replace the provisions
of the present Article.
  4. The Roumanian Government undertakes to return the property
referred to in the present Article in good order and, in this connexion,
to bear all costs in Roumania relating to lab-our, materials and
transport.
  5. The Roumanian Government will co-operate with the United
Nations in and will provide at its own expense all necessary facilities
for, the search for and restitution of property liable to restitution un-
der the present Article.
  6. The Roumanian Government shall take the necessary measures
to effect the return of property covered by this Article held in any
third country by persons subject to Roumanian jurisdiction.

  11Foreign Relations, 19)43, vol. I, p. 443.



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FOREIGN RELATIONS, 19 4 6, VOLUME IV



  7. Claims for the restitution of property shall be presented to the
iRoumanian Government by the Government of the country from
whose territory the property Nwas removed, it being understood that
rolling stock shall be regarded as lhaving been removed from the ter-
ritory to which it originally belonged. The period during which such
claims may be presented shall be six months from the date of coming
into force of the present Treaty.
  8. The burden of identifying the property and of proving owner-
ship shall rest on the claimant government, and the burden of proving
that the property was not removed by force or duress shall rest on the
Roumanian Government.

                   PART VI. ECONOMIC CLAUSES
                            ARTICLE 24
  1. Insofar as Roumania has not already done so, Roumania shall
restore all the legal rights and interests in Roumania of the United
Nations and their nationals as they existed on June 22, 1941, and shall
return all property in Roumania including ships** of the United Na-
tions and their nationals as it now exists.
  2. The Roumanian Government undertakes that all property, r ghts
and interests passing under this Article shall be restored free of all
encumbrances and charges of any kind to which they may have be-
come subject as a result of the war and without the imposition of any
charges by the Roumanian Government in connection with its return.
The Roumanian Government will nullify all measures, including
seizures, sequestration or control, taken by it against United Nations'
property between June 22, 1941 and the coming into force of the
present Treaty. In cases where the property has not been returned
within 6 months of the coming into force of the Treaty, application
shall be made to the Roumanian authorities not later than 12 months
from the coming into force of the Treaty, except in cases in which the
claimant is able to show that he could not file his application within
this period.
  3. The Roumanian Government undertakes to invalidate transfers
involving property, rights and interests of any description belonging
to United Nations nationals, where such transfers resulted from force
or duress exerted by Axis Governments or their agencies during the
war.

*The U.K. Delegation agrees to paragraph 7 on the understanding that the
question of restitution of shipping is covered in Article 24. [Footnote in
source
text. ]
**The Agreement of the U.K. Delegation to this paragraph is subject to a
defi-
nition of the ships deemed to be covered thereby. See also Annex 4 Part C.
[Footnote in source text.]



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DRAFT PEACE TREATIES



  4. U.S. proposal:
  a. Where, as a result of the war, the property cannot be returned
or the United Nations national has suffered a loss because of injury
to the property, the Roumanian Government shall compensate the
owner by the payment of a s5umT in lei sufflient at the date of payment
to enable the recipient to purchase sirMrilar property or to make good
the loss or damage suffered.
  b. Sums in lei paid by the Roumanian Government under this Arti-
cle shall be freely usable in Roumania but shall be subject to the for-
eign exchange control regulations which may be in force in Roumania
from time to time. The Roumanian Government agrees to accord to
United Nations nationals fair and equitable treatment with respect
to the allocation of materials, and of foreign exchange required for
the importation of materials, for the repair or rehabilitation of their
properties in Roumanwia, and in no e vent to discriminate in these re-
spects against nationals of the United Nations as compared with
Rounmanian nationals.
  c. In cases where a corporation or association of any nationality
other than that of one of the United Nations has suffered a loss of its
property in Roumania as a result of the war, compensation in lei
shall be paid by the Roumnanian Government to United Nations na-
tionals who have directly, or indirectly through intermediate corpora-
tions or associations of any nationality other than that of one of the
United Nations, an ownership interest in the corporation or association
which has suffered the loss. This compensation shall be that frac-
tional part of the amount which would be required to enable the
corporation or association to make good the loss or damage suffered,
which the interest of the United Nations nationals constitutes of the
totality of ownership interests in the corporation. Such compensa-
tion, however, shall not be required in case the Roumanian Govern-
ment shall provide to the corporation or the association itself such full
comrnpensation or restoration as would be due under this Article if it
were a corporation or association of one of the United Nations. In
cases where the corporation or association receives from the Rouwa-
nian Government partial compensation for the damage or loss sus-
tained, the United Nations nationals shall be paid by the Roumanian
Government compensation in lei in an amount equal to their respective
proportionate shares of the loss or damage for which the corporation
or association does not itself receive compensation from the Rouma-
nian Government. For purposes of this paragraph the extent of
interest of a United Nations national shall be determined as of June 22,
1941, or the outbreak of war between the United Nation concerned and



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FOREIGN RELATIONS, 19 4 6, VOLUME IV



Roumania, as may be the more favorable to the United Nations
national.
  d. As used in this Article, the phrase "as a result of the war"
in-
cluded the consequences of any action taken by the Rounmanian Govern-
ment, any action taken by any of the belligerents, any action taken
under the Armistice of September 12, 1944, and any action or failure to
act caused by the existence of a state of war.
  U.S.S.R. proposal:
  Roumania recognizes the necessity for compensation for the property
of the United Nations and their nationals in Roumania lost or damaged
during the war. In view of the fact, however, that Routmania has
not only withdrawn from the war against the United Nations, but
declared war on, and effectively waged war against Germany, and in
consideration of the losses sustained by Rourmania in the course of
military operations against Germany on Roumanian territory, it is
agreed that such compensation will be made in part to the extent of
one-third of the losses and will be paid in Roumanian lei.
The U.K. and French Delegations approved the U.S. proposal subject to
reservation as to the drafting.
  5. All reasonable expenses incurred in Roumania in establishing
claims, including the assessment of loss or damage, shall be borne by
the Roumanian Government.
  6. United Nations nationals and their property shall be exempted
from any exceptional taxes, levies or imposts, imposed on their capi-
tal assets in Roumania by the Roumanian Government, or any Rou-
manian authority between the date of the Armistice and the coming
into force of the present Treaty for the specific purpose of meeting
charges arising out of the war or of meeting the costs of occupying
forces or of reparations payable to any of the United Nations. Any
sums which have been so paid shall be refunded.
  7. The owner of the property concerned and the Roumanian Gov-
ernment may agree upon arrangements in lieu of the provisions of
this Article.
  8. As used in this Article:
  a. "United Nations nationals" means individuals who are nationals
of any of the United Nations or corporations or associations organised
under the laws of any of the United Nations at the date of the com-
ing into force of the present Treaty, provided that they also had this
status at the date of the Armistice with Roumania.
  The term "United Nations nationals" also includes all individuals,
corporations or associations which under the laws in force in Rou-
mania during the war, have been treated as enemy.



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DRAFT PEACE TREATIES



  b. "Owner" means the United Nations national, as defined in sub-
paragraph a above, who is entitled to the property in question, and
includes a successor of the owner, provided that the successor is also
a United Nations national as defined in subparagraph a. If the suc-
cessor has purchased the property in its damaged state, the transferor
shall retain his rights to compensation under this Article, without
prejudice to obligations between the transferor and the purchaser
under domestic law.
  c. "Property" means all movable and immovable property, whether
tangible, or intangible including industrial, literary and artistic prop-
erty, as well as all rights, estates or interests in property of any kind.

                           ARTICLE 25
  Roumania recognises that the Soviet Union is entitled to all Ger-
man assets in Roumania transferred to the Soviet Union by the Con-
trol Council for Germany and undertakes to take all necessary
measures for facilitating such transfers.

                           ARTICLE 26
  1. Each of the Allied and Associated Powers shall have the right
to seize, retain, liquidate or take any other action with respect to all
property, rights and interests within its territory which on the date
of coming into force of the present Treaty belong to Roumania or to
Roumanian nationals, and to apply such property or the proceeds
thereof to such purposes as it may desire, within the limits of its claims
and those of its nationals against Roumania or its nationals, including
debts other than claims fully satisfied under other Articles of the
present Treaty. All Roumanian property, or the proceeds thereof,
in excess of the amount of such claims, shall be returned.
  2. The liquidation and disposition of Ro-umanian property shall be
carried out in accordance with the law of the Allied or Associated
Power concerned. The Roumanian owner shall have no rights with
respect to such property except those which may be given him by that
law.
  3. The Roumanian Government undertakes to compensate Rou-
manian nationals whose property is taken under this Article and not
returned to them.
  4. No obligation is created by this Article on any Allied or Asso-
ciated Power to return industrial, literary or artistic property to the
Roumanian Government or Roumanian nationals, or to include such
property in determining the amounts which may be retained under
paragraph 1 of this Article. The Government of each of the Allied
and Associated Powers shall have the right to impose such limitations,
     219-115-70---6



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FOREIGN RELATIONS, 1946, VOLUME IV



conditions and restrictions on rights or interests with respect to in-
dustrial, literary and artistic property acquired prior to the coming
into force of the present Treaty in the Territory of that Allied or
Associated Power by the Government or nationals of Roumania, as
may be deemed by the Government of the Allied or Associated Power
to be necessary in the national interest.
  5. The property covered by paragraph 1 of this Article shall be
deemed to include Roumanian property which has been subject to
control by reason of a state of war existing between Roumania and
the Allied or Associated Power having jurisdiction over the property,
but shall not include:
  a. Property of the Roumanian Government used for consular or
diplomatic purposes.
  b. Property belonging to religious bodies or private charitable
institutions and used for religious or charitable purposes.
  c. Property of natural persons who are Roumanian nationals per-
mitted to reside within the territory of the country in which the prop-
erty is located or to reside elsewhere in United Nations' territory,
other than Roumanian property which at any time during the war
was subjected to measures not generally applicable to the property
of Roumanian nationals resident in the same territory.
  d. Property rights arising since the resumption of trade and finan-
cial relations between Roumania and the Allied and Associated
Powers, or arising out of transactions between Roumania and the
Governments of any Allied or Associated Power since September 12,
1944.
                            ARTICLE 27
  U.S.S.R. proposal:
  1. Limitations imposed in respect of Roumanian property on the ter-
ritory of Germany and on the territory of other countries which took
part in the war on the side of Germany shall be withdrawn after the
coming into force of the present treaty. The rights of Roumanian
owners with respect to the disposal of the property in question shall
be restored.
  2. Roumania shall hare the right to restitution of identifiable prop-
erty which was compulsorily or forcibly removed from Roumania
after Augu.st 24, 1944, and is at present in Germany.
  The restitution of Routmanian property situated in the territory of
Germany will be efected in accordance with the instructions of the
military authorities of the Powers in occupation of Germany.
  U.K., U.S. and French proposal:
  Roumania hereby renounces on its own behalf and on behalf of
Roumanian nationals all claims, including debts, against Germany



74


 

					
				
				


DRAFT PEACE TREATIES



and Geriman nationals outstanding on May 8,1945, except those arising
out of contracts and other obligations entered into, and rights ac-
quired, before September 1, 1939. This renunciation shall be deemed
to include not only all inter-governmental claims in respect of arrange-
ments entered into in the course of the war, but also all claims for loss
or damage arising during the war. This renunciation shall be without
prejudice to any dispositions in favour of Roumania or Roumanian
nationals made by the Powers in occupation of Germany.
                           ARTICLE 28
  1. The Contracting Parties agree that the existence of the state of
war shall not, in itself, be regarded as affecting the obligations to pay
pecuniary debts arising out of obligations and contracts which existed,
and rights acquired, before the existence of a state of war, which
became payable prior to the coming into force of the present Treaty,
and which a-re due by the Govermuent or nationals of Roumania to
the Government or nationals of one of the Allied and Associated
Powers or are due by the Government or nationals. of one of the Allied
and Associated Powers to the government or nationals of Roumania.
  2. Except as otherwise expressly provided in the present Treaty.
nothing therein shall be construed as impairing debtor-creditor rela-
tionships arising out of pre-war contracts concluded either by the
Government or nationals of Roumania.
                           ARTICLE 29
  1. Roumania waives all claims of any description against the Allied
and Associated Powers on behalf of the Roumanian Government or
Roumanian nationals arising directly out of the war or out of actions
taken because of the existence of a state of war in Europe after
September 1, 1939, whether or not the Allied or Associated Power
was at war with Roumania at the time, including the following:
  a. Claims for losses or damages sustained as a consequence of acts
of forces or authorities of the Allied or Associated Powers;
  b. Claims arising from the presence, operations or actions of forces
or authorities of the Allied or Associated Powers in Roumanian
territory;
  c. Claims with respect to the decrees and orders of Prize Courts
of the Allied or Associated Powers, Roumania agreeing to accept as
valid and binding all decrees and orders of such Prize Courts on or
after September 1, 1939, concerning Roumanian ships or Roumanian
goods or the payment of costs;
  d. Claims arising out of the exercise or purported exercise of bel-
ligerent rights.



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76 FOREIGN RELATIONS, 1946, VOLUME IV

2. The provisions of this Article will bar, completely and finally,
all claims of the nature referred to herein, which will henceforward
be extinguished, whoever may be the parties in interest. The Rou-
manian Government agrees to make equitable compensation in lei to
persons who furnished supplies or services on requisition to the forces
of the Allied and Associated Powers in Roumanian territory and in
satisfaction of non-combat damage claims against the forces of the
Allied and Associated Powers arising in Roumanian territory.

3. Roumania likewise waives all claims of the nature covered by
paragraph 1 of this Article on behalf of the Roumanian Government
or Roumanian nationals against any of the United Nations which
severed diplomatic relations with Roumania and took action in co-
operation with the Allied and Associated Powers.

4, The Roumanian Government will assume full responsibility for
Allied military currency issued in Roumania by the Allied military
authorities, including all such currency in circulation on the date
of the coming into force of this Treaty.

5. The waiver of claims by Roumania under this Article includes
any claims arising out of actions taken by any of the Allied and Asso-
ciated Powers with respect to Roumanian ships between September 1,
1939, and the date of the coming into force of the present Treaty, as
well as any claims and debts arising out of Conventions on prisoners
of war now in force.

ARTICLE 30

1. Pending the conclusion of commercial treaties or agreements
between Roumania and the United Nations, the Roumanian Govern-
ment shall during the 18 months following the coming into force of
the present Treaty grant the following treatment to each of the United
Nations which, in fact, reciprocally grants similar treatment in like
matters to Roumania:

a. In all that concerns duties and charges on importation or expor-
tation the internal taxation of imported goods and all regulations per-
taining thereto, the United Nations shall be granted unconditional
most-favoured-nation treatment.

6. In all other respects, Roumania shall make no arbitrary discrim-
ination against goods originating in or destined for any territory of
any of the United Nations as compared with like goods originating
in or destined for any other territory of the United Nations or of any
other foreign country ;

¢. Natural and legal persons who are nationals of any of the United
Nations shall be granted national and most-favoured-nation treat-
ment in all matters pertaining to commerce, industry, shipping and
other forms of business activity within Roumania.. .

					
				
				
DRAFT PEACE TREATIES U7

The U.S.S.R. Delegation proposes the following text as an integral
part of the paragraph:

. excluding certain branches where, in accordance with the in-
ternal legislation of the country, private enterprise does not take place.

The U.K., U.S. and French Delegations propose the following
alternative to the U.S.S.R. proposal:

This paragraph shali not be deemed to confer on the United Na-
tions, or their nationals, rights to engage in any branch of commerce,
industry, shipping or other form of business activity which under
Rowmanian law is a monopoly of the Roumanian State. Nevertheless,
the most-favoured-nation principle shall be observed in any such cases
in which foreign participation is allowed.

Proposed further addition to this paragraph by the U.S. Delegation
supported by U.K.

It is further understood that this paragraph shall not apply to civil
aviation, but that Roumania will grant no exclusive or discriminatory
right to any country with regard to the operation of civil aircraft m
international traffic and will afford all the United Nations equality
of opportunity for obtaining international commercial aviation rights
on Roumanian territory.

The U.S.S.R. Delegation sees no reason for inclusion of this addi-
tion in the Treaty.

2. U.S.S.R. proposal:

The foregoing undertakings by Roumania shall be understood to
be subject to the exceptions customarily included in commercial
treaties concluded by Rowmania before the war which relate to rela-
tions with neighbouring countries applied to them; and the provisions
with respect to reciprocity granted by each of the United Nations shall
be understood to be subject to the exceptions customarily included in
the commercial treaties concluded by that Power.

French, U.K. and U.S. proposal:

The foregoing undertakings by Rowmania shall be understood to
be subject to the exceptions customarily included in commercial
treaties concluded by Roumania before the war, and the provisions
with respect to reciprocity granted by each of the United Nations shall
be understood to be subject to the exceptions customarily included in
the commercial treaties concluded by that Power.

 

 

ARTICLE 31

U.K. proposal:

Any disputes which may arise in connexion with Articles 23 and 24
and Annexes 4, 5 and 6 of the present Treaty shall be referred to a
Conciliation Commission composed of an equal number of representa-
tives of the United Nations Government concerned and of the Rouma-

 

					
				
				
78 FOREIGN RELATIONS, 1946, VOLUME IV

nian Government. If agreement has not been reached within three
months of the dispute having been referred to the Conciliation Com-
mission, either Government may require the addition of athird member
to the Commission, and failing agreement between the two Govern-
ments on the selection of this member, the President of the Interna-
tional Court of Justice shall be requested to make the appointment.
T he decisions of the Commission, as so constituted, shall be taken by
the same procedure as is provided for decisions of the International
Court itself in Articles 48 and 55-57 of the Statute of the Court and
shalt be final and binding on all parties.

U.S.S.R. proposal :

Any disputes which may arise in giving effect to the present Articles
23 and 24 of the present Treaty shall be referred to a Conciliation
Commission consisting of an equal number of Representatives of the
Government of the United Nations concerned and the Government
of Roumania, appointed on an equal footing. If within 3 months
after the dispute has been referred to the Conciliation Commission no
agreement has been reached, either Government may ask for the addi-
tion to the Commission of a third member selected by mutual agree-
ment of the two Governments from nationals of third countries.
Should the two Governments fail to agree on the selection of a
third member of the Commission, the Governments shall apply to the
three Heads of the Diplomatic Missions in Bucharest of the U. S.S.R.,
U.K. and US., who will appoint the third member of the Commission.

The U.S. Delegation can accept either the U.K. proposal or the
U.S.S.R. proposal provided the following sentence is added at the
end of the latter.

If the three Heads of Mission are unable to agree within a period
of one month upon the appointment of the third member, the Secre-
tary-General of the United Nations shall be requested by either party
to make the appointment.

The French Delegation has the same proposition as the U.S. Dele-
gation provided Annexes 4, 5 and 6 are covered by the Article. |

 

 

 

ARTICLE 32

Articles 23, 24 and 30 and Annex 6 of this Treaty shall apply to
the Allied and Associated Powers and France and to those of the
United Nations which have broken off diplomatic relations with
Roumania.

ARTICLE 83

The provisions of Annexes 4, 5 and 6 shall, as in the case of the
other Annexes, have force and effect as integral parts of the present
Treaty.

					
				
				
DRAFT PEACE TREATIES 79
Parr VII. Cuatses RELATING TO THE DANUBE

ARTICLE 34

U.K. and U.S. proposal:

1. Navigation on the Danube River, its navigable tributaries and
connecting canals shall be free and open on terms of entire equality to
the nationals, vessels of commerce and goods of all states.

2. Sanitary, police and other laws and regulations applicable to the
Danube River system shall be administered by Roumania in a non-
discriminatory manner and shall not unreasonably impede commercial
navigation.

3. No obstacles or impediments to navigation shall be placed in the
main channels of the Danube River system or along the shores thereof.
Roumania undertakes to remove any existing obstacle or impediment
on the main channels lying within its jurisdiction or to permit such re-
movals by any international authority which may be established for
the Danube River system.

4. No tolls, dues or other charges shall be levied by Roumania except
for the purpose of defraying the cost of development and maintenance
of the waterway in a commercially navigable condition; and no tolls,
dues or other charges shall be levied with respect to navigation of any
naturally navigable portion of the waterway. All tolls, dues and
other charges shall be levied in such a manner as not to discriminate
agaimst nationals, vessels of commerce or goods of any state. The
schedule of these charges shall be open for public inspection and shall
be publicly displayed in appropriate places.

5. In the establishment, administration and operation of any in-
terim or permanent international regime for the Danube River system,
Roumania shall enjoy a status equal to that of the other member states.

6. Any dispute between the parties [to] the present Treaty with re-
spect to the application or interpretation of this Article relating to the
regime and conditions of navigation on the Danube River system,
which cannot be resolved by negotiation, shall be submitted to a
chamber of three or more judges formed by the International Court of
Justice under Article 26 of its Statute.

U.K. Delegation propose to add:

A conference of all interested states, including Roumania will be
convened within a period of sia months of the coming into force of the
present treaty to establish the new permanent international regime
for the Danube.

U.S.S.R. proposal :

The question of the Danube cannot be solved by the Peace Treaties
with Roumania, Bulgaria and Hungary since it has to be settled with

 

 

 

					
				
				


FOREIGN RELATIONS, 1946, VOLUME IV



the participation of the Danubian States which include Allied States
such as Czechoslovakia and Yugoslavia. The Delegation of the
U.S.S.R., therefore, proposes not [to] have the provisions relating to
the Danube included in the Peace Treaties with Roumania, Bulgaria
and Hungary.
                   PART VIII. FINAL CLAUSES

                           ARTICLE 35
  For a period not to exceed 18 months from the coming into force of
the present Treaty, the Heads of the Diplomatic Missions in Bucharest
of the U.S.S.R., the U.K. and U.S. acting in concert, will represent
the Allied and Associated Powers in dealing with the Roumanian
Government in all matters concerning the execution and interpreta-
tion of the present Treaty.
  The three Heads of Mission will give the Roumanian Government
such guidance, technical advice and clarification as may be necessary
to ensure rapid and efficient compliance with the spirit and terms of
the present Treaty.
  The Roumanian Government undertake to afford the said three
Heads of Mission all necessary information and any assistance they
may require in the fulfilment of the tasks devolving on them under
the present Treaty.
                           ARTICLE 36
  U.K. and U.S. proposal:
  Except where any other procedure is specifically provided under
any Article of the present Treaty, disputes concerning the interpreta-
tion or execution of the Treaty shall be referred to the three Heads of
Mission acting as provided under Article 35 and, if not resolved by
them within a period of two months, shall, at the request of any party
to any dispute, be referred to the International Court of Justice. Any
dispute still pending at, or arising after, the date when the Heads of
Mission tereninate their functions under Article 35, and which is not
settled by direct diplomatic negotiations, shall equally, at the request
of any party to the dispute. be referred to the International Court of
Justice.
  U.S.S.R. proposal:
  Save where any other procedure is specifically provided under any
Article of the present Treaty, disputes concerning the interpretation
or execution of the Treaty shall be settled by direct diplomatic nego-
tions and. in case the disputes are not settled in this way, they shall be
referred to the three Heads of Mission acting as provided under
Article 35, except that in this case the Heads of Mission will not be
restricted by the time-limit provided in that Article.



80


 

					
				
				
DRAFT PEACE TREATIES Sl

ARTICLE 37

Any other member of the United Nations not a signatory to the
present Treaty which is at war with Roumania, may accede to the
Treaty and upon accession will be deemed to be an Associated Power
for the purposes of the Treaty.

Instruments of accession will be deposited with the Government
of the U.S.S.R. and shall take effect upon deposit.

ARTICLE 38

The present Treaty, of which the Russian and English texts are
authentic, shall be ratified by the Allied and Associated Powers. It
shall also be ratified by Roumania. It will come into force imme-
diately [upon] deposit of ratifications by the U.S.S.R., U.K. and
U.S.A. The instruments of ratification will, in the shortest time pos-
sible, be deposited with the Government of the U.S.S.R.

With respect to each Allied and Associated Power whose instrument
of ratification is thereafter deposited, the Treaty shall come into force
upon the date of deposit. The present Treaty will be deposited in the
archives of the Government of the U.S.S.R., which shall furnish cer-
tified copies to each of the signatory States.

Done in the city of... .......6. in the Russian, English and
Roumanian languages.

ANNEX 1

(See Article 1)

Map of the Roumanian Frontiers *

ANNEX 2

(See Article 13)
Definition of Naval, Military and Air Training

Military training is defined as: the study of and practice in the use
of war material specially designed or adapted for army purposes, and
training devices relative thereto; the study and carrying out of all drill
or movements which teach or practice evolutions performed by fight-
ing forces in battle; and the organised study of tactics, strategy and
staff work.

Military air training is defined as: the study of and practice in the
use of war material specially designed or adapted for air force pur-
poses, and training devices relative thereto; the study and practice of

* No map accompanied the English text of the Draft Treaty.

					
				
				
82 FOREIGN RELATIONS, 1946, VOLUME Iv

all specialised evolutions, including formation flying, performed by
aircraft in the accomplishment of an air force mission, and the or-
ganised study of air tactics, strategy and staff work.

Naval training is defined as: the study, administration or practice
in the use of warships or naval establishments as well as the study or
employment of all apparatus and training devices relative thereto,
which are used in the prosecution of naval warfare except for those
which are also normally used for civilian purposes; also the teaching,
practice or organised study of naval tactics, strategy and staff work
including the execution of all operations and mancuvres not required
in the peaceful employment of ships.

ANNEX 3

(See Article 15)
Definition and List of War Material
Definition of War Material:

The term: “war material” as used in this Treaty shall include all
arms, ammunition and implements specially designed or adapted for
use in war as listed below.

The Alhed and Associated Powers reserve the right to amend by
modification or addition, the list, periodically, in the light of subse-
quent scientific development.

Category I,

1) Military rifies, carbines, revolvers and pistols; barrels for these
weapons and other spare parts not readily adaptable for civilian use.

2) Machine guns, military automatic or autoloading rifles, and
machine pistols; barrels for these weapons and other spare parts not
readily adaptable for civilian use; machine gun mounts.

3) Guns, howitzers, mortars, cannon special to aircraft; breechless
or recoilless guns and flame-throwers, barrels and other spare parts not
readily adaptable for civilian use; carriages and mountings for the
foregoing.

4.) Rocket projectors; launching and controi mechanisms for self-
propelling and guided missiles; mountings for same.

5) Self-propelling and guided missiles, projectiles, rockets, fixed
ammunition and cartridges, filled or unfilled, for the arms listed in
1—4 inclusive above and fuses, tubes or contrivances to explode or
operatethem. Fuses required for civilian use are not included.

6) Grenades, bombs, torpedoes, mines, depth charges and incendiary

					
				
				


DRAFT PEACE TREATIES



material or charges, filled or unfilled; all means for exploding or
operating them. Fuses required for civilian use are not included.
  7) Bayonets.
Category II.
  1) Armoured fighting vehicles; armoured trains, not technically
convertible to civilian use.
  2) Mechanical and self propelled carriages for any of the weapons
listed in Category I; special type military chassis or bodies other than
those enumerated in 1 above.
  3) Armour plate, greater than three inches in thickness, used for
protective purposes in warfare.
Category 111.
  1) Aiming and computing devices, including predictors and plot-
ting apparatus, for fire control; direction of fire instruments; gun
sights; bomb sights; fuse setters, calibration equipment for the cali-
bration of guns and fire control instruments.
  2) Assault bridging, assault boats and storm boats.
  3) Deceptive warfare, dazzle and decoy devices.
  4) Personal war equipment of a specialised nature not readily
adaptable to civilian use.
Category IV.
  1) Warships of all kinds, including converted vessels and craft
designed or intended for their attendance or support, which cannot
be technically reconverted to civilian use, as well as weapons, armour,
anmmunition, aircraft and all other equipment, material machines and
installations not used in peace time on ships other than warships.
  2) Landing craft and amphibious vehicles or equipment of any
kind; assault boats or devices of any type as well as catapults or other
apparatus for launching or throwing aircraft, rockets, propelled
weapons or any other missile, instrument or device whether manned
or unmanned, guided or uncontrolled.
  3) Submersible or semi-submersible ships, craft, weapons, devices
or apparatus of any kind, including specially designed harbour de-
fence booms, except as required by salvage, rescue or other civilian
uses, as well as all equipment, accessories, spare parts experimental
or training aids, instruments or installations as may be especially
designed for the construction, testing maintenance or housing of the
same.
Category V.
  1) Aircraft, assembled or unassembled, both heavier and lighter
than air which are designed or adapted for aerial combat by the use



83


 

					
				
				


FOREIGN RELATIONS, 1946, VOLUME IV



of machine guns, rocket projectors, or artillery or for the carrying and
dropping of bombs, or which are equipped with, or which by reason of
design or construction are prepared for, any of the appliances re-
ferred to in paragraph 2 below.
  2) Aerial gun mounts and frames, bomb racks, torpedo carriers and
bomb release or torpedo release mechanisms; gun turrets and blisters.
  3) Equipment specially designed for and used solely by airborne
troops.
  4) Catapults or launching apparatus for ship-borne, land or sea-
based aircraft; apparatus for launching aircraft weapons.
  5) Barrage balloons.
Category VI.
  Asphyxiating, lethal, toxic, incapacitating substances intended for
war purposes, or manufactured in excess of civilian requirements.
Category VII.
  Propellants, explosives, pyrotechnics, liquefied gases destined for
the propulsion, explosion, charging, filling of, or use in connection with
the war material in the present categories, not capable of civilian use
or manufactured in excess of civilian requirements.
Category VIII.
  Factory and total equipment specially designed for the production
and maintenance of the products enumerated above and not tech-
nically reconvertible to civilian use.

                             ANNEX 4
    Special Provisions Relating to Certain Kinds of Property
         A. INDUSTRIAL, LITERARY AND ARTnSTIC PROPERTY
  1. a. A period of one year from the coming into force of the present
Treaty shall be accorded to the Allied and Associated Powers or their
nationals without extension fees or other penalty of any sort in order
to enable such persons to accomplish all necessary acts for the obtain-
ing or preserving in Roumania of rights in industrial, literary and
artistic property which were not capable of accomplishment owing to
the existence of a state of war.
  b. Allied and Associated Powers or their nationals who had duly
applied in any Allied or Associated Power for a patent or registration
of a utility model not earlier than 12 months before the outbreak of
the war with Roumania or during the war, or for the registration of
an industrial design or model or trade mark not earlier than 6 months
before the outbreak of the war with Roumania or during the war, shall



84


 

					
				
				


DRAFT PEACE TREATIES



be entitled within 12 months after the coming into force of the present
Treaty to apply for corresponding rights in Roumania with a right
of priority based upon the previous filing of the application in that
Allied and Associated Power.
  c. Each of the Allied and Associated Powers or its nationals shall
be accorded a period of one year from the coming into force of the
present Treaty during which they may institute proceedings against
those persons who are alleged illegally to have infringed their rights
in industrial, literary or artistic property between the date of the
outbreak of the war and the coming into force of the present Treaty.
  2. A period from the outbreak of the war until a date 18 months
after the coming into force of the present Treaty shall be excluded
in considering the time within which a patent should be worked or a
design or trade mark used.
  3. The period from the outbreak of the war until the coming into
force of the present Treaty shall be excluded from the normal term
of rights in industrial, literary and artistic property which were in
force in Roumania at the outbreak of the war or which are recognised
or established under this Annex and belonging to any of the Allied
and Associated Powers, or their nationals. Consequently, the normal
duration of such rights shall be deemed automatically extended in
Roumania for a further term corresponding to the period so excluded.
  4. The foregoing provisions concerning the rights of the Allied and
Associated Powers or their nationals shall apply equally to Roumania
and its nationals.
  But nothing in these provisions shall operate so as to give to Rouma-
nia or any of its nationals greater rights than are accorded in like
cases by any of the Allied or Associated Powers to any other of the
United Nations.
  The U.S.S.R. Delegation considers it unnecessary to include the passage
in
italics.
  The U.S. Delegation would not agree to this Annex unless paragraph 4 were
included in its entirety.
  5. Third parties in the territories of any of the Allied and As-
sociated Powers or Roumania who before the coming into force of
the present Treaty have bona fide acquired industrial property rights
conflicting with rights restored under this Article or with rights ob-
tained with priority claimed thereunder, or have bona fide manu-
factured, used or sold the subject-matter of such rights, shall be per-
mitted without any liability for infringement, to continue to exercise
such rights and to continue or to resume such manufacture, use or
sale which had been bona fide acquired or commenced. In Roumania,
such permission shall take the form of a non-exclusive license granted



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FOREIGN RELATIONS, 19 4 6, VOLUME IV



on terms and conditions to be mutually agreed by the parties thereto
or in default of agreement to be fixed by the Conciliation Commission
established under Article 31 of the Treaty. In the territories of the
Allied and Associated Powers, however, bona fide third parties shall
receive such protection as is accorded under similar circumstances to
bona fide third parties whose rights are in conflict with those of the
nationals of other Allied and Associated Powers.
  6. Nothing in this Annex shall be construed to entitle Pioumania or
its nationals to any patent or utility model rights in the territory of
any of the Allied and Associated Powers with respect to inventions
relating to any article listed by name in the definition of war material
contained in Annex 3 of the present Treaty made or upon which ap-
plications were filed by Roumania or any of its nationals in Roumania
or in the territory of any other of the Axis Powers or in any territory
occupied by the Axis forces, during the time when the place in question
was under the control of enemy forces or authorities.
  7. Roumania shall extend the benefits of this Article to any United
ATation other than an Allied or Associated Power which undertakes to
extend to Roummania the benefits accorded to Roumania under this
Article.
The U.S.S.R. Delegation does not see the reason for inclusion of paragraph
7
in the present Treaty.
  8. Nothing in this Annex shall be understood to conflict with
Articles 24, 26 and 28 of the present Treaty.

                          B. INSURANCE
  U.K. proposal:
  1. United Nations Insurers shall be granted full facilities by the
Roumanian Government to recover their former portfolios of business
in Roumania and they shall not be required to conform to any legisla-
tive enactments more onerous than those which were applicable to
them before the outbreak of war.
  2. In so far as the guarantee deposits and reserves of United Na-
tions insurers have been reduced by reason of the payment of insurance
claims arising out of the, war they shall be entitled to compensation
from the Roumanian Government by way of the reinstatement of such
deposits or reserves to the amount of the claims.
  3. The Roumtanian Gov'ernmcgit undertakes that if any United Aa-
tions' Insurer desires to resume business in Roumania and it is found
that the value of any guarantee deposit or reserves required to be held
as a condition of carrying on business in Rouwwtnia have been dimin-
ished by reason of disappearance or depreciation of the securities in
which they are constituted, Rounania shall either



86


 

					
				
				


DRAFT PEACE TREATIES



  a. Itself reconstitute the deposits or reserves except in so far as the
diminution or disappearancewas caused by paymnent of losses already
compensated for under paragraph 2 above; or
  b. Accept the securities at the value at the outbreak of war for the
purpose of compliance with the legal requireuments relating to such
deposits and reserves.
  The U.S.S.R. Delegation considers that this subject is also covered by
Article
24 on United Nations property in Roumania and sees no reason to include any
special provisions relating to Insurance.
  The U.S. Delegation is not opposed in principle to treaty provisions on
special
problems relating to insurance but is unable to accept the draft as a whole.
                            C. SHIPPING
  U.K. proposal:
  1. The expression "property" includes all vessels of the United
Na-
tions, with full inventory, equipment and cargoes which were in the
waters of Roumania or Roumnanian territorial waters of the Danube on
June 22, 1941.
  Vessels falling into the following categories are regarded as belong-
ing to a United Nation or United Nations national:
  (i) If on June 22, 1941 (at the time they fell under Roumanian
control), they were registered in, the territory of a United Nation.
  (ii) If on June 22, 1941 (at the time they fell under Roumanian
control), they had the right to fly the flag of a United Nation whether
or not formally registered in the territory of that Nation.
  (iii) If, after June 22, 1941, they were built in Roummania by, or for,
or acquired by, any national of a United Nation, and registered in its
territory (if liable to registration).
  2. The Roumanian Government is responsible for handing over in
Roumanian territorial waters the vessels of the United Nations in
complete good order as they existed on June 22, 1941, within a period
of one month from the coming into force of this Treaty, and to pay
fair compensation for the loss of use and loss of profits from June 22,
1941 up to the date of the handing over of the vessels. In the event of
the Roumanian Government failing to hand over within the time limit
laid down the Roumanian Government shall pay further compensa-
tion in the currency of the United Nation concerned for such further
loss of use and profits up to the date of handing over of the vessels.
  3. The Roumanian Government undertakes to restore the vessels in
good navigable condition including the carrying out of repairs shown
to be necessary by an expert survey. T Up to the time of handing
over all damages or defects found in the vessels are the sole responsi-
bility of the Roumanian Government.
t Repairs to be done in Roumania or if outside Roumania the cost to be to
the
charge of the Roumanian Government who must provide the necessary foreign
exchange. [Footnote in source text.]



87


 

					
				
				


FOREIGN RELATIONS, 19 4 6, VOLUME IV



  The Roumanian Government accepts that the retuXrn of such vessels
is without prejudice to any rights or remedies provided in any other
Articles of the present Treaty relating to the payment of compen-
sation in respect of any acts or omission of the Roumanian Govern-
ment or its nationals.
  4. Where United Nations' vessels have been lost these are to be
valued at replacement cost and vessels of a similar category delivered
to the same value; if the Roumanian Government should be unable
to deliver from existing vessels, the required vessels are to be con-
structed either in Roumanian shipyards or elsewhere, the respon-
sibility for payment resting with the Roumanian Government.
The U.S. and French Delegations consider it desirable that the Peace Con-
ference include in the treaty a definition of the ships to which the Article
on
United Nations Property will apply but believe the other provisions proposed
on this subject are unnecessary.
The U.S.S.R. Delegation considers that this subject is also covered by Article
24 on United Nations property in Roumania and sees no reason to include any
special provisions relating to shipping.
                          D. PETROLEuM
  U.K. proposal:
  1. The complete restoration and replacement of damaged or de-
stroyed property belonging to United Nations nationals engaged in
the petroleum industry in Roumania shall receive priority over the
restoration or replacement of other property in the petroleum industry
of Rournania, and failing the complete restoration or replacement
of damaged or destroyed property of United Nations nationals within
a period of one year froms the date of the coming into force of this
Treaty, the Roumanian Government undertakes to pay to such United
Nations nationals convertible currency equivalent to the assessed value
of the property which the Roumtanian Government failed to restore
or replace.
  2. The Roumanian Government accepts to compensate United Na-
tions nationals engaged in the petroleum- industry in Roumania for
all reasonable expenses incurred in preparation for and in execution
of provisional repairs and replacements to the damaged property of
United Nations nationals, during the war and since the signing of
the Armistice and until such time as complete restoration or replace-
ment of damaged or destroyed property has been effected.
  3. The Roumanian Government undertakes to repeal the Petroleum
Law of July 1942 and to re-enact the Mining Law of 1937 pending
the coming into force of a new petroleum law.
  4. United Nations nationals engaged in the petroleum industry of
Roumania reserve the right to demand the revocation of any acts,
deeds, or titles deriving from the Petroleum Law of 1942 which they



88


 

					
				
				


                       DRAFT PEACE TREATIES                        89

consider preJudicial to their interests and the Roumanian Govern-
ment will impiement such revocations free of cost and free of en-
cumbrances to the United Nations nationals.
  5. The Roumanian Government shall compensate Roumanian na-
tionals who may suffer damage through the implementation of the
revocations mentioned in paragraph 4.
  6. All "rights acquired,' by United Nations nationals under each
and every mining law and petroleum law in Roumania shall be main-
tained at the request of the United Nations nationals concerned.
  7'. All expenses incurred by United Nations nationals engaged in
the petroleum industry of Rouinania such as bank charges and inter-
ests on loans raised to facilitate on behalf of the Roumanian Govern-
ment deliveries of petroleum products to the Axis Powers during the
war shall be borne by the Ro'uinanian Government.
  8. In order to facilitate the rehabilitation and maintenance of the
property of United Nations nationals, engaged in the petroleum in-
dustry of Roumania, the Roumnanian Government undertakes to make
the necessary alterations in the labour law to allow all employees
selected by such United Nations nationals to enter Roumania and to
exercise their respective professions in the petroleum industry of
Roumnania, without hindrance.
  The U.S. Delegation considers that the problems sought to be dealt with
in the
draft Annex on Petroleum would, in general, be covered by the general provisions
agreed on United Nations property, if these provisions made adequate provision
for compensation.
  The U.S.S.R. Delegation considers that this subject is also covered by
Article
24 on United Nations property in Roumania and sees no reason to include any
special provisions relating to Petroleum.


                               ANNEX 5
        Contracts, Prescriptiows and Negotiable Instrumnents Yt

  U.K. proposal:
                            I. CONTRACTS

  1. Any contract concluded between enemies shall be deemed to
have been dissolved as from. the time when any of the parties became
an enemy, except in respect of any debt accrued or money paid or other
pecuniary obligation arising out of any act done thereunder, and sub-

  '"In view of the constitutional position of the Federal Government,
the U.S.
Delegation would be unable to accept any obligations on the matters covered
by
this Annex. The United States would not object to the inclusions of provisions
on these subjects in the Treaty but would wish to have a clause included
niaking
them inapplicable as between the United States and Roumania.
  The U.S.S.R. Delegation sees no reason for inclusion in the Peace Treaty
of the
matters covered by this Annex.
  The French Delegation supports the U.K. proposal with regald to prescriptions
  tnd negotiable instruments. [Footnote in source text.]
      219-115-70   7


 

					
				
				


90



FOREIGN RELATIONS, 1946, VOLUME IV



ject to the exceptions set out in the following paragraph. The pro-
qisions of this paragraph shall be without prejudice to contracts of
insurance and reinsurance, which shall be subject to a separate
agreement.
  (Alternatively a special annex can be included.)
  2. The following classes of contracts notwithstanding the prQo-
visions of paragraph 1 are excepted from  dissolution and without
prejudice to the rights contained in Article 26, remain in force subject
to the application of municipal laws, orders or regulations made since
the outbreak of war by any member of the United Nations and subject
to the proper law and terms of the contracts:
  a. Contracts for the transfer of estates or of movable or immov able
property where the property therein has passed or delivery been made
before the parties became enemies;
  b. Leases or agreements for leases of land, houses or parts thereof;
  c. Contracts of mortgages or lien;
  d. Concessions of mines, quarries or deposits;
  e. Contracts between indiciduals or associations and states, munic-
ipalities or other similar juridical persons charged with administrative
functions and concessions granted by states, municipalities or
other similar juridical persons eharged with administratice functionsv,
  f. Aly contract of which the execution shall be required ie /te
general interest within sixn months from the date of the coming into
force of the present treaty by a government of one of the United
N7ations of which one of the parties to such a contract is a national;
when the execution of the contract thus kept alive would, owing to the
alteration of particular conditions, cause one of the parties substantial
prejudice, the Conciliation Commission established under article 31
shall be empowered to award fair compensation to the prejudiced
parties.
  3. If a contract is dissolved in part under paragraph 1, the remain-
ing provisions of that contract shall, subject to the same application
of municipal laws as is provided for in paragraph 2. continue in force
if they are severable, but where they are not severable the contract
shall be deemed to have been dissolved in its entirety.
  4. Nothing in the present Annex shall be deemed to invalidate the
transactions lawfully carried out in accordance with a contract be-
tween enemies if it has been carried out with the authority of the
Government of one of the United Nations.
  5. For the purposes of Parts I, II and III of the present Annex
the parties to a contract shall be regarded as enemies when trading
between them shall have been prohibited by or otherwise become un-
lawful under laws, orders or regulations to which one of these parties


 

					
				
				
DRAFT PEACE TREATIES OQ]

or the contract was subject. They shall be deemed to have become
enemies from the date when such trading was prohibited or otherwise
become unlawful.

II. Peritops or PRESCRIPTION

1. All periods of prescription, or limitation of right of action,
whether they began to run before or after the outbreak of war, shall be
treated in the territory of the High Contracting Parties, as far as
regards relations between enemies, as having been suspended for the
duration of the war. They shall begin to run again at the earliest,
three months after the coming into force of the present Treaty. This
provision shall apply to the period prescribed for the presentation of
interest or divided coupons or for the presentation for repayment of
securities drawn for repayment or repayable on any other ground.

2. Where, on account of failure to perform any act or comply with
any formality during the war, measures of execution have been taken
in Roumanian territory to the prejudice of a national of one of the
United Nations, the claim of such national shall, if the matter does
not fall within the competence of the Courts of one of the United Na-
tions be heard by the Coneiliation Commission established under
article 31,

3. Upon the application of any interested person who is a national
of one of the United Nations, the Conciliation Commission shall order
the restoration of the rights which have been prejudiced by the meus-
ures of execution referred to in paragraph 2 wherever such restoration
is equitable and possible. If such restoration is inequitable or im-
possible, the Conciliation Commission may award compensation to
the prejudiced party to be paid by the Rowmanian Government.

4. Where a contract between enemies has been dissolved by reason
either of failure on the part of either party to carry out its provisions
or of the exercise of a right stipulated in the contract itself the party
prejudiced may apply to the Conciliation Commission for relief.
The Commission will have the powers provided for in paragraph 3.

5. The provisions of the preceding paragraphs of this Article shall
apply to the United Nations nationals who have been prejudiced by
reason of measures referred to above taken by Rowmania on invaded
or occupied territory, if they have not been otherwise satisfactorily
compensated.

6. Roumania shall compensate any third party who may be pre;-
udiced by any restitution or restoration ordered by the Conciliation
Commission under the provisions of the preceding paragraphs of this
Part. |

					
				
				
9? FOREIGN RELATIONS, 1946, VOLUME IV

7. As regurds negotiable instruments, the period of three months
provided under paragraph 1 shall commence as from the date on
which any exceptional regulations applied in the territories of the
interested Power with regard to negotiable instruments shall have
definitely ceased to have force.

Ill. NecortasLteE INSTRUMENTS

1. As between enemies no negotiable instrument made before the
war shall be deemed to have become invalid by reason only of failure
within the required time to present the instrument for acceptance or
vayment or to give notice of non-acceptance or non-payment to draw-
ers or endorsers or to protest the instrument, nor by reason of failure
to complete any formality during the war.

2. Where the period within which a negotiable instrument should
have been presented for acceptance or for payment, or within which
notice of non-acceptance or non-payment should have been given to
the drawer or endorser, or within which the instrument should have
been protested, has elapsed during the war, and the party who should
have presented or protested the instrument or have given notice of
non-acceptance or non-payment, has failed to do so during the war,
a period of not less than three months from the coming force of the
present Treaty shall be allowed within which presentation, notice of
non-acceptance or non-payment or protest may be made.

3. If a person has either before or during the war become liable
upon a negotiable instrument in accordance with an undertaking given
to him by a person who has subsequently become an enemy, the latter
shall remain liable to indemnify the former in respect of his liability
notwithstanding the outbreak of war.

IV. MIsScELLANEOUS

1. Stock Hachange and Commercial Hachange Contracts.

a. Rules made during the war by any recognised Huchange or Com-
mercial Association providing for the closure of contracts entered into
before the war by an enemy are confirmed by the High Contracting
Parties, as also any action taken thereunder, provided :

1. That the contract was expressed to be made subject to the rules
of the Exchange of |or| Association in question;

2. That the rules applied to all persons concerned ;

3. That the conditions attaching to the closure were fair and
reasonable.

b. The preceding paragraph shall not apply to rules made during
the occupation by Exchanges or Commercial Associations in the dis-
tricts occupied by the enemy.

					
				
				


DRAFT PEACE TREATIES



  2. Security.
  The sale of a security held for an unpaid debt owing by an enemy
shall be deemed to have been valid irrespective of notice to the owner
if the creditor acted in good faith and with reasonable care and
prudence, and no claimy by the debtor on the ground of such sale shall
be admitted.
  This stipulation shall not apply to any sale of securities effected by
oan enemy during the occupation in regions invaded or occupied by
the enemy.

                             ANNEX 6

                   Prize Courts and Judgments

                        A. PRIZE COURTS
  Each of the Allied and Associated Powers reserves the right to
examine, according to a procedure to be established by it, all decisions
and orders of the RoumanianI Prize Courts involving ownership rights
of its nationals, and to recommend to the R1oumanian Government that
revision shall be undertaken of these decisions or orders which may not
be in conformity with international law.
  Roumania undertakes to supply copies of all documnents comprising1
the records of these cases, including the decisions taken au(l orders
issued, and to accept all recommendations made, subsequent to the
examination of the said cases, and to give effect to such recoinnuenda-
tions.
                          B. JUDGME-Ni TS
  U.S. proposal supported by U.S.S.R.:
  The Roumctnian Government shall take the necessary measues to
enable nationals of any of the United Nations at any time withini one
year after the coming into force of this Treaty to submit to the appro-
priate Roumranian authorities for review any judgment given by a
Roumanian Court between June 22, 1941, and the coining into force
of the present Treaty in any proceeding in which the United Nations
national was unable to make adequate presentation of his case aas plain-
titf or defendant. The Roumanian Government shall provide that,
where the United Nations national has suffered injury by reason of
any such judgment, he shall be restored in the position in which he was
before the judgment was given or shall be afforded such relief a.n may
be jfust and equitable in the circumstances. The term "United Na-
tionts nationals&' includes corporations or associations organised or
con-
stituted under the laws of any of the United Nations.



93


 

					
				
				


FOREIGN RELATIONS, 19 4 6, VOLUME IV



  Fr-ench proposal:
  The Rouimanian Government undertake to adopt appropriate, meas-
ures in order that nationals of any of the United Nations may obtain
durieng a period of one year fromn the coming into force of the present
Treaty. revision of the judgments rendered by the Rbounmanian Courts
1find Trilbnnars bet/teen June 22, 1941, and the date of coming into
force of the present Treaty, either in absence of such nationals, or on
account of their inability as a result of circumstances to have defended
theeir cause satisfactorily.
  The Ronimanian Government shall indemnni fy nationals of the
United Nations for the pre judiee caused thiough the initial j?/lgrltn,
and shall award compensation, if revision of such judgment did not
coneclude by re-establishing them de facto in the situation where they
wt er e when the procedure was instituted.
  Should dispute arise either as regards the ability of nationals of any
of the United Nations to have defended their cause satisfactorily, or
the adequacy of the compensation to be awarded by the Roumanian
Government. the said dispute shall be submitted to the Conciliation
Con ?n ission established under Article 31 of the present Treaty.
  U.K. proposal:
  1. Judgments given by the Courts of a member of the United Na-
tions in all cases which, under the present Treaty, they arbe comnpetent
to decide, shall be recognised in Roumania as final and shall be en-
forced without it being necessary to have themn declared executory.
  2. If a judgment in respect of any dispute which may have arisen
has been given during the war by a Roumanian Court against a United
Nations national in a case in which he was not able adequately to pre-
sent his case whether as plaintiff or defendant, the United Nations
national who has suffered prejudice thereby shall be entitled to recover
compensation, to be fixed by the Concileation Commission under the
procedure laid down in Article 31 for settlement of disputes.
  3. At the instance of the United Nations national and where it is
possible the Conciliation Commission may in lieu of compensation by
order replace the parties in the situation which they occupied before
the judgment was given by the Roumanian Court.
  4. Such compensation or replacement mnay likewise be obtained be-
fore the Conciliation Commission by United Nations nationals who
have suffered prejudice by judicial mneasures taken in invaded or occu-
pied territories if they have not been otherwise compensated.



94


 

					
				
				



DRAFT PEACE TREATIES



DRAFT PEACE TREATY WITH BULGARIA, PREPARED BY THE COUNCIL
  OF FOREIGN MINISTERS, PALAIS DU LUXEMBOURG, PARIS, JULY 18,
  1946
CFMI Files
               Draft Peace Treaty With Bulgaria 13

                            PREAMBLE
  The Union of Soviet Socialist Republics, the United Kingdom, the
United States of America, Australia, the Byelorussian Soviet Socialist
Republic, Czechoslovakia, Greece, India, New Zealand, the Ukranian
Soviet Socialist Republic, the Union of South Africa and Yugo-
slavia, as the States which are at war with Bulgaria and actively
wagced war against the European enemy states with substantial mili-
tary force, hereinafter called the Allied and Associated Powers of
the one part,
  and Bulgaria, of the other part;
  Whereas Bulgaria, having become an ally of Hitlerite Germany and
participating on her side in the war against the Union of Soviet
Socialist Republics, the United Kingdom, the United States of
America and other United Nations, bears her share of responsibility
for this war;
  AW7hereas, however, Bulgaria having ceased military operations
against the United Nations, broke off relations with Germany, and,
having concluded on October 28, 1944, an Armistice with the Gov-
ernmnents of the Union of Soviet Socialist Republics, the United
Kinigdom and the United States of America,'4 acting on behalf of
all the United Nations at war with Bulgaria, took an active part in
the war against Germany; and
  Whereas the Allied and Associated Powers and Bulgaria are re-
spectively desirous of concluding a treaty of peace which will form
the basis of friendly relations between them and settle questions still
outstanding between them as a result of the events hereinbefore re-
cited; thereby enabling the Allied and Associated Powers to support
Bulgaria's application to become a member of the United Nations and
also to adhere to any convention concluded under the auspices of the
United Nations;
  Have therefore agreed to declare the cessation of the state of war
and for this purpose to conclude the present Peace Treaty, and
have appointed as their Plenipotentiaries ....... . .. .. .   . 14a
who, after presentation of their full powers, found in good and due
form, have agreed on the following provisions:
' The table of contents and list of annexes of the source text are not printed
here.
14 Department of State Executive Agreement Series 437.
14a Ellipsis occurs in the source text.



95


 

					
				
				


96



FOREIGN RELATIONS, 1946, VOLUME IV



                 PART I. FRONTIERS OF BULGARIA
                           ARTICLE 1
  The frontiers of Bulgaria, as shown on the map annexed to the
present Treaty (Annex 1) shall be those which existed on January 1,
1941.
  NoTE.-This text should be considered as tentative, in respect of the
Greek-Bulgarian frontier, until the Governments of Greece and Bul-
garia have had an opportunity to present to the Peace Conference or to
the Council of Foreign Ministers their respective views on this subject.



PART II. POLITICAL CLAUSES

        SECTION I
        ARTICLE 2



  [Identical, mutatis mitdandis, to Article 3
Treaty.]
                           ARTICLE 3
  [Identical, mutatis nutandis, to Article 4
Treaty.]
                           ARTICLE 4
  [Identical, mutatis mutandis, to Article 5
Treaty.]
                           ARTICLE 5
  [Identical, mmutatis matandis. to Article 6
Treaty.]
                           SECTION II
                           ARTICLE 6
  [Identical, mutatis mutandis, to Article 7
Treaty.]
                           ARTICLE 7



of the Draft Rumanian



of the Draft Rumanian



of the Draft Rumanian



of the Draft Rumanian



of the Draft Rumanian



  [Identical, mutatis mutandis, to Article 9 of the Draft Rumanian
Treaty.]
                           ARTICLE 8
  [Identical, mutatis mautandis, to Article 10 of the Draft Rumanian
Treaty.]


 

					
				
				


DRAFT PEACE TREATIES



97



                   PART III. MILITARY CLAUSES
                            SECTION I
                            ARTICLE 9

  The maintenance of land, sea and air armaments and fortifications
will be closely restricted to meeting tasks of an internal character and
local defence of frontiers. In accordance with the foregoing, Bul-
garia is authorised to have armed forces consisting of not more than:
  a. A land army, including frontier troops, with a total strength
of 55,000 personnel;
  b. Anti-aircraft artillery with a strength of 1,800 personnel;
  c. A navy with a personnel strength of 3,500 and a total tonnage
of 7,250;
  d. An air force, including any naval air arm, of 90 aircraft, includ-
ing reserves, of which not more than 70 may be combat types of air-
craft, with a total personnel strength of 5,200. Bulgaria shall not
possess or acquire aircraft designed primarily as bombers with inter-
nal bomb-carrying facilities.
  These strengths will in each case include combat, service and over-
head personnel.
                           ARTICLE 10

  [Virtually identical, matatis inutandis. to Article 12 of the Draft
Rumanian Treaty.]
                           ARTICLE 11

  [Identical, mutatis m'utandis. to Article 13 of the Draft Rumanian
Treaty.]
                           ARTICLE 12
  [Identical, mutatis mutandis, to Article 14 of the Draft Rumanian
Treaty.]
                           ARTICLE 13
  [Virtually identical, nmatatis mqutandis, to Article 15 of the Draft
Rumianian Treaty.]
                           ARTICLE 14

  [Identical, rutatis mutandis, to Article 16 of the Draft Rumanian
Treaty.]
                           ARTICLE 15

  [Identical, muitatis mutandis, to Article 17 of the Draft Rumanian
Treaty.]


 

					
				
				


FOREIGN RELATIONS, 1946, VOLUME IV



                           ARTICLE 16
  [Identical, mutatis mutandis, to Article 18 of the Draft Rumanian
Treaty.]
                           ARTICLE 17
  [Identical, mnutatis mutandis, to Article 19 of the Draft Rumanian
Treaty and Article 39 of the Draft Italian Treaty.]

                           SECTION II
                           ARTICLE 18
  [Identical, mutatis mutandis8, to Article 20 of the Draft Rumanian
Treaty.]
                           War Graves
  [Identical to the unnumbered proposal following Article 20 of the
Draft Rumanian Treaty.]


              PART IV. WITHDRAWAL OF ALLIED FORCES

                          ARTICLE 19
  All armed forces of the Allied and Associated Powers shall be with-
drawn from Bulgaria as soon as possible and in any case not later than
90 days from the coming into force of the present Treaty.
  All unused Bulgarian currency and all unused Bulgarian goods in
the possession of the Allied forces in Bulgaria, received in accordance
with Article 15 of the Armistice agreement of October 28, 1944, con1-
cluded between the Governments of the U.S.S.R., U.K. and U.S.A.
and the Bulgarian Government, will be returned to the latter within
the same period of 90 days.
  Bulgaria, however, undertakes to provide, during the period be-
tween the coming into force of the present Treaty and the final with-
drawal of Allied forces, all such supplies and facilities as may be
specifically required for the forces of the Allied and Associated Powers
which are being withdrawn, and due compensation shall be paid to the
Bulgarian Government for such supplies and facilities.


             PART V. REPARATION AND RESTITUTION

                          ARTICLE 20
  Losses caused to Yugoslavia and Greece by military operations and
by the occupation by Bulgaria of the territory of those States will be
indemnified by Bulgaria to Yugoslavia and Greece, but, taking into



98


 

					
				
				


DRAFT PEACE TREATIES



consideration that Bulgaria has not only withdrawn from the war
against the United Nations, but has declared and in fact, waged war
against Germany, the Parties agree that compensation for the above
losses will be made by Bulgaria not in full but only in part, namely
to the amount of-United States dollars payable over-years.*

                            ARTICLE 21
  [Identical, mutatis mnutandis, to Article 65 of the Draft Italian
Treaty with the exception that paragraph 8 of the latter text is not
included.]

                  PART VI. ECONOMIiC CLAUSES

                            ARTICLE 22

  [Identical, mutatis imutandis, to Article 68 of the Draft Italian
Treaty. The date of April 24, 1941, is used here instead of the date
of June 10, 1940, appearing in the article in the Draft Italian Treaty.]

                            ARTICLE 23
  [Identical, mutatis mnutandis, to Article 25 of the Draft Rumanian
Treaty.]
                            ARTICLE 24

  U.S., U.K. and French proposal:
  [The proposal included here in italics is identical, mutat.s in utadis,
to Article 26 of the Draft Rumanian Treaty.]
  U.S.S.R. proposal:
  The rights of the Bulgarian Governrnent and of Bulgarian ply Jedl
and juridical persons with regard to Bulgarian property and other
Bulgarian assets on the territory of Allied and Associated Poweurs,
insofar as such rights were limited in consequence of the participation
of Bulgaria in the war on the side of Gerunany. shall be restored after
the coming into force of the present Treaty.

                           ARTICLE 25
  U.S.S.R. proposal:
  I. Any restrictions imposed in respect of any Bulgarian property in
Germany, and in other countries which participated in the wvar on
Germany's side shall be removed after the coming into force of the
present Treaty. The rights of any Bulgarian owners with regard to
the (7ispoCf1l of a(ny such pr&/)erty shall balso be restored.

*NOTE.-The Council of Foreign Ministers decided to postpone consideration
of this Article until the question could be discussed with the Governments
of
Yugoslavia and Greece. [Footnote in the source text.]



99


 

					
				
				


FOREIGN RELATIONS, 1946, VOLUME IV



  2. BTdgaria shall be entitled to the restitution of any identifiable
property removed by force or under duress fromin Bulgaria after Sep-
tem12ber 6,1944, and now located in Germany.
  The restitution of any Buleagarian property now located in Germany
shall be carried out under the direction of the military aathorities of
the Powers in occupation of Germany.
  U.K., U.S. and French proposal:
  [Identical, muttatis nmtandis, to the U.K., U.S. and French pro-
posal to Article 27 of the Draft Rumanian Treaty.]

                           ARTICLE 26

  [Identical, mutatis mutandis, to Article 28 of the Draft Rumanian
Treaty and Article 70 of the Draft Italian Treaty.]

                           ARTICLE 27

  [Identical, m'tatis mutandis, to Article 29 of the Draft Rumanian
Treaty with the following exception: paragraph 4 of the Rumanian
article is not included.]
                           ARTICLE 28

  [Identical, mutatis mutandis, to Article 30 of the Draft Rumanian
Treaty.]
                           ARTICLE 29
  [Identical, mutatis mutandis, to Article 31 of the Draft Rumanian
Treaty and Article 72 of the Draft Italian Treaty.]

                       ARTICLES 30 AND 31

  [Identical, miatatis mutandis, to Articles 32 and 33 of the Draft
Rumanian Treaty and Articles 73 and 74 of the Draft Italian Treaty.]


          PART VII. CLAUSES RELATING TO THE DANUBE

                           ARTICLE 32

  [Identical, mitatis mutandis, to Article 34 of the Draft Rumanian
Treaty.]

                   PART VIII. FINAL CLAUSES

                   ARTICLES 33, 34, 35, AND 36

  [Identical, mutatis mnutandis, to Articles 35, 36, 37, and 38 of the
Draft Rumanian Treaty and Articles 75, 76, 77, and 78 of the Draft
Italian Treaty.]



100


 

					
				
				



DRAFT PEACE TREATIES



                            ANNEX 1
                        (See Article 1)

               Map of the Bulgariaan Frontiers 15

                            ANNEX 2
                        (See Article 11)

         Definition of Military, Air and Naval Training
  [Identical to Annex 2 of the Rumanian Draft Treaty and Annex
5 B of the Draft Italian Treaty.]

                            ANNEX 3
                        (See Article 14)

               Definition and List of War Material
  [Identical to Annex 3 of the Draft Rumanian Treaty and Annex 5 (9
of the Draft Italian Treaty.]

                            ANNEX 4
    Special Provisions Relating to Certain Kinds of Property
  [Identical, matatis iim tandis. to Annex 6 of the Draft Italian Treaty
and Annexes 4 A and 4 B of the Draft Rumanian Treaty.]

                            ANNEX 5
       Contracts, Prescriptions and Negotiable Instruments
  [The proposals set forth here are identical, mutatis mutandis, to
those in Annex 5 of the Draft Rumanian Treaty.]

                            ANNEX 6
                            Judgmnents

  [The proposals set forth in this Annex are identical, mutatis
matandis, to the proposals set forth in Annex 6 B of the Draft Ruma-
nian Treaty and Annex 8 B of the Draft Italian Treaty.]

'5 No map accompanied the English and French texts of the Dralft Treaty.



101


 

					
				
				
102 FOREIGN RELATIONS, 1946, VOLUME IV

DRAFT PEACE TREATY WITH HUNGARY, PREPARED BY THE COUNCIL
OF FOREIGN MINISTERS, PALAIS DU LUXEMBOURG, PARIS, JULY 18,
1946

CFM Files

Draft Peace Treaty With Hungary
PREAMBLE

The Union of Soviet Socialist Republics, the United Kingdom, the
United States of America, Australia, the Byelorussian Soviet Socialist
Republic, Canada, Czechoslovakia, India, New Zealand, the Ukranian
Soviet Socialist Republic, the Union of South Africa, and Yugoslavia.
as the States which are at war with Hungary and actively waged war
against the European enemy states with substantial military force,
hereinafter called the Allied and Associated Powers, of the one part,
and Hungary, of the other part;

Whereas Hungary, having become an ally of Hitlerite Germany
and participating on her side in the war against the Union of Soviet
Socialist Republics, the United Kingdom, the United States of Amer-
ica and other United Nations, bears her share of responsibility for
this war;

Whereas, however, Hungary on December 28, 1944, broke off rela-
tions with Germany, declared war on Germany and on January 20,
1945, concluded an Armistice with the Governments of the Union of
Soviet Socialist Republics, the United Kingdom and the United States
of America,” acting on behalf of all the United Nations which were
at war with Hungary; and

Whereas the Allied and Associated Powers and Hungary are re-
spectively desirous of concluding a treaty of peace, which will form
the basis of friendly relations between them and settle questions still
outstanding as a result of the events hereinbefore recited, thereby
enabling the Allied and Associated Powers to support Hungary’s
application to become a member of the United Nations and also to
adhere to any Convention concluded under the auspices of the United
Nations.

Have therefore agreed to declare the cessation of the state of
war and for this purpose to conclude the present Peace Treaty,
and have appointed as their Plenipotentiaries............

who, after presentation of their full powers, found in good and due
form, have agreed on the following provisions.

** The table of contents and the list of annexes in the source text are not
printed here.

™ Department of State Executive Agreement Series 456.

“a Marks of ellipsis throughout this document occur in the source text.

					
				
				
DRAFT PEACE TREATIES 103

Part I. Frontiers or Hungary
ARTICLE 1

1. The frontiers of Hungary with Austria and with Yugoslavia
shall remain those which existed on January 1, 1938.

2. The decisions of the Vienna Award of August 30, 1940 are de-
clared null and void. The frontier between Hungary and Roumania
existing on January 1, 1938, is hereby restored.

8. The frontier between Hungary and the Union of Soviet Socialist
Republics, from the point common to the frontier of those two States
and Roumania to the point common to the frontier of those two States
and Czechoslovakia, is fixed along the former frontier between Hun-
gary and Czechoslovakia as it existed on January 1, 1938.

4.* The decisions of the Vienna Award of November 2, 1938, are
declared null and void. The frontier between Hungary and Czecho-
slovakia, from the point common to the frontier of those two States
and Austria to the point common to the frontier of those two States
and the Union of Soviet Socialist Republics, is hereby restored as it
existed on January 1, 1938.

5. The frontiers described above are shown on the map annexed to
the present Treaty (Annex 1).

Part II. Pourricau CLAvsEs
Srecrion I
ARTICLE 2

[Identical, mutatis mutandis, to Article 3 of the Draft Rumanian
Treaty and Article 14 of the Draft Italian Treaty. |

ARTICLE 3

[Identical, mutates mutandis, to Article 4 of the Draft Rumanian
Treaty. |
ARTICLE 4

[Identical, mutatis mutandis, to Article 5 of the Draft Rumanian
Treaty. |
| ARTICLE 5

[Identical, mutatis mutandis, to Article 6 of the Draft Rumanian
Treaty and Article 38 of the Draft Italian Treaty. |

*NOTE.—This text should be considered as tentative until the Governments of
Czechoslovakia and Hungary have had an opportunity to present to the Peace
Conference or to the Council of Foreign Ministers their respective views on this
subject. [Note in source text. ]

					
				
				


FOREIGN RELATIONS, 1946, VOLUME IV



                           SECTION II
                           ARTICLE 6
  [Identical, mutatis imutantdis, to Article 7 of the Draft Rumanian
Treaty and Article 15 of the Draft Italian Treaty.]

                            ARTICLE 7
  [Identical, mutatis muttandis, to Article 8 of the Draft Rumanian
Treaty.]
                            ARTICLE 8
  [Identical, miutatis mutandis, to Article 9 of the Draft Rumanian
Treaty and Article 32 of the Draft Italian Treaty.]
                            ARTICLE 9
  [Identical, vtutatis imutandis, to Article 10 of the Draft Rumanian
Treaty and Article 37 of the Draft Italian Treaty.]


                  PART III. MILITARY CLAUSES

                            SECTION I

                            ARTICLE 10

  The maintenance of land and air armaments and fortifications will
be closely restricted to meeting tasks of an internal character and local
defence of frontiers. In accordance with the foregoing, Hungary is
authorized to have armed forces consisting of not more than:
  a. A land army, including frontier troops, anti-aircraft and river
flotilla personnel, with a total strength of 65.000 personnel;
  b. An air force, of 90 aircraft, including reserves, of which not
more than 70 may be combat types of aircraft, with a total personnel
strength of 5.000. Hungary shall not possess or acquire aircraft
designed primarily as bombers with internal bonmb-carrying facilities.
  These strengths will in each case include combat, service and over-
head personnel.
                           ARTICLE 11

  [Virtually identical, mutatis mutandis, to Article 12 of the Draft
Rumanian Treaty with the exception of the omission of the word
"Navy".]
                           ARTICLE 12

  [Identical, mutatis mutand is, to Article 13 of the Draft Rumanian
Treaty with the exception of the omission of the words "Naval"
and
"naval training".]



104


 

					
				
				


                     DRAFT PEACE TREATIES                    105

                           ARTICLE 13

  [Identical, inutatis mutandis. to Article 14 of the Draft Rumanian
Treaty.]
                           ARTICLE 14

  [Identical, mutatis mnutandis, to Article 15 of the Draft Rumanian
Treaty.]
                           ARTICLE 15

  [Identical, mutatis mutandis, to Article 16 of the Draft Rumanian
Treaty.]
                           ARTICLE 16

  [Identical, mutatis mutandis, to Article 17 of the Draft Rumanian
Treaty.]
                           ARTICLE 17

  [Identical, mmutatis muatandis, to Article 18 of the Draft Rumanian
Treaty.]
                           ARTICLE 18

  [Idential, mutatis ?nutandis, to Article 19 of the Draft Roumanian
Treaty with the exception of the omission of the word "naval*.]

                           SECTION II

                           ARTICLE 19

  [Identical, mutatis mutandis, to Article 20 of the Draft Rumanian
Treaty.]
                          War Graves

  [Identical to the unnumbered provision following Article 20 of the
Draft Rumanian Treaty.]


            PART IV. WITHDRAWAL OF ALLIED FORCES

                           ARTICLE 20
  [Identical, mutatis mnutandis, to Article 21 of the Draft Rumanian
Treaty.]

              PART V. REPARATION AND RESTITUTION
                          ARTICLE 21 t

  Losses caused to the Soviet Union, Czechoslovakia and Yugoslavia
by military operations and by the occupation by Hungary of the ter-

t The U.S. Delegation reserves the right to reopen this question at the Peace
Conference. [Footnote in source text.]
    219-113-70--S


 

					
				
				


FOREIGN RELATIONS, 1946, VOLUME IV



ritories of these States will be indemnified by Hungary to the Soviet
Union, Czechoslovakia and Yugoslavia but taking into consideration
that Hungary has not only withdrawn from the war against the United
Nations but has also declared war on Germany, the Parties agree that
compensation for the above losses will be made by Hungary not in full
but only in part, namely to the amount of 300 million United States
dollars payable over 8 years from January 20, 1945 in commodities
(machine equipment, river craft, grain, etc. ...), the sum to be paid
to ithe Soviet Union to amount to 200 million United States dollars, and
the sum to be paid to Czechoslovakia and Yugoslavia to amount to
100 million United States dollars.
  The basis for calculating the settlement provided for in this Article
will be the American dollar at its gold parity on the day of the signing
of the Armistice Agreement, i.e. 35 dollars for one ounce of gold.
                            ARTICLE 22
  [Identical, mutatis mnutandis, to Article 65 of the Draft Italian
Treaty with the exception that paragraph 8 of the latter text is not
included.]

                   PART VI. ECONOMIC CLAUSES
                            ARTICLE 23
  [Paragraphs 1 through 8 of this article are identical, mutatis
mutandis, to Article 68 of the Draft Italian Treaty. The date of
April 10, 1941 is used here in place of June 10, 1940 appearing in the
Italian Treaty article.]
  9. French proposal supported by U.K. and U.S. subject to drafting:
  A new agreement shall be negotiated between the Danube-Sava-
Adriatica Railway Company, the Governments concerned, and the
Committee of Bondholders of the Company, in order to determine the
method of applying the provisions of the Rome Agreement of March
p29, 1923, laying down the Company's Articles of Association, and the
modifications required to adapt them to the changes which have fol-
lowed on the redistribution of the lines over the territories of various
States. This Agreement shall contain all the provisions necessary to
ensure satisfactory servicing of the bonds and payments of amounts
in arrears.
The U..S.S.R. Delegation considers that there is no reason for the inclusion
in
the Peace Treaty of the French Delegation's proposal, because a Peace Treaty
should not contain provisions dealing with particular private Companies.
                            ARTICLE 24
  Hungary recognizes that the Soviet Union is entitled to all German
assets in Hungary transferred to the Soviet Union by the Control



106


 

					
				
				


DRAFT PEACE TREATIES



Council for Germany and undertakes to take all necessary measures
for f-acilitating such transf ers.
                           ARTICLE 25
  U.S.S.R. proposal:
  The rights of the Hungarian Government and of Hungarian physi-
cal and juridical persons with regard to Hungarian, property and
other Hungarian assets on the territory of Allied and Associated
Powers, insofar as such rights were limited in consequence of the
participation of Hungary in the war on the side of Germany, shall be
restored af ter the coming into force of the present Treaty.
  U.S., U.K., and French proposal:
  [The proposal included here in italics is identical, mautatis mutandis,
to Article 26 of the Draft Rumanian Treaty.]
                           ARTICLE 26
  U.S.S.R. proposal:
  1. Any restrictions imposed in respect of any Hungarian property
in Germany, and in other countries which, participated in the war on
Germiany's side, shall be removed after the coming into force of the
present Treaty. The rights of any Hungarian owners with regard to
the (isposal of any such property shall also be restored.
  2. Hungary shall be entitled to the restitution of any identifiable
property removed by force or under duress from Hungary after Janu-
ary 20. 1945, and now located in Germatny.
  The restitution of any Hungarian property now located in Germany
shall be carried out under the direction of the military authorities of
the Powers in occupation of Germany.
  U.K., U.S. and French proposal:
  [Identical, mutatis mutandis, to the U.K., U.S. and French proposal
to Article 27 of the Draft Rumanian Treaty.]
                          ARTICLE 27
  [Identical, mutatis mutandis, to Article 28 of the Draft Rumanian
Treaty and Article 70 of the Draft Italian Treaty.]

                          ARTICLE 28
  [Identical, mutatis mutandis, to Article 29 of the Draft Rumanian
Treaty.]
                          ARTICLE 29
  [Identical, nvutatis m'utandis, to Article 30 of the Draft Rumanian
Truleaty.]



107


 

					
				
				


FOREIGN RELATIONS, 1946, VOLUME IV



                    ARTICLES 30, 31, AND 32

  [Identical, inutatis mutandis. to Articles 31, 32, and 33, respectively,
of the Draft Rumanian Treaty and Articles 72. 73, and 74, respec-
tively, of the Draft Italian Treaty.]


         PART VII. CLAUSES RELATING TO THEi DANUBE

                          ARTICLE 33

  [Identical, rntatfs vmwrtai7is, to Article 34 of the Draft Rtumanian
Treaty.]

                  PART VIII. FINAL CLAUSES

                  ARTICLES 34, 35, 36, AND 37

  [Identical, mutatis mutandis, to Articles 35, 36, 37, and 3S, respec-
tively, of the Draft Rumanian Treaty and Articles 75, 76, 77, and 78,
respectively, of the Draft Italian Treaty.]

                             ANNEX 1
                         (See AX-rticle 1)

               Map of the Hungarian Frontiers 18

                             ANNEX 2
                         (See Article 12)

             Definition of Military and Air Training
  [Identical to the first two paragraphs of Annex 2 of the Draft
Rumanian Treaty and Annex 5 B of the Draft Italian Treaty.]

                             ANNEX 3
                         (See Article 14)

               Definition and List of War Mcatter ial
  [Identical to Annex 3 of the Draft Rumanian Treaty and Annex
" C of the Dr aft Italian Treaty.]

                             ANNEX 4
     Special Provisions Relating to Certain A"nds of 1Property
  [Identical, mnutatis mnttandis. to Annex 6 of the Draft Italian Treaty
and Annexes 4 A and 4 B of the Draft Rumanian Treaty.]

'8 No map accompanied the English and French language versions of the Draft
Treaty.



108


 

					
				
				


DRAFT PEACE TREATIES



                             AN NEX a
       Contracts, Pr escriptions and Negotiable Instruments
  [Identical, muttatis mutarndis, to Annex 5 of the Draft Rumanian
Treaty.]
                             ANNEX 6

                           Judgmten ts

  [The proposals set forth in this Annex are identical, mittatis
mutandis, to the proposals set forth in Annex 6 B of the Draft Ru-
manian Treaty and Annex 8 B of the Draft Italian Treaty.]


DRAFT PEACE TREATY WITH FINLAND, PREPARED BY THE COUNCIL
OF FOREIGN MINISTERS, PALAIS DU LUXEMBOURG, PARIS, JULY 18,
1946
CF11J Files
              Draft Peace Treaty With Finland 19

                           PREAMBLE
  The Union of Soviet Socialist Republics, the United Kingdom,
Au~stralia, the Byelorussian Soviet Socialist Republic, Canada,
Czechoslovakia, India, New Zealand, the Ukrainian Soviet Socialist
Republic, and the Union of South Africa, as the States which are at
w-ar with Finland and actively waged war agains< the European
enemy states with substantial military force, hereinafter called the
Allied and Associated Powers, of the one part, and Finland, of the
other part;
  AW/hereas Finland, havincg become an ally of Hitlerite Germany and
participating on her side in the war against the Union of Soviet
Socialist Republics, the United Kingdom and other United Nations,
bears her share of responsibility for this war;
  Whereas, however, Finland on September 4, 1944, entirely ceased
military operation against the U.S.S.R., withdrew from the war
against the United Nations, broke off relations with Germany and
her satellites, and, having, concluded on September 19, 1944, an
Armistice with the Governments of the Union of Soviet Socialist
Republics and the United Kingdom,20 acting on behalf of the United
Nations at war with Finland, loyally carried out the Armistice terms;
and

" The table of contents and the list of annexes in the source text are
not
printed here.
20 For text, see British and Foreign State Papers, vol. CXLV, p. 513.



109


 

					
				
				


110          FOREIGN RELATIONS, 1946, VOLUME IV

  Whereas the Allied and Associated Powers and Finland are re-
spectively desirous of concluding a treaty of peace which will form
the basis of friendly relations between them and settle questions still
outstanding as a result of the events hereinbefore recited; thereby
enabling the Allied and Associated Powers to support Finland's appli-
cation to become a member of the United Nations and also to adhere
to any convention concluded under the auspices of the United Nations.
  Have therefore agreed to declare the cessation of the state of war
and for this purpose to conclude the present Peace Treaty and have
appointed as their Plenipotentiaries.

who, after presentation of their full powers, found in good and (hie
form, have agreed on the following provisions:


                   PART I. TERRITORIAL CLAUSES

                            ARTICLE 1

  The frontiers of Finland, as shown on the map annexed to this
Treaty (Annex 1), shall be those existing on January 1, 1941, except
as provided in the following Article.

                            ARTICLE 2

  In accordance with the Armistice Agreement of September 19, 19344,
Finland confirms the return to the Soviet Union of the province of
Petsamo (Pechenga) voluntarily ceded to Finland by the Soviet
State under tLX Peace Treaties of October 14, 1920, and March 12,
1940.21 The frontiers of the province of Petsamo (Pechenga) are
shown on the map annexed to the present Treaty (Annex 1).


                    PART II. POLITICAL CLAUSES

                            SECTION I
                            ARTICLE 3

  In accordance with the Armistice Agreement, the effect of the Peace
Treaty between the Soviet Union and Finland concluded in Mosc-ow
on March 12, 1940, is restored, subject to the replacement of Articles
4, 5 and 6 of that Treaty by Atlicles 2 and 4 of the present Treaty.

  20a Ellipsis occurs in the source text.
  21For text of the Treaty of October 14, 1920. see League of Nations Treaty
Series, vol. III, pp. 5-79. For text of the Treaty of Mlarch 12, 1940, see
the Depart-
inent of State Bulletin, April 27, 1940, pp. 453-456.


 

					
				
				


                      DRAFT PEACE TREATIES                    111

                            ARTICLE 4
  1. In accordance with the Armistice Agreement the Soviet Union
confirms the renunciation of its right to the lease of the Peninsula of
Hangd, accorded to it by the Soviet-Finnish Peace Treaty of March 12,
1940, and Finland for her part confirms having granted to the Soviet
Union on the basis of a 50 years lease at an annual rent payable by
the Soviet Union of 5 million Finnish marks the use and adminis-
tration of territory and waters for the establishment of a Soviet
naval base in the area of Porkkala-Udd as shown on the map annexed
to this Treaty (Annex 1).
  2. Finland confirms having secured to the Soviet Union in accord-
ance with the Armistice Agreement, the use of the railways, water-
ways, roads and air routes necessary for the transport of personnel
and freight despatched from the Soviet Union to the naval base at
Porkkala-Udd, and also confirms having granted to the Soviet Union
the right of unimpeded use of all forms of communication between
the U.S.S.R. and the territory leased in the area of Porkkala-Udd.

                            ARTICLE 5
  The Aaland Islands shall remain demilitarized in accordance with
the situation as at present existing.

                 ARTICLEs 6, 7, 8, 9, 10, 11, AND 12
  [Identical, nmutatis nmttandis, to Articles 3, 4, 5, 6, 7, 9, and 10,
respectively, of the Draft Rumanian Treaty.]


           PART III. MILITARY, AIR AND NAVAL CLAUSES

                           ARTICLE 13
  1. The maintenance of land, sea and air armaments and fortifica-
tions shall be closely restricted to those required for meeting tasks of
an internal character and local defence of frontiers. In accordance
with this principle, Finland is au-thorised to have armed forces con-
sisting of not more than:
  a. A land army, including frontier troops and anti-aircraft artil-
lery, with a total strength of 34,400 personnel;
  b. A Navy with a personnel strength of 4,500 and a total tonnage
of 10,000 tons;
  c. An airforce, including any naval air arm, of 60 aircraft, includ-
ing reserves, with a total personnel strength of 3,000. Finland shall
not possess or acquire aircraft designed primarily as bombers with
internal bomb-carrying facilities.


 

					
				
				


FOREIGN RELATIONS, 1946, VOLUME IV



  2. These strengths will in each case include combat, service and
overhead personnel.
                            AARTICLE 14
  [Virtually identical, mutatis muttandis, to Article 12 of the Draft
Rumanian Treaty.]
                      ARTICLES 15 16, AND 17
  [Identical, mnutatis imutandis, to Articles 13, 14, and 15, respectively,
of the Draft Rumanian Treaty.]

                            ARTICLE 18
  [Identical, mnutatis 9nutandis, to Article 16 of the Draft Rumanian
Treaty with the following exception: paragraphs 2 and 3 of the
Rumnianian treaty article are combined in the single paragraph 2 here
and subsequent paragraphs are renumbered accordingly.]

                            ARTICLE 19
  [Virtually identical, mutatis rnutanidis, to Article 17 of the Draft
Rumanian Treaty.]
                        ARTICLES 20 AND 21
  [Identical, qniitats ,nutandi;.. to Articles 18 and 19 of the Draft
Rumanian Treaty.]


             PART IV. REPARATION ANt D RESTITUTION

                           ARTICLE 22
  Losses caused to the Soviet Union by military operations and by the
occupation by Finland of Soviet territory will be made good by Fin-
land to the Soviet Union, but taking into consideration that Finland
has not only withdrawn from the war against the United Nations but
has declared war on Germany and assisted with her forces in driving
German troops out of Finland, the parties agree that compensation
for the above losses will be made by Finland not in full, but only in
part, namely to the amount of 300 million United States dollars pay-
able over 8 years as from September 19, 1944, in commodities-timber
products, paper, cellulose, sea-going and river craft, sundry machin-
ervy etc.
  The basis for calculation for the payment of indemnity will be the
United States dollar at its gold parity on the day of the signing of
the Armistice Agreement, i. e. 35 dollars for one ounce of gold.



112


 

					
				
				



DRAFT PEACE TREATIES



                            ARTICLE 23
  Finland, in so far as she has not yet done so, undertakes within the
time limits indicated by the Government of the U.S.S.R. to return to
the Soviet Union in complete good order all valuables and materials
removed from its territory during the war, and belonging to State,
public and co-operative organisations, enterprises, institutions or in-
dividual citizens, such as: factory and works equipment, locomotives,
rolling stock, tractors, motor vehicles, historic monuments, museum
valuables and any other property.


                   PART V. ECONOMIC CLAUSES
                            ARTICLE 24
  [Identical, mutatis mutandis, to Article 68 of the Draft Italian
Treaty with the following exceptions: the U.S. proposal in paragraph
4 of the Italian article appears here as a U.K. proposal; the note ap-
pearing at the end of paragraph 4 of the Italian article, indicating
U.TK. and French approval of the U.S. proposal, is not included here.
The date of June 22, 1941 is used here in place of the date of June 10,
1940 appearing in the Italian treaty article.]
                            ARTICLE 25
  [Identical, mutatis mutandis, to Article 25 of the Draft Rumaniani
Treaty.]
                            ARTICLE 26
  1. Insofar as any such rights were restricted on account of Fin-
land's participation in the war on Germany's side, the rights of the
Finnish Government and of any Finnish national or legal persons
relating to Finnish property or other Finnish assets on Allied and
Associated Powers territory shall be restored after the coming into
force of the present Treaty.
  2. Any restrictions imposed in respect of any Finnish property in
Germany and in other countries which participated in the war on
Germany's side shall be removed after the coming into force of the
present Treaty. The rights of any Finnish owners with regard to the
disposal of any such property shall also be restored.
  3. Finland shall be entitled to the restitution of any identifiable
property remoq ed by force or duress froim Finland after September 19,
1944, and now located in Germany.
  The restitution of any Finnish property now located in Germany
shall be earried out under the direction of the military authorities of
the Powers in occupation of Germany.
The U.K. Delegation propose deletion of paragraph 3.



113


 

					
				
				


FOREIGN RELATIONS, 1946, VOLUME IV



                           ARTICLE 27
  [Identical, qmutatis rnutandis, to Article 29 of the Draft Ruimanian
Treaty with the following exceptions: the second sentence of para-
graph 2 of the Rumanian article is not included here; paragraph 4 of
the Rumanian article is not repeated here.]

                           ARTICLE 28
  [Identical, mutatis mutandis. to Article 30 of the Draft Rumanian
Treaty with the following exceptions: joint U.K., U.S. and French
proposals to paragraph 1 cHand paragraph 2 of the Rumanian article
appear here as U.K. proposals; the further addition to paragraph
1 c of the Rumanian article proposed by the U.S. and supported by the
U.K. is not repeated here.]
                           ARTICLE 29
  [Identical, mutatis mutands., to Article 31 of the Draft Rumanian
Treaty and Article 72 of the Draft Italian Treaty with the following
exception: the U.S. and French propositions at the end of the Ruina-
nian and Italian articles are not repeated here.]

                      ARTICLES 30 AND 31
  [Identical, imutatis rutandi. to Articles 32 and 33 of the Draft
Rumanian Treaty and Articles 73 and 74 of the Draft Italian Treaty.]

                    PART VI. FINAL CLAUSES

                           ARTICLE 32
  1. For a period not to exceed 18 months from the coming into force
of the present Treaty, the Ministers in Helsinki of the U.S.S.R. and
U.K. acting in concert will represent the Allied and Associated Powers
in dealing with the Finnish Government in all matters concerning the
execution and interpretation of the present Treaty.
  2. The two Ministers will give to the Finnish Government such
guidance, technical advice and clarification as may be necessary to
ensure rapid and efficient compliance with the spirit and terms of the
present Treaty.
  3. The Finnish Government undertakes to afford the said Ministers
all necessary information and any assistance they may require for the
fulfilnent of the tasks devolving oln them under the present Treaty.



114


 

					
				
				


DRAFT PEACE TREATIES



                          ARTICLE 33
  [Identical, mutatis mnutandis. to. Article 36 of the Draft Rumanian
Treaty and Article 76 of the Draft Italian Treaty with the exception
that the joint U.K.-U.S. proposal of the iRumanian and Italian articles
appears here as a U.K. proposal.]

                          ARTICLE 34
  [Identical, mutatis mutandis, to Article 38 of the Draft Rumanian
Treaty and Article 78 of the Draft Italian Treaty.]

                             ANNEX 1

                     (See Articles 1, 2 and 4)

                  Map of Finnish Frontiers 21a

                             ANNEX 2
                         (See Article 15)

         Definition of Military, Air and Naval iraining
  [Identical to Annex 2 of the Draft Rumanian Treaty and Annex 5
13 of the Draft Italian Treaty.]

                             ANNEX 3
                        (See Article 16)

               Definition and List of War Material
  [Identical to Annex 3 of the Draft Rlumanian Treaty and Annex 5
C of the Draft Italian Treaty.]

                             ANNEX 4
     Special Provisions Relating to Certain Kinds of Property
  [Identical, imutatis mat andis, to Annex 6 of the Draft Italian Treaty
and Annexes 4 A and 4 B of the Draft Rumanian Treaty with the
exception that the U.S. position specified at the end of A 4 of the
Italian and Rumanian annexes is not repeated here.]

2la Map not reproduced.



115


 

					
				
				


116          FOREIGN RELATIONS, 1946, VOLUME IV

                            ANNEX 5
       Contracts, Preseci-ptions and Negotiable Instruments
  [Identical, mutatis rnutartdis, to Annex 5 of the Draft Rumanian
Treaty with the exception that the footnote describing the position of
the U.S. and French Delegations is not repeated here.]

                            ANNEX 6
                  Pze Courts and Judgments

  [Identical, mutatis mutandis, to Annex 6 of the Draft Rumanian
Treaty and Annex 8 of the Draft Italian Treaty with the following
exceptions: the U.S. proposal supported by U.S.S.R. under B. Judg-
ments of the Rumanian and Italian annexes appears here as a U.S.S.R.
proposal; the French proposal under B. Judgments of the Rumanian
and Italian annexes is not repeated here.]


 

				
      
      
				
				









1I. OBSERVATIONS ON THE DRAFT PEACE TREATIES
               BY THE EX-ENEMY STATES
OBSERVATIONS ON THE DRAFT PEACE TREATY WITH ITALY BY
                   THE ITALIAN GOVERNMENT
CF-M Files

  Observations on the Draft Peace Treaty With Italy Submitted
                   by the Italian Delegation 1

                                             PARIS, August, 1946.


                  I. Political and Territorial Clauses

Doe. No. 1 (P).
      ifeimoorandumn on the Preamble to the Draft Peace Treaty

  1. The first premises of the Preamble deal with the Fascist, war of
a ggress!on1 waged by Italy and the responsibility which results. The
wordliol, of this paragraph appears somewhat summary and certain
points are insufficiently precise. It is, therefore, proposed that the
following alterations should be made.
  a. Instead of "Italy under the Fascist regime became a party to
the Tripartite Pact"', insert the following text "Italy was led
by the
Fascist regime to become a party to the Tripartite Pact".
  b. Instead of "declared a war of aggression and entered into war
with all the Allied and Associated Powers and with other United
Nations" it is proposed to adopt the wording used in the Draft Peace
Treaties with other States, as follows: "declared a war of aggression
against some of the above-imentioned Powers and entered into war
with other United Nations".
  It should be pointed out that far from havting entered into war with
all the States mentioned in the Preamble, Italy never declared war
on some of them (Belgium, the Netherlands, Poland, Czechoslovakia)
and never received a declaration of war from the latter. Even though
some of these States, at a particular moment, considered themselves
IS being in a state of war with Italy, this was only as the result of uni-

  1 This document was introduced by and summarized in C.P.(Gen) Doe. 2,
August 26, not printed.
                                                         117


 

					
				
				
118 FOREIGN RELATIONS, 1946, VOLUME IV

lateral action which was not communicated to the other party. No
hostile acts actually occurred and the nationals of these States were
never considered in Italy to be enemy aliens. Neither their property
nor their activities were ever placed under any restrictions or other-
wise interfered with by the Italian Government.

2, The second premises refer to the overthrow of the Fascist regime
and the Armisi.ce. No mention is made of the active role played by
the Italian people in these events, and there is no reference to the
struggle of the intellectuals and workers which made the “coup d’état”
of 25th July possible.

It would seem equitable to delete the assertion that Italy “sur-
rendered unconditionally”, since it was agreed in the Protocol signed
at Brindisi on November 9th, 1948 that the words “at the discretion
of” contained in Article 1 a of the Malta Armistice should be deleted.
Consequently, the above premises might be amended as follows:

a. Instead of “under the pressure of military events, the Fascist
regime in Italy was overthrown” read “owing to the military situ-
ation the Italian people were able to overthrow the Fascist regime”.

6. Instead of “Italy surrendered unconditionally and accepted terms
of Armistice” read: “and Italy was the first to break with the Powers
of the Tripartite Pact, accepting the terms of Armistice. . .”.?

3. The third premises describe much too cursorily the period of
co-belligerency and overlooks the important contribution made by
the Italian Regular Army and the partisans to the liberation cam-
paign. It also omits Italy’s declaration of war on Japan.

It is, in a word, the spirit of these premises which should be modified
by adding references which recall Italy’s material share in the war
against Germany, which lasted for 18 months. This text might be
worded as follows:

“Whereas after the said Armistice the Italian Regular and Under-
ground Forces immediately took a substantially active part in the
war against Germany and Italy formally declared war on Germany
as from October 18, 1948, and on Japan as from July 15, 1945, and
thereby became a co-belligerent against Germany and Japan.”

 

Proposed Preamble

The U.S.S.R., U.K., U.S.A., China, France, Australia, Belgium,
Bielorussian S.S.R., Brazil, Canada, Czechoslovakia, Ethiopia,
Greece, India, the Netherlands, New Zealand, Poland, Ukrainian
S.S.R., Union of South Africa and Yugoslavia, hereinafter referred
to as the Allied and Associated Powers of the one part, and Italy of
the other part:

* Marks of ellipsis throughout the observations on the draft treaties occur in
the source texts.

					
				
				
OBSERVATIONS ON DRAFT PEACE TREATIES 119

Whereas Italy was led by the Fascist regime to become a party to
the Tripartite Pact with Germany and Japan, declared a state of
war of aggression against some of the above-mentioned Powers and
entered into war with other United Nations, and therefore bears her
share of responsibility for the war; and

Whereas, owing to the military situation, the Italian people was
able to overthrow the Fascist regime on July 25, 1948, and [taly was
the first to break with the Powers of the Tripartite Pact accepting the
terms of Armistice signed on September 3 and 29 of the same year; and

Whereas after the said Armistice the Italian regular and under-
ground forces immediately took a substantially active part in the war
against Germany, and Italy formally declared war on Germany as
from October 18, 1948, and on Japan as from July 15, 1945, and thereby
became a co-belligerent against Germany and Japan, and

Whereas the Allied and Associated Powers and Italy are respec-
tively desirous of concluding a treaty of peace which will form the
basis of friendly relations between them and settle the abvve-men-
tioned questions, thereby enabling the Allied and Associated Powers
to support Italy’s application to become a member of the United Na-
tions and also to adhere to any convention concluded under the auspices
of the United Nations;

Have therefore agreed to declare the cessation of the state of war
and for this purpose to conclude the present Peace Treaty, and have
accordingly appointed as their Plenipotentiaries .............
who, after presentation of their full powers, found in good and due
form, have agreed on the following provisions.

 

Doe. No. 11 (P).

Memorandum on the Territorial Clauses Relative to the Frontier
Between Italy and France (Art. 2, 5, 6, 7, 8 and 9)

ARTICLES 2, 5, 6, 7, 8 AND 9

The deep-seated desire of Italy for a resumption of peaceful and
friendly relations with France met with real encouragement in the
speech made by M. Bidault on 15th August at the plenary meeting
of the Peace Conference. The painful memories of a disastrous past
are progressively disappearing before the reality of a new Italy, who,
having given proofs in the struggle by the side of the Allies, of the
genuine will of its people, appeals to others and more especially to
the French nation not to stifle the rebirth of the Italian nation in the
framework of democratic and peaceful republican institutions.

					
				
				
120 FOREIGN RELATIONS, 1946, VOLUME IV

It is in this spirit of collaboration that Italy envisages now as
before, the problem of her frontiers with the great neighbouring
republic and reaffirms her desire to meet most of the French demands
for frontier rectifications in spite of the sacrifices involved.

The Italian Government firmly believes that these sacrifices and the
goodwill underlying them will find a suitable response, and that
France will give favourable consideration to the two reservations
Italy is compelled formally to insist upon. For the Italian Govern-
ment considers that it is only thus that the two countries can arrive
at a general agreement, an essential condition for the justification
and maintenance of the cessions which Italy is prepared to accept.

According to the actual terms of the memorandum submitted to the
Council of Foreign Ministers on the 17th July, 1946, the Italian Gov-
ernment signified its agreement to those modifications which aim at
ensuring that the frontier shall follow the Alpine watershed more
closely, a principle justified by geographical reasons and by a long
historical tradition. The Italian Government accordingly declares
itself prepared:

1. To renounce in favour of France its sovereign rights over the
territorial districts of the upper valleys of the Vésubie and Tinée,
usually referred to as the “Hunting Grounds”, within the limits ex-
plicitly laid down by the Convention of 16th March, 1861 governing
the application of the Franco-Sardinian Treaty of 24th March, 1860.

2. To push back the existing frontier in the districts of the Little
St. Bernard Pass to the watershed, renouncing Italian sovereign
rights over this strip of territory in favour of France.

Furthermore, in its desire to reach an agreement with France, the
Italian Government has agreed to make an exception to the fundamen-
tal principle that the frontier shall follow the watershed, and declared
itself ready to meet French wishes as regards the narrow valley of
Bardonecchia, and Mont Chaberton.

As regards the narrow Valley of Bardonecchia, the Italian Govern-
ment, while realising that the French claim entails heavy sacrifices on
the part of Italy, recognises that the populations of Dauphiné and
Savoy might derive some advantage from the establishment of direct
communications running exclusively through French territory. As
regards Mont Chaberton, while realising that such a rectification
would constitute, as in the previous case, a serious departure, at Italy’s
expense, from the principle that the frontier shall follow the water-
shed, and that it would involve a very heavy sacrifice, as this moun-
tain dominates a considerable area of Italian territory, the Italian
Government, acceding to the wishes expressed by the French Govern-

					
				
				


OBSERVATIONS ON DRAFT PEACE TREATIES



ment on strategic grounds, has declared its willingness to accept, in
principle, the suggested rectification of the frontier.
  Finally, the Italian Government, in the Memorandum of 17th June,
expressed its willingness to accede to French wishes on four points,
namely:
  1. Little St. Bernard Pass.
  2. Narrow Valley of Bardonecchia.
  3. Mont Chaberton.
  4. The Upper Tinee and Vesubie Valleys.
  Only three claims thus remain to be examined. They all concern
territories which, as in the cases mentioned above, are on the Italian
side of the watershed. From South to North, these rectifications
concern:
  1. The commune of Olivetta San Michele, situated in the Lower
Roya Valley.
  2. The Upper Roya Valley, where the communes of Tenda and
Briga are situated.
  3. The Mont Cenis plateau.
  The commune of Olivetta San Michele never formed part of the
County of Nice, and never came under discussion when the Treaty
of 1860 was being drafted. Italian in feeling and language, the 1.100
inhabitants of Olivetta San Michele are economically and historically
linked with Italy. Moreover, the catchment area and the canal for
diverting the water supplying the power station of Airola, as well is
the catchment area of the aqueduct supplying the population of Ven-
timiglia with drinking water, and with water for agricultural irri-
gation and for the market gardens of this Italian town, are situated in
this territory.
  If the French Government wishes to include in French territory
the district through which the tunnel of the Nice-Breuil railway runs,
this could be effected by a slight rectification of the frontier which, by
cutting off the salient of the "dei Termini" Pass would leave nearly
the
whole of the commune of Olivetta San Michele in Italian territory.
  As regards the Upper Roya Valley i.e. Tenda and Briga, the Italian
Government has already had occasion to state its views, in connection
with the report of the Commission of Enquiry appointed by the Coun-
cil of Foreign Ministers. In the Italian Government's view the
separation of this district from Italy is not justified either by the
sentiments of the inhabitants, historical precedents, on grounds of
language, or on geographical and economic grounds.
  The French claim to the Mont Cenis plateau remains to be con-
sidered. Situated entirely on the Italian side of the range 40 kms.
in a direct line from Turin (from which it is not separated by any



219-115-70    9



121


 

					
				
				


FOREIGN RELATIONS, 1946, VOLUME IV



serious geographic obstacle), the Mont Cenis plateau literally com-
mands the whole lower valley of Susa which opens into the plain of
the Po some kilometres lower down. This is emphasised, almost
dramatically, by the fact that the contents of the reservoir situated
on the plateau, (with a capacity of approximately 32.000.000 cubic
metres), would in the event of the dam bursting, overflow into the
plain, causing a catastrophe of seismic proportions which would trans-
form a very busy and fertile district into a valley of death.
  It is inconceivable that such an enormous body of water should be
massed in non-Italian territory, leaving a large and important Italian
region exposed to such a serious threat. It would be equally in-
admissible that the cession so proposed should for the first time in
history establish such a precedent to the detriment of Italy.
  To these considerations, others of a military character and of fun-
damental importance must be added. The transfer of the district
of Tenda, and of the plateau of Mont Cenis, would add little or
nothing to the security of France, but would irreparably prejudice
the security of Italy, since the defensive value of the barrier of the
Alps would thus be completely abolished.
  However convinced it might be that the good neighbourly policy
which will inspire its relations with its neighbour is reciprocated on
the other side of the frontier, no nation could maintain relations of
reciprocal trust and fruitful collaboration if, in implementing the
principle of collective security, a reasonable measure of security for
both parties had first to be sacrificed.
  For the various reasons set forth in this Memorandum, the Italian
Government deems it its duty to stress the fact that the rectifications
proposed by France in the Mont Cenis district and in the Roya Valley
are not consonant with the necessity for establishing ties of real col-
laboration and mutual trust between the two peoples.
  The Italian Government, therefore, whilst reserving to the Con-
stituent Assembly the right to approve the decisions taken, considers
that Art. 2 of the Draft Peace Treaty with Italy might be drafted as
follows:
  Art. 2, par. 1. Little St. Bernard:  No change.
             2. Plateau of Mont Cenis: To be deleted.
          -3. (1) Mont Thabor:       Amend as follows:
  "The line shall leave the present frontier at Mont Gran Somma
(3111) and follow the crest of the escarpment of the Ponite Melchiore
as far as the Pointe Quattro Sorelle, subsequently descending into
the "Narrow Valley" along the contours 2409-1915. Where it crosses
the valley, this line would leave to Italy the dam and catchment area
of the hydroelectric plant of Bardonecchia, afterwards rejoining the



122


 

					
				
				
OBSERVATIONS ON DRAFT PEACE TREATIES 123

former frontier at the “Cime de la Suer” along the western escarp-
ment of the “Comba, della Gorgia” Valley.

The suggested alteration is intended to ensure that the dam and the
catchment area by which the hydro-electric plant of Bardonecchia is
supplied remain in Italy, since the article, as at present drafted is not
sufficiently clear on this point.

2. Mont Chaberton: Amended as follows:

“In the Chaberton area, the frontier shall leave the existing frontier
some 3 kms. to the north of Mont Chaberton, passing round it to the
East as far as the escarpment of the Pointe della Portiola. The
frontier will follow the escarpment as far as Portiola, subsequently
rejoining the existing frontier at the Col de l’Alpet, passing to the
north of Granges les Baisses.”

While it gives France the strategic advantages demanded this
modification would leave the commune of Claviéres its pastures and
forests and allow it to operate the tourist attractions which have made
it internationally famous.

Par. 4. Upper Tinée, Vésubie and Roya Valleys: Amend as follows:

“The frontier shall leave the present frontier at Colla Lunga and
follow the water-shed by Mont Clapier, Mont Gran Capelet and Mont
Meraviglie merging again into the existing line of frontier at the
Cima del Diavolo”.

To Art. 2 a fifth paragraph might be added as follows:

“The frontier shall leave the present frontier some 3 kms. to the
south of Breuil and, running southwards, rejoin the former frontier
at boundary mark 26 east of Colla Longa”.

Art. 5—See Memorandum No. 12(G) and 12 bis (G).

Art. 6.—Must be considered with reference to the alterations sug-
gested to Art. 2.

Art. 7—See Memorandum No 2(P).

Art. 8.—See Memorandum No 19(E).

Art. 9.—Must be considered with reference to the alterations sug-
gested to Art. 2.

 

Doc. No. 10 (P).

Memorandum on the Territorial Clauses Concerning the Frontier
Between Italy and Yugoslavia and the Frontier of the Free Terri-
tory of Trieste (Art. 3,4 and 16.)

ARTICLES 8, 4 AND 16

With reference to the proposals made by the Council of Foreign
Ministers in connection with the new Italo-Yugoslav frontier and
the creation of the Free Territory of Trieste, the Italian Delegation

					
				
				


FOREIGN RELATIONS, 19 4 6, VOLUME IV



can only confirm the views already set forth in the Italian Memo-
randum of September, 1945, and reiterated by President De Gasperi
in London (Sept. 18, 1945), in Paris (May 3, 1946) and recently, at
the plenary session of the present Conference (August 10, 1946).
  Voicing the unanimous wishes of all Italians, and, in particular,
of the population concerned-that of Venezia Giulia-the Italian
Delegation formally reaffirms that no ethnic, historical, geographical,
economic or moral reasons can, in its view, justify the severance from
Italy of a population which has always considered itself and desires
to remain Italian, as was proved by the impartial investigation carried
out by the Committee of Experts for Venezia Giulia, and as could
easily be confirmed by consulting the local population.
  However, in event of the Italian point of view being rejected and
of the creation of a "Free Territory of Trieste" being approved
by
the Commission the boundaries proposed by the Council of Foreign
Ministers being adopted as a basis of discussion, the Italian Dele-
gation, subject to the consent which will have to be given by the
Italian Constituent Assembly on the substance of the question sub-
mits for the Commissionl's consideration the following remarks on
the frontier in the Gorizia area, and the enlargement of the Free
Territory of Trieste.

      I. The Frontier in the Upper and Middle Isonzo Valley
  The Italo-Yugoslav frontier in this region should be drawn so as
to facilitate communications for the local population, to satisfy the
essential needs of railway traffic, and to safeguard the development
of the Isonzo hydro-electric power stations and their exploitation for
the benefit of the zone for which they were built. In this connection
the following points should be noted:
  a. The new frontier proposed leaves in Yugoslav territory mixed-
language groups, naturally linked to the Italian towns in the Friuli
plain (Udine and Cividale) by the exigencies of local life and trade.
A glance at the map will show that the inhabitants of the Isonzo
Valley have excellent main roads and a railway connecting them with
Udine and Cividale but are much further away from the main towns
of Slovenia, such as Ljubljana, with which they are linked only by
secondary roads, often impassable in winter.
  b. The new frontier leaves to Yugoslavia part of the territory
through which the Predil railway which was intended to form a direct
link between Trieste and Austria was to pass. The construction of
this line was provided for in the Treaty of St. Germain but was not
completed because of the world economic crisis and international



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OBSERVATIONS ON DRAFT PEACE TREATIES



events (90 kms. of the line remain to be built). Once built, it will
provide the shortest link between Trieste and Central Europe.
  Trieste, as everyone is aware, is now connected with its Danubian
hinterland by three railways. The longest of these runs entirely
through Italian territory (the Trieste-Udine-Pontebba-Tarvisio line).
It is single-tracked and was mainly built to serve Venice; technically
it would be a very difficult matter to! add a second track to this line.
The other two railways (the Trieste-Postumia-Ljubljana and the
Trieste-Piedicolle-Assling lines) would, according to the frontier
proposal made, run entirely through Yugoslav territory. Yugoslavia
would thus be in a position to control the larger and better section of
the railway system joining Trieste with its hinterland in addition to
all communications with the rival port of Fiume.
  The problem therefore is to place the Free Territory of Trieste and
its port on the same footing as the port of Fiume, so as not to leave
one and the same State in control of the traffic of both ports. Neither
Italy nor Yugoslavia should be in a position to bring economic pres-
sure to bear on the Free Territory by controlling its communications.*
It follows that Trieste should be linked with its hinterland not only
by the two railways passing through Yugoslavia, but also by a new
and modern line (the Predil line) passing through Italian territory.
  Now, if the frontier were drawn as proposed by the French Delega-
tion this requirement would not be fulfilled. The new Predil line
would start at Trieste, would have to pass first through Italian, then
through Yugoslav territory, and once more re-enter Italy before finally
reaching Austrian territory (see, map in Annex I).
  c. The new frontier leaves the entire course of the Isonzo River
north of Gorizia and therefore the'big hydro-electric power stations
at Doblari and Plava in Yugoslavia. These stations were built by
Italy in 1938; their annual output is 130 million kwh. of direct and
100 million kwh. of alternating current. These stations do not serve
the areas proposed to be ceded to Yugoslavia. On, the other hand, they
are indispensable to the Monfalcone and Gorizia areas of Italy and
above all to Trieste itself, as was admitted in the Report prepared by
the Commission of Investigations (Paras. 48 and 68) and in Annex
9/C of the draft Treaty. The same would apply to the hydro-electric
power which might be obtained by a further development of the same
river. The zone to be ceded to Yugoslavia never used the power sup-

  *The Yugoslav delegate, Mr. Bebler, stated on 18th July at the meeting
of the
Conimittee for thl Statute of Trieste that "Yugoslavia can never be
forced to
make the sacrifi'es, required in order to ensure the prosperity of a city
and a
port of whose ownership she was deprived". (Official text supplied by
the
Yugoslav representatives.) [Footnote in the source text.]



125


 

					
				
				


FOREIGN RELATIONS, 19 4 6, VOLUME IV



plied by these plants, as they are served by the power stations at Fiume,
Arsa, Aidussina, Idria, Chiapovano and other smaller stations.
  The Italian Delegation will submit a special Memorandum on the
subject of the guarantees to be given to the Free Territory of Trieste
in connection with the electric power to be supplied by the above
stations (Annex 9/C).
  The transfer of the Isonzo Valley to Yugoslavia would likewise de-
prive Italy of the control of the water supply used for irrigating the
Cormons and Monfalcone plains which will be retained by Italy.
  Conclusion: The new Italo-Yugoslav frontier north of Gorizia
should run east of the "French line", following a line which might
be
considered by a special committee of the Political Commission.

                 II. Frontier in the Gorzia Area

  The line suggested by the Council of Foreign Ministers for the
Gorizia area cuts this town in two, breaking up its unity with all the
consequences that such a paradoxical situation would entail in a
modern city (see map and photographs in Annexes 2 and 31).
  This line leaves in Yugoslav territory:
  -the suburbs of Vertoiba, San Pietro and Soldano;
  -the springs and water-works of the town's two sources of water
supply, whose capacity is already insufficient to satisfy Gorizia, and
requires immediate extension;
  -the old town cemetery and the Jewish cemetery;
  -the sanatorium, the ossuaries and the war memorials erected in
honour of the Italian soldiers who died in the 1915-1918 war;
  -the wooded area to the east. of the town, which constitutes the
town's lung.
  In order to avoid this absurd situation it is, therefore, absolutely
necessary to consider a fresh boundary.
  The proposed line was evidently drawn with a view to leaving within
Yugoslav territory the local routes of communication between Aidus-
sina and the Piedicolle area (which, incidentally carry very little
traffic) as well as the Trieste-Piedicolle-Assling-Vienna railway.
  Now, it is quite possible to build a loop line starting at Prevacina,
passing through Sanbasso and Britovo and rejoining the existing
Isonzo railway near Auzza di Canale. Alternatively, another loop
line could be built starting at Aidussina passing through the Tribussa
(Idria) Valley and rejoining the Piedicolle railway at Baccia di
Modrea.
  The Italian Government is prepared to examine the possibility of
co-operating with the Yugoslav Government in building this loop line.
1 Map and photographs not printed.



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OBSERVATIONS ON DRAFT PEACE TREATIES



  It might be added that both the American and the British line en-
visaged a somewhat similar territorial solution.
  There is no doubt that the French line in the Gorizia area could be
modified so as to satisfy both the needs of the city and Yugoslav rail-
way requirements.
        III. Enlargement of the Free Territory of Trieste
  1. The draft Treaty with Italy provides for the establishment of a
"Free Territory of Trieste" bounded by the "French line"
(art. 4 and
16 of the draft with some reservations involving minor rectifications
suggested by the U.S. Delegation).
  2. It may be useful to recall the origin of the French line. It will
be remembered that the Council of Foreign Ministers decided, at their
London session in September 1945, that the Italo-Yugoslav boundary
should be "an ethnic line leaving a minimum of population under
alien rule". The line was also to take into account the economic needs
of the population concerned.
  A commission of experts was sent to Venezia Giulia and, after an
investigation on the spot, submitted a unanimous report in which it
recognized, in the case of western and southern Istria, that "the Italian
element is located in the towns situated on or near the coast and also
inhabits a considerable number of rural localities of western Istria.
It constitutes the majority and, in certain instances, almost the whole
population in many of the towns on or near the coast, while in certain
towns in the interior of western and southern Istria it constitutes an
important minority" (para. 76).
  However, each of the four delegations constituting the Commission
recommended a different line for the future boundary; the American
and British lines following more closely the findings of the report,
inasmuch as they left to Italy the major part of western and southern
Istria.
  3. The "French Line" was drawn following the principles of the
so-called "ethnic balance". According to the estimates of the French
Experts (which, incidentally, appear to be based on data which, in
the Italian Government's opinion, do not reflect the actual situation)
such a line would leave an almost equal number of Italians in Yugo-
slavia and of Slavs in Italy.
  With all due reservations as regards the information on which the
estimates of the French Experts were based, or the interpretation by
these Experts of the instructions given to them by the Council of For-
eign Ministers (London, 19th September, 1945), it is obvious that, as
a result of the creation of a "Free Territory of Trieste", the
ethnic



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FOREIGN RELATIONS, 19 4 6, VOLUME IV



balance between Italy and Yugoslavia, which the French Experts
were trying to establish has been radically modified.
  In fact, if the French line were adopted as the boundary, Venezia
Giulia would be split in such a way to leave, according to the 1921
census:
  a. About 10.000 Slavs in Italian territory;
  b. About 180.000 Italians (including those of Zara and the islands)
in Yugoslavia;
  c. 266.000 Italians and about 50,000 Slavs in the Free Territory of
Trieste.
  Thus, the creation of a Free Territory entirely carved out of the
territory which the French had intended to award to Italy, has
radically altered the balance between the number of Italians and Slavs
left outside their respective countries. 266.000 Italians-who through
being domiciled west of the French line, were to remain in Italy-
are instead severed from their country and included in the Free Ter-
ritory, while only about 50.000 Slavs-whom the French line had left
in Italy-are included in the Free Territory. In other words, while
the Italian element is burdened with a further heavy sacrifice, 50.000
Slavs-who, according to the principle of ethnic balance as followed
by the French line, should have remained in Italy-are now at least
given the advantage of becoming citizens of a Free Territory.
  Therefore, in order to re-establish the ethnic balance, the main
motive underlying the French line, it would be necessary for the
50.000 and more Slavs now passing from Italy to the Free Territory
to be balanced by an equal number of Italians withdrawn from Yugo-
slav sovereignty and becoming citizens of the Free Territory also.
This can be easily arranged by including in the Free Territory the
portion of western Istria south of Cittanova contained within the
British line.
  4. The creation of a Free Territory of Trieste was an expedient
devised by the Council of Foreign Ministers as a solution of an ex-
tremely difficult problem. It is now necessary to review the entire
problem of the frontiers in that area from this new angle. It was
decided not to leave Trieste to Italy, and, at the same time, in view of
its obviously Italian character, not to give it to Yugoslavia.  Now
there seems to be no reason why the same principle should not be ap-
plied to the Italians who constitute the vast majority of the popula-
tion of western Istria. In fact, in the area included within the "British
line" to the south of the "French line" (see map No. 4) there
live,
according to the 1921 census, 79.437 Italians and 15.595 Slavs (accord-
ing to the 1910 census, 66.071 Italians and 34.963 Slavs).



128


 

					
				
				


OBSERVATIONS ON DRAFT PEACE TREATIES



  5. Western Istria has been a part of Italy since 1919, but its in-
habitants were always a part of the Italian Nation. Their history
proves it beyond any possible doubt.
  Western Istria, as above defined, is so undeniably Italian that, if
we admit the principle of the Atlantic Charter, according to which no
territorial changes should be made "that do not accord with the freely
expressed wishes of the peoples concerned", the Italian majority in
this area would undoubtedly affirm its will to remain united to Italy.
  6. The inclusion of Pola and the island of Brioni within the Free
Territory of Trieste would, of course, entail the complete demilitarisa-
tion and neutralization of this naval base. This would be a substan-
tial contribution to the security both of Italy and Yugoslavia.
  7. The frontier proposed by the American Experts left to Italy the
coal mines of Arsa and the bauxite deposits of Istria in view of the
fact that there are abundant supplies of these minerals already avail-
able to Yugoslavia in her own territory. In order to strengthen the
economic vitality of the Free Territory of Trieste, its administration-
or whatever other authority may be designated for this purpose-
should be granted a 99-year lease of the coal and bauxite mines left
in the area ceded to Yugoslavia.
  8. Finally, if ethnic principles are to be adhered to, there is no
doubt that the island of Lussino, whose population is almost entirely
Italian, should likewise be included in the Free Territory. The line
proposed by President Wilson (1919) allotted Lussino to Italy.


Doc. No. 12 (G).
Memorandum on the Clause of the Draft Treaty Relating to Disputes
            on Boundary Demarcation (Art. 5, par. 3.)

                            ARTICLE 5
  Article 5 provides that all questions concerning Italy's new fron-
tiers (according to a United States proposal, this clause should also
apply to questions concerning the frontiers between the Free Territory
of Trieste and Italy or Yugoslavia) shall be referred to Boundary
Commissions composed of representatives of the Governments con-
cerned. In case of disagreement, the questions will be referred to
the four Ambassadors for final settlement by such methods as they
may determine, including, "where necessary", the appointment of
an impartial third Commission. ("Additional Commission" is the
term used in the United States proposal.)
  In view of the special character of the tasks entrusted to these Com-
missions and consequently, of the questions liable to cause disagree-



129


 

					
				
				


FOREIGN RELATIONS, 1946, VOLUME IV



ment in the Commissions themselves, it seems preferable to keep to the
plan for a superarbitrator ("impartial third Commissioner", as
in the
Draft, or "additional Commissioner", as in the United States proposal)
whenever such disputes are to be settled. This super-arbitrator should
be appointed by the Parties themselves. Only in the event of dis-
agreement between them he should be appointed by the four
Ambassadors.
  Article 5 states that the work of the Commissions shall be completed
"in any case within a period of six months".
  This time-limit seems too short in view of the complex nature of the
work to be done on the spot, and also in view of climatic conditions
in the mountains, which will limit the number of days available for
work on the spot.
  We, therefore, propose to delete the last words of the second para-
graph: "and in any case within a period of sixI months".


Doe. No. 12 bis (G).
Proposal To Amend the Provisions of the Draft Treaty Concerning
          Disputes on Boundary Demarcation (Art. 5)

                            ARTICLE 5
  "Any questions which the Commissions are unable to agree will be
referred to an impartial third Commissioner appointed by agreement
between the interested parties. Should the parties fail to agree on
this appointment the third Commissioner will be appointed by the
four Ambassadors acting as provided for in article 75."


Doe. No. 2 (P).
Memorandum on the Provisions of the Peace Treaty Dealing With
Archives Relating to the Territory Ceded to France in 1860 (Art. 7)

                            ARTICLE 7
  Article 7 of the Treaty specifies that:
  "The Italian Government undertakes to hand over to the French
Government all archives, historical or administrative, prior to 1860
and which concern the territory ceded to France under the Treaty of
March 24, 1860, and the convention of August 23, 1860."
  The reference made in this article to "historical", as distinct
from
"administrative" archives, is in contrast with the provisions of
the
Franco-Sardinian Convention signed on August 23, 1860, to the effect
that archives representing deeds to property, together with adminis-



130


 

					
				
				


OBSERVATIONS ON DRAFT PEACE TREATIES



trative, religious and legal instruments concerning Savoy and the
district of Nice held by the Sardinian Government would be handed
over to the French Government (art. 10).
  In point of fact, after the signature of the Convention, disagree-
ments arose as to the interpretation of this article, for France de-
manded that, among others, historical documents belonging to Savoy
(concerning also the Royal House of Italy) which had at different
periods been added to the national archives in Turin, be handed over.
  The contrary interpretation, which is that of the Italian Govern-
ment, is confirmed not only by the exact provisions of the Convention,
but by the customary practice followed in such matters in interna-
tional treaties. In this respect the Convention of 1860 is based on
the Austro-French and the Austro-Franco-Sardinian Treaties of
Zurich of November 10, 1859 in connection with the similar question
of Lombardian and Venetian archives. Normally, in case of ter-
ritorial cession the State making the cession hands over the sets of
administrative records, instruments in course of negotiation and deeds
recently concluded, to ensure continuity of administration in the dif-
ferent branches (legal, financial, ecclesiastic, military, etc.), but re-
tains the historical and political archives which are logically the
property of the State to which the ceded territory belonged.
  Thus France, after 1870, retained the archives of Alsace and Lor-
raine. The history of those provinces up to that date was French,
not Prussian, in the same way as the history of Savoy up to 1860 is
not part of that of France but of the Kingdom of Sardinia, and con-
sequently to Italy.
  However, to meet the wishes of France and as a friendly act, the
Italian Government has already declared its readiness to select the
documents which might be ceded without causing irreparable damage
to the national archives of Turin. A commission has recently been
appointed for the purpose. The Italian Government would be glad
if the work of this Commission could be taken over by a joint Franco-
Italian Commission.
  We would, therefore, ask for the deletion of article 7 and for the
question to be settled amicably by both Governments through the Joint
Commission established for that purpose.



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FOREIGN RELATIONS, 1946, VOLUME IV



Doe. No. 19 (E).
Memorandum on the Provision of the Peace Treaty Under Which the
  Italian Government Undertakes To Cooperate With the French Gov-
  ernment in the Establishment of a Railway Connection Between
  Briangon and Modane (Art. 8)

                           ARTICLE 8
  Under the second paragraph of Article 8, the Italian Government
undertakes to authorise, free of customs duty and inspection, passport
and other such formalities, the passenger and freight railway traffic
passing through Italian territory, on the connection to be established
between Modane and Briangon. There is reason to believe that this
clause of the draft Peace Treaty is intended to cover the transport of
passengers and luyggagre in sealed cars under escort over the Italian
section of this line, and to the transport of merchandise in sealed
trucks. It is, however, desirable that the Treaty should make pro-
visions for subsequent agreements between both Governments, in
order to determine between them the transit formalities, which should
be simplified as far as possible.
  Moreover the words "and other such formalities" should be deleted,
as the formalities in question should be determined by direct agreement
between the countries concerned. Lastly, we propose the insertion in
the Treaty of a clause corresponding to the second paragraph of
Article 2 for the Coni-Ventimiglia line, a section of which is situated
on French territory, and which may be compared with the Briangon-
Mlodane line. The clause to be added might read as follows: "The
same treatment shall be extended to Italian passenger and freight
traffic passing over the French section of the Coni-Ventimiglia line
from one point in Italy to another point in Italy, in either direction."


Doe. No. 15 (P).
Memorandum (Observations on Art. 10 of the Draft Peace Treaty
                           With Italy)
                           ARTICLE 10
  In its statement made in Paris on May 30th, 1946, to the Deputies
of the Ministers of Foreign Affairs, the Italian Government under-
took to study arrangements, which should be as comprehensive as
possible, for facilitating rail and road traffic, and also frontier transit,
in order to develop Italian means of communication between the North
and East Tyrol.



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OBSERVATIONS ON DRAFT PEACE TREATIES



  The Italian Government is therefore prepared to revive, extend and
complete the railway and customs agreements previously in force be-
tween Italy and Austria, which Austria herself allowed to lapse, after
1932, stating that, owing to the electrification of the Tauri line, there
was no further point in routing traffic over the Italian section of
Brenner-Fortezza-San Candido.
  Following the undertaking given, the Italian Government has al-
ready forwarded to the Austrian Government, through the Repre-
sentative of Italy in Vienna, a draft Railway Convention (Annex A)
providing that passenger and freight traffic from the other side of
the Brenner, routed to a destination beyond San Candido, or similar
traffic in the opposite direction, may be operated by Italian or Austrian
personnel and material. Passengers would be able to pass in transit
without presenting a passport, and freight would be subject to no
customs formalities. At the same time, the Austrian Government
has been informed that a senior Italian official is prepared to proceed
to Vienna for the final drafting of this agreement and in order to
submit similar proposals with regard to road traffic between the Bren-
ner and San Candido.
  It is, therefore, quite clear, not only that the Italian Government has
no objections to the tenor of Art. 10 of the Tireaty, but that it approves
this article, as a special provision, consonant with the whole series of
far more comprehensive arrangements, already in operation or about
to be put in operation to meet the requirements of the German-speak-
ing minorities in the Upper Adige and to establish relations between
Italy and Austria on a basis of constructive collaboration between the
two countries.
  In that same statement of Mlay 30th, 1946, the Italian Government
declared that it was firmly resolved that the Upper Adige should
become the best possible example of the way in which peaceful and
useful collaboration could be brought about between two racially
distinct groups, by giving an equitable and liberal solution for a
whole series of problems of long standing and by guaranteeing to
the German-speaking populations that their traditions and special
interests would be safeguarded. Thus, the Italian Government has
already provided for a bilingual system of education, the use of both
languages in government offices and documents and the names of
localities, and the reintroduction of the German form of recently
Italianized names. Pending the forth-coming free municipal elec-
tions, the Italian Government has appointed German-speaking mayors
and town councillors in all communes with a German majority. The
Italian Government has also decided to admit German-speaking em-



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FOREIGN RELATIONS, 19 4 6, VOLUME IV



ployees in government offices and has instituted special preparatory
courses for their benefit.
  As regards the problem of optants for German nationality, the
Italian Government has agreed in principle to revision of the 1939
options, including those who have in the interval formally acquired
German nationality. The text of the relevant law, already prepared
by the Government, is now undergoing final revision, with the col-
laboration of German-speaking elements, in order to facilitate the
recovery of Italian nationality in a spirit of far-reaching tolerance.
  In collaboration with the Tiroler Volkspartei which represents the
aspirations of the German-speaking population, the Italian Govern-
ment is preparing a bill, for submission to the Constituent Assembly,
granting the Upper Adige the most liberal form of administrative
autonomy, on the model of that recently granted to the Valley of
Aosta.
  All these arrangements, already made or in process of being made,
not only represent a political undertaking entered into by the Italian
Government in order to solve the special problem of the Upper
Adige-they also reflect the broader aspirations and views of the
Italian people on the general problem of the protection of racial
minorities which the territorial status quo in the Upper Adige and the
cessions suggested for other areas would leave on one side or the
other of the Italian frontiers. In others words, they correspond
to the ideal of protection of human rights which is entirely in the
tradition of our Risorgimento. This principle, forgotten by Fascism,
has now been revived by the new Italian democracy in a spirit of
reciprocity and will be faithfully observed by the Government of the
Republic for the defence both of the minorities under its own pro-
tection, and the Italian minorities which may be left outside its
frontiers.
  May I state once more that the Italian Government will base its
relations with the Austrian people on this special principle and on a
broader spirit of solidarity calculated to clear the way for more com-
prehensive economic agreements. This will be done even though we
still have a vivid recollection of the 10 mainly Austrian divisions
operating in Italy, and of the four Austrian divisions operating in
the Balkans and in the islands, and of the detachments of S.S. police,
which, from September 8, 1943 up to the end of the war put up a
bitter fight against the Italian regulars, the partisan troops and the
civil resistance forces, and so largely contributed to aggravate the
suffering and the sacrifices of a reborn Italy.



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                  Annex A to Document No. 15 (P)
                           ARTICLE 1
 The Italian Government shall permit, through facilities provided
by the following articles, the direct transit of passenger and goods
traffic along the Brenner-Fortezza-San Candido line, proceeding from
beyond the Brenner and bound for beyond San Candido and vice
versa.
  The Italian State Railways shall undertake to convoy this traffic by
their own means.
  In certain particular cases, on the basis of particular agreements,
which will be concluded between the two railway Administrations
such trains may be manned by Austrian state railway personnel and
composed of Austrian rolling stock.

                            ARTICLE 2
  Passenger or goods traffic in transit along the Brenner-Fortezza-
San Candido line proceeding from Austrian stations beyond the
Brenner and bound for Austrian stations beyond San Candido, and
vice versa, shall be effected with transport documents (tickets and
way-bills) of the Austrian State and be subject to Austrian internal
regulations and tariffs.
  The rules and tariffs for international services in force in Austria
will be applied to traffic proceeding from abroad and bound for Aus-
tria, and vice versa, along the Brenner-Fortezza-San Candido line.

                            ARTICLE 3
  The Austrian railways shall collect, to their exclusive benefit and
according to their own tariffs, the receipts from the passenger, baggage
and goods traffic, in transit, along the Brenner-Fortezza-San Candido
line, by all conveyance provided under Article 2.
  The Austrian railways shall undertake to pay the Italian railways,
by way of reimbursement for the transit services connected with the
above-mentioned traffic, a sum which shall be fixed, by mutual agree-
ment, by the two administrations and which shall vary according to
whether the rolling stock and the personnel are provided by the Aus-
trian railways, or the Italian railways, who are the owners of the line.
  This sum shall be proportional to the actual cost of the services
rendered.
                            ARTICLE 4
  The Italian Customs Administration and Police Authorities shall
exempt the passengers and goods in transit on the Brenner-Fortezza-
San Candido line of all frontier formalities.



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FOREIGN RELATIONS, 19 4 6, VOLUME IV



  For this purpose, the carriages and rail-cars shall cross the Italian
territory, with all doors closed and under the escort of the Italian police
and frontier guards.
  Austrian personnel driving and accompanying trains, shall be issued
with appropriate passes. Passengers in transit by those means on the
Brenner-Fortezza-San Candido line, shall be exempt from presenting
their passports or other documents.
  While on Italian territory, they will be forbidden to leave the car-
riages or rail-cars or to commit acts contrary to Italian laws concerning
customs, police, etc.
  Goods vans in transit will be provided with Austrian customs seals.
In the absence of these, the Italian customs undertake to apply their
own customs seals, free of charge.
  Transit of animals, parts of animals or similar types of traffic are
allowed to cross without any inspection by the Italian veterinary serv-
ice. Such traffic shall, however, be accompanied by certificates, de-
claring that the animals proceed from territories free from infectious
diseases and that the animal parts or similar items come from healthy
animals.
                            ARTICLE 5
  The Italian Customs authorities shall authorize the transit by the
S. Candido-Fortezza-Brennero highway of goods transported directly
from one point of the frontier to another by motor-lorries registered
in Austria.
  The motor-lorries shall in such case enjoy all the Customs privileges
applicable to the temporary importation of motor vehicles and, in
particular, shall be exempt from the circulation tax.
  No special deposit shall be required for the goods, provided that this
is guaranteed by transport concerns or other companies which are
domiciled or have chosen their legal domicile in Italy.
  The Italian Customs authorities may also dispense with this guaran-
tee on goods covered by circulation permits issued by the Austrian
Customs authorities proving that the carrier is under an obligation
to bring the goods back into Austrian territory.
  The Italian and Austrian Customs authorities shall lend one another
assistance in tracing offenders and recovering Customs duties in cases
of abuse.
                            ARmIxcL 6
  Detailed rules relating to the application of this convention shall be
established, by mutual agreement, between the Administrations (rail-
ways, customs, etc.) of the two countries.


 

					
				
				


OBSERVATION'S ON DRAFT PEACE TREATIES



Doc. No. 12 (P).
JlMemorandurm Concerning Fishing Rights in the Adriatic and Ionian
                         Seas (Art. 11)

                            ARTICLE 11
  The seriousness of the food situation in Italy, which is only mitigated
by the very great efforts made by U.N.R.R.A. and the United Nations
in general, makes it essential that fishing in the Adriatic should be re-
sumed at the earliest possible moment, particularly in view of the fact
that this industry provided Italy with more than 140.000 tons of fish
per annum before the war.
  On this matter the draft Peace Treaty makes provision only for the
question of fishing in the waters of Pelagosa and round the neighbour-
ing islands, without touching on the very much greater needs of Italian
fishing in general and also the food requirements of the peninsula.
  The Peace Treaty should, therefore, stipulate an obligation for Italy
and Yugoslavia to conclude, within the six months following the entry
into force of the Peace Treaty, a special convention governing the exer-
cise of fishing rights in their respective territorial waters, including
the Island of Pelagosa, in accordance with the principles which have in
the past applied to fishery conventions between Italy and the Austro--
Hlungarian Empire, and later between Italy and Yugoslavia.
  For the same reasons the Treaty should also make it an obligation for
Italy and Greece, on the one hand, and Italy and Albania, on the other
hand, to conclude, within six months from the entry into force of the
Peace Treaty, special conventions to regulate the exercise of fishing
rights in their respective territorial waters.


Doe. No. 13 (P).
Memorandwm on the Clauses of the Draft Peace Treaty ConcerningZ
         Territory To Be Ceded to Yugoslavia (Art. 11)

                            ARTICLE 11
  The text of Article 11 of the Draft Peace Treaty with Italy should
be considered in connection with the modification which have been
requested in respect of Articles 3 and 16 (See Doc. Nos 10 (P) and
12 (P).



219-115-70-10



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FOREIGN RELATIONS, 19 4 6, VOLUME IV



Doc. No. 35 (G).
Memyorandu'm on the Clauses of the Draft Peace Treaty Concerning
                    Fiume and Zara (Art. 11)

                           ARTICLE 11
  Included in the territory which, under the terms of article 11 of
the draft Peace Treaty, should be ceded to Yugoslavia by Italy is the
city of Fiume, together with the surrounding area.
  The future disposal of this city calls for rather special consideration.
  From the time of its incorporation into Austria (1471) until the
collapse of the Austro-Hungarian monarchy, the city of Fiume has
enjoyed a special autonomous status. In 1779, Fiume was solemnly
declared a "corpus separatum" annexed to the Hungarian Crown, and
it has always enjoyed this special juridical position. The reason for
this is to be found in the Italian character of the city, which has al-
ways been acknowledged, and which has always been resolutely de-
fended, as regards both Hungary and Croatia.
  After the collapse of the Austro-Hungarian Monarchy, the Italo-
Yugoslav Treaty signed at Rapallo on 12th November, 1920, recog-
nised the independent state of Fiume, which was effectively organised
on democratic lines with a Constitution adopted by a Constituent As-
sembly freely elected by the people. The independent State of Fiume
was also recognised by the Governments of the other Powers.
  The two Governments which signed the Treaty of Rapallo under-
took "to respect in perpetuity" the independence and liberty of
the
State of Fiume (Art. 4).
  After the events which followed the conclusion of the Treaty of
Rapallo, the solution which would now be most consonant with justice
and the wishes of the population of Fiume, would be to re-establish
the Free State of Fiume as it was recognised by the Treaty of Rapallo,
as the latter was the outcome of free negotiation between the two
countries directly concerned.
  It would, in any case, be essential to provide certain guarantees to
ensure that, in becoming a part of Yugoslavia, the city of Fiume
should be accorded a statute in harmony with its special circumstances
and its traditions.
  To this end the Treaty should provide that Fiuime, as well as the
territory which formed part of the Free State of Fiume, under the
terms of the Treaty of Rapallo, should be granted legislative, ad-
ministrative and judicial autonomy.
  The peace Treaty must also provide that the statute of Fiume should
be guaranteed by U.N.O.



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OBSERVATIONS ON DRAFT PEACE TREATIES



  Certain guarantees for administrative autonomy should also be
stipulated in the Peace Treaty for the city of Zara and for other
communities in Istria where the majority of the inhabitants are
Italian-speaking.

Doc. No. 3 (P).
Memorandum on the Clauses of the Draft Peace Treaty Concerning
                 the Dodecanese (Art. 12 and 13)

                        ARTICLES 12 AND 13
  Article 12 provides for the cession to Greece in full sovereignty of
the Italian islands in the Aegean Sea, but makes no mention of the
Italian nationals who live there. Their fate would, therefore, seem
to be decided on the basis of the general provisions of Article 13, in
accordance with which Italian nationals domiciled in any territory
ceded by Italy will become nationals of the State to which the territory
in question is ceded, unless within a period of one year they opt for
Italian nationality. In the latter event, the State which has acquired
the territory may compel persons who have exercised their right of
option to transfer their domicile to Italy within one year.
  Italy considers that it would be particularly unjust to apply this
treatment to the Italian community of the Dodecanese which, by its
efforts, has contributed so much to the prosperity of these Islands.
  The work done by Italy in Rhodes has been demonstrated in a pub-
lication distributed to all delegations. It describes in detail the great
strides made in economic activities, capital investments in public
works, public welfare, agriculture, the tourist industry, etc. thanks to
Italians. The whole world is aware of the contribution made by
Italian archaeologists in the Dodecanese to world culture by their ex-
cavations and their publications. All this proves that the Italian
Government as well as the Italian community, far from dreaming of
selfish exploitation, have only had in mind the welfare of the local
inhabitants.
  Democratic Italy, which condemns and deplores the aggression com-
mitted against Greece, is convinced that the cession of the Aegean
islands of whidh she has long been an advocate, will promote the re-
establishment of cordial co-operation between the two countries. It
is in this spirit that she asks that the Italians, to whom the prosperity
of the Dodecanese is so largely due, should not be deprived of the right
of continued residence and, consequently, of the property, rights and
interests which they have hitherto enjoyed as the results of their la-
bours; that they should be allowed to continue to make use of their



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FOREIGN RELATIONS, 1946, VOLUME IV



cultural institutions, to practice their religion, etc. freely, and, finally,
to continue their professional and economic activities.


Doe. No. 3 bis (P).
                   iDraft Amendment Proposed

                           ARTICLE 12
  Add the following two paragraphs to the text:
  "Persons belonging to the Italian community in the Dodecanese
will be entitled to retain their residence in the Islands, together with
their property, rights and interests, and to continue their professional
and economic activities there.
  "They will also be entitled to retain their own cultural and educa-
tional institutions, and to practice their religion without hindrance."


Doe. No. 15 (G).
Aenowrandwm Concerning the Clauses of the Peace Treaty on Nation-
  ality and the Legal Position of Persons Living in Ceded Territory

                           ARTICLE 13
  1. Under paragraph 1, Italian citizens who were domiciled on 10
June, 1940, in territory to be transferred by Italy shall (except in
case of option) become nationals of the State to wvhich the territory is
transferred with full civil and political rights, in accordance with
legislation to be introduced to that effect by that State within three
months of the coming into force of the present Treaty.
  The latter provision permits of an interpretation which could cer-
tainly not have been intended by those who drafted it, and on the
strength of which the rights of the new citizens might be more limited
than the rights enjoyed by other citizens, if the special legislation
which is envisaged should so provide.
  To avoid any misunderstanding it would be necessary to omit the
latter provision, and to lay down that the persons aforementioned
should enjoy the same civil and political rights as are provided for
other nationals of the State.
  2. Paragraph 2 provides a right to opt for Italian nationality in
ceded territory. If the Italian proposals in regard to territorial
clauses should not be accepted, the territory which Italy would lose
in the East would be partly ceded to Yugoslavia and partly made
into an autonomous State (The Free Territory of Trieste). There-
fore, considering the close ties of kinship, commerce, etc. which have



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OBSERVATIONS ON DRAFT PEACE TREATIES



always existed between Trieste and the other parts of Istria, the
Italian delegation requests that Italian nationals in the ceded terri-
tories should be granted the right to opt for citizenship of the Free
Territory of Trieste.
  Incidentally, the conditions governing the exercise of the right of
option, as also the supervision of those conditions, should not be re-
stricted to the State to which the territory is ceded. It is, therefore,
suggested that provision should be made for the necessary guarantees
in accordance with the principles which have been adopted on other oc-
casions (e.g. the options in Upper Silesia, the German-Polish Con-
vention of Geneva of 15th May, 1922).
  3. In addition to the above rule, it is essential that Article 13 should
make provision to guarantee to Italians domiciled in ceded territory
who become nationals of the Successor State, full equality in law
and in fact with other nationals of that State, as well as the right to
retain their own cultural and educational institutions and to make
free use of their language.


Doe. No. 15 bis (G).
                      Proposed Amendment8

                            ARTICLE 13
  1. Italian citizens who were domiciled on June 10, 1940 in territory
transferred by Italy to another State under the present Treaty shall,
except as provided in the following paragraphs, become citizens with
full civil and political rights of the State to which the territory is
transferred and shall enjoy all civil and political rights enjoyed by
other nationals of the same state. Upon becoming citizens of the
State concerned they shall lose their Italian citizenship.
  2. All persons mentioned in paragraph 1 over the age of eighteen
years (or married persons whether under or over that age) whose
customary language is Italian shall be entitled to opt for Italian
citizenship within a period of one year from the coming into force of
the present Treaty. Any person so opting shall retain Italian cit-
izenship and shall not be considered to have acquired the citizenship
of the State to which the territory is transferred.
  The option of the husband shall not constitute an option on the
part of the wife. Option on the part of the father, or, if the father
is not alive, on the part of the mother, shall, however, automatically
include all unmarried children under the age of eighteen years.
  3. Persons coming under the provisions of paragraph 2 who were
domiciled on June 10, 1940 in territory transferred by Italy to Yugo-



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FOREIGN RELATIONS, 19 4 6, VOLUMEr IV



slavia under the present Treaty, shall have the right to opt for citizen-
ship of the Free Territory of Trieste, under the conditions laid down
in paragraph 2.
  4. Conditions governing the exercise of the right of option laid
down in paragraphs 2 and 3 and the settlement of any disputes which
may arise in this connection shall be the subject of an agreement to
be concluded within three months from the date of the coming into
force of the present Treaty under the auspices of the four
Ambassadors.
  5. The State to which the territory is transferred may require those
who take advantage of the option to move to Italy within a year fromn
the date when the option was exercised.
  U.S. proposal:
  6. The State to which the territory is transferred shall take all
measures necessary to secure to all persons within the territory, with-
out distinction as to race, sex, language or religion, the enjoyment of
human rights and of the fundamental freedoms, including freedom
of expression, of press and publication, of religious worship, of
political opinion and of public meeting.
  7. The State to which the territory is ceded shall take all necessary
measures to ensure that the Italian speaking nationals in its territory
shall receive the same treatment and the same guarantees in law and
in fact as are enjoyed by other nationals, including the right to estab-
lish, manage, and control at their own expense, charitable, religious
or social institutions, schools or other educational establishments,
freely to use their own language, to practice their religion therein.
No restriction shall be imposed on the free use by the said nationals
of their own language whether in private or business relations in
matters concerning religion in the press or in publications of any
kind or in public meetings in the law courts.
  In regard to public education, the State, to which the territory is
ceded shall grant the communes where a considerable number of the
inhabitants are Italian speaking the necessary facilities to ensure
that in the elementary schools the children of such nationals shall be
taught in their own language.
  All these arrangements, completed or in process of completion, con-
stitute not merely the political undertaking given by the Italian
Government to solve the special problem of the Upper Adige, but
they also reflect the wider hopes and more generous views of the
Italian people on the general problem of the protection of the racial
minorities which, as a result of the territorial status quo in the ipper
Adige and the proposed amputations to be made in other sectors,
will be left on one or other side of the frontiers of the Peninsula.



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OBSERVATIONS ON DRAFT PEACE TREATIES



They will thus correspond to the ideal of protection of human rights
which is entirely consistent with the traditions of our Risorgimento..
This ideal, forgotten by Fascism, has now been revived by the new
Italian democracy in a spirit of reciprocity which the Government
of the Republic will faithfully observe in its dealings with minorities
and in the protection and defence of such Italian minorities as may
be left on the other side of the frontier.
  It should once more be stated that the Italian Government intends-
to conduct its relations with the Austrian people according to this
special principle and in a general spirit of solidarity calculated to
pave the way for far-reaching economic agreements. And this, not-
withstanding the fact that, from September 1943 to the last days
of the war, ten divisions, mainly composed of Austrians, operating
in Italy, four Austrian divisions operating in the Balkans and in the
isles, and S.S. police detachments put up a fierce fight against the
Italian regular, partisan and civilian resistance forces, thereby largely
adding to the sufferings and sacrifices of a reborn Italy.


Doc. No. 28 (G).
Memorandum on the Clauses of the Draft Treaty Concerning the
     Safeguard of Human Rights and Fundamental Freedoms

                            ARTICLE 14
  The Italian Delegation is of opinion that the provisions of article
14 ought to be suppressed on the following grounds:
  1. Respect of human rights and fundamental freedoms has always
inspired the legislation of democratic Italy; it can even be said that,
before and after the fascist period, it was the foundation of all legisla-
tion. In the new Constitution that the Constituent Assembly is work-
ing on, all these fundamental freedoms and rights will be solemnly
confirmed by rules having the value of proper constitutional law. It
therefore seems superfluous that an international obligation, such as
the one imposed on Italy by this clause, should be inserted in the
Treaty.
  2. The disposition of article 14 as now worded can be interpreted
in widely different ways. It might also give rise to serious incon-
veniences. The mere fact that respect of such principles would take,
according to article 14 the form of an obligation on Italy's part with
each single Allied or Associated signatory Power, might lead any of
these Powers to have recourse to this article in order to intervene in
internal Italian matters, at the risk of endangering the good feelings
among nations.



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FOREIGN RELATIONS, 19 4 6, VOLUME IV



  3. The Charter of the United Nations establishes among its aims
respect and universal observance of human rights and fundamental
freedoms for all without distinction as to race, sex, language or
religion. One may expect that a general agreement on this matter
will be reached under the auspices of the United Nations. Following
her admission to the United Nations, Italy will participate in any
such a general agreement. Furthermore, Italy declares that she is
even now ready to pledge herself in this matter to any obligation which
the other members of the United Nations will take. Italy's admission
to the United Nations being provided for in the very Preamble of the
Treaty, it would seem advisable to avoid a clause pre-establishing a
juridical situation whereby Italy-once a member of the United Na-
tions-would find herself in this matter in a position different from
that of other members. Such a situation would be inconsistent with
-the fundamental principle of sovereign equality among all members
of the United Nations.
  In short, the insertion in the Treaty of a special clause such as the
one contained in article 14 would not be justified unless its validity
were terminated at the time when Italy joins the United Nations.


TDoc. No. 8 (P).
MIemorandum on the Clauses of the Draft Treaty Concerning Italy's
  Obligation To Recognize the Peace Treaties To Be Signed With
  Other Countries (Art. 15)
                            ARTICLE 15
  Article 15 establishes Italy's obligation to recognize the full force
,of the peace treaties to be signed with certain other States.
  1. The first part of the article states that Italy undertakes to recog-
nize the full force of the treaties with Rumania, Bulgaria, Hungary
.and Finland.
  Such a clause is indeed a strange one. It implies in fact the obliga-
tion to underwrite now, without knowing what their content will be,
-treaties which still remain to be stipulated, to whose drafting Italy
is not a party, and which on the other hand may have a bearing on
the considerable Italian interests in those countries.
  2. The second part of the article sets down the same Italian obliga-
tion with regard to "other agreements and arrangements which have
been or will be reached by Allied and Associated Powers in respect of
Austria, Germany and Japan for the restoration of Peace." In this
case the obligation appears even more serious, as it means that Italy
must underwrite now all future enactments with regard to countries
against which she has been at war. It should be especially noted that:



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OBSERVATIONS ON DRAFT PEACE TREATIES



  a. With regard to Germany and Japan, such a clause appears con-
trary to all principles of law, inasmuch as a state of war between Italy
on the one side and Germany and Japan on the other was established
by formal and direct declarations. The ensuing juridical situation
cannot be brought to a close except by peace treaties in which Italy
takes direct part. On the other hand, the fact that the Allied and
Associated Powers have recognized Italy as a co-belligerent against
Germany and Japan implies in itself Italy's right to take a direct part
in the peace treaties with those countries. Therefore nothing can
justify a clause in her own peace treaty which deprives Italy of such
a right.
  Consideration should furthermore be given to the claims which Italy
must advance against Germany and Japan. Italy was engaged in war
against Germany during eighteen months. Her losses in life during
that time surpass those of the preceding war years. The results of
Germany's occupation of a major portion of the Italian territory and
of the long war waged by Italy against Germany are well known.
Germany made the Italian people pay heavily for having been the first
to rebel against Fascism and the Axis war. Long years must pass
before such widespread damage can be repaired and before compensa-
tion can be made for the painful losses suffered by the Italian Nation
in its war against Germany.
  b. Regarding Austria, Italy as a belligerent against Germany
of which Austria was an integral part can legitimately claim the
rights that such a status bestows on her when the time comes to make
pearce with that country. It should furthermore be remembered, with
regard to Austria, that Italian interests in that bordering country
are so varied and complex that, for this consideration as well, Italy
should be admitted to participate directly in the conclusion of the
treaties concerning that country.
  3. It should be noted, finally, that the Conference has recently ad-
mitted a certain number of States-some of which were never at war
with Italy-to present their viewpoint on the Italian Treaty. Among
them is Austria, which has indeed been at war with Italy, but on the
German side. The Italian people fail to understand why they should
be placed in a less favourable position than those States, when the
time comes to discuss the Peace Treaties with countries such as Ger-
many, Austria and Japan against whom Italy has been at war.
  4. In view of the above, the Italian Delegation is of the opinion that
Article 15 or, at least, that part of the article which concerns agree-
ments bearing on Germany, Austria and Japan should be suppressed.
  Subordinately, the Italian Delegation asks that the following sen-
tence be added to Article 15: "When the time comes to conclude an



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FOREIGN RELATIONS, 19 4 6, VOLUME IV



accord with Austria, Germany and Japan, Italy will be admitted to
defend the interests and to claim the rights resulting from her status
of belligerent."

Doe. No. 4 (P).
Aemnwrandumr on the Clauses of the Draft Peace Treaty Concerning
              the Italian Territories in Africa (Art. 17)

  Italy believes that she has sufficiently stressed the importance she
attaches to the problem of her African territories through the political
and technical documents submitted to the Nations taking part in the
Conference.
  The Italian Government has already stated that it adheres to the
principles of the San Francisco Charter for the administration of
territories considered up to now colonial, and has recalled the long
record of sympathetic understanding of the natives' problems which
stands behind the policy of democratic Italy in the past, as well as the
studies carried out by Italian scientists on the subject.
  In particular, Italy envisages in a most friendly spirit her relations
with the Arab countries and is prepared to consider her African ter-
ritories a field for collaboration with all local inhabitants. Nor should
one forget that many tens of thousands of Italians have long since
sunk their roots there, becoming part of the population. They are
naturally the first to want a most cordial understanding with the other
inhabitants to whom they are bound by the common interests of the
country.
  It would therefore have been possible to arrive at an equitable solu-
tion of this problem along the lines of the proposal examined and
favourably received by certain members of the Council of Foreign
Ministers in their meeting of May 10, 1946, namely for the United
Nations to entrust Italy with a mandate over these territories. In its
present reading, Article 17 of the Draft Peace Treaty postpones in-
stead by one year the final decision on the Italian territories in Africa
-following the proposal of the American Secretary of State to the
Council of Foreign Ministers.
  The Italian Government fully realizing the spirit governing this
postponement proposal, has the following remarks to make on the
formulation of Article 17:
  1. The present position, both de jure and de facto, of Libya,
Eritrea and Somalia is still that of territories under Italian sover-
eignty and as such internationally recognized. These territories are
under British military occupation (for the major part) and under
French military occupation with regard solely to southern Libya.



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OBSERVATIONS ON DRAFT PEACE TREATIES



  Under such circumstances, Article 17, as it stands adds to the post-
ponement clause, two very serious conditions:
  a. Italy must renounce her sovereignty now, before any decision is
taken;
  b. Italy must accept for one more year British military administra-
-tion (and French for a small part).
  In other words Article 17, as it now reads, imposes on Italy a re-
nouncement to the only ties still binding her both de jure and de facto
to her African territories. It is thus no longer a matter of simple post-
ponement as proposed at first, but of a formula which implies a de-
cision already taken against Italian interests.
  2. This surrender of sovereignty has no juridical justification. If
Italy's sovereignty is cancelled by treaty, through the formula of
Article 17 (first part), these territories (Libya, Eritrea and Somalia-)
become, according to international law, 'res nullius". Such a jurid-
ical situation is contrary to Italy's interests as she would thus see all
her rights voided, but it would likewise be extremely prejudicial to
the general interests of the international community, and this in a
part of the world so politically neuralgic as the Middle East. What
would be the advantage of such a voiding of Italian sovereignty if
the result is merely to increase the instability of the Middle East?
  3. The necessity has been mentioned for Italy to renounce before-
hand her sovereignty in order that she may be later given the admin-
istration in trusteeship of her African territories. But in this case
'Italian sovereignty should cease at the very moment when the United
Nations approve the trusteeship so that no solution [dissolution?] of
continuity takes place between Italian sovereignty and the new juridi-
cal situation under the United Nations.
  4. It should be added that even though refugees now living in Italy
at public expense or in Rhodesian and Kenya camps are not permitted
to return home, two points can still be established beyond doubt. One
juridical: Italy's sovereignty; the other factual; the presence of
'Italians in these territories. Is it fair to ask Italy to sign away her
sovereignty, which constitutes the last remaining link with the Italians
in Africa whose labours through dozens of years have totally trans-
formed Libya, Eritrea and Somalia?
  5. Concerning the provisional administration of these territories,
it should be remarked that in occupied territories it is customary to
maintain local administration under military control of the occupying
Power. But in Italy's African territories (Libya, Eritrea and So-
malia) British Military Administration has completely taken the place
of Italian administration.



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148



FOREIGN RELATIONS, 1946, VOLUME IV



  And even when Italians (mostly technicians) are to be found in
British offices, they hold only minor positions, and never "jure
proprio" (namely not as employees of the previous Italian Adminis-
tration) but are considered merely experts attached to the British
Military Administration.
  Up to now this situation, contrary to the "droit de guerre" has
been
merely a de facto one, prolonged, in spite of Italian reservation, even
after the end of hostilities.
  The clause, now inserted in Article 17, reading "the said possessions
shall continue under their present administration" would have two
consequences: first, it would give juridical recognition to the present
de facto situation; second, it would prolong it, under the new form,
for one year.
  Now that the extension of the occupation in Libya, Eritrea and So-
malia is being sanctioned by treaty, the Italian Government asks that
the administration of these territories shall be submitted to the normal
rules of international law under the control of the military occupa-
tional Authorities.
  In the Attached Doc. 4 bis (P) will be found the text of the pro-
posed amendments to Article 17.


Doe. No. 4 bis (P).
                      Amendment Proposed

                            ARTICLE 17
  The final disposal of Italy's territorial possessions in Africa, namely
Libya, Eritrea and Italian Somaliland, shall be determined jointly by
the Governments of the U.S.S.R., U.S.A., U.K. and France, according
to the principles laid down in the San Francisco Charter and taking
into account Italian interests in said territories, withbin one year of the
coming into force of the present Treaty.
  Pending their final disposal, the said possessions shall continue under
their present provisional administration.
  However, a fair share of this administration shall be entrusted to
Italian officials, under control of the military occupation authorities,
according to international law.
  Said provisional administration shall continue to apply the laws in
force in these territories at the moment of their occupation.


 

					
				
				


OBSERVATIONS ON DRAFT PEACE TREATIES



Doc. No. 7 (P).
Memorandumr on the, Clauses of the Draft Peace Treaty Concerning
                       Albania (Art. 21-26)

                          ARTICLES 21-26
  The Italian Government recognizes and undertakes to respect with-
out reservation the full sovereignty and independence of Albania.
  New Italy condemns without exception all violations committed by
the Fascist Government against those democratic principles on which
her institutions are now based. Italy has the strongest desire that
her relations with Albania may again become cordial and trustful.
  It is in this spirit that the Italian Government approves the gen-
eral lines of the articles of the draft Treaty concerning Albania. The
amendments which the Italian Government proposes in respect to
certain clauses of these articles are based, in the first place, on the
consideration that, thanks to Italian labour and capital, numerous
public works of considerable import have enriched the Albanian ter-
ritory. It would therefore be fair and equitable that due account
should be taken of them. In the second place the Italian Govern-
ment feels that the rights of Italian subjects in Albania should not be
deprived of the protection that international rules have always recog-
nized in similar cases.
  Upon detailed examination of the articles, the following remarks
can be made:
  ART. 21.-Accepted.
  ART. 22.-Accepted.
  ART. 23.-By this article Italy is asked formally to renounce in
favour of Albania all property, rights, interests and advantages of
all kinds acquired by the Italian State whether before or after 1939.
In this connection the following considerations are submitted:
  1. The draft of the Treaty in the case of this article, as in the case
of others, places on the same footing the rights acquired by Italy in
Albania before and after 1939. The Italian Government wishes to
make the preliminary remark that such an approach appears inspired
by the principle that all activity by Italy in Albania from 1925 onward
was directed against the interests of that country. This principle
does not tally with the truth either from an historical point of view
or in relation to actual facts. It may be recalled in this connection,
that Italian activity in Albania, in the economic and banking field,
after 1925, followed closely the recommendations made by the League
of Nations (as shown in the book "Italy and Albania").
  2. On the other hand, the Draft omits to take into consideration the
value of the imposing public works carried out by Italy and the equip-



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FOREIGN RELATIONS, 19 4 6, VOLUME IV



ment she has installed in Albania at the cost of heavy economic sacri-
fice, all of which would automatically become the property of Albania
under the title of State-owned property. Italy's contribution to the
development of Albania far exceeds any figure that Albania can rea-
sonably claim as reparation. The Italian Government has already
submitted complete documentary evidence on this contribution.
  In the present form, Article 23 might be construed to mean that the
renunciation Italy is now called to make would not even be set against
eventual Albanian claims toward Italy. In fact, in that section of
the Draft which envisages the possibility of granting reparations to
Albania (Art. 64-Note) no reference is made to Article 23. It fol-
lows that, should reparations be granted, they might be considered as
due over and above the renunciation just mentioned.
  The Italian Government is of the opinion that these provisions, in
their present form, are inconsistent with the general principles of in-
ternational law and with the practice followed in previous Peace
Treaties. The Italian Government therefore suggests that Art. 23
should be amended so that the value of property, rights, interests, etc.,
which Albania is to receive, is credited to Italy and that this credit is
balanced against Albania's claims for reparation when that question
comes up for settlement.
  With regard to the controversies which might possibly arise, see
considerations made below in connection with Article 24.
  ART. 24.-The first part of Article 24 provides that Italian nationals
in Albania will enjoy the same juridical status as other foreign na-
tionals. This part can give rise to no objections.
  The second part, instead, implies Italy's acceptance of all measures
cancelling or modifying concessions or special rights granted to Italian
nationals which Albania may take within a year from the coming into
force of the Treaty.
  These provisions are contrary to the principles which should regu-
late relations among Nations. Indeed, it appears hardly in keeping
with the principles of law and equity to oblige one of the contracting
parties to accept in advance the interpretation and the application
given to a treaty by the other party.
  The Italian Government considers therefore that the second part of
Article 24 relating to these provisions should be suppressed. With
regard to the right accorded to Albania to annul or modify the con-
cessions or rights granted to Italian nationals, it would appear neces-
sary that:
  a. The right to revise or cancel concession or special rights should
be limited to those granted to Italian nationals after April 8, 1939;
and that;



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OBSERVATIONS ON DRAFT PEACE TREATIES



  b. The benefit of an equitable compensation should be recognised in
favour of those persons whose interests are affected; and that likewise
the Treaty should establish guarantees to be accorded to the above
persons, such as recourse to the Four Ambassadors as envisaged in
Article 75.
  ART. 25.-The provisions of this article can entail extremely serious
consequences. The agreements made between the Italian and Al-
banian Authorities after 1939 have given birth to numerous transac-
tions and to manifold rights. Should the above-mentioned agree--
ments be considered null and void, the corresponding rights and trans--
actions would also lose all juridical foundation. The result would be
a series of controversies between private individuals. Since, for the.
purpose of the Treaty, it is sufficient that the above-mentioned agree-
ments should cease to have effect in the future, and since, moreover,
the Treaty already establishes the renunciations to all rights which
might derive from these agreements, the Italian Government believes
that the words "are null and void" could be substituted with the
words
"have ceased to have effect".
  ART. 26.-In the view of the Italian Government, the provision of
Article 26 (as already remarked with regard to similar clauses con-
tained in Art. 24) is contrary to the principles which should inspire
relations between countries. The obligation imposed upon one party to
accept in advance the interpretation and the application given to a
treaty by the other party, does not correspond to the principles of jus-
tice. This is all the more serious because, according to Article 26,
Albania is under no obligation to answer to the other contracting par-
ties for the execution and interpretation of the treaty. The Italian
Government believes that Article 26 should be suppressed.

Doe. No. 7 bis (P).
                      Proposed Amendmvents

                            ARTicLE 23
  1. Italy renounces all claims to special interests or influence in
Albania.
  2. Albania will receive all property owned by the Italian State in
Albanian territory (apart from normal diplomatic and consular
premises) as well as all rights and interests of the Italian State in
Albania.
  3. The value of the assets described in para. 2 shall be credited to
Italy.



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FOREIGN RELATIONS, 19 4 6, VOLUME IV



  4. Any controversy arising from the interpretation and execution
of this article shall be referred to the four Ambassadors acting as
provided under Article 75 of the present Treaty.

                           ARTICLE 24
  Italian nationals in Albania will enjoy the same juridical status as
other foreign nationals, but Albania will have the right to annul or
modify, against adequate compensation, concessions or special rights
granted by the Italian Government to Italian nationals after April 8,
1939, provided such measures are taken within one year from the
coming into force of the present Treaty. Any controversy concern-
ing said measures shall be referred to the four Ambassadors acting as
established in Article 75 of the present Treaty.

                            ARTICLE 25
  Italy recognises that all agreements and arrangements made be-
tween Italy and Albania from April 1939, to September 1943 are null
and void as from the latter date.
                           ARTICLE 26
  Should be suppressed.

Doe. No. 5 (P).
Menoranduwm on the Clauses of the Draft Peace Treaty Concerning
                      Ethiopia (Art. 27-31)

                        ARTIcLEis] 27-31
  The Italian Government agrees without reservations to recognize
the full sovereignty and independence of the State of Ethiopia and
is prepared to undertake to respect the same.
  New Italy condemns without exception all violations perpetrated
by the fascist Government against those democratic principles which
now form the keystone of her own institutions, and expresses a firm
desire to see her relations with the Ethiopian Empire become again
cordial and trustful.
  In this spirit, the Italian Government approves the general lines of
the articles of the Draft Peace Treaty concerning Ethiopia. The
amendments which the Italian Government proposes in respect to
certain clauses of these articles are based, in the first place, on the
consideration-indeed undeniably vouched for by any number of un-
biassed witnesses-that Italian capital and labour have enriched Ethi-
opian territory with public works of outstanding value, a fact which it
is only fair and just to take into account.



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OBSERVATIONS ON DRAFT PEACE TREATIES



  Secondly, the rights which Italian nationals have acquired in Ethi-
opia during Italian sovereignty must not be deprived of the protection
which international law provides in such cases.
  Upon detailed examination of these articles, the following remarks
can be made:
  Art. 27.-Accepted.
  Art. 28.-Italy renounces in favour of Ethiopia all property, rights,
interests and advantages of all kinds acquired at any time in Ethiopia
by the Italian State.
  No remarks on principle. However:
  1. It should be observed that the Draft omits to take into considera-
tion the imposing value of the public works built by Italy and of the
equipment she has installed in Ethiopia at the cost of heavy economic
sacrifice. Italy's contribution to the development and advancement
of Ethiopia far exceeds any figure that Ethiopia could reasonably
claim as reparation. The Italian Government has already submitted
complete documentary evidence on this contribution.
  In its present form Article 28 might be construed to mean that the
renunciation Italy is now called to make would not even be set against
eventual Ethiopian claims toward Italy.
  In fact, in that section of the Draft which envisages the possibility
of granting reparations to Ethiopia (Art. 64, note) no reference is
made to Article 28. It follows that, should reparations be granted,
they might be considered as due over and above the renunciation just
mentioned.
  The Italian Government is of the opinion that these provisions, in
their present form, are inconsistent with the general principle of in-
ternational law and with the practice followed in previous peace
treaties. The Italian Government therefore suggests that Article
28 should be amended so that the value of property, rights, interests
etc. which Ethiopia is to receive, is credited to Italy and that this
credit is balanced against Ethiopian claims for reparation when that
question comes up for settlement.
  2. Article 28 makes an exception for "normal diplomatic or consular
premises". In view of the fact that some consular Agencies existing
in Ethiopia since 1904 had never been recognized as such by the Ethi-
opian Government and were instead regarded as "Commercial
agencies", the Treaty should specify that the above exception must
comprise also the premises of these Commercial Agencies. It would
be sufficient to add to the sentence: "normal diplomatic and consular
premises" the words: "or by commercial Agencies".



219-115-70--11



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FOREIGN RELATIONS, 19 4 6, VOLUME IV



  Art. 29.-It is difficult to understand the precise implication of the
clauses obliging Italy "to recognize the legality of all measures which
the Government of Ethiopia has taken or may in future take in order
to annul Italian measures regarding, Ethiopia taken after October 3,
1935 and the effect of such measures"'.
  If the article means that Ethiopia, in the enjoyment of her full
sovereignty, may adopt any measures she deems fit to abrogate or
modify measures enacted by Italy when the latter exercised sovereign
rights on Ethiopian territory, then this article appears superfluous in
the light of what is laid down in Article 27.
  If, on the other hand, the article wishes to establish that Italy must
waive in advance all claims arising from measures that Ethiopia might
adopt over and above the mutual rights and obligations sanctioned
by the Peace Treaty, the article would then appear unacceptable be-
cause contrary to law.
  This article should either be suppressed or further elucidated.
  Art. 30.-The first part of Article 30 provides that Italian nationals
in Ethiopia will enjoy the same juridical status as other foreign
nationals. This part can give rise to no objections.
  The second part, instead, implies Italy's acceptance of all measures
cancelling or modifying concessions or special rights granted to Italian
nationals which Ethiopia may take within a year from the coming into
force of the Treaty.
  These provisions are, in the opinion of the Italian Government,
contrary to the principles which should regulate relations between
nations. Indeed, it appears hardly in keeping with the principles of
law and equity to oblige one of the contracting parties to accept in
advance the interpretation and the execution given to a treaty by the
other party.
  The Italian Government considers therefore that the second part of
Article 30 relating to these provisions should be suppressed. With
regard to the right accorded to Ethiopia to annul or modify concessions
or rights granted to Italian nationals, it is necessary to provide for
the persons whose interests are affected by the benefit of adequate
compensation and to establish guarantees on their behalf.
  It would, moreover, be necessary to specify that the right to annul
or modify concessions granted to Italian nationals can only apply
to those granted by the Italian Government since October 3, 1935.
  Art. 31.-Although there is nothing to be said against the article
in itself, it is felt that it should be completed so as to grant recogni-
tion to Italian accomplishments in the field of scientific research.
This could be done by adding the following words: "with the excep-
tion of objects found by archeological and other scientiflc research
Mi9ssions".



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OBSERVATIONS ON DRAFT PEACE TREATIES



Doc. No. 5 bis (P).
                      Proposed Amendments

                            ARTICLE 28
  1. Italy renounces all claim to special interests or influence in
Ethiopia.
  2. Ethiopia shall receive the property owned by the Italian State
in Ethiopian territory (apart from normal diplomatic or consular
premises or the premises occupied by commercial agencies), as well
as all rights and interests of the Italian State in Ethiopia..
  3. The value of the assets covered by para. 2 of this article shall be
credited to Italy.
                            ARTICLE 29
  Should be suppressed.
                            ARTICLE 30
  Italian nationals in Ethiopia will enjoy the same juridical status
as other foreign nationals, but Ethiopia will have the right to annul
or modify, against adequate compensation, concessions or special rights
granted by the Italian Government to Italian nationals after Octo-
ber 3, 1935, provided such measures are taken within a year from
the coming into force of the present Treaty.

                          ARTICLE 30 BIS
  Any dispute concerning the interpretation of Articles 28 and 30
of this Treaty shall be referred to the four Ambassadors acting as
provided under Art. 75 of the Treaty.

                            ARTICLE 31
  Italy shall restore all Ethiopian works of art, religious objects
and objects of historical value removed from Ethiopia to Italy since
October 3, 1935, with the exception of objects found by Archeological
and other scientific research missions.


Doc. No. 24 (G).
Afemnoranduam on the Clauses of the Draft Peace Treaty Concerning
  the Liquidation of the International Institute of Agriculture (Art.
  32, par. 2.)
                            ARTICLE 32
  Paragraph 2 of Article 32 provides that Italy shall accept any ar-
rangements which have been or may be agreed for the liquidation
of the International Institute of Agriculture in Rome.



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FOREIGN RELATIONS, 19 4 6, VOLUME IV



   The Italian Government has already signed the Rome Protocol
 of June 1946 concerning the dissolution and liquidation of the Inter-
 national Institute of Agriculture. Dissolution of the said Institute
 has been approved by the General Assembly of the Institute, which
 terminated its proceedings on July 9, 1946.
   There would, therefore, seem to be no reason for the maintenance
 of the second paragraph of Article 32, which should be deleted.


 Doe. No. 6 (P).
 Memorandum on the Provisions of the Draft Peace Treaty Concerning
                 the Statute of Tangiers (Art. 34.)

                            ARTICLE 34
   1. The Draft Treaty contains the following article concerning
Italy's position in the international zone of Tangiers:
  ART. 34.-"Italy recognises the provisions of the final act of Au-
gust 31, 1945, and of the Franco-British Agreement of the same date
on the Statute of Tangier, as well as all provisions which may be
adopted by the Signatory Powers for carrying out these instruments."
  According to the first part of -this article, Italy is called upon to
accept the provisions contained in agreements she had no part in,
though she was one of the parties concerned.
  According to the second part of the same article, Italy is expected
to accept in advance all the measures that the Powers having signed
these agreements may think fit to adopt in enforcing this article.
  2. The Statute of the international zone of Tangiers created by
said agreements of 1945 and within the framework of which all meas-
ures to enforce it will be taken, is of a provisional nature (Art. 1, 2,
etc., of the Franco-British Agreement) and will cease to be valid once
the Powers that signed the Algeciras Act (one of which was Italy)
draw up and approve a new Statute at a Conference to be called for
the purpose (Art. 2 of the Franco-British Agreement).
  3. No mention has been made, in Article 34 of the Peace Treaty, of
the provisional nature of the Tangiers Statute established by the 1945
agreements, and this might lead to erroneous interpretations concern-
ing Italy.
  Indeed, the fact that Italy is asked, in Article 34 of the Peace Treaty,
to accept the Tangiers Statute drawn up in the 1945 agreements and
the measures adopted for enforcing it, might lead to the deduction
that Italy's position in Tangiers is now definitely settled on the basis
of the aforesaid agreements and measures. Obviously, however, this
would be in contrast with the letter and spirit of the same 1945



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OBSERVATIONS. ON DRAFT PEACE TREATIES



agreements that Article 34 refers to. This erroneous interpretation
might also arise if the double reserve contained in Articles 2 and 11
of the Franco-British Agreement were incorrectly applied.
   4. The Italian Government feels, therefore, that in order to avoid
 any erroneous interpretations, Article 34 of the Peace Treaty should
 call attention to the provisional nature of the 1945 Statute as well
 as to Italy's right to take part in the future Conference of the Powers
 that signed the Algeciras Act.
   Article 34 might be modified as follows:
   ART. 34.-Italy recognises the provisions of the Final Act of Au-
gust 31, 1945 and of the Franco-British Agreement of the same date
on the provisional Statute of Tangiers, as well as all provisions which
may be adopted by the Signatory Powers for carrying out these in-
struments until the enactment of the new convention to be drawn up
at the Conference foreseen in Article 2 of the Franco-British agree-
ment, in which Italy will take part as one of the Signatory Powers of
the Algeciras Act.

Doc. No. 9 (P).
Menmorandwm on the Clauses of the Draft Peace Treaty Concerning
                    the Congo Basin (Art. 35.)
                            ARTiCLE 35
  Article 35 of the Draft Peace Treaty provides that: "Italy under-
takes to accept and recognises any arrangements which may be made
by the Allied and Associated Powers concerned for the modification
of the Congo Basin Treaties with a view to bringing them into accord
with the Charter of the United Nations".
  Italy is a contracting party to the international agreements concern-
ing the Congo Basin: i.e., the Berlin Act of February 26, 1885, the
Brussels Act of July 2, 1890 and the St. Germain Convention of Sep-
tember 19, 1919. By Article 35 Italy undertakes to accept any
modification which might at any time in the future be brought to said
agreements: and this even after Italy's admission to the United
Nations.
  Article 35 would thereby limit the rights which Italy should enjoy
as a member of the United Nations.
  It would therefore seem expedient to complete Article 35 by a second
paragraph stating that:
  "Nevertheless, Italy, being a contracting party to the Berlin Act,
to
the Brussels Act and to the Declaration thereto attached as well as to
the St. Germain Convention, shall, after her admission to the United
Nations, be invited to take part in any future agreement on this
subject."



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Doe. No. 13 (G).
    Memorandum on the Clauses of the Draft Treaty Concerning
                   Bilateral Treaties (Art. 37.)

                           ARTICLE 37
  According to Article 37 as worded in the Draft Treaty, each Allied
or Associated Power can, within 6 months of the coming into force
of the Treaty, notify Italy which pre-war bilateral treaties it desires
to keep in force or revive.

Doc. No. 13 bls (G).
Amendment Proposed to the Clauses of the Draft Treaty Concerning
                   Bilateral Treaties (Art. 37.)

                           ARTICLE 37
  1. Each Allied or Associated Power will notify Italy, within a
period of 6 months of the coming into force of the present treaty, which
pre-war bilateral treaty it does not desire to keep in force or revive.
  2. All treaties so notifled are to be regarded as abrogated within one
month from the date of notifieation.
  3. Any provisions in treaties not so notified, which are not in con-
formity with the present treaty, shall be deleted.
  4. All treaties not so notified will be registered with the Secretariat
of the United Nations in accordance with Article 102 of the United
Nations Charter.

Doe. No. 10 (G).
Memorandum on the Clauses of the Draft Peace Treaty Concerning
                 the Criminals of War (Art. 38)

                           AritcLE 38
  1. According to the text of sub-paragraph 1 (a) of Article 38
Italy's obligation to apprehend and surrender for trial persons accused
of war crimes would extend not only to persons accused of having
committed war crimes proper, but also to persons accused of crimes
against peace or humanity and to their accomplices.
  As regards crimes against peace and humanity, such a measure is
hardly justifiable to-day with regard to Italy. Italian political lead-
ers responsible for the Fascist war as well as their accomplices have
all already been dealt with directly by the Italian people.
  As regards the accomplices of war criminals, it must be pointed out
that the provision of Article 38, is open to unforeseen extensions in its
execution.



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OBSERVATIONS ON DRAFT PEACE TREATIES



  The first paragraph of this article should therefore be limited to
cover war criminals in the strict sense of the word.
  2. Italy, according to Article 38 is obliged to apprehend and surren-
der for trial the above-mentioned persons, without any guarantees, at
the simple request of the foreign country concerned. It would appear
necessary that Italy's obligation to apprehend and surrender persons
accused of war crimes should be preceded by a screening of each request
by the Council of four Ambassadors acting as provided under
Article 75. This Council, after allowing the Italian Government to
submit all pertinent information, could decide in each case if sufficient
indications exist to warrant approval of the request.
  3. Article 38 of the draft Peace Treaty fails to provide a clause defin-
ing the Court before which the war criminals must be tried. The
Italian Government feels entitled to ask that this Court should be
formed in such a way as to afford indispensable guarantees of impar-
tiality. To this end an International Court should be established,
whose composition and procedure should be the subject of an agree-
ment between the four Big Powers and Italy.
  4. The Moscow Conference of October 30, 1943, ordered, as regards
Germany, the surrender of all war criminals to the Governments of
the countries where they had committed their crimes for trial before
local Courts. The Italian Government feels entitled to ask that
Italian nationals accused of war crimes be given a different treatment
than that provided for Germans. It would, in fact, be contrary to
justice to confuse the conduct of Italian and German armed forces.
Moreover, the Italian request for trial by an International Court is con-
sistent with the spirit of the Moscow Declaration (October 30, 1943)
which spoke of Italian war criminals in different terms from those
used for the Germans, merely establishing that they would be "brought
to trial" without any further indication.
  The Italian request is based, above all, on the fact that Italy, even
though qualified as a former enemy country, is also-as stated in the
Preamble of the Draft Treaty-a co-belligerent with the Allied and
Associated Powers against Germany.

Doc. No. 10 bis (G).
                      Proposed Amendment
                           ARTICL 38
  1. Italy shall take the necessary steps to ensure the apprehension
and surrender for trial of:
  a. Persons accused of having ordered or committed war crimes on
their own responsibility.
                     v1



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FOREIGN RELATIONS, 19 4 6, VOLUME IV



  b. Nationals of the Allied and Associated Powers accused of having
violated their national law by treason or collaboration with the enemy
during the war.
  2. The Ambassadors in Rome of the U.S.S.R., U.K., U.S.A. and
France shall examine every application relative to the persons men-
tioned in subparagraph (a) of paragraph 1 of the present Article with
the view to establishing the fact whether sufficient indications of guilt
exist, indicting the person who is the object of the application. 'With
this end in view, the Italian Government shall furnish the four Ambas-
sadors with all information which may be necessary.
  3. The persons referred to in sub-paragraph (a) of paragraph 1
of the present Article shall be tried by an International Tribunal,
which shall assure them the necessary guarantees of the right of de-
fence. The rules concerning the composition and functioning of the
International Tribunal shall be fixed by agreement between the Four
Allied and Associated Powers of the one part, and Italy of the other
part.
  4. At the request of the United Nations Government concerned, Italy
will likewise make available as witnesses persons within its jurisdic-
tion whose evidence is required for the trial of the persons referred to
in paragraph 1 of this Article.
  5. Any disagreement concerning the application of this Article shall
be referred by any of the Governments concerned to the four Ambas-
sadors who will reach agreement with regard to the difficulty.

Doc. No. 10 (E).
Menorandznm on the Arrangements for the TMithdralal of Allied
                        Troops (Art. 63)
                           ARTICLE 63
  Paragraph 2 of article 63 provides that all Italian property for
which compensation has not been made and which is in possession of
the armed forces stationed in Italy at the time of the coming into force
of the Treaty, shall be returned to the Italian Government within a
period of ninety days or due compensation shall be made.
  In connection with the above provision, the Italian Government
would like to point out that several goods and assets are at present in
possession of certain Allied Authorities depending from the armed
forces without however enjoying a definite military status, such as the
Allied Commission and the Allied Financial Agency, which will pre-
sumably be leaving Italy at the same time as the Allied Forces.



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OBSERVATIONS ON DRAFT PEACE TREATIES



  It would therefore seem necessary to extend also to the above Au-
thorities and Agencies-although this may be implicit-the obligation
of returning property. In any case the latter should make adequate
compensation, as provided in the paragraph under discussion, for any
property (usually real estate) they continue to use. This should be
done in order to avoid an unjustifiable difference in the position of the
owners of property requisitioned by the Allied Armed Forces and the
owners of property requisitioned by civilian Allied authorities, a
difference, moreover, not mentioned in any provision of the Treaty and
probably never intended.
  With regard to paragraph 3 of the same Article 63, the Italian Gov-
ernment wish to point out that the text, as it now stands, provides no
solution to a question which has already been the object of a previous
exchange of views between the Italian Government and the Allied Au-
thorities in Italy.
  As it is known, the Allies, at the time of the disbanding of the Ger-
man and Fascist armed forces, seized or froze over 16 billion lire which
had been found deposited in the name of German authorities, as well as
a number of cheques, bonds, shares, etc. (13.729 millions deposited
with the Bank of Italy, 3.086 with other banks).
  These accounts cannot be classed as German-owned assets, even
though they were found set down to German credit, but represent
actually Italian currency which it had been possible to withhold from
the Germans. In fact, after the 8th of September 1943, the Germans,
in addition to looting all removable goods from the country, imposed
on Italy the payment of an occupation indemnity, which amounted
at first to 7 billion lire per month, but was increased to about 10 billion
lire as from January 1944 and to 12 billion as from January 1945.
The Bank of Italy partially succeeded in evading the fulfilment of
the German imposition by limiting the printing and the issue of the
currency needed to meet the above-mentioned requests. It was thus
possible to force the Germans into leaving, at the moment of their
collapse, a considerable amount of credits, earmarked to the Reich-
skredit-Kasse, which they did not have time to avail themselves of.
  As the Germans did not succeed in laying hands on these sums, it
is obvious that they should be returned to Italy. Indeed, in view of
their origin (the current account formed by the occupation indemnity
imposed on Italy) these credits cannot in all fairness be considered to
represent anything but an indemnity imposed on Italy and, precisely,
that part of it which the Germans did not succeed in getting hold of.
  It should also be noted that every time the question was raised, the
Allied Financial Agency has specified, in connection with these ac-



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FOREIGN RELATIONS, 1946, VOLUME IV



counts, that their ultimate destination would not be prejudiced by the
fact of their temporary freezing.
  The same considerations apply to money-orders and cheques pay
able to Italian citizens which were found in the possession of German
troops by Allied authorities. These assets had obviously been taken
from their rightful owners, but they are still being held by Allied
Authorities.
  As all the above-mentioned assets cannot be considered "cash and
bank balances supplied free of cost by the Italian Government", it is
felt that paragraph 3 of Article 63 should be partially modified.
  It is suggested that paragraphs 2 and 3 of Article 63 of the Peace
Treaty should read as follows:
  2. All Italian property for which compensation has not been made
and which is in possession of the Armed Forces or other Allied Au-
thorities in Italy at the time of the coming into force of the present
Treaty shall be returned to the Italian Government within the same
period of 90 days or due compensation shall be made.
  3. All bank and cash balances in the hands of the Forces of the
Allied and Associated Powers at the time of the coming into force of
the present Treaty, which have been supplied free of cost by the Italian
Government, shall be returned or a corresponding credit given the
Italian Government.
  In the same way all bank and cash balances in the hands of said
Armed Forces or other Allied Authorities and proceeding from war
and other indemnities imposed on that part of Italy occupied by the
German Forces wiill be returned to the Italian Government.


Doc. No. 36 (G).
         Memorandum. on the Mixed Court of Arbitration

                        ARTICLES 69 AND 72
  Some of the amendments proposed by the Italian Delegation for
Articles 69 and 72 as well as for the provisions of Annexes 6 and 7
of the draft Peace Treaty call for the establishment of a Mixed Court
of Arbitration to deal with the matters covered by said articles and
provisions.
  The Italian Delegation proposes that an article be inserted in the
Draft Treaty covering this matter.
  Such an article might be worded as proposed in the attached
document.,



1 Document No. 36 bis (G), infra.



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OBSERVATIONS ON DRAFT PEACE TREATIES



D)oc. No. 36 bis (G).
     Proposed Additional Article To Be Called Article 76 bis
                           ART. 76 BIS
  1. Whenever the execution of the clauses of the present Treaty re-
quires it, each of the Allied or Associated Powers, or Italy, can request
the convening of a Mixed Court of Arbitration. Such Courts shall
be composed of three members. Within two months after the request
for Arbitration, each Government concerned will appoint one repre-
sentative. The President of the Court shall be selected by mutual
agreement of the two Governments concerned from nationals of third
countries. Failing this agreement, either government may request
the President of the International Court of Justice to make the ap-
pointment of the third member of the Mixed Court of Arbitration.
  In the event of the death or resignation of any member of the Court,
or if any member is prevented for whatsoever reason from fulfilling
his functions, the same procedure followed for his appointment shall
be followed to replace him.
  The decision of the majority shall be considered the Court's decision.
  2. The Mixed Courts of Arbitration appointed in compliance with
para. 1 of this article are empowered with the competence attributed
to them by the provisions of Articles 69 and 72, and of Annexes 6 and
7, of the present Treaty.
  3. Each Mixed Court of Arbitration shall determine its own pro-
cedure adopting rules conforming to justice and equity. It shall have
authority to determine expenses to be paid by the losing party.
  4. Each Government shall pay the salaries and emoluments due to
those members of the Court it has appointed, as well as to any other
agent it may designate to represent it at the Court. The emoluments
of the President of the Court shall be determined by mutual agree-
ment of the Governments concerned and, together with other common
expenses of the Court, shall be shared equally by the two Governments
concerned.
  5. The Contracting Parties of the present Treaty undertake to pro-
vide that their own Law Courts and Authorities extend to the Mixed
Courts of Arbitration all possible assistance especially with regard
to the forwarding of notifications and the collecting of proof.
  6. The Contracting Parties of the present Treaty pledge themselves
to consider the decisions of the Mixed Courts of Arbitration as binding
and final and to enforce them in regard to their own nationals.
  7. The seat of the Mixed Court of Arbitration shall be selected by
mutual agreement of the two Governments concerned. Failing agree-
ment, the seat shall be selected by the President of the Mixed Court
of Arbitration.



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Doe. No. 14 (P).
Memorandum on Annex 9 as Proposed by the United States Delega-
  tion in the Draft Peace Treaty, Concerning the Electricity Supply
  in the "Compartimnento" of Venezia Giulia

  1. The Italian Government has on many occasions put forward
the various reasons (political-economic-orographic-hydrographic, of
transport, etc.) whereby the Italo-Yugoslav frontier on the Upper and
Middle Isonzo, as proposed by the draft Treaty, should be modified.
  2. In particular it is to be pointed out that the generating stations of
Doblari and Plava on the Isonzo river and the other power stations
planned on that section of the river or on its tributaries have been
built or planned mainly for the needs of Trieste, its harbour, factories
and dense population. They are technically linked to the Italian elec-
tric system which can supply Trieste and the rest of Venezia Giulia
with the electricity required when the Isonzo river is short of water
(midsummer and winter) and, on the other hand, can very advan-
tageously absorb and make use of the surplus of electricity which the
power stations of the Isonzo can generate when the river is full of
water (spring and autumn).
  3. The portion of Venezia Giulia to be ceded to Yugoslavia does not
need, in the least, the electricity generated by Doblari and Plava as it
could not absorb the surplus energy mentioned in the previous para-
graph and, moreover, those two power stations could not possibly
supply electricity to that portion of Venezia Giulia, in winter and
summer, when the Isonzo is short of water, after having supplied
the needs of Trieste. In fact, as we have already explained, the
electricity generated by these power stations, in such periods is not
even sufficient for the needs of Trieste inasmuch as the latter must
be assisted by the Italian electric system. On the other hand the
portion of Venezia Giulia ceded to Yugoslavia can count upon large,
even immense water and thermo-electric resources (it is enough to
mention that each Yugoslav citizen disposes of an amount of coal
12 times larger than that of the Italian citizen) and in any case can,
if desired, continue to be supplied by the Italian system at the con-
ditions and for the time to be agreed upon by the parties concerned.
  4. Therefore, should the so-called "Free Territory of Trieste"
really be established, Italy, recognising the paramount importance
for Trieste and its territory of the power possibilities existing or
potentially available on the Middle and Upper Isonzo, would be ready
to grant to the "Free Territory of Trieste" as such, the following
concessions, which she would be ready to embody in the Treaty.
  a. The permanent concession of rights to the waters necessary for
the purpose of working existing and future generating stations.



164


 

					
				
				


OBSERVATIONS ON DRAFT PEACE TREATIES



  b. The ownership (by the Government of the "Free Territory of
Trieste" or by such body as chosen by it) of the generating stations
above-mentioned, electric transmission and telephone lines, with the
undertaking never to adopt any measure which might alter the full
ownership of the above installations and their free working.
  c. The full right of transmission and use of the electricity as
generated, without imposing on it any payment of taxes or charges
of any kind. Italy would likewise in no case forbid, limit or im-
pose any customs or other duties on the importation of materials
necessary for the proper working and upkeep of installations.
  d. Any other right or faculty necessary for the proper working of
the power stations, electric transmission and telephone lines.
  5. The Italian Delegation asks, therefore, to be allowed to submit
some counter-proposals concerning the text of Annex 9 as proposed
by the United States Delegation.
  6. Should the Italian proposal for the improvement of the new
frontier between Yugoslavia and Italy for the area of the Upper and
Middle Isonzo not be accepted, it would in any case be essential for
the reasons set forth in the preceding paragraphs, that the aforesaid
concessions and facilities should be granted by Yugoslavia to the
"Free Territory of Trieste".


Counter-Proposals Concerning Annex 9 (Territory of Trieste) as
            Proposed by the United States Delegation
  N.B.-The sentences and words underlined in the following para-
graphs repeat sentences or words taken from Annex 9, par. c of the
United States proposals.
  1. The Italian Government will permanently grant the "Free Ter-
ritory of Trieste" (or such body as is chosen by it):
  a. A permanent concession of rights to the waters of the Isonzo and
its tributaries north of Salcano (Gorizia) up to the source of the river
for the purpose of working existing and future generating stations;
  b. The ownership of the Doblari and Plava generating stations of
the high tension electric transmission lines Doblari-Trieste (at 130.000
volts) and Plava-Gorizia-Monfalcone-Trieste (at 50.000 volts) and
of the telephone lines essential to the proper operation of those power
stations. The Italian Government will undertake never to adopt
any measure which might alter or modify the full free ownership of
the above installations and their free development;
  c. The right of transmitting and utilising the electricity generated
there, undertaking never to request payment or taxes or charges of
any kind for the electricity thus generated. Italy will not in any



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FOREIGN RELATIONS, 19 4 6, VOLUME IV



case forbid, limit or impose taxes of any kind on any material neces-
sary for the proper working and maintenance of these installations;
  d. Any other right or faculty which might be deemed necessary for
the proper working and maintenance of the said power stations and
electric transmission and telephone lines.
  2. (See par. C-1 of the United States proposals.)
  Yugoslavia-Italy and the "Free Territory of Trieste" shall main-
tain the existing supply of electricity to the former Italian com-
partimento of Venezia Giulia furnishing to the Territory such
quantities of electricity at such rates of output as the latter may
require.
  3. (See par. C-2 of the United States proposal.)
  The price to be charged by Yugoslavia by Italy or by the "Free
Territory of Trieste" to any of the other parties, for the electricity
furnished to it, shall be no higher than the price charged in Italy,
Yugoslavia or in the "Free Territory of Trieste" for the supply
of
siZmilar quantities of electricity on the same conditions, and from the
same sources of supply in their respective Territories.
  4. (See par. C-3 of the United States proposal.)
  Yugoslavia, Italy and the Free Territory of Trieste shall exchange
information continuowsly as to the flow and storage of water and the
output of electricity in respect of stations supplying now or in future
the former Italian compartimnento of Venezia Giulia so that each
of the parties will be in a position to determine its requirements.
  5. (See par. C-4 of the United States proposal.)
  Yugoslavia, Italy and the Free Territory of Trieste shall main-
tain in good and substantial condition all of the electrical plants,
transmission lines, sub-stations and other installations which are re-
quired for the continued supply of electricity to the former Italian
compartimento of Venezia Giulia.
  6. (See par. C-5 of the United States proposal.)
  The "Free Territory of Trieste" shall ensure that the existing
and
any future power installations on the Isonzo are operated so as to
provride that such supplies of water as Italy may from time to time
request may be diverted from the Isonzo for irrigation in the region
from Goriia southwestward and westward to the Adriatic and for
the generation of electricity. The "Free Territory of Trieste"
shall
be obliged to provide only such amounts of water for this purpose as
do not substantially exceed past requirements, i.e. approximately 23
cubic meters per second for irrigation purposes and amounts of water
not substantially exceeding past requirements for the purpose of
generating electricity.
  7. (See par. C-6 of the United States proposal.)



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OBSERVATIONS ON DRAFT PEACE TREATIES



  Yugoslavia, Italy and the "Free Territory of Trieste" shall,
through
joint negotiation, adopt a mutually agreeable convention in conformity
with the foregoing provisions for the continuing operation of the
electricity system which serves the former Italian comnpartimento of
Venezia Giulia. This convention shall be so drawn up as to allow
for the possible expansion of the aforesaid electricity system by fur-
thier hydroelectric developments in the Upper Isonzo by the furnish-
ing of additional supplies of electricity from Northern Italy, or by
other means.
  8. (See par. C-7 of the United States proposal.)
  Under the aforesaid convention, a Commission, or such other in-
strumentality as may be jointly agreed, shall be established, with head-
quarters in Trieste and with equal representation for Yugoslavia, Italy
and the Free Territory of Trieste.  The Commission shall facilitate
the execution of the provisions in paragraphs 1 to 6 above, and those
adopted by the same convention, and shall supervise and coordinate
the operation and future development of the electricity system.
  9. Arbitration clause. In case of disagreements on the meaning of
the clauses of this Annex or of the convention mentioned in para-
graph 8, the three Governments of Yugoslavia, Italy and the "Free
Territory of Trieste" will refer to the arbitration of the President
of
the Swiss Association of Engineers and Architects of Zurich, or of
a person nominated by him, and will submit loyally to the result of
that arbitration as its decision will be final (or see Art. 72 proposed by
the United States Delegation).

                         II. Military Clauses
Doc. No. 1 (M).
  Memorandum on the Military Clauses of the Draft Peace Treaty

  The fact of becoming a member of the United Nations carries with
it, together with the obligation of performing certain duties, the
faculty of enjoying the rights granted by Articles 2, 43 and 51 of the
Charter of the United Nations to its members.
  The draft Peace Treaty, on the contrary, prevents Italy from ful-
filling the duties mentioned in Article 43 of the Charter and from
enjoying the rights granted in Article 51. In fact, Italy will no
longer be able to defend her frontiers, i. e. her independence, thus
practically losing her fundamental rights as a sovereign nation
(Art. 2). This fact is in contrast with the very interests of the
United Nations because, in case of invasion of Italy, the United
Nations would obviously find themselves unable to take advantage



167


 

					
				
				


FOREIGN RELATIONS, 19 4 6, VOLUME IV



of the Italian territory for the purpose of joint military operations
as foreseen in Article 43 of the Charter.
  The inability of Italy to defend her own territory derives not only
from the weakness and from the precarious character of the new fron-
tiers drawn in the Treaty, but also from the one-sided demilitarisation
of a band of territory along the frontier and from the military re-
strictions concerning certain stretches of her shores and finally from
the limitation of armaments.
  The drafters of the Treaty evidently planned these limitations with
the aim of depriving Italy of any aggressive power. Such a pos-
sibility can, however, be altogether dismissed for the following
reasons:
  a. The democratic trend of the country is leading Italy towards
the establishment of sincere, friendly and peaceful relations with all
nations;
  b. Economic and industrial conditions oblige Italy to devote to
her armed forces the minimum possible amount of her financial
resources;
  c. While the present Italian frontiers afford Italy certain guaran-
tees from the defensive point of view, they place her, from the point
of view of offence, in a condition of marked inferiority in comparison
to neighbouring countries.
  In fact, to the west, on the French side, the mountain barrier is
of considerable thickness and provides a series of successive defen-
sive lines, while vital objectives are all far removed. In such condi-
tions, an Italian offensive action is bound to failure. This is,
moreover, confirmed by the fact that never, not even at the time when
Italy was a party to the Triple Alliance (with the German and Aus-
trian Empires), has the Italian General Staff envisaged on the West-
ern Alps any operations other than of a strictly defensive character.
  On the east one finds similar conditions with regard to the thickness
of the mountain zone, the natural defensive lines and the vital objec-
tives. The imperviousness of large waterless areas, thick with forests,
should also be considered.
  Hence, in the 1915-18 war, the progress achieved in eleven furious
battles on the Isonzo was out of all proportions with the amount of
forces and means engaged and with the blood heroically shed by the
Italian army. On the contrary, in 1917, a simple local success of
the enemy in the region of Caporetto was sufficient to force a general
withdrawal of the whole front.
  The frontier changes proposed in the draft Treaty are such that
Italy, from a military standpoint, will be placed in a situation far
more serious than the one existing in 1914.



168


 

					
				
				


OBSERVATIONS ON DRAFT PEACE TREATIES



  Such a weakness might be compensated by the use of powerful mo-
bile forces, but these are forbidden by the clauses of the Treaty and
by Italian financial conditions.
  In the worst case, if the frontier cannot be modified to render it
slightly less vulnerable, it would at least be necessary to grant Italy
the faculty of fortifying the frontier zone in a strictly defensive
manner.
  In consideration of the above, and independently of what may be
decided on territorial questions from a political view-point the fol-
lowing minimum amendments of the clauses of the draft Treaty are
here presented:
  1. In order to give Italy a reasonable possibility, not of aggression
but merely of defence, it is necessary to cancel in the Draft Treaty the
demilitarisation clauses (Art. 40 and following) and, should this
prove impossible, at least to limit them to fortifications and weapons
of an offensive nature.
  2. As regards the time limit established by the second paragraph of
Article 5 and sub-paragraphs 1 (c) of Articles 40 and 41 dealing re-
spectively with the determination, on the spot, of the exact line of the
new frontier and with the destruction of permanent fortifications, the
Italian Delegation points out that the time limit therein fixed is too
short, considering the climate obtaining in the high mountain areas
where this work must be carried out.
  Seeing that, notwithstanding the best Italian intentions, this time
limit would probably be overstepped (a fact which might give rise
to controversy), it is indispensable that the time limit be reasonably
extended.
  3. The restriction imposed by Article 44 which forbids the posses-
sion, construction or experiments with self-propelled or guided mis-
siles, should be attenuated in order to allow their use for strictly de-
fensive purposes against aircraft, armoured cars and landing craft.
  4. The limitation whereby the Italian Army may not possess more
than 200 tanks appears too restrictive. The Italian Delegation sug-
gests that an adequate reserve should be allowed. The sanme considera-
tion applies to other war materials for the equipment of the Italian
Army. (Art. 46 and 58).
  5. The limitations imposed on the Italian air forces (Art. 55, par. 1)
include in the equipment of auxiliary services even air-sea rescue,
liaison and reserve types of aircraft. The Italian Delegation sub-
mits that the following aircraft types should be allowed over and
above the amount described by Article 55:
  a. Air-sea rescue and liaison types of aircraft. The former be-
cause they carry out humanitarian tasks of an international nature.
     219-115-70-12



169


 

					
				
				
170 FOREIGN RELATIONS, 1946, VOLUME IV

The latter because their work is, in practice, similar to that of private
tourist planes. These types of aircraft do not carry military appa-
ratus of any kind and could not possibly perform any military
activity ;

b. Reserve aircraft, so as not to reduce further the very limited num-
ber of 350 aircraft permitted, and to allow the building up of a reserve
not smaller than 40 p.100. [per cent |

6. The necessity of meeting the task of “local defence of Italian
frontiers” (as described in Art. 55, par. 1) 1s in contradiction with
paragraph 2 of the same article, which forbids Italy to have any air-
craft with bomb-carrying facilities.

As it is impossible to conceive an effective cooperation of air forces
with ground and naval forces without weapons capable of counter-
acting land—or sea—attack craft of a would-be aggressor, the Italian
Delegation submits that paragraph 1 of Article 55 be drafted so as to
allow Italy to possess appropriate arms for reacting against surface
mobile objectives.

7. Questions relating to the naval clauses are more complex and,
owing to their technical character, require a more detailed examina-
tion which will be made separately. It is sufficient here to point out—
as it has already been done in the Memoranda presented in May and
July 1946—the following fundamental points, namely :

a. The juridical and ethical basis on which the disposal of excess
units of the Italian Navy should stand, in keeping with the principles
expressed by President De Gasperi in his statement at the Luxem-
bourg;

b. The fact that the naval forces left to Italy appear inadequate to
the minimum needs of her legitimate defence, not only owing to the
prohibition of certain types of vessel of a primary defensive character,
but also to the smallness of the fleet in relation to the geographical and
economic position of the country.

To sum up: Italy has not, and cannot have, any future offensive
intentions. Consequently, she has no objection to the measures pro-
vided by the Treaty to prevent any offensive action, but she asks that
these measures be limited to this eventuality and do not include re-
strictions in the strictly defensive field.

The clauses, as drafted in the Treaty, are conceived in such a way as
to crush any possibility of defence. This is in open contradiction with
the rights of sovereignty and of legitimate defence which should be
granted to all Nations.

Such an unjust situation, which deeply wounds the dignity of the
Italian Nation, could be improved, at least partially by inserting in
Article 39 of the Treaty a provision to the effect that the military

					
				
				


             OBSERVATIONS ON DRAFT PEACE TREATIES                171

clauses are to be revised after a given period, in compliance with
the governing principles of the United Nations.
  In the meantime Italy should be given some precise guarantees
against possible aggression, for, if it is fair that she should be for-
bidden to carry out aggression against other Nations, it would be also
fair that, in turn, she should receive suitable assurance of liberty
and independence.

Doe. No. 1 bis (M).
        Proposals of Amendment to the Military Clauses *
                 ARTICLE 39.-Reason for proposal:
  The necessity to fix a time-limit for the eventual revision of the
military clauses in view of the consequences they may bring to bear
especially in regard to the construction of new weapons and naval
vessels.
                       Amendment proposed:
  After the words: "by agreement between the Allied and Associated
Powers and Italy" add "or until Italy becomes a member of the United
Nations. In any case they are subject to revision along the lines set
down by the United Nations, 'within a time limit of two years from
the entry into force of the present Treaty."
  Or:
maintain the present text, adding the following phrase:
  "In any case they will be subject to revision, along the lines set
down by the United Nations, within a time limit of two years from
the entry into force of the present Treaty."
                ARTICLE 40.-Reason for proposal:
  To grant Italy a minimum possibility of defence on her sea and land
frontiers.
                        Amendment proposed:

  Cancel the article, or, at least:
  a. Insert in sub-paragraph 1-a the following underlined words:
"The system of permanent Italian fortifications and military instal-
  *The proposed amendment to part IV section III of the draft Peace Treaty
are
based upon observations included in the following memorandums:
     a) "Considerations regarding the Italian Navy with reference to
the Peace
   Treaty" (April 1946).
     b) "Considerations by the Italian Government with respect to the
Naval
   Clauses of the draft Peace Treaty" (July 1946).
     c) "Additional considerations by the Italian Government regarding
the
   Naval clauses of the Draft Peace Treaty" (August 1946). Doe. 5 M.
,
which must be considered as official documents of the Italian Documentation
sent
the Peace Conference. [Footnote in the sourer text.]


 

					
				
				


FOREIGN RELATIONS, 19 4 6, VOLUME IV



lations of an offensive character along the Franco-Italian frontier,
and likewise their armaments of an offensive nature, shall be de-
stroyed or removed. ["]
  b. In sub-paragraph 1-b after the words: "pill-boxes of any type"',
insert: "in which are installed weapons capable of firing on French
territory or on French territorial waters as well as observation posts
capable of directing fire on to French territory or French territorial
waters". Cancel the remaining portion of the article after the word:
"shelters".
  c. In sub-paragraph 1-c in the place of "within one year from"'
write "as soon as possible after the," (and this for the same reasons
expounded for the amendment proposed for Art. 5).
  d. Suppress sub-paragraph 3-b.
  e. Suppress paragraph 4.

                            ARTICLE 41
  The same amendments proposed for Article 40 are reproposed for
the same reasons. As regards the defence of the Italian seashore it is
asked that paragraphs 4 and 5 be substituted with a clause somewhat
as follows: "Italy pledges herself, after the coming into force of the
present Treaty, to negotiate with the four Powers and with Yugo-
slavia and Albania the definition of the reciprocal measures of de-
militarisation which may bring about conditions of peace and muatual
assistance in the Adriatic."
          ARTICLE 43, PARAGRAPH 1.-Reason for proposal
  The need for a minimum of defense in the Straits of Bonifacio.
  Amendment proposed: Substitute the whole paragraph with one
reading somewhat as follows: "Italy pledges herself, after the com-
ing into force of this Treaty, to enter into negotiations with France
in order to define the reciprical measures of demilitarisation needed
to bring about mutual conditions of security in the Straits of
Bonifacio".

   ARTICLE 43, PARAGRAPHS 2, 3, AND 4.-Reasons for proposal
   By infringing on the right of self-defence, the restrictions they
establish are a serious check on the possibility of timely defence.
                      Amendment proposed
  Substitute the three paragraphs with one reading somewhat as
follows: "Italy pledges herself to confine her military fortiflcations
in Sardinia and Sicily to those strictly necessary for the defence of
the isWands."



172


 

					
				
				
OBSERVATIONS ON DRAFT PEACE TREATIES 173

ArticLe 44,—FReason for proposal

To have the possibility of employing self-propelled missiles within
the limits of anti-aircraft, anti-tank and anti-landing defence.

Amendment proposed

After the words: “connected with their discharge” add: “with the
exception of those designed for anti-aircraft or anti-tank fire provided
their range is not over 30 kilometres”. Instead of the words: “Any
guns with a range of over 30 kilometres” write: “Any guns installed
in such away as to have a range of over 30 kilometres”.

ArticLE 52.—Reason for proposal

The need for reserve armaments and equipment for the forces per-
mitted, and to replace such armaments and equipment rendered even
temporarily unserviceable.

Amendment proposed

Add a third paragraph reading as follows: “In the determination
of armaments required, by the Italian Army an adequate reserve quota
will be borne in mind.”

ArTIcLE 55, Paracrapu 1.—/feason for proposal

The need not to reduce further the small force of 850 aircraft.

Proposed Amendment

Modify paragraph 1 as follows: “The Italian Air Force, including
any Naval Air Army, shall be limited to a force of 200 fighter and
reconnaissance types and 150 transport, airsea rescue, training (school
type) types of aircraft. Z'hese totals will not include reserve aircraft
which shall not exceed 40% of the above totals.” The rest of the para-
graph to stand.

Arricte 55, Paracrarn 2.—Reason for proposal

The need to dispose of weapons suitable to counteract ground or sea
assault craft.
Amendment proposed

Substitute the paragraph with the following: “The fighter aircraft
designed to support ground or sea forces in operations of defence of
frontiers may be equipped with arms suitable to engage mobile sur-
face objectives.” |

					
				
				


FOREIGN RELATIONS, 1946, VOLUME IV



                ARTICLE 58.-Reason for proposal
  In view of the latitude with which Annex 5 (C) defines "war ma-
terial" it is feared that such broad and vague wording may give rise
to
transfer of equipment other than was contemplated in the Section of
the Draft dealing with reparation.

                      Amendment proposed

  Paragraphs 1 and 4 of the article should read as follows:
  Par. 1.-"All war material of Italian origin in excess of that per-
mitted for the Armed Forces specified in Sections III, IV, and V shall
be destroyed or reconverted for non-military use; the part not re-
convertible for civilian purposes may be used by Italy for the pay-
ment of reparations to the Allied Na tions.
  Par. 4.-In the sentence: "Italy shall renounce all rights to the
above-mentioned war material" substitute "above-mentioned war ma-
terial" with "the war material mentioned in paragraphs 2 and 3
of
this article", and:
  Add to the sentence: "lists of all excess war material" the words:
"mentioned in paragraphs 2 and 3 of this article".


Proposal of Amendment to Part IV.-Sect. III of the Draft
                          Peace Treaty
                          ARTICLE 47
  The present Italian fleet shall be reduced to the units given in Ann.
4/A.
                           ARTICLE 48
  1. Italy undertakes, as soon as the present Treaty comes into force,
to utilize part of the excess units listed in Ann. 4/B to replace ships
lost by the Allied Nations through Italian action, in such measure and
according to the modalities to be established by means of negotiations
between Italy and the Nations concerned.
  Should no agreement be reached through these negotiations, the
questions under discussion shall be decided by a Commission including
representatives of the four Great Powers, Italy, and the Nation
concerned.
  2. Excess war vessels not utilized as above shall be destroyed or
scrapped for metal, and the material thus salvaged will not be used
for military purposes.



174


 

					
				
				


OBSERVATIONS ON DRAFT PEACE TREATIES



  Such destruction will take place within the following time-limits to
be taken as commencing with the coming into force of the present
Treaty:
  Submarines: six months;
  Surface vessels: one year.
  3. Excess units to be transferred to other Nations according to the
agreements mentioned in par. 1 will be handed over in their present
operational conditions.
  Italy however undertakes, following additional agreements with the
Nations concerned, to carry out such repairs as may be requested for
fully refitting them and completing their stocks of reserve stores and
spare parts, according to the laws in force in the Italian Navy.
                           ARTICLE 49
  1. Italy shall effect the following disposal of non-operational ships
not considered in the negotiations mentioned in Article 48/1. Time-
limits specified below should be taken as commencing with the coming
into force of the present Treaty.
  a. Surface ships afloat not listed in Ann. 4 including ships under
construction afloat, shall be destroyed or scrapped for metal within
nine months.
  b. Ships under construction on slips shall be destroyed or scrapped
for metal within nine months.
  c. Ships sunk in Italian harbours and approach channels, in obstruc-
tion of normal shipping, shall be destroyed by demolition or may be
salvaged and subsequently destroyed or scrapped for metal within
two years.
  d. Ships sunk in shallow Italian waters, not in obstruction of nor-
mal shipping, shall, within one year, be rendered incapable of salvage.
  e. Ships capable of reconversion, which do not come within the
definition of war material and which are not listed in Ann. 4, may be
reconverted to civilian uses or are to be demolished within two years.
  2. The salvage materials resulting from the destructions mentioned
in par. 1 shall not be utilized by Italy for military purposes.
  3. Italy undertakes, prior to the destruction of ships mentioned in
Articles 48/2 and 49/1 to salvage, as far as possible, such equipment
and spare parts as may be useful in completing the on-board and
reserve allowances of spare parts and equipments to be supplied on
request of the Nations concerned for the operation of ships to be trans-
ferred according to Article 48/1.
                           ARTICLE 50
  1. Italy undertakes not to construct or acquire battleships, aircraft
carriers, submarines and specialised types of assault craft, until the



175


 

					
				
				


FOREIGN RELATIONS, 1946, VOLUME IV



general rules concerning such classes of vessels are examined by UNO,
or until the present clause is modified on the basis of the agreements in
Article 39.
  2. Until a general regulation concerning armaments are examined
by UNO, the total standard deplacement of the war vessels of the
Italian fleet, other than battleships, including ships under construc-
tion as from the date of the launching, shall not exceed 82.000 Tons.*
  3. Any replacement of war vessels by Italy shall be effected within
the limit of tonnage given in par. 2. There shall be no restriction on
the replacement of auxiliary vessels.
  4. Italy undertakes not to acquire or lay down any war vessels be-
fore January 1st 1950, except as necessary to replace any over-age
ship or any ship accidentally lost; in the latter case the displacement of
the new ship is not to exceed by more than 10 p. 100 [per cent] the
displacement of the ship lost.
  5. The terms used in this article are, so far as necessary, defined in
Annex 5/A.
                           ARTICLE 51
  1. The total personnel of the Italian Navy, excluding any naval air
personnel, and including personnel for coastal defence, shall not exceed
35.000 officers and men.t
  2. During the period of minesweeping due to the war, Italy shall
be authorised to employ for this purpose an additional number of
officers and men not to exceed 2.500, such period to be determined by
the International Control Board for Mine Clearance of European
Waters.
  3. The reduction of naval personnel to reach the figures in par. 1
and 2, will have to be carried out within six months from the coming
into force of the present Treaty.
  Two months after the completion of minesweeping by the Italian
Navy, the excess personnel authorised by par. 2 is to be disbanded or
absorbed within the above numbers.
  4. Personnel, other than those authorised under par. 1 and 2, and
any naval air personnel authorised under Article 56, shall not receive
any form of naval training as defined in Annex 5/B.

*The figure of 82,000 Tons is calculated on the basis of Ann. 4/A as amended.
[Footnote in the source text.]
tThe Memorandum of July 1946 stated that, even after all the possible reduc-
tions, the complement of the Italian Navy cannot be reduced much under the
requested 40.000 men. A thorough examination has enabled to fix at approxi-
mately 12.5.5% the entity of such reduction; this makes for the figure of
35.000
men mentioned above. [Footnote in the source text.]



176


 

					
				
				
OBSERVATIONS ON DRAFT PEACE TREATIES 177

ANNEX 4

(See Art. 47)

The names in this Annex are those which were used in the Italian
Navy on June Ist, 1946.

Parr A. Last or Sures To Compose true Tranian FLErr
MAJOR WAR VESSELS

2 Battleships: Doria, Duzitzo.

6 Cruisers :* Abruzzi, Garibaldi. Eugenio, Aosta, Regolo, Scipione.

8 Destroyers :+ Legionarto, Velite, Mitragliere, Granatiere, Grecale,
Fuciliere, Carabiniere, Artiglere.

12 Torpedo-boats :{ Aretusa, Clio, Sivio, Libra, Cassiopea, Calliope,
Sagittario, Ariete, Fortunale, Animoso. Orione, Orsa.

20 Corvettes: Ape, Baionetta, Chimera. Cormorano, Danaide,
Driade. Fenice, Flora, Folaga, Gabbiano, Gru, Ibis, Minerva, Pel-
licano, Pomona, Scimitarra, Sfinge, Sibilla, Urania. Plus one vessel
to be salvaged, completed or constructed.

4 Submarines :§ Platino, Nichelio, Marea, V ortice.

MINOR WAR VESSELS

24M. T. B.: || Ms 24, 31, 35, 52, 54, 55, 56, 61, 65, 72, 73, 75.

MAS 510, 514, 516, 520, 521, 523, 538. 540, 543, 545, 547, 562.

14 Vedettes: VAS 201, 204, 211, 218, 222, 224, 233, 235, 237, 240,
GLI, 245, 246, 248.

1 Minelayer: /asana.

30 Minesweepers: RD 6, 16, 20, 21, 25, 27, 28, 29, 32, 34, 38, 40, 41,
102, 103, 104, 105, 113, 114, 129, 131, 132, 133, 134, 148, 149.

Plus 4 units under construction.

*Owing to the conditions of the Italian ships and to the wear and tear on them
during the past years, and the consequent need of frequent repairs, one must cal-
culate that, on an average 24 of them will be in full commission and 14 under
repair. For this reason as also for the general considerations expounded in the
Memorandum of Avril 1946 (p.11), it is thought that at least 6 cruisers have to be
left to Italy, 4 of which of the same type with 6 inch. guns, and 2 with 5, 4
inch. guns. [Footnote in the source text. ]

*The same remarks made for the cruisers apply even more to the destroyers,
and justify the request of 8 destroyers. The larger number of destroyers
requested comes together with a corresponding reduction of the number from
16 to 12 of the torpedo-boats. [Footnote in the source text. ]

tObviously the over-age torpedo-boats have been excluded. [Footnote in the
source text. ]

§They are necessary for the fundamental needs of the training of anti-sub-
marine units. [Footnote in the source text.]

[It is pointed out that Finland, Roumania, and Bulgaria have been granted
the right to have M. T. B.s for defensive purposes. Nations which are far better
off than Italy with regard to defensive needs (length of the coast line—geograph-
‘cal shape and position—vulnerability of objectives—entity of sea - traffic, etc.).
‘Footnote in the source text.]

					
				
				
178 FOREIGN RELATIONS, 1946, VOLUME IV

AUXILIARY CRAFT {

6 Fleet Tankers: Lete, Prometeo, Stige, Nettuno, Tarvisio, Urano.

20 Water carriers: Anapo, Arno, Bisagno, Dalmazia, Frigido, Idria,
Lsarco, [stria, Liri, Metaura, Mincio, Ofanto, Oristano, Po, Polcevera,
Sesia, Sprugola, Timavo, Tirso, Vippaco.

38 Large and medium tugs: Abbazia, Arsachena, Asinara, Atlante,
Carbonara, Chioggia, Ercole, Gaeta, Gaglhardo, Gorgona, Lampedusa,
Licosa, Lipari, Liscanera, Mesco, Mestre, Molara, Nereo, Piombino,
Porto Adriano, Porto Conte, Porto Fossone, Porto Pisano, Porto
Quieto, Porto Recanati, Porto Torres, Porto Tricase, Rapallo, Salvore,
Sant? Angelo, Sant’Antioco, San Remo, Talamone, Taormina, Tifeo,
Vado, Ventimigha, Vigoroso.

30 Small Tugs: WV. 7, V. 4, NV. 5, N. 9, N. 10, NV. 22, N. 26, N. 27, N. 32,
N.47,N.52,N.538,N.78,N.96,N.104,R. 0.1, RF. L.3,R.L.9, RB. L. 10,
Argentario, Astico, Col. Pozzi, Cordevole, Irene, Passaro, Porto Rosso,
Porto Vecchio, San Bartolomeo, San Benedetto, Tagliamento.

2 Training ships: Colombo, Vespucci.

4 Transport ships and 12 MZ:** Giuseppe Messina, Montecucco,
Montegrappa, Panigaglhia, MZ 728, 729, 737, 744, 758, 776, 778, 780,
781, 784, 800, 831.

3 Tenders: Anteo, Hritrea, Miraglia.

2 Surveying ships: Azzo, Cherso.

4 Lighthouse service vessels: Buffoluto= plus 3 L. C. tt

1 Cable ship: Rampino.

1 Repair ship: Pacinotti.

Part B. List or Excess Unirs or THE [ratian Navy
MAJOR WAR VESSELS

3 Battleships: Cesare, Italia, Vittorio Veneto.

3 Cruisers: Cadorna, Monteguccoli, Pompeo.

3 Destroyers: Da Recco, Oriani, Riboty.

10 Torpedo-boats: Abba, Aliseo, Ardimentoso, Carini, Fabriza.
Giovannini, Indomito, Monzambano, Mosto, Pitlo.

In the opinion of the Italian Government, Annex 4/A should be limited to
major and minor war vessels, and should not include auxiliary ships. Therefore
the list of Ann. 4/A should stop here. Anyway the auxiliary ships which Italy
requests in accordance with the needs of the Navy are included in the following
list. [Footnote in the source text. ]

**12 MZ have been included in this category as the characteristics of these
units are such that they cannot be looked upon as landing craft, but are real
transport units as is proved by the use that has always been made of them. Not
being suited for long trips, and their engines being very delicate. it would be
dificult for other Nations to find any use for them. If necessary their weapons
could be removed. [Footnote in the source text. ]

++To be bought from Great Britain as war surplus. [Footnote in the source
text. ]

					
				
				


OBSERVATIONS ON DRAFT PEACE TREATIES



  35 Submarines: Alagi, Atropo, Bandiera, Bragadino, Brin, Cagni,
CB 7, CB 8, CB 9, CB 10, CB 11, CB 12, CB 19, CM 1, Corridoni,
Dandolo, Da Procida, Diaspro, Galatea, Giada, H 1, H 2, HI4, Jalea,
Mameli, Manara, Menotti, Onice, Otaria, Pisani, Settimo, Speri,
Sgqtalo, Turchese, Zoea.
                      MINOR WAR VESSELS
  I1 M. T. B. s:MS 11,53, 64,74;
  MlAS 433, 434, 519;
  ME 38,39, 40,41.
  1 Gunboat: Iliria.

                    AUXILIARY NAVAL VESSELS
  7 Water Carriers: Aterno, Basento, Pescara, Simeto, Stura, Tronto,
Vas 226.
  15 Large and medium tugs: Basivuzzo, Gapo d'Istria, Gapraia,
Gefalu, Emilio, Lilibeo, Linosa, Marechiaro, Porto Empedocle, Porto
Rose, Procida, Pronontore, S. Pietro, San Vito, Teulada.
  14 small Tugs: Generale Valfre, Licata, Noti, Velosca, N. 2, 3, 23,
24,28,35,36, 37,80, 94.
  2 Transport ships and 4 MZ: Amalia Messina, Tarantola, MLZ 713,
717, 722,726.
                       III. Economic Clauses
Doe. No. 26 (E).
  Memorandum on the Economic Gonsequences of the Peace Treaty
  1. The Italian Delegation has the honour of presenting to the
Economic Commission for the Peace Treaty with Italy its remarks
and considerations concerning the provisions contained in the Draft
Treaty falling within the province of Commission, namely articles
64 to 71, 73,74 and Annexes III, VI, VIII.
  2. In presenting its remarks concerning the aforesaid articles and
annexes of the Treaty, it is the Italian Delegation's duty to set forth
as briefly as possible Italy's actual economic and financial situation
and the principal measures required, to avoid a total collapse of the
country's economy and finances and make possible a normalisation
though slow and gradual.
  This exposition shows that, unless the economic provisions of the
Treaty are profoundly and sometimes radically revised, it would be
practically impossible for Italy, despite all the efforts of the Govern-
ment and the people, to carry them out.



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FOREIGN RELATIONS, 1946, VOLUME IV



  The normalisation of Italy's economy and finances so as to provide
a minimum standard of life for the country's 47 million inhabitants,
is obviously a preliminary condition for the nation's political and
social balance and the basis for Italy's international economic rela-
tions. This normalisation however, on which is based the political
and social balance of the nation, cannot be brought about by Italy's
efforts alone.
  For these reasons the provisions of an economic nature should be
considered as a whole before examining each one in detail.
  3. In order to estimate the economic consequences of the Peace
Treaty, one must consider:
  I. War damages suffered by Italy;
  II. Italy's present economic and financial situation;
  III. Renunciations laid down in the draft Peace Treaty;
  IV. New burdens determined by the draft Peace Treaty.

                          I. WAR DAMAGES
  4. The war assumed characteristic and even unique aspects in Italy.
Italy fought two wars: one unfortunately, on the side of Germany,
the other on the side of the Allied Powers. Consequently she was ex-
posed to a double offense. Then, to quote Churchill, she saw the war
pass like a harrow of fire over practically the whole of her territory
from Sicily to the Po Valley.
  The war caused destruction everywhere: to houses,* public works
or works of public interest (harbours, roads, power stations, acque-
ducts, etc.), railways,t the merchant navy,: industrial plants,§ agri-
cultural equipment, livestock and forests.
  The destruction has been so terrific that if the reconstruction in-
dispensable for meeting the fundamental needs of the country were
to be carried out, a sum of at least 3.000 billion lire would be called
for, namely six times the total annual expenditure of the State budget
which is about 500 billion lire.
  *The number of rooms destroyed and damaged amounted to 6.800.000, of which
1.878.000 were totally destroyed. [Footnote in the source text.]
  tIn July 1945 the number of engines was rednced to 555% and the number
of
trucks, to 46% as referred to the pre-war period. 38% of the lines in use
were
destroyed; for double track lines the decrease amounted to 68%. Further,
17 km.
of iron bridges and 37 km. of stone bridges needed to be re-built or repaired.
The destruction suffered by fixed installations was so serious that barely
25% of
Italy's pre-war railway traffic was possible. [Footnote in the source text.]
  tOn June 30, 1939 the Italian merchant navy had a gross tonnage of 3.500.000
tons, to which were added during the war, new constructions for about 350.000
tons. By the end of the war this fleet was reduced to 500.000 tons, namely
15%
of its total gross tonnage. [Footnote in the source text.]
  §The destruction was most serious in Southern and Central Italy. The
industrial zone of Naples, which is one of the poorest towns, was completely
devastated and the same may be said of the Northern Tuscany zone and of other
smaller ones. In 1945 the output of the hydroelectric plants of the Apennine
network was reduced to 30% of its pre-war output. [Footnote in the source
text.]



180


 

					
				
				


OBSERVATIONS ON DRAFT PEACE TREATIES



  It should be remembered that the great majority of the damages
sustained by Italy refer to the period after the Armistice of Septem-
ber 3,1943, when, as a consequence of Italy's having voluntarily placed
herself at the side of the Allies, the devastations and looting of the
German vengeance were added to the destruction caused by the war
fought on Italian territory for almost two years.
  Italy formally requests that this circumstance be constantly borne
in mind when determining the economic and financial clauses of the
Treaty.
               II. THE PRESENT SITUATION IN ITALY
  5. The seriousness of the situation in Italy can be judged from the
following data concerning the main aspects of the country's economy.
  a. State budget:
    Annual expenditure ..............         530 billion lire.
    Annual revenue ..............                  180

      ANNUAL DEFICIT ................           . 350      -

  The deficit is limited to the above sum because State expenditure is
reduced to a minimum; compensations for war damages are extremely
limited and restricted only to the poorer classes; very few subsidies
are paid to the unemployed, and these in the form of charity and only
to the most desperate cases; relief for illnesses and for tuberculosis,
which is rampant among ex-prisoners of war and children, is abso-
lutely insufficient.
  Local collectivities (townships, provinces and relief organisations),
despite the very limited sums paid out, also report deficits in the same
proportions as that of the State budget.
  b. Domestic public debt. Including the debt to the Bank of Issue,
this has passed from 146 billions in 1939, of which only 41 billions were
floating debts, to about 1.200 billions at present, of which over 850
billions are floating debts. When Italy entered the war against Ger-
many in September 1943, this debt only amounted to a little over 350
billions.
  c. Monetary circulation. This has passed from 24.5 billions in 1939
to 395 billions in 1946, including occupation money. In September
1943, the monetary circulation was not quite 120 billion lire, including
Allied money already spent after the landing in Italy, so that there
has been an increase of 275 billions from the beginning of our Co-
belligerency up to the present.
  d. Balance of payments. In the years preceding the war, Italy's
trade balance always presented a deficit. On an average our exports
covered only 70-75% of our imports; nor were the other assets of our



181


 

					
				
				


FOREIGN RELATIONS, 19 4 6, VOLUME IV



balance of payments (tourism, emigrants, remittances, shipping
freights) sufficient to neutralise this deficit; consequently the reserves
of the Bank of Issue were considerably reduced.
  The situation threatens to be terribly serious for the years to come:
our import needs, to meet normal requirements as well as the excep-
tional demands of reconstruction, have increased; the invisible items
of our balance of payments have ceased almost completely and there
has been a heavy drop in our possibilities of exportation for the fol-
lowing main reasons:
  -40-45% of our exports consisted of manufactured products, more
than half of which were made from imported raw materials which
now, unavoidably, we shall be short of owing to payment difficulties
and the needs of all the countries devastated by the war;
  -20-25% consisted of vegetables and fruit, of which about 70%
was sent to the countries of Central Europe, whose capacity of absorp-
tion is very low at the present moment and will only pick up very
slowly.
  Such imports as are indispensable to ensure a minimum of sub-
sistence to the population and sufficient occupation for the working
classes to avoid social disturbances, amount to 1.200-1.500 million
dollars a year.11 For the next few years such exports as are possible
and the other assets of our balance of payments cannot be anticipated
to cover more than 30-40% of the aforesaid requirements, so that
Italy will have a deficit fluctuating, according to various forecasts,
between 750 and 950 million dollars.
  These figures, which do not take into account debts falling due be-
fore and after the war or further burdens such as the imposition of
reparations on Italy or other payments to foreign countries, contain
the fundamental drama of Italy's national life, which for the next
few years can only be solved by the opening of foreign credits.
  Without these, the standard of life of the Italian people, whose food
consumption even before the war was below minimum physiological
requirements and is now reduced to from one-half to two-thirds of
those requirements, would become unbearable.
  Prices of food have increased about 36 times as compared with pre-
war prices, whereas workers' wages have only increased 13-14 times
and clerks' salaries 9-10 times.
  In actual value, therefore, pay is reduced to barely 40%o of pre-war
rates for workers and 30% for clerks. All this has brought about a
lowering of the standard of life, of which we have ample proof, more-

  IlThe report presented by U.N.R.R.A. to the Session of its General Council
at
Geneva 5-17 August 1946, admits that Italian imports for 1947 should amount
to 1,261 million dollars. [Footnote in the source text.]



182


 

					
				
				
OBSERVATIONS ON DRAFT PEACE TREATIES 183

over, in the heavy increase (almost double) in the most serious social
diseases. ‘Tuberculosis mortality, which in 1938 was about 8 for every
10.000 inhabitants, rose to 15.4 in 1945.

It is only thanks to the generous assistance of the United States and
of other Allied Nations that have supplied food, industrial raw ma-
terials and coal, either direct or through U.N.R.R.A., that it has been
possible, to a certain extent, to attenuate the terrible sufferings of the
Italian people, to keep inflation within bounds and to uphold the
delicate Italian economic situation. The balance maintained so far
with great difficulty is absolutely lacking in stability: any factor of a
technical or psychological nature could upset it from one moment to
another, provoking complete monetary chaos and the collapse of the
whole economic system.

So far the basis of this precarious system has been the confident
hope of the Italian people that the provisions of the Peace Treaty,
putting an end to a state of uncertainty and confirming indisputably
the promises made to Italy with regard to her co-belligerency, would
improve economic and financial conditions. It 1s easy to see that these
expectations will be deluded if to the present situation are added the
further burdens determined by the Peace Treaty.

III. RENUNCIATION oF CuaIms By ITALY

6. Attention must be drawn to the three following points which
would be disastrous for Italy’s recovery.

a. Cessions and renunciations both of some of Italy’s territory and
of territory outside Italy.

It is certainly not our intention to argue about the reasons and
foundedness of these cessions and renunciations, but the fact remains
that these losses will increase Italy’s difficulties enormously.

The public works and property built by Italy especially in Albania,
in Africa and in the Dodecanese Islands, amount to a figure of
about 1.5 billion dollars and private investments in these territories
exceed 800 million dollars. But these figures do not give the full
measure of the losses to Italian economy. The proceeds in foreign
currency from the harbour and industries of Trieste, the bauxite and
coal in Istria (this latter covers one-tenth of Italy’s requirements and
represents half of her output), the drop in the labour outlet to these
regions and in trade exchanges with them, have also to be added to the
losses mentioned farther back.

It is for these reasons that Italy must request, if territorial cessions
and reparations are imposed on her, that due account be taken of her
investments remaining in these territories.

					
				
				
184 FOREIGN RELATIONS, 1946, VOLUME IV

6. Italy is called upon to renounce all rights and claims against
Germany (Article 67). The latter would include also the machinery
carried off by the Germans (for about 80 billion lire) which, were it
available, would contribute vastly to Italy’s industrial reconstruction.
For the most part this machinery was up-to-date and among the best
that Italian industry, very modestly equipped, possessed. Perhaps
Italy is also to be called upon to waive her claims to about 70 tons of
gold taken by the Germans after the Armistice, from the small quantity
that was all she had left.

The removal of the aforesaid clauses from the draft Treaty, at least
as far as the period of co-belligerency is concerned, is necessary for
moral and juridical reasons arising from this co-belligerency.

c. Italy 1s requested to accept the orders and decrees of the Prize
Courts and other measures emanated on this subject by Allied and
Associated Powers after September 1, 1939 and consequently to waive
all claims concerning Italian merchant ships. (Art. 66, No. 1 ¢ and
No.5).

When Italy entered the war, five hundred and sixty thousand gross
tonnage of merchant shipping were or took shelter in harbours of the
United Nations—most of them in harbours of Nations that only went
to war with Italy or broke diplomatic relations with her later on.

Moreover, at the time of the Armistice, ships for a gross tonnage of
about 800.000 tons were in territories occupied by the Germans; part
of these were sunk or sabotaged by the Italian crews so that they should
not be used by the Germans.

Quite apart from any recognition of Italy’s co-belligerency, it
seems only fair, for obvious reasons of justice, that the remaining
ships or those that can be salvaged, belonging to the aforesaid cate-
gories, should be restored to Italy.

Italy who, before the war, imported by sea about 20 million tons
of goods, was left at the end of the war with only 15 p. 100 [per cent]
of her merchant fleet ; she has now to bear in her balance of payments—
in which this item was formerly an asset—the burden of hundreds of
millions of dollars.

A fair re-examination of these provisions of the draft Treaty could
lessen the need, especially in these next few years, for the huge quanti-
ties of foreign currency which will otherwise be necessary for shipping

freights.
IV. New BurvEns

7. Attention is called in particular to the following burdens:
a. The expenses the Italian Government would have to incur in ap-
plying Article 64 for war reparations.

					
				
				
OBSERVATIONS ON DRAFT PEACE TREATIES 185

It is not possible for the Italian Delegation, at the present moment,
to estimate these expenses as the Draft Treaty, though determining
the sum to be paid to the Soviet Union at one hundred million dollars,
does not establish the amount of reparations to be paid to other Na-
tions, or the sources from which further reparations should be paid.

The Italian Delegation must repeat its opinion, however, that repa-
rations cannot be considered as something apart, to be added to the
cession without compensation of important property that other pro-
visions of the draft Treaty allot to some of the Nations claiming repa-
rations from Italy.

b. The obligation leaving to the Italian Government the whole bur-
den (Art. 66, no. 2) of compensating its citizens for requisitions during
the period of co-belligerency and for the furnishing of supplies or
services to the Allied and Associated Powers and after that period, as
well as for non-combat damage caused by the presence of the forces
of aforesaid Powers in Italian territory.

c, The obligation contained in article 66, No. 4, according to which
the Italian Government is to assume full responsibility for the occupa-
tion currency issued by the Allied military authorities.

The items mentioned in } and ¢ amount to enormous sums.

It is true that when the Italian Government signed the Armistice,
it undertook to assume responsibility for items } and ¢; but, at that
time, there was reason for both parties to anticipate that the occupa-
tion troops would only remain in Italian territory for a short time and
also that the number of these troops would be quite small, considering
the enthusiastic reception they had received from the Italian people.

Instead, for military reasons, Italy was turned into a huge base for
operations against the German troops, including those stationed in
the Balkans and in Central Europe. Consequently the number of
Allied troops that poured into Italy and the requirements for supplies
and services were far in excess of what would have been needed merely
for the occupation of Italy.

These burdens, therefore, should be lightened considerably, both
in recognition of our co-belligerency—which moreover placed heavy
financial burdens on Italy’s shoulders—and in consideration of the
fact that Italy’s exhausted economy could not bear up under them.{

d. The obligation contained in Article 66, No. 5, according to which
Italy is to waive all claims in favour of Italian prisoners of war—aris-
ing out of the Geneva Conventions of 1929 concerning the treatment
of prisoners of war—for the work they undertook to do of their own

IThis necessity has already been realised by the United States Government
which has opened a credit in dollars to compensate for part of the occupation
money. [Footnote in the source text. ]

219-115—70——13

					
				
				


FOREIGN RELATIONS, 1946., VOLUME IV



free will for the United Nations and the Italian Government's con-
sequent obligation to make these payments itself, is very high.**
  e. The obligation that Article 68 would impose on Italy to com-
pensate United Nations nationals for damage sustained by their prop-
erty in Italy, no matter at what time it occurred and consequently also
during the period of co-belligerency and no matter who (Italians,
Germans or the Allies themselves) caused it.
  f. The liquidation of Italian property abroad contemplated in Arti-
cle 69 is doubly serious from an economic standpoint for it means not
only a loss of income in foreign currency, but also that the Italian
Government will be obliged to compensate the owners of the aforesaid
property.
  It seems impossible to understand why, when-as we have shown
and as has been acknowledged-Italy must try and find the means
for her reconstruction in the strengthening of international economic
relations, she is to be deprived of activities abroad which are the basis
of traditional business relations.
  8. The Memorandums presented separately show how serious the
renunciations requested of Italy and the burdens to be imposed on
her are, and contain the reservations made by the Italian Delegation.
But even the brief considerations set forth so far are sufficient to prove
that Italy's economy and finances, already thoroughly exhausted, can-
not bear the burdens laid down by the draft Treaty.
  Without the fundamental raw materials essential to modern life,
first among which is coal; with an agricultural output that is very
far from satisfying the minimum needs of a growing population
crowded into a very restricted cultivable territory; with a foreign
trade more than 60 p. 100 [per cent] of which, for over half a century,
was carried on with European countries which are now suffering the
after-effects of war too-Italy's difficulties would be immense even
if no renunciations and further burdens were imposed on her by the
Peace Treaty.
  Owing to the country's conditions, therefore, and quite apart from
any reasons of justice and equity, it seems necessary for some of the
aforesaid renunciations and burdens to be removed completely and for
others to be very much reduced; also, such sums as are established
should be payable over a long period of years, beginning not less than
six years after the coming into force of the Peace Treaty.
  Meanwhile, assistance should be granted to Italy-as has been the
case during the last few years-so as to enable her to improve her
balance of payments and normalise her finances on the basis of a grow-

  **The United States acknowledge to Italy a credit In dollars for prisoners
of
war claims. [Footnote in the source text.]



186


 

					
				
				
OBSERVATIONS ON DRAFT PEACE TREATIES 187

ing output, fed by incoming raw materials. The assistance needed
from outside will be proportionately less if it is possible to get back
from Germany the property she removed from Italy and if the Ger-
man credits of all kinds having accumulated legitimately in favour
of Italy, during the period of co-belligerency, are paid to her.

During the five years which are anticipated as being necessary for
the reconstruction of her economic forces, Italy should be relieved
of payments abroad for debts incurred before the end of the war.

Unless the aforesaid measures are adopted and the amendments
mentioned further back adapted to the provisions of the Peace Treaty,
period of depression will ensue for Italian economy, even more serious
than that of the last few years when, as already mentioned, it was
assisted by some of the United Nations. Thenew expenses for repara-
tions and compensations and the consequent need to issue huge quan-
tities of paper money would deal a death blow to the Italian State
budget, which already has a heavy deficit. The lira would collapse
completely and all the efforts made by the democratic Governments
up to the present to maintain order throughout the country would
have been in vain and probably the assistance Italy has been receiv-
ing—and that it is indispensable for her to continue to receive—
would lose much of its effect.

Everything possible must be done to avoid such a situation. Italy
appeals to the understanding and generosity of the Nations with
whom, unfortunately, she was at war in the beginning, through the
fault of Fascism. Italy trusts that this appeal will not remain un-
heard when the economic clauses of the Peace Treaty are definitely
drawn up.

It is up to the United Nations to tone down with wisdom the de-
mands laid down by the draft Treaty, whether they regard repara-
tions, renunciations, compensation or indemnities, and limit them to
the possibilities of the Italian people. It is only thus that Italy can be
enabled to work, produce, resume her international trade relations once
more and avoid the calamity of inflation. It is only thus that Italy,
once more a co-operating force in the community of free nations, can be
enabled to meet her international obligations.

The Italian Delegation trusts that the contents of this Memoran-
dum and also the specific remarks set forth apart will be remembered
when the various articles of the Treaty are examined. _

The Italian Delegation is ready to furnish any data that may be
asked for to prove the statements made in this memorandum.

					
				
				
188 FOREIGN RELATIONS, 1946, VOLUME IV

Doe. No. 11 (E).
Memorandum (Art. 64)

ARTICLE 64

At the present moment the Italian Delegation is not in a position
to express its opinion on the question of reparations, owing to the
fact that the draft Peace Treaty contains the reservation to examine
the requests sent in by the other Powers which, besides Russia, claim
reparation from Italy. The Italian Delegation ignores what this
reservation may be.

Concerning the problem of reparation, the Italian Delegation refers
in principle to what it set forth in the Memorandum concerning the
economic consequences of the Peace Treaty.

It will give its full attention to this problem—examining the
amounts, sources of payment and time limit as referred to the paying
power of Italian economy in the general framework of the burdens to
be imposed on Italy—as soon as it is informed of the exact requests of
the Powers asserting the right to reparations from Italy.

In the attached document, the Italian Delegation merely makes
some remarks of a strictly technical nature concerning the clauses
of Article 64.

[Attachment]

Memorandum on the Clauses Concerning the Terms for the Payment
of Reparations to Russia (Art. 64)

ARTICLE 64

1. In order to leave no doubt as to the interpretation of the provi-
sion under letter A, 2 6 and in order that it may be more easily
applied, the following modifications are suggested :

a. A different wording which, for obvious reasons, would make
it quite clear that the provision refers to “net assets” ;

6. The addition of the following words at the end of the paragraph
“and according to special agreements that may be drawn up between
Russia and Italy”. The purpose of this would be to see if it is not
possible for some firms to remain in the countries in which they now
reside, in the interest of these countries themselves.

The paragraph would then read as follows:

“Italian net assets in Roumania, Bulgaria and Hungary, subject
to the exceptions specified in paragraph 5 of Article 69 and according
to special agreements that may be drawn up between Russia and
Italy.”

					
				
				
OBSERVATIONS ON DRAFT PEACE TREATIES 189)

2. Regarding the provision under letter A, 5 0, it is suggested
that an Italian representative should take part in the evaluation of
Italian assets. These are technical matters which call for consulta-
tion and it may even be necessary to have recourse to a technical
Committee of Arbitration to dispel any uncertainty or clear up any
disagreements that may arise.

It would be advisable to make it quite clear that the above refers
also to installations. Consequently the paragraph might be worded
as follows:

“The four Ambassadors, in consultation with an Italian representa-
tive, shall determine the value of the Italian industrial machinery and
installations and of the Italian assets to be transferred to the

U.S.S.R.”

 

Doe. No. 12 (E).

Memorandum on the Clauses of the Peace Treaty Concerning the
Return of Property to the United Nations (Art. 65)

ARTICLE 65

The Italian Government acknowledges its obligation (confirmed in
Nos. 1 and 2 of Article 65) to return all property removed from the
territory of the United Nations and now in Italy. It is of opinion,
however, that the obligation confirmed in No. 3 (to return such
property in good condition and to pay for the labour and material
entailed by repairs) is particularly hard. This provision, if applied
in full, would lay a heavy burden on Italy. As some of the property
to be returned was removed from the United Nations by another Axis
Power and then transferred to Italy, it would be unfair to compel the
latter to repair the damage done before the property was transferred.

Moreover, Italy would also be expected to repair damages due to
natural causes and force of circumstance or produced by the United
Nations themselves.

The obligation of the Italian Government should be restricted
exclusively to repairing such damages as can be ascribed to it. The
provision in No. 3 should be modified in this sense.

The provision in No. 7 of the same article requires the Italan
Government to prove that the property belonging to the United
Nations was not removed by violence. This reversal of the burden
of proof, which is contrary to general usage, would be extremely un-
fair as in most cases it would be practically impossible for the Italian
Government to produce the proofs called for by No. %.

					
				
				
190 FOREIGN RELATIONS, 1946, VOLUME IV

Further, by this reversal of the burden of proof, the Italian
Government would be asked to prove a negative fact, which is also
opposed to all generally recognised principles.

The second part of No. 7 concerning the necessity for the Italian
Government to produce proof that the property was not forcibly seized
should be suppressed.

Concerning the gold transferred by Italy from occupied countries,
it is suggested that the word “looted” contained in No. 8 be eliminated,
leaving “wrongfully removed to Italy”.

With these modifications the Italian Government accepts the
provision in No. 8 and also acknowledges that its obligation to return
the gold in question “exists irrespective of any transfers or removals
of gold from Italy to any other Power or a neutral country”.

However, the Italian Government wishes to make it clear that,
though agreeing to the provision in No. 8, it cannot waive its own
claim for the gold removed from Italy by Germany to be returned if
found—wherever and in whatever quantity it may be—by any United
Nation.

In this connection, it should be stated that Italy considers that all
Italian property removed by Germany should be returned to her and,
in another Memorandum concerning Article 67 of the draft Treaty,
she sets forth the points of law and justice in her favour on this matter.

Coming back to the question of gold, Italy repeats that, since she is
ready to return all gold wrongfully removed to Italy, or its equivalent,
to its rightful owners, it would be most unjust to deny her the right
to get back her own gold.

Attention is also called to the Final Act of the Paris Conference on
Reparation (December 21st 1945), which decided that a pool be formed
of all the gold found in Germany, or in third countries where it had
been transferred by the Germans. This gold was then to be divided
among all the Nations whose gold was looted by Germany. Therefore,
if the gold removed from Italy by Germany is not totally or partially
found it is requested that her right to participate in this gold pool on
the same footing as other Nations be acknowledged without delay.
Italy’s participation in the pool would naturally refer only to such
part of the gold as had not been recovered.

These requests are made without prejudice to whatever solution may
be found for the matter considered in Article 67 of the draft Treaty.

For the above reasons it is proposed that No. 8 of Article 65 be
modified as follows:

“8, The Italian Government accepts the obligation to restore to the
Government of the United Nation concerned all monetary gold
wrongfully removed to Italy, or to transfer to the Government of the

					
				
				
OBSERVATIONS ON DRAFT PEACE TREATIES 191

United Nation concerned an amount of gold equal in weight and
fineness to that wrongfully removed. This obligation is recognised
by the Italian Government to exist irrespective of any transfers or
removals of gold from any other Axis Power or a neutral country.

“In consideration of the above Italy is to be recognised the right to
the restoration of the gold looted by the Germans and now in Germany
or any other country. Should the gold in question not be totally or
partially recovered, Italy is to be allowed compensation for such part
as is not recovered from the pool provided for in the final Act of the
Paris Reparations Conference (December 21st, 1945)”.

 

Doc. No. 38 (BE).

Memorandum on the Clauses of the Peace Treaty Concerning the
Return of Rolling Stock to the United Nations (Art. 65, No. 6)

ARTICLE 65

A considerable amount of Italian rolling stock (including a certain
number of engines) is at present within the territory of Allied and As-
sociated Powers or in territories controlled by them.

This rolling stock is absolutely indispensable to Italy’s economic
reconstruction and to the resumption of trade with foreign countries.
The Italian Government, while acknowledging its obligation to re-
turn to the Allied and Associated Powers all rolling stock belonging
to them, requests that the same principle be applied, for obvious rea-
sons of justice, to Italian rolling stock. Consequently the addition
of the following paragraph to Article 65, No. 6, is suggested:

“Likewise, Italian rolling stock within the territory of said Powers
or in territory under their control shall be returned to Italy”.

 

Doc. No. 35 (H).

Memorandum on the Clauses of the Peace Treaty Concerning Italy’s
Renunciation of Claims Against the United Nations, Particularly
Those Resulting From the Decisions of the Prize Courts (Art. 66)

ARTICLE 66

According to paragraph 1 of article 66 Italy must waive, on behalf
of her Government and nationals, all claims arising directly out of
the war or out of actions taken because of the existence of a state of
war, whether or not Italy was at war at the time with the country
taking such actions.

1. It should be remarked that the date from which this provision
applies is September 1, 1939. In this way the Treaty would sanction

					
				
				


FOREIGN RELATIONS, 19 4 6, VOLUME IV



seizures, captures and other measures taken at a time when Italy was
at war with none of the countries adopting these measures. This is
contrary to all general principles of law.
  2. According to letter c of paragraph 1, Italy would have to agree
to accept as valid and binding all decrees and orders of the Prize
Courts of the Allied or Associated Powers, even if enacted during
Italy's non-belligerency. This means that Italy must accept all meas-
ures adopted by the Prize Courts concerning Italian ships and freights
as well as payment of costs. This renunciation is further extended
by the provisions under paragraph 5, referring to measures taken by
certain countries with regard to Italian ships before Italy was at war
with these countries.
  Quite apart from the question of the date, it would obviously be
unjust to deprive Italy and her nationals of the right to prove, when
necessary, the illegality of these measures, a right sanctioned by in-
ternational law and by the laws of the countries concerned.
  3. According to paragraph 3, the waiver of claims under paragraph
1 should include claims against United Nations which were never at
war with Italy and merely severed diplomatic relations with her.
This is also contrary to the general principles of law, war measures
only being admissible as a consequence of the existence of a state of
war.
  4. Paragraph 5, mentioned above, calls upon Italy to waive all
claims concerning measures taken in connection with Italian ships
before the outbreak of war. This provision should be suppressed
for obvious reasons of justice. Attention is drawn to the fact that
this provision would have extremely serious consequences for Italy's
merchant navy. Several countries in fact seized a considerable num-
ber of Italian ships which had taken shelter in their ports at a time
when Italy was neutral.
  5. It should also be remarked that, according to the Armistice of
September 3, 1943, later confirmed by the Cunningham-de Courten
agreement of Sept. 23, 1943, the Allied and Associated Powers re-
served the right to requisition Italian merchant vessels and, therefore,
implicitly waived their right to seizure. For this reason as well as
for the reasons given above, all these measures, harmful to the interests
of the Italian merchant navy, should be considered illegal whether or
not they are the result of decisions taken by the Prize Courts.
  In view of the above considerations as well as of the remarks made
in connection with other articles of the draft Peace Treaty, the Italian
Delegation submits that the losses these provisions would cause to
Italy assume the proportion of real reparations. Their amount would
often exceed whatever damage Italy may have caused through actions



192


 

					
				
				
OBSERVATIONS ON DRAFT PEACE TREATIES 193

of war. If Italy is compelled to waive her claims on merchant ships
to whose restitution she is entitled, she would lose a large number of
ships absolutely essential to meet her immediate needs.

In view of the above, Italy asks that sub-paragraph c of paragraph
1, and paragraph 5, be suppressed.

 

Doe. No. 13 (EB).

Memorandum on the Clauses of the Draft Peace Treaty Concerning
Italy’s Responsibility for All Requisitions Made by the Allied
Authorities and for All Currency Issued by Said Authorities (Art.
66, Nos. 2, 4)

ARTICLE 66

Apart from the legal aspects of Article 66 and other problems raised
by the same article, attention is drawn to two particular matters which
might be more usefully dealt with outside the Peace Treaty, in view of
the fact that they do not concern all the United Nations but merely
those which actually occupied Italian soil, and that they have, more-
over, already been the subject of an exchange of views between Italy
and the same occupying Powers.

The second paragraph [sentence] of No. 2 of Article 66 reads as
follows:

“The Italian Government agrees to make equitable compensation in
lire to persons who furnished supplies or services on requisition to the
forces of the Allied or Associated Powers in Italian territory and in
satisfaction of non-combat damage claims against the forces of the
Allied and Associated Power arising in Italian territory.”

N. 4 of the same article states:

“The Italian Government will assume full responsibility for all
Allied military currency issued in Italy by the Allied military author-
ities, including all such currency in circulation on the date of the
coming into force of the present Treaty.”

With regard to the second paragraph of No. 2 of Article 66 (apart
from the obligation which is imposed on Italy to compensate non-
combat damage claims, a point to be taken up in another memorandum
on Article 66) the occupying Powers have considered the whole ques-
tion of requisition of goods and services and relative payments as
regulated by Article 33 (A) of the Armistice of 29th September 1943.

With regard to No. 4 of Article 66, these same Powers have up to now
considered the question as regulated by Article 23 of that same
Armistice.

They are both, in fact, questions of a temporary character strictly
connected with the occupation of Italian territory.

					
				
				


FOREIGN RELATIONS, 194 6, VOLUME IV



  In view of the fact that the occupation has been prolonged over a
period far more extensive than could possibly have been foreseen at
the time of the Armistice, the Italian Government has long since ap-
proached the occupying Powers (U.S.A. and Great Britain) asking
that a benevolent interpretation should be placed on those clauses in
order to lighten the staggering onus they carried with them and which
has so notably contributed to the deterioration of the economy and
finances of the country.
  On their side, the occupying Powers, far from turning down this
request of the Italian Government, have recognized that even if some of
the Armistice clauses were formulated somewhat loosely, this is no
reason for interpreting them in their strictest sense and for disregard-
ing the sacrifices incurred by Italy through her war efforts as a co-
belligerent.
  If now all the above questions should be solved as provided in the
draft Peace Treaty, the entire onus of all payments past and future, of
all requisitions, and the entire responsibility for the Am-lire issued
would bear down on the already exhausted Italian economy, disap-
pointing every expectation of a softening of these clauses.
  It is therefore proposed that the above two subjects should be lifted
from the Peace Treaty in order that they may continue to be treated
through the channels already opened for them, through which there
is every expectation that an equitable and reasonable solution may be
reached.

Doc. No. 24 (E).
Memorandunm Concerning the Clauses of the Peace Treaty Connected
  With Italy's Waiving of Credits Ari'sinq Aut of the Geneva Conven-
  tion on Prisoners of War (Art. 66, No. 5)
                           ARnCLE 66
  The last [clause] of paragraph 5 establishes the waiving of all claims
and credits arising out of the conventions now in force concerning
prisoners of war. This means cancelling, among other things:
  a. Credits arising out of wages, or such like, not paid to Italian
prisoners of war. This applies not only to those who have not yet been
repatriated, but also to those who are already at home and to whom
the United Nations have not yet paid all that they are entitled to.
  b. Credits arising from advance payments made by Italy to prison-
ers belonging to the Allied and Associated Powers and which, accord-
ing to the terms of Article 23 of the Geneva Convention of July 27th
1929, should be refunded by the latter.



194


 

					
				
				


OBSERVATIONS ON DRAFT PEACE TREATIES



  It should be remarked, to begin with, that the conventions regarding
prisoners of war were stipulated in order to regulate relations between
belligerent States concerning the obligations and rights arising out of
a war and during a war.
  Obviously a clause which, at the end of hostilities, regulates the
above-mentioned relations otherwise than provided in said conven-
tions, does not appear justified.
  The need to settle this point is so deeply felt that some of the United
Nations are already paying in full to the Italian prisoners, at the
moment of repatriation, the sums due to them. Moreover, the cancel-
ling of this type of credit (especially those listed under letter [Ssubpara-
graph] a which amount to large sums) would seriously affect the Italian
State budget and, together with the other economic clauses of the
Treaty, would increase the danger of inflation and prove unbearable for
the already exhausted finances of the Italian Government. On the other
hand Italy cannot neglect the claims of her prisoners of war, most of
whom belong to the poorest classes.
  Lastly, it is inadmissible, for both moral and juridical reasons, that
Italy should be asked to accept these renunciations for the period after
October 13, 1943, when Italy formally declared war on Germany.
  On that date Italy was recognised as a co-belligerent by the Allied
and Associated Powers and as a consequence of this fact, Italy decided
to engage all the country's armed forces in the fight for the liberation
of her territory. However, the Allied Powers, though they had pro-
claimed Italy a co-belligerent, refused to change the juridical status
of Italian prisoners of war and strictly applied the Armistice clauses.
  The result was a clear distinction between free Italians who were
fighting and Italian prisoners of war who were asked by the Allied
Powers to co-operate in the common war effort despite the rules of
the Geneva Convention which forbids employing prisoners for work
directly connected with warfare. Most Italian prisoners accepted
eand thus became "co-operators". Consequently, some Powers, by
unilateral decision, paid them better, though always less (military
pay included) than their militarised workers.
  Altogether it would seem unfair to refuse Italian cooperators the
pay they are entitled to, just as any other militarised worker, for
work done for various countries as a contribution to the common
victory of the Allied and Associated Powers. The settlement of these
matters might become the subject of special agreements between Italy
and each of the countries concerned.



195


 

					
				
				


FOREIGN RELATIONS, 1946, VOLUME IV



Doc. No. 17 (E).
Memorandum on the Clause of the Draft Peace Treaty Concerning
               Submarine Cables (Art. 66, No. 6)
                         ARTICLE 67 [66]

  The provision in Article 66, No. 6, safeguarding Italian property
rights on such submarine cables as belonged, at the beginning of the
war, to the Italian Government or to Italian nationals, is in keeping
with the principles of international law.
  Therefore it is hard to understand the reservation made by the
United States and U.S.S.R. Delegations concerning the "right to pro-
pose changes with regard to the treatment in the present Treaty of
submarine cables".
  The Italian Delegation would like to stress the fact that the acquisi-
tion and destruction of cables cannot be regulated by the principles
concerning war booty. There is indeed no provision of international
law consenting the acquisition or destruction of cables during hos-
tilities, except the provision in Article 54 of the Hague Convention
which foresees a special case and, even then, provides for the return
of the cable and compensation at the end of the war.
  On the basis of the above principles it is felt that there can be
absolutely no doubt that submarine cables belonging to the Italian
State and to Italian nationals (natural persons or body corporates)
should be returned to them.


Doc. No. 15 (E).
Memorandum on the Clauses Concerning the Waiving of Claim8
                   Against Germany (Art. 67)

                           ARTICLE 67
  Article 67 states that Italy renounces on her own behalf and on
behalf of Italian nationals all claims, including credits against Ger-
many and German nationals outstanding on May 8, 1945, except those
arising out of contracts and other obligations entered into before
Sept. 3, 1939.
  It should be mentioned that most of Italy's claims against Germany
arose after Italy declared war on Germany on October 13, 1943. These
claims refer especially to the following main items:
  1. Opening of credits with the Bank of Italy for the occupation
indemnity imposed on the government of the so-called fascist repub-
lic by the German Command between October 1943 and April 1945.



496


 

					
				
				


OBSERVATIONS ON DRAFT PEACE TREATIES



This opening of credits, which for the most part were drawn, amounts
to an enormous sum.
  2. A huge quantity of monetary gold removed from Italy by the
German authorities and transferred to Germany ;*
  3. Industrial installations and machinery-often the most up-to-
date models-taken from Italian factories by the Germans;
  4. Debts with private firms and public Administrations left un-
paid and amounting to several billion present-day lire. Requisitions,
indemnities and miscellaneous items that were not settled.
  To waive all these claims-as Article 67 compels Italy to do-
would mean to cancel undeniable Italian rights born from the war
which Italy declared and fought against Germany side by side with
the United Nations. Italy fought this war at the cost of great sacri-
fice and it would be against all laws of justice to deny her legitimate
claims against Germany for acts committed during the occupation,
often against international law.
  Nor is the reservation in the last part of the article-which gives
vague assurance as to measures that may be taken on this point by the
Powers in occupation of Germany-sufficient to attenuate the serious-
ness of the clause.
  It is felt that the problem of Italy's claims against Germany should
be reexamined so that a fairer solution may be reached. The ques-
tion could be considered from the following two angles:
  a. Italian property wrongfully removed by the Germans to their
country. Surely there can be no possible objection to Italy's getting
back such part of her property as has been found on Germany terri-
tory or elsewhere. This right, moreover, has already been recognised
by some of the Allied and Associated Powers;
  b. Claims against Germany arising in cases considered in Nos. 1 and
4 of this Memorandum and in other cases.
  It is realised that it will be difficult to meet these claims, in view
of the burden imposed on Germany as reparation. It is to be hoped,
however, that once German economy and production have picked up,
it will be possible for Germany not only to pay the reparations due
to the Powers entitled to them, but also to gradually pay off her debts
towards Italy.
  It is requested, therefore, that the question of Italy's claims against
Germany be reconsidered, taking into account the legitimate Italian
interests according to the procedure which the U.S.S.R. proposed to
adopt for the settlement of similar question for Finland, Hungary,
Bulgaria and Roumania.
  *The gold question and the question of rolling stock are dealt with in
detail
under Article 65. [Footnote in the source text.]



197


 

					
				
				


FOREIGN RELATIONS, 1946., VOLUME IV



Doc. No. 21 (E).
Memorandur on the Question of United Nations Property in Italy
                            (Art. 68)
                            ARxincu 68
  With the laws of February 1, 1945 No. 36, and March 26, 1946
No. 140, drafted in every detail in accord with the Allied Authorities
in Italy, the Italian Government has already taken steps to revoke
all measures adopted during the war against property and firms be-
longing to the United Nations and their nationals.
  It would therefore seem superfluous to apply Nos. 1, 2 and 3.
  Concerning No. 4, the Italian Delegation draws attention to the size
of the burden deriving from the proposal made by the United States
and adhered to in principle by Great Britain and France.
  Letter [subparagraph] a (referring to letter d which gives an exces-
sively broad definition to "war acts") would compel Italy to make
good
all the damage caused to United Nations' property-both before and
after Italy's declaration of war against Germany on the side of the
United Nations-through force of circumstance, through war opera-
tions by Germany and the United Nations themselves, and through
measures they adopted.
  The conditions laid down for Italy are far harsher than those pro-
vided for Germany in the Versailles Treaty, in which (Art. 297) the
payment of compensation is established, but is:
  a. Determined by a Commission of arbitration;
  b. Granted only in as far as the damages can be ascribed to
Germany.
  The damage suffered by Allied property in Italy is essentially war
damage and should, as a matter of principle, be compensated in the
same measure as the property of Italian nationals.
  However the Italian Government does not ask for the cancellation
of this obligation but for obvious ethical reasons and in view of the
burden implied, it makes the two following remarks:
  1. After October 13, 1943 the war was fought in Italy, with the
latter on the side of the United Nations. Surely, therefore, Italy's
co-belligerency, mentioned in the preamble to the Treaty, should
exonerate her from compensating the damage caused by war opera-
tions or measures enacted by the Germans against the property of the
United Nations and their citizens. The war was fought in common,
for a common cause, and it is unjust that Italy alone, who suffered
such immeasurable damage through the war fought on her territory,
should bear all the consequences in this respect.



198


 

					
				
				


OBSERVATIONS ON DRAFT PEACE TREATIES



  It is therefore requested that the obligation to make compensation
for damages be limited to such as occurred prior to October 13, 1943
and that the period for submitting claims for compensation be fixed
at one year from the coming into force of the Treaty.
  2. Letter c grants United Nations citizens compensation for such
sums as they had directly or indirectly invested in corporations or
associations of any nationality other than of one of the United Na-
tions. This measure, besides increasing the burdens imposed on
Italy:
  a. Is a serious deviation from the fundamental principles of law,
for it makes an inadmissible distinction between the juridical subject
(corporation or association) having suffered the damage and the
person interested in this company or association;
  b. Proposes a different treatment for the various members of
the same body;
  c. May give rise, when applied in practice, to serious drawbacks in
view of the ease with which shares can be shifted from one person
to another within the same corporation or association.
  Finally, the clause contained in No. 6 is opposed to the fiscal
sovereignty of the Italian State, for it provides that the property of
United Nations citizens is to be exempt from any exceptional taxes on
capital imposed, or to be imposed, by the Italian Government during
the period between the Armistice and the Peace Treaty.
  This clause has no counterpart even in the Versailles Treaty, in
which the provision concerning exceptional taxes on capital has a
fundamentally different aim and is solely meant to regulate the trans-
ferability of such levies. The clause appears moreover to serve no
practical purpose in view of the limited time taken under consideration.
  On the strength of the above remarks, the following amendments
are suggested:
  1. No amendment.
  2. No amendment.
  3. No amendment.
  4. a. Where, as a result of the war, the property cannot be returned,
or the United Nations' national has suffered a loss because of injury
to the property, the Italian Government shall compensate the owner
by the payment of a sum in lire sufficient at the date of payment to
enable the recipient to buy similar property or to make good the loss
or damage suffered. The provision of thi2 8Ub-paragraph applie8 to
lose and damage muffered before October 13, 1943. alaims for in-
demnitie8 8hall be mbmitted within one, year of the coming into force
of the present Treaty.
    b. No amendment.
    c. To be suppressed.



199


 

					
				
				

FOREIGN RELATIONS, 19 4 6, VOLUME IV



  5. No amendment.
  6. To be suppressed.
  7. No amendment.
  8. No amendment.


Doe. No. 25 (E).
Menorandiumr on the Clawses of the Draft Peace Treaty Concerning
Italian Property in the Territory of the, United Nations (Art. 69)

                            ARTICLE 69
  A. According to Article 69, each of the Allied and Associated
Powers shall have the right to seize, retain or liquidate all property,
rights and interests within its territory which on the date of the com-
ing into force of the Treaty belong to Italy or Italian nationals,
including property subject to control by reason of the state of war
and with the exception of certain categories specially mentioned.
  The Italian Government has already called the attention of the
United Nations Governments to the consequences of the adoption of
a measure of this nature. The Italian nationals, who would lose the
property in question, acquired it after long years of hard work. Per-
sons who are in no way responsible for the policy of the Fascist regime,
and who contributed considerably to the economic development of
the countries they were living in, would thus be deprived of all their
property. Obviously no amount in lire, paid to them in Italy, could
compensate them for the loss of positions they had acquired through
their work and sacrifice in many years. On the other hand the com-
pensation that the Italian Treasury would have to pay to persons thus
deprived of their property would impose an extremely heavy burden
on the Italian budget.
  The loss of Italian property abroad would compromise beyond re-
pair the situation of certain Italian enterprises having interests abroad
and would thus most seriously affect Italy's domestic economic
situation.
  Another no less serious consequence is the following: despite the
best intentions, despite the fall in the Italians' standard of life, despite
outside help, Italy cannot hope to absorb all the man-power at her
disposal. Consequently she must count on the possibility of a new
increase of emigration (which used to counterbalance the effects of
over-population most effectively before being restricted for political
reasons by the fascist regime) as soon as general conditions make it
possible. The requirements of reconstruction and industrial develop-



200


 

					
				
				

OBSERVATIONS ON DRAFT PEACE TREATIES



ment in various foreign countries lead one to hope that Italian man-
power may be utilised abroad on a large scale to the advantage of
world economy. But emigration would meet with serious obstacles,
also of a psychological nature, if, when Italy is once more admitted to
the international community, Italians owning property abroad were
to see the results of their work suddenly annulled.
  It should be remarked, moreover, that this clause does not exist in
the Treaty with Finland and its inclusion in the Treaties with
Rumania, Hungary and Bulgaria is still under discussion.
  Consequently the Italian Delegation must insist on Article 69 being
suppressed or at least restricted to the property, rights and interests
of the Italian State other than those used for consular or diplomatic
purposes.
  B. Should the suppression not be possible, this article would have to
be differently worded so that the clause is only applied in cases where
credits actually exist and only within such limits as are strictly neces-
sary for satisfying the claims of the Allied or Associated Powers,
respecting at the same time the principles of justice and legality. The
provision of Article 69 merely mentions that Italian property, rights
and interests will be liquidated in accordance with the laws of the
Allied or Associated Power concerned, but does not establish the pro-
cedure to be followed in determining the amount of the credit of each
Allied or Associated Power and of its nationals. On the contrary
this article seems to leave such evaluation to the creditor Powers, in
contrast to all generally recognised juridical principles.
  Furthermore, no procedure is established for determining the value
of property, rights and interests that each of the Allied or Associated
Powers contemplates liquidating to pay its credit.
  The clause under discussion seems to exclude also the possibility for
Italy to pay her debts by other means in order to avoid the liquidation
foreseen by the Treaty. This would mean ignoring the right that all
legislations generally recognise to debtors of meeting their obligations
by any appropriate means of payment in order to avoid the seizure
of their property by their creditors.
  As this clause restricts the right of ownership in the most excep-
tional manner and is in contrast with the general principle according
to which each person must answer with his property for his obligations
and only for them, it is essential to modify the proposed system so that
the Allied and Associated Powers shall have the right to seize Italian
property until their claims and those of their nationals are satisfied,
but shall not have the right to liquidate it unless it is impossible for
them to obtain the payment of their credits otherwise.



219-115-70 ----14



201


 

					
				
				

FOREIGN RELATIONS, 19 4 6, VOLUME IV



  Furthermore if it really becomes necessary to liquidate this prop-
erty, its liabilities should be taken into account as well as the personal
debts of the owners in the country where the property is located. It
is moreover requested that, to the owners of the liquidated property,
the right be granted to buy back their property by paying the price
of liquidation.
  C. Paragraph 4 of the article under discussion stipulates that the
Allied and Associated Powers are under no obligation to return to
the Italian Government or Italian nationals industrial, literary or
artistic property rights or to include such property rights in deter-
mining the amounts which may be retained for satisfying the claims
advanced by each of the Allied Powers against the Italian Govern-
ment or Italian nationals.
  The Government of each of the Allied and Associated Powers would,
moreover, have the right to impose such limitations, conditions and
restrictions as may be deemed necessary by the said Power, on rights
and interests with respect to industrial, literary and artistic property
acquired by the Italian Government or Italian nationals prior to the
coming into force of the Peace Treaty with the Power concerned. In
this way even rights and interests acquired after the Armistice would
be subject to this provision.
  The Italian Government, while recalling its remarks on the clauses
concerning industrial, literary and artistic property (Annex 6), wishes
to stress the fact that copyrights and patents are of a special character
which, in spite of differences in the various legislations as for their
nature, always entail pecuniary remuneration. Less severe conditions
should therefore be made as regard these rights than for other prop-
erty, rights and interests. On the contrary, the provision in question
deals with these rights still more severely. Consequently it is felt that
this provision should be suppressed, though reserving to Annex 6 the
settlement of the rights and interests of industrial, literary and artistic
property. Provision should be made for these rights and interests not
to be included among those to be retained or liquidated.
  D. Paragraph 5, letter (c) provides that the clause in Article 69
does not apply to the property, rights and interests of natural persons
of Italian nationality "permitted to reside . . . "
  In order to avoid any misunderstanding it should be specified that
this provision also refers to the property of Italians "permitted to
reside on September 3,1939...
  E. For obvious reasons of humanity and justice it should be agreed
that the property considered in paragraph 1 of Article 69 does not
include wages, pensions and indemnities for the expiration of labour
contracts due to Italian nationals by public or private juridical per-
sons or by natural persons and which have not yet been paid owing



202


 

					
				
				
OBSERVATIONS ON DRAFT PEACE TREATIES 203

to the state of war. The aforesaid sums are really maintenance allow-
ances and, in most cases, will be used to meet the obligations contracted
for subsistence during the period in which said sums were not paid.

F. Paragraph 5, letter f, proposes that the property of corporations
or associations having “siége social” in ceded territories or in the Free
Territory of Trieste be exempted from the provisions of the article
in question provided that they are not owned or controlled by persons
in Italy.

It should be remarked that this limitation would create an arbitrage
[arbitrary?] distinction between certain corporations or associations
of the same nationality and would, quite apart from its harshness, give
rise to a number of difficulties as to how it should be applied.

Moreover, according to most legislations, it is the séége social that
determines the nationality of corporations and insurance companies.
Furthermore the fact that a corporation has its siége social in ceded
territories or in the territories of Allied or Associated Powers can only
be of advantage to the economic situation of these corporations and
to the prosperity of these territories.

The right of Allied or Associated Powers to seize, retain or liquidate
property, rights and interests owned by the Italian Government or by
Italian nationals should not be applied to rolling stock belonging to
the Italian Government or to Italian nationals which, on the date of
the coming into force of the Treaty, may happen, for any motive, to
be in the territory of Allied or Associated Powers. This amendment
is necessary in order not to jeopardize such trade exchanges as have
already been resumed between Italy and other European countries,
with the agreement of the Allied and Associated Powers. Obviously
neither the State railways nor private owners of such rolling-stock
would allow it outside Italy if it were liable to seizure.

 

Doc. No. 29 (E).

Memorandum on the Economic and Financial Provisions Relating to
Ceded Territories (Annex 8)

1. Paragraph 1 of Annex 3 establishes that the Successor State shall
receive, without payment Italian State and parastatal property within
ceded territories. It should be remarked that this provision is not in
keeping with the principles of international law and with the rules
applied in international treaties.

As regards State properties, Italy should be granted the right to
have their value credited, and to establish the procedure for their
evaluation if the two Governments do not succeed in reaching an agree-
~ ment on this point.

With particular regard to the territories ceded by Italy on the East-
ern frontier, the precedent of the St. Germain Treaty should be re-

					
				
				


FOREIGN RELATIONS, 1 9 4 6,, VOLUME IV



called. In Article 208 of the Treaty, Italy was debited with the value
of all State property existing in the annexed area and wrote it down
as reparations.
  As regards the extension of this obligation to parastatal property,
it must be stressed that this is contrary to international usage: the
Versailles Treaty provided for the cession of property situated in
ceded territories (and even this cession was not without payment),
but of State property only.
  Moreover, the definition of parastatal property contained in para-
graph 1 is so extensive that property of an undeniably private charac-
ter can easily be included in it.
  While there is no objection to the cession of property of local au-
thorities, who, residing in the ceded territory, must of course retain
the property necessary to carry out their function; and while the
former property of the Fascist party and its auxiliary organisations
has, according to Italian legislation, become State property and need
not be mentioned here; it is, on the other hand, inadmissible to consider
State or parastatal property the property of "public institutions"
(a
category not easy to define) and, still less, the property of "publicly
owned Companies and Associations".
  In fact, in the case of companies carrying on business or industrial
activities, exploiting mines, etc., the fact that the State facilitates their
formation by subscribing all or part of their capital, does not modify
the nature of the Company which must still be classed according to its
aims and activities and not according to the nature of its shareholders.
  State investments in companies of a strictly business nature may
be a deviation from normal State activities and a sign of the unwar-
ranted interference of the State in the economic life in recent years.
But in view of its form (participation in limited companies or associa-
tions) State intervention must be considered a purely transitory
phenomenon, which consents at a later stage to abolish this interfer-
ence, and does not alter the nature of the economic organ under con-
sideration. Such intervention, therefore, does not authorise the
classing under public institutions of economic bodies having a strictly
private nature.
  For all the above reasons, the suppression of the words "without pay-
ment" and "parastatal", as well as the entire second part
of the para-
graph is proposed.
  2. No remarks are called for concerning the system laid down in
Paragraph 2 for the conversion of currency. It would be necessary,
however, to complete this provision with guarantees ensuring that the
currency withdrawn cannot be put into circulation again. It is pro-
posed that this operation take place before Italian Government repre-
sentatives, and that the notes withdrawn be destroyed in their presence.
  3. Paragraph 3 of Annex 3 provides for the assumption by the



204


 

					
				
				
OBSERVATIONS ON DRAFT PEACE TREATIES 205

Successor State of a part of the Italian public debt. There is no dif-
ficulty in accepting the British proposal, also supported by the United
States Delegation, although the principle it is based on, means a
heavier burden for Italy than is customary to adopt in similar cases.

It should be remarked, moreover, that the proposals of the French
and Russian Delegations could not possibly be applied as no public
debts have been specifically incurred in Italy for construction of public
works in ceded territories.

Furthermore, the guarantees mentioned under No. 2 above should
also be inserted in Paragraph 3, namely, when the Successor State
proceeds to replace the bond certificates of the public debt it assumes
in obligation, the withdrawal and destruction of the former Italian
bonds should take place in the presence of representatives of the Italian
State.

4, While accepting the clause under No. 5, the suppression is re-
quested of the French Delegation’s proposal according to which the
Successor State would be entitled to appropriate, free of charge, prop-
erty, rights and interests of Italian concessionary companies or public
utility services such as water, gas, electricity and transport, situated
in ceded territories. This clause is in contrast with the principles
generally adopted in the case of cession of territories, principles on
which the measures in Annex 3, concerning property, are based.

Should the French proposal be accepted, owners of property in
ceded territories might be subject to measures of expropriation based
on accidental grounds, such as the nature or destination of the territory,
and this in open contrast with the general guarantees, duly provided
by the other paragraphs of the Annex, for the protection of property
rights.

In any case, according to the laws and usage of most States, conces-
sionaries of public utility services, though subject to special provision,
do not lose their private character.

It would be advisable to add to Paragraph 5 of the Annex a third
subparagraph as proposed by the United States Delegation (sup-
ported by the British) in order to avoid doubts as to its meaning and
consequent disputes in the future.

5. The words “within the limits” should be removed from the second
subparagraph of paragraph 6 which provides for the removal of
property to Italy. These words, taken literally, might give rise to
the interpretation that the Successor State can restrict the guarantees
granted in the first subparagraph of paragraph 6.

6. Concerning paragraph 7, it should be remarked that the addi-
tional proposal made by the French Delegation would restrict and, in
certain cases, annul the faculty of removing property, rightly granted
by the proposal of the United States and Great Britain to companies
having their siége social in ceded territories.

					
				
				
206 FOREIGN RELATIONS, 1946, VOLUME IV

7. Concerning the proposal contained in paragraph 10 (supported
by the British and American Delegations subject to drafting, and
considered superfluous by the U.S.S.R. Delegation) the following re-
marks are in order: This proposal asserts that a new agreement shall
be negotiated between the Company, the States concerned and the
Committee of Bondholders of the Company, but, on the other hand,
the proposal limits to such an extent the contents of this new agree-
ment as to hamper its conclusion; all the more so in view of the finan-
cial charges that would arise for the Signatory States.

Apart from this, it is essential that the Peace Treaty pledge the
Signatory States to see that the Company fulfils its general tasks,
namely : to promote the coordination of the tariff policies of the States
operating the railways running to Trieste, as well as all other measures
for the increase of the traffic of this important port.

It is therefore proposed that the provision under discussion be
modified as follows: “A new agreement shall be negotiated between
the Danube-Sava-Adriatic Railway Company, the Governments con-
cerned and the Committee of Bondholders of the Company. This
agreement will take into account the changes which have followed on
the redistribution of the lines over the territories of various States.
It will likewise ensure satisfactory servicing of the bonds and develop
the functions of public interest exercised by the Company so as to
obtain close co-operation among the States in promoting traffic.

8. Owing to the complexity of the matters dealt with in Annex 3
and the ensuing possibility of controversy, some form of arbitration
should be provided. A Commission of Arbitration composed of three
members might be established, two members being appointed by the
parties concerned and the third by mutual agreement or, failing this,
by the President of the International Court of Justice.

9. The Italian Delegation agrees to the proposal of the United
States suggesting that Annex 3 should not be applied to the Free Ter-
ritory of Trieste, for which special provision should be made.

10. As the remarks contained in this Memorandum concern most
of the provisions in Annex 8, a draft of the amended text is attached.

[Attachment]

Amendments Proposed for Annex 3, Economie and. Financial
Provisions Relating to Ceded Territories

1. The value of Italian state and parastatal property within terri-
tory ceded under the present Treaty shall be credited to Italy. For
the purposes of this article all movable and immovable property
formerly belonging to the Fascist Party or its auxiliary organisations
are considered as State property.

					
				
				


OBSERVATIONS ON DRAFT PEACE TREATIES



  Local authorities in the ceded territory shall retain their property
in said territory without payment.
  The Successor State shall receive all relevant archives concerning
the territory in question.
  2. The Successor State shall make arrangements for the conversion
into its own currency of Italian currency held within the Ceded Terri-
tory by persons continuing to reside on the said territory or juridical
persons continuing to carry on business there. Full proof of the
source of the funds to be converted may be required from their holders.
  The conversion and destruction of Italian currency shall be carried
out in the presence of delegates of the Italian Government according
to agreements stipulated between the Country concerned and Italy.
  3. The Successor Government shall not be required to make any
contribution to the service of the Italian public debt, but it shall assume
the obligations of the Italian Government to holders of the Italian
public debt who continue to reside in the said territory or who, being
juridical persons, retain their head office or principal place of business
there. Full proof of the source of such holdings may be required from
the holders.
  The conversion and destruction of Italian Public Debt bonds shall
be carried out in the presence of delegates of the Italian Government
according to agreements stipulated between the country concerned and
Italy.
  4. No changes.
  5. The property, rights and interests of Italian nationals perma-
nently resident in the Ceded Territories at the date of the coming into
force of the present Treaty shall, provided they have been lawfully
acquired, be respected on a basis of equality with the rights of
nationals of the Successor State.
  The property, rights and interests within the Ceded Territory of
other Italian nationals and also of Italian juridical persons, provided
they have been lawfully acquired, shall be subject only to such legisla-
tion as may be enforced from time to time regarding the property of
foreign nationals and juridical persons generally.
  Said property, rights and interests shall not be subject to retention
or liquidation under the provisions of Article 69 of the present Treaty,
but shall be restored to their owners freed of any measures of this kind
or from any other measure of transfer, compulsory administration or
sequestration taken between September 8, 1943 and the date of the
coming into force of the present Treaty, in the conditions in which
they were before the application of the measures in question.
  6. Persons who opt for Italian nationality and move to Italy shall
be permitted, after the settlement of any debts or taxes due from them
in Ceded Territory at the date of the coming into force of the Treaty,
to take with them their movable property and transfer their funds,



207


 

					
				
				
208 FOREIGN RELATIONS, 1946, VOLUME IV

provided such property and funds were lawfully acquired. No export
or import duties will be imposed in connexion with the moving of such
property. Further they shall be permitted to sell their movable and
immovable property under the same conditions as nationals of the
Successor State.

The removal of property to Italy will be effected under conditions
agreed upon between Italy and the Successor State.

The conditions and time-periods of the transfer of the funds, includ-
ing the proceeds of sales, shall likewise be agreed.

7. Companies incorporated under Italian law and having Szége
Social in the Ceded Territory, which wish to remove Siége Social to
Italy, shall likewise be dealt with under the provisions of paragraph 6
of this article, provided that more than fifty percent of the capital of
the company is owned by persons usually resident outside the Ceded
Territory, or by persons who have opted under the present Treaty to
move to Italy.

8. No changes.

9. No changes.

10. A new agreement shall be negotiated between the Danube-Sava-
Adriatic Railway Company, the Governments concerned and the Com-
mittee of Bondholders of the Company. This agreement will take
into account the changes which have followed on the redistribution of
the lines over the territories of various States. It will likewise ensure
satisfactory servicing of the bonds and develop the functions of public
interest exercised by the Company so as to obtain close cooperation
among the States in promoting traffic.

11. No changes.

12. All differences of opinion arising as to the meaning and applica-
tion of this Annex shal] be referred to a Commission of Arbitration
formed as follows:

The Government concerned and the Italian Government shall each
appoint a member. The third member shall be selected by mutual
agreement of the two Governments. Should the two Governments
fail to reach an agreement, the third member shall be selected by the
President of the International Court of Justice. The Commission of
Arbitration shall establish its own rules of procedure. The decisions
of the Commission will be final and binding.

 

Doc. No. 4 ter (P),

Memorandum on the Clause of Annex 3 Concerning Italian Colonies
(Annex 3, par. 11)

Annex 8 of the draft Peace Treaty, which deals with economic and
financial provisions relating to Ceded Territories, states at Para. 11

					
				
				
OBSERVATIONS ON DRAFT PEACE TREATIES 209

that the said provisions “shall not apply to the former Italian
Colonies”.

The Italian Delegation has already explained in Memorandum 4
(P) the Italian Government’s point of view on the Colonies and has
proposed, in Memorandum 4 dis (P), a new text for article 17. Ac-
cording to this new text, the final disposal of Italy’s African Terri-
tories “shall be determined jointly by the Governments of the U.S.8.R.,
U.S.A., U.K., and France, according to the principles laid down in
the San Francisco Charter and taking into account Italian interests
in said territories, within one year of the coming into force of the
present Treaty.”

With a view to harmonizing para. 11 of Annex 3 with the new text
of article 17 quoted above, it is proposed that paragraph 11 should
be worded as follows:

“The questions dealt with in this Annex, insofar as they apply to the
Italian Colonies, will be reconsidered when a decision is reached on
their final disposal”.

This proposed text is consistent with the footnote to paragraph 11
of Annex 3 of this Treaty.

 

Doe. No. 86 (EB).
Memorandum on the Clauses of Annex 6

A. Industrial, literary and artistic property.

The clauses of Annex 6 concern the safeguarding and restoration
of industrial, literary and artistic property rights injured or lost as a
consequence of the state of war. This question does not merely con-
cern relations between former enemy countries, but also relations be-
tween Allied countries, between belligerents and neutral countries as
well as between neutral countries.

For this reason, pending the conclusion of the Peace Treaties, the
question covered by Annex 6 has been examined by the international
organisations concerned. Suffice it to mention the resolutions adopted
at Zurich (June 1946) by the “Executive Committee for Industrial
Property” and—as regards copyrights—the resolutions adopted in
Paris in the same month by the Legislation Committee of the “Interna-
tional Confederation of Authors and Composers” which includes some
52 Federated Societies belonging to almost all the countries of the
world.

It would be highly welcome if the provisions of Annex 6 could be
adopted also by States not signing the Peace Treaty, as well as by
Allied and Associated Nations for their mutual relations, in order to
attain the necessary uniformity in this field when the time comes for

					
				
				


FOREIGN RELATIONS, 19 4 6,, VOLUME IV



the inevitable regulation of these rights as was done after World War I
through the Bern "Arrangement" of June 30, 1920.
  In fact, one might adopt, for the cases it covers, the draft of the
international "Arrangement" drawn up at Zurich by the above-men-
tioned "Executive Committee", completing it with special provisions
concerning literary property. This Draft is inspired by the Bern
"Arrangement" of June 30, 1920, as well as by the Agreement stipu-
lated by France and Great Britain on August 29, 1945. Moreover,
it does not in any way depart from the general provisions contained
in Annex 6 of the present Draft Peace Treaty.
  2. Should it be desired to retain the clauses of Annex 6, the follow-
ing amendments would have to be made:
  a. The failure to comply with the procedure established by the laws
of the various countries concerning industrial, literary and artistic
property is due, in most cases, to difficulties arising out of the existence
of a state of war. The Italian Delegation therefore proposes that
Sept. 1, 1939, be fixed as the date on which these difficulties started.
This date was also chosen by the Draft "Arrangement" drawn up at
Zurich. (The Franco-British agreement of August 29, 1945, and an
Italian law on this subject fix the date at Sept. 3, 1939 and August 31,
1939 respectively.)
  b. To avoid any uncertainty which the expression "owing to the
existence of a state of war" might give rise to, the substitution of
the
three lines of sub-paragraph 1, a, with the following sentence is
proposed:
         preserving in Italy of rights in industrial, literary and
artistic property already acquired on Sept. 1, 1939, or which, had war
not broken out, could have been acquired after this date as the result
of an application made before or during the war".
  c. In sub-paragraph 1, b, it should be made quite clear that applica-
tions for the right of priority mentioned in Article 4 of the interna-
tional Convention of Paris can only be made by Allied and Associated
Powers which are members of the Union, or by their nationals. Con-
sequently it is proposed that, in the first line, the words "belonging
to the Paris Convention" be added after "The Allied and Associated
Powers".
  For the reason set forth above it would be advisable to substitute the
date of Sept. 1, 1939, to that of the outbreak of war with Italy con-
tained in the clause under sub-paragraph 1, b. The two sentences "12
months before the outbreak of the war with Italy" should be replaced
by "12 months before Sept. 1, 1939" and "six months before
Sept. 1,
1939".
  d. In accordance with the provisions contained in the Bern "Ar-
rangement", the Zurich draft "Arrangement" and the Franco-British
Agreement, the Italian Delegation proposes that the time-limit laid



210


 

					
				
				


OBSERVATIONS ON DRAFT PEACE TREATIES



down in paragraph 2 be fixed "from Sept. 1, 1939, to the date of the
coming into force of the present Treaty" and not "from the outbreak
of the war until a date 18 months after the coming into force of the
present Treaty". There is in fact no justification for such a long delay.
  e. Concerning paragraph 3, the Italian Delegation agrees as to the
advisability of excluding the war period from the normal duration of
rights in industrial, literary and artistic property. The Italian Gov-
ernment on its part, with a law of June 20, 1945, concerning literary
and artistic property has already provided for an extension of the
duration of rights in the economic exploitation of intellectual
production.
  The Italian Delegation proposes that, in analogy with the other
terms, the date from which the further period provided in paragraph 3
should begin shall be fixed at Sept. 1, 1939.
  Instead of ". . . which were in force in Italy at the outbreak of
the
war" the sentence: "which were in force in Italy on September 1,
1939"
should be inserted.
  f. The Italian Delegation finds that the proposal of the U.S.S.R.
Delegation to suppress the sentence in italics in paragraph 4 is justi-
fied, for it would be extremely difficult to ascertain the rights granted
by any one Allied or Associated Power to any other United Nation.
  g. In paragraph 5 the protection of the rights belonging to third
parties should also be extended to literary and artistic property. It
would be sufficient to add to the first part of paragraph 5 the words
underlined in the following sentence:
       Have bona fide acquired industrial, literary and artistic prop-
erty rights ..
  h. The Italian Delegation also proposes that, failing agreement
between the parties concerned, the terms and conditions of license men-
tioned in the second part of paragraph 5 be fixed by the Mixed Court
proposed in Article 76 bis (Italian amendment) and not by the Con-
ciliation Commission established under Article 72 of the present
Treaty. The controversies would in fact concern relations between
private persons and not between governments.
  i. With regard to paragraph 8 it should be recalled that the Italian
Delegation has suggested that rights in industrial, literary and artistic
property should not be included in the property which, according to
paragraph 1 of Article 69, may be retained or liquidated. There is
consequently no ground for mentioning Article 68 in paragraph 8,
Annex 6. Such mention should therefore be suppressed.
  7. [sic] In accordance with what has already been said, the Italian
Delegation insists that clauses be added to Annex 6 establishing:
  -the date of cessation of the measures which the Signatory Coun-
tries of present Treaty intend to adopt; and



211


 

					
				
				


FOREIGN RELATIONS, 19466, VOLUME IV



  -the revision of conditions of license both with regard to the
payment and the duration.
  The Italian Delegation consequently accepts the proposals contained
in resolution No. 3 adopted by the "Legislation Committee" of the
"International Confederation of Societies of Authors and Composers".
This resolution, with regard to the revision of the conditions of exploi-
tation of rights, is consistent in principle with the clause of Article 2
of the Franco-British Agreement of August 29, 1945 and reads as
follows:
  "The measures taken by certain countries (other than measures for-
bidding or restricting relations with the enemy or concerning enemy
property or the export of capital) which infringe on the rights enjoyed
by foreign authors in these countries before the war, shall cease to have
effect, and a revision of the financial terms for the exploitation of their
works in the past shall be made at the request of the parties concerned.
Suitable provisions shall also be made concerning the time-limit legally
established for these rights, subject to transitional measures which
may be granted to spread, over a short period of time, rights acquired
by third persons."
  5. In order to avoid the difficulties which the cession of territories
might cause to the owners of rights in industrial, literary and artistic
property following their change of nationality, it would be advisable
to add a clause recognising and keeping in force industrial, literary
and artistic property rights for the duration established in Italian law.
  A clause of this kind would not be without precedent in other Peace
Treaties, for such clauses already exist in the Treaties of Versailles
(Art. 311), Saint-Germain (Art. 264 and 274) and Lausanne, July 24,
1923 (Art. 8).
  The need for such a clause is also recognised by the "Committee of
Legislation" mentioned above (Proposal No. VI).
  It might be worded as follows:
  "The inhabitants of the territories ceded by Italy in compliance with
the present Treaty shall retain, notwithstanding the cession and their
subsequent change of nationality, the full enjoyment in Italy of all
industrial, literary and artistic property rights which they owned
under Italian law at the time of the cession.
  "The industrial, literary and artistic property rights in force in
the
territories ceded by Italy in compliance with the present Treaty, or
those to be restored through the application of the provisions of the
present annex, shall be recognised by the Country to which said terri-
tories are ceded. These rights will remain in force for the duration
granted by Italian law."
  6. Italy has stipulated bilateral treaties concerning literary and
artistic property with the United States of America, with the Republic
of Cuba and with Nicaragua. She also has an Agreement with the



212


 

					
				
				


OBSERVATIONS ON DRAFT PEACE TREATIES



U.S.S.R. providing for a temporary status quo with regard to indus-
trial, literary and artistic property.
  The U.S.S.R. did not take part in the Paris Convention of
March 20, 1883 for the safeguarding of industrial property or in the
Bern Union of September 9, 1886 for the protection of literary and
artistic property. The three other States mentioned above did not take
part in the latter Convention. Therefore the reasons set forth for the
modification of Article 37 concerning bilateral treaties in general are
even more valid when applied to bilateral treaties concerning indus-
trial, literary and artistic property. In their case, in fact, the period
of uncertainty-fixed by said article at six months after the coming
into force of the Treaty-might seriously prejudice the exercise of the
rights protected by these bilateral treaties.
  Should the Italian Delegation's proposal for the modification of
Article 37 not be accepted, a special clause concerning bilateral treaties
dealing with industrial, literary and artistic property should be
inserted.
  Such a clause might be worded as follows:
  Art. 37 bis.-"1. Each Allied or Associated Power will notify Italy
within a period of six months of the coming into force of the present
Treaty which bilateral treaty concerning industrial, literary and
artistic property it does not desire to keep in force.
  "2. All treaties so notified are to be regarded as abrogated one month
after the date of notification.
  "3. Any provision of treaties not so notified which are not in con-
formity with the present Treaty shall be deleted.
  "4. The Treaty thus kept in force will be registered with the Secre-
tariat of the United Nations in accordance with Article 102 of the
United Nations Charter."
  Nom-.-See:
  Bern "Arrangement" of June 30, 1920;
  Resolutions adopted at the Paris meeting of June 1946 by the
"Legislation Committee" of the "International Confederation
of
Societies of Authors and Composers";
  Resolutions adopted at the Zurich meeting of June 1946 by the
Executive Committee of the "International Associations for the Pro-
tection of Industrial Property";
  Franco.-British Agreement of August 29, 1945.


Doc. No. 36 bis (E).
                      Proposed Amendments
                             ANmx 6
  A. Industrial, literary and artistic property.



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FOREIGN RELATIONS, 19 4 6, VOLUME IV



  1. a. Substitute:
  ". . . which were not capable of accomplishment owing to the exist-
ence of a state of war".
  with: ". . . already acquired on September 1, 1939, or which, had
war not broken out, could halve been acquired after that date as a result
of an application made before or during the war."
  b. Add (1st line):
  "The Allied and Associated Powers taking part in the Paris
Convention."
  c. No changes.
  2. Substitute:
  ". . . from the outbreak of the war until a date 18 months after the
coming into force of the present Treaty"
  with: ". . . from September 1, 1939 until the date of the coming
into force of the present Treaty.
  3. Substitute:
  "the outbreak of the war"
  with: "September 1, 1939".
  4. Suppress the words in italics.
  5. Add after:
  ". . . have bona fide acquired industrial"
  the words "literary and artistic".
  Substitute in the same paragraph the words:
  "the Conciliation Commission"
  with "the Mixced Court of Arbitration".
  6 and 7. No changes.
  8. Suppress the mention of Article "69" in this paragraph.
  Add to the Annex:
  1. The provisions proposed by the Legislation Commission of the
International Confederation of Copyrights. This Commission, in
No. 3 of its Resolutions, adopted in the Paris meeting of June 29, 1946,
established the following:
  "The measures taken by certain countries (other than measures for-
bidding or restricting relations with the enemy, or concerning enemy
property, or the export of capital) which infringe on the rights en-
joyed by foreign authors in these countries before the war, shall cease
to have effect, and a revision of the financial terms for the exploitation
of their works in the past shall be made at the request of the parties
concerned. Suitable provisions shall also be made concerning the
time-limit legally established for these rights, subject to transitional
measures which may be granted to spread, over a short period of time,
rights acquired by third persons."
  2. Provisions concerning- industrial, literary and artistic property
rights in territory to be ceded by Italy.



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OBSERVATIONS ON DRAFT PEACE TREATIES



  The provisions might be worded as follows:
  "The inhabitants of the territories ceded by Italy in compliance with
the present Treaty shall retain, notwithstanding the cession and their
subsequent change of nationality, the full enjoyment in Italy of all
industrial, literary and artistic property rights which they owned
under Italian law at the time of the cession.
  "The industrial, literary and artistic property rights in force in
the
territories ceded by Italy in compliance with the present Treaty, or
those to be restored through the application of the provisions of the
present Annex, shall be recognised by the Country to which said ter-
ritories are ceded. These rights will remain in force for the duration
granted by Italian law."
  3. The reasons set forth for the modification of Article 37 concern-
ing bilateral treaties in general are even more valid when applied to
bilateral treaties concerning industrial, literary and artistic property.
  Should the Italian Delegation's proposal for the modification of
Article 37 not be accepted, a special clause concerning bilateral treaties
dealing with industrial, literary and artistic property should be
inserted.
  Such a clause might be worded as follows:
  "ART. 37 bis.-1. Each Allied or Associated Power will notify Italy,
within a period of six months of the coming into force of the present
Treaty which bilateral treaty concerning industrial, literary and
artistic property it does not desire to keep in force.
  2. All treaties so notified are to be regarded as abrogated one month
after the date of notification.
  3. Any provision of treaties not so notified which are not in con-
formity with the present Treaty, shall be deleted.
  4. The Treaty thus kept in force will be registered with the Secre-
tariat of the United Nations in accordance with Article 102 of the
United Nations Charter."


Doc. No. 34 (E).
   Memorandum on the Clauses of the Peace Treaty Concerning
                    Imurances (Annex VI, B)
  The Italian Delegation agrees with the U.S.S.R. Delegation that
the clauses proposed in Annex VI-letter B-are unnecessary. In
fact some of the questions considered are already taken care of by
other clauses in the draft Treaty-for instance Article 68. Nor should
it be forgotten that, even during the war, the Italian Government did
its best to safeguard the interests of United Nations insurance com-
panies, so that there is no reason why they should not be able to carry
on their activity in the best possible way.



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FOREIGN RELATIONS, 19 4 6, VOLUME IV



  However, should it not be possible to accept the solution proposed
above, the Italian Government is perfectly willing to grant the same
treatment accorded to national insurance companies to the insurance
companies of the United Nations. The following words should there-
fore be added at the end of paragraph 1:
         except for the general measures applying to the Italian in-
surance companies."


Doc. No. 16 (G).
Memorandum on the Clauses of the Draft Peace Treaty Concerning
             Prize Courts and Judgments (Annex 8)

  The draft Peace Treaty provides that each of the Allied and As-
sociated Powers reserves the right to examine, according to a proce-
dure to be established by it, all decisions and orders of the Italian
Prize Courts involving ownership rights of its nationals and to recom-
mend to the Italian Government that revision shall be undertaken of
these decisions or orders which may not be in conformity with inter-
national law. Italy shall undertake-it is added-to accept and give
effect to all recommendations made in the matter by the Allied or
Associated Power concerned.
  According to the above, the concerned Allied or Associated Power
itself would be given the faculty to decide whether or not a decision
of an Italian Prize Court is contrary to international law. This is not
consistent with the axiom that nobody can be at the same time a judge
and a party to the judgment.
  If an Allied or Associated Power considers that a decision of an
Italian Prize Court is contrary to international law, the question
should be settled under the procedure normally followed for the settle-
ment of international controversies.
  It is therefore proposed that the above provision be cancelled, or,
failing this, that at least the second part of the second paragraph-
where it says that Italy undertakes "to accept all the recommendations
made, subsequent to the examination of the said cases and to give effect
to such recommendations"-be suppressed.
  B. The draft Peace Treaty contains several proposals concerning
judgments given by Italian Courts between June 10, 1940, and the
coming into force of the Treaty in any proceeding in which a United
Nations' national was unable to make adequate presentation of his
case as defendant. Italy's obligation to accept revision of such judg-
ments or award compensation when necessary is also envisaged.
  Now, it is a fact that Italian law has never limited in any way the
faculty of enemy nationals to defend their cases before Italian Courts
during the war. Article 280 of the Italian loi de guerre after declar-



216


 

					
				
				


OBSERVATIONS ON DRAFT PEACE TREATIES



ing that enemy nationals preserve their ability to stand in judgment
as plaintiffs or defendants, adds that when an enemy national is sum-
moned to court and the Court judges that he is unable to defend his
case satisfactorily, it appoints a person to represent him in judgment.
Moreover, enemy nationals benefited on a par with Italian nationals
from the general measures enacted in Italy to extend the terms of
procedure.
  The case of a United Nations' national unable during the war to
defend himself adequately in an Italian trial can only have arisen
exceptionally and even then solely as a consequence of de facto difficul-
ties due to the state of war. It would hardly seem justified therefore
to lay the responsibility in such a field on the Italian Government.
  However, a procedure for the revision of judgments rendered by
Italian Courts during the war against a United Nations' national
could be set up in cases in which he can prove that he was unable to
present his defence adequately, but at the same time it would be only
fair that such a privilege were limited to the nationals of those United
Nations where a reciprocity in favour of Italian nationals exists in this
matter.
  The British Delegation has also proposed that "judgments given by
the Courts of a member of the United Nations in all cases which, under
the present Treaty, they are competent to decide, shall be recognised in
Italy as final, and shall be enforced without it being necessary to have
them declared executory".
  There seems to be no justification for such a departure from the
normal rules concerning the execution of foreign judgments.


OBSERVATIONS ON THE DRAFT PEACE TREATY WITH RUMANIA BY
                 THE RUMANIAN GOVERNMENT
CFM Files
Observations on the Draft Peace Treaty With Rumania Submitted by
                    the Rumanian Delegation

C. P. (Gen) Doc. 3                         PARIS, August 26, 1946.
                              TABLE
                 I. POLITICAL AND TERRITORIAL CLAUSES
                      Preamble
                      Part II
                      Part VIII
                II. NAVAL, MILITARY AND AIR CLAUSES
                      Part III
               III. ECONOMIC CLAUSES
                      Part V
                      Part VI
                      Annex 6
    219-115-70  15



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FOREIGN RELATIONS, 1946, VOLUME IV



OBSERVATIONS OF THIE ROUMANLiN GOVERNMENT ON THE PREAMBLE
AND ON SECTIONS [PARTS] II (POLITICAL CLAUSES) AND VIII (FINAL
  CLAUSES) OF THE DRAFT OF TILE PEACE TREATY WITH ROUMANIA
  Having made a thorough study of the provisions of the Draft Peace
Treaty with Rournania and as a sequel to the statement made on
13th August, 1946, to the Conference by Mr. Georges Tataresco, Vice-
President of the Council and Minister of Foreign Affairs, the Rou-
manian Delegation has the honour to lay before the Conference the
following observations, reserving at the same time the right to amplify
or expand them:
  The Roumanian Delegation considers itself bound, as much in the
interests of historical accuracy as of discharging its responsibilities
towards the Roumanian people, to recall the efforts Roumania made
and the great sacrifices which she suffered in the cause of the United
Nations during the last nine months of the war. In her opinion these
efforts and these sacrifices should to a great degree redeem the sins of
the past and place Roumania in a different situation from that which
is given her in the Treaty under discussion.
  It is, of course, true that, as a result of the military events in Europe
during Mlay and June of 1940, and with the connivance of a handful of
reckless individuals and traitors, Hitlerite Germany was able to make
Roumania her temporary ally and drag her into a stupid war. It is
equally true, however, that the Roumanian people, who had nothing
in common with Hitlerite Germany and whose hopes, in fact, were
bound up with the Allied nations, saw in the defeat of Germany their
own deliverance.
  This was the general feeling which led up to the act of 23rd August,
1944, a date which will be one of the most memorable in Roumanian
history.
  On that day the King, the Army and the people, united in one
single belief and one single hope, burst the German bonds and as one
man took their stand by the side of the Allies in the war for the
liberation of humanity.
  The act of 23rd August, 1944 occurred at a moment when, in the
words of Generalissimo Stalin, the glorious Chief of the Red Army,
the outcome of the war was not yet clear. It was not an easy or a safe
step to take. It involved risks which might have been mortal for the
country. At that time Germany had in Roumania an army 612,507
strong, of whom 390,873 officers and men, that is 26 divisions, plus
36,248 officers and men of the Air Force and Navy, were active troops.
  The German army took immediate action. For three consecutive
days their Air Force bombed the city of Bucharest, almost continu-
ously in a series of terror raids which caused serious damage, while
German troops advanced on the capital.



218


 

					
				
				
OBSERVATIONS ON DRAFT PEACE TREATIES 219

On 28rd August, 1944 the Roumanian people, inspired by genuinely
democratic motives and with the full agreement and support of their
young and gallant King, took their stand at the side of their natural
Allies and resolutely embarked on a war of liberation. In accomplish-
ing one of the greatest and most difficult feats in their history, they
have, in our opinion, made a valuable contribution to the war of the
United Nations and to final victory.

From that moment Roumania threw into the struggle all her forces
and all her resources. Eighteen Roumanian divisions, with a total
strength of 385,000 men, supported by an air force, engaged the armed
forces of Germany and of Horthy’s Hungary which refused to break
away from Germany.

After bitter fighting, and in the record time of eight days,
Roumanian territory to the south of the Carpathians was cleared of
the invader who left behind more than 5,000 dead and 538,159 prisoners.

Therefore, when the Armistice Terms were signed in Moscow on
12th September, 1944, this first phase of the operations had already
ended and the Roumanian Army found itself on the eve of new offen-
sive operations this time in association with the Soviet forces. The
Roumanian Army had to continue these efforts until the final sur-
render of Germany.

Although she had undertaken, by the terms of the Armistice, to con-
tribute to the war on the side of the Allies at least 12 divisions,
Roumania had in the field at any time between 23rd August, 1944 and
10th May, 1945, never less than 15 divisions. Operating under the
Soviet Supreme Command, the Roumanian armies fought for 260 days
under conditions of terrain and climate which were often very severe.
Having penetrated to a depth of 1.000 kilometres into the enemy
positions, they fought first on their native soil, then in Hungary up to
the gates of Budapest, and finally, in Czechoslovakia up to the out-
skirts of Prague. In the battles which it fought it took 103,214
enemy prisoners.

How much this effort of Roumania’s begun on 23rd August, 1944
contributed to the successful conclusion of the war is set out in a special
memorandum which has already been circulated to members of the
Conference (see memorandum No. 1).

It will be sufficient to state here that, in addition to the great. losses
in property and materials of all kinds, to which should be added the
losses caused by acts of war on the part of the German and Hungarian
armies, the war which Roumania waged on the side of the Allies
against Germany and Hungary, from 30th August, 1944 onwards
cost her not less than 111,379 killed and wounded, and some units lost.
their effective strength several times on the field of battle.

Firmly convinced of the contribution she has made to final victory,
and conscious of the blood which was so freely shed by her sons in the

					
				
				
220 FOREIGN RELATIONS, 1946, VOLUME IV

common cause, Roumania hopes that she will be accorded the common
justice of being acknowledged as a co-belligerent.

She further requests:

(a) that, in view of the de facto situation, incidentally confirmed
in Article 1 of the Armistice Terms, paragraph 4 of the Preamble to
the draft Treaty should be amended so as to show that Roumania en-
tered the war on the side of the Allied Powers on 24th August 1944
and not on 12th September 1944 after the Armistice had been con-
cluded; and

(6) that in view of the de facto and de jure situation confirmed by
Article 1 of the Armistice Terms, as also by Article 8 of the draft
Peace Treaty, it should be stated at the end of paragraph 4 of the
Preamble that Roumania took an active part in the war, not only
against Germany, but also against Hungary.

PART II-—POLITICAL CLAUSES
Article 3.

Whilst recognising the very great value of the principles proclaimed
in this Article, it is questionable whether their inclusion in a Peace
Treaty would not give rise to discrimination.

It would seem that the provisions contained in the Preamble and in
Article I of the Charter of the United Nations referring to “respect
for human rights and fundamental freedom for all without distinction
as to race, sex, language or religion” might in this respect be deemed
sufficient. If, on the day when Roumania is invited to become one
of the United Nations, it appeared that there were discrepancies in
this respect ‘between the system provided for in the Charter and that
provided for in the Treaty, 1t would be difficult to reconcile the reten-
tion of the special provisions of Article 3 of the Treaty with “the
principle of the sovereign equality of all members” which is laid down
in Article II of the Charter.

In order to avoid any semblance of discrimination in the relations
between Members of UNO, the Roumanian Government would suggest.
that in Article 3 it should simply be stated that Roumania, in the
exercise of her full sovereign rights and in accordance with the princi-
ples embodied in her Constitution and in virtue of the legislation
subsequently enacted on 23rd August, 1944 and 6th March, 1945,
undertakes to ensure the effective enforcement of the principles which
are expressed in Chapter IT (Articles 5 to 32—Rights of Roumanians)
in the said Constitution. The Roumanian Government feel that they
should in particular point out that under Article 5 of the Constitution
“All Roumanians without distinction as to racial origin, language or
religion, enjoy freedom of conscience, meetings and association and
all statutory rights and liberties.”

					
				
				


OBSERVATIONS ON DRAFT PEACE TREATIES



  Those are in fact the principles set out in Article 3 of the Treaty
and they have the advantage of not offending national sensibilities by
creating a regime of discrimination.
Article 4.
  Roumania applies all the provisions laid down in Article 4. There
can therefore be no question of her completing them.
  In order to avoid any misunderstanding as to the interpretation or
the execution of the Treaty, we consider accordingly that in Article 4
the words "undertakes to complete these measures" should be deleted.
Article 7.
  The Roumanian Delegation would like to have an opportunity of
giving the Conference its views on the questions relating to Roumania
in the Peace Treaties referred to in this Article, particularly the
Treaty with Hungary.
  If Roumania had to undertake forthwith to recognize these Treaties
as well as the agreements or arrangements which have already been
or will in future be reached in relation to the countries mentioned in
this Article and to which she is not or will not be a party, it should
at least be made clear that:
  (a) These treaties, agreements or arrangements should not involve
Roumania or her nationals in obligations or burdens nor deprive them
of their existing rights and interest, beyond what is laid down in the
present Treaty;
  (b) That the States referred to in the present Article should
similarly recognize the full force of the Treaty of Peace with
Roumania;
  (c) That the treaties, agreements or arrangements in question
should not be such as to impair Roumania's rights to reparation aris-
ing whether from the Treaties which terminated the first World War
or the subsequent agreements relevant thereto.
Article 8.
  There is no precedent for a Peace Treaty re-establishing peaceful
relations between two belligerent countries without the simultaneous
participation of both interested parties.
  Yet this is what Article 8 of the Draft Peace Treaty with Roumania
does when it says that the state of war between Roumania and Hun-
gary will terminate upon the coming into force of the present Treaty
and the Treaty of Peace between the Allied Powers and Hungary.
  Although Roumania declared war on Hungary and the Roumanian
Armed Forces collaborated with those of the United Nations in the
war against Germany and Hungary, there will be no Peace Treaty
between Roumania and Hungary.



221


 

					
				
				
222 FOREIGN RELATIONS, 1946, VOLUME IV

The Roumanian Government would stress the unusual nature of
such a course of procedure which is quite unprecedented in interna-
tional practice. The latter has established very definitely that a state
of war is not legally terminated between belligerents except by a
formal treaty of peace.

Under Article 8 we have the curious result that the restoration of a
state of peace between two countries can be brought about by a process
to which neither of them has given its formal consent.

In these circumstances it is for the Conference to find some means
of reconciling the prerogatives of Roumania as a sovereign State, the
general principles of international law in regard to the conclusion of
treaties and the provisions of the draft Treaty drawn up by the United
Nations.

It would appear that the most effective procedure would be for a
special Protocol to be concluded between Roumania and Hungary*
simultaneously with the Peace Treaty itself and on the same day as
the latter is signed.

The technical device of a “Protocol” as a means of re-establishing
peace is commonly resorted to in international practice (e.g. the sig-
nature on 22nd December, 1929, of the Protocol of Khabarovsk, which
brought to an end the war between China and the U.S.S.R.; the
signature on the 12th June, 1935, of the Protocol of Buenos Aires,
which brought to an end the Chaco war between Bolivia and
Paraguay, etc.)

Article 10.

Roumania considers that the application of Article 10 might lead to
serious difficulties since most of the former treaties which would be
revived are no longer suited to present-day conditions.

PART VITI—-FINAL CLAUSES

Article 87.

This Article would appear to be superfluous. Roumania herself is
not aware of any other States members of the United Nations who
were at war with her apart from those listed in the Preamble to the
Peace Treaty.

Besides, there is no corresponding Article in the Peace Treaty with
Finland.

Article 38.

The wording of this Article is most debatable. It is a contradiction
in terms first to stipulate expressly that Roumania should ratify the
Treaty, and then to provide that it “will come into force immediately

*The Roumanian Government does not think that this legal instrument should
be regarded as a protocol additional to the Peace Treaty seeing that the parties
are not identical [Hungary is not a signatory to the Peace Treaty]. [Footnote in
source text. ]

					
				
				


OBSERVATIONS ON DRAFT PEACE TREATIES



after deposit of ratifications by the U.S.S.R., the United Kingdom,
and the United States" quite irrespective of whether ratification by
Roumania has or has not been effected. It is a well-established prin-
ciple that ratification, and not signature alone, gives final force to
treaties [Protocol No. 19 of the Berlin Congress of 13th July, 1878]
and that "conventions become binding only if they have been ratified".
  Such a departure from accepted principles is still less admissible
when it refers to the coming into force of a peace treaty, the most
important kind of international agreement.
Annex 1.
  No map has been supplied.
Note
  In the case of those Articles which have not yet been agreed by the
Council of Foreign Ministers and in regard to which the Roumanian
Government has not made any observations the Roumanian Govern-
ment reserves the right to present its views at a later date.
OBSERVATIONS OF THE ROUMANIAN GOVERNMENT ON PART III OF THE
  DRAFT PEACE TREATY WITH ROU3MANIA (NAVAL, MILITARY AND
  AIR CLAUSES)
  Having taken due note of the principles underlying the provisions
of Article 19, and in the light of those principles, the Delegation, in
the conditions ruling in Roumania to-day, has the following observa-
tions to make:
  As a result of the historic event of 23rd August, 1944, the Rou-
manian Army took such a definite line that its contribution to final
victory on the side of the Allies is notable for the following three
considerations:
  Immediate action as from 4 a. m. on 24 August, 1944.
  Total action, in the sense that all the resources of the country, in
men and material, were placed at the disposal of the Allies.
  Combined action, in the sense that no subversive influence arose
within the Army to frustrate or weaken the joint effort.
  In fact, the whole Roumanian Army, without the slightest defection
by any individual or group, spontaneously accepted the decision of
His Majesty King Michael I and the Roumanian people.
  In one single night, it took its stand alongside those from whom an
,accursed regime had tried to separate it, and turned its arms, with
complete determination, against those with whom it had morally
nothing in common.
  Having substantially contributed, immediately after 23rd August,
1944, to the clearing up on Roumanian territory of the German troops
still there totalling 612,000 men, 128,682 of these being on the lines
of communication and 56,704 in the interior of the country, the Rou-



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FOREIGN RELATIONS, 19466, VOLUME IV



manian Army took part in four great series of military operations,
namely:
  -Covering the advance and concentration of Soviet troops to the
North of the Carpathians;
  -Liberation of Northern Transylvania;
  -Defeat of Horthy's Hungarian Army;
  -Liberation of Czechoslovakia.
  Side by side with the glorious Red Army, the whole Roumanian
Army, for 260 days, shed its blood unstintedly and fought with a
spirit, a courage, and a disregard for losses which obtained for it not
less than 78 written testimonials from various Soviet commanders,
among them seven Orders of the Day signed by Generalissimo Stalin
and a Decree conferring on H.M. Michael I the Order of Victory.
  Throughout all this period of nearly nine months the Roumanian
Army put into the line forces which reached a maximum of 29 divi-
sions (with a total manpower of 385,847 men) and never fell below
15 divisions (185,567 men).
  The Roumanian Army covered more than 1,000 kilometres, took
part in 383 battles or actions, conquered 3,831 towns or villages,
captured 103,214 prisoners, and left on the battlefield 169,822 dead,
wounded or missing.
  In spite of having been forced to carry on a war which she neither
wanted nor understood against her natural Allies, we consider that,
by its conduct on 23rd August, 1944 and by its subsequent operations,
as the above statement shows, the Roumanian Army is entitled to very
special consideration from the Allies.
  We think this consideration could most suitably be shown by the
following modifications in the military clauses of the draft Peace
Treaty.
Article 11
  a) Since early June this year Roumania has been reorganising her
armed forces on the basis of a personnel strength of 138,000 men, as
provided for in the above Article (in the case of other ranks this
reorganisation had already been completed by 15th July; in the case
of officers and N.C.O's it will be completed by 9th September; under
a Decree of 7th August last, 16,120 officers and N.C.O's out of a total
of 41,511 were placed on the reserve list.
  In order not to exceed this figure, Roumania, while cutting down to
a minimum the strength of the formations she has retained, has had
to disband certain troops of the interior. This will make it very dif-
ficult to execute certain material operations arising out of the war.
  Therefore, the Roumanian Delegation asks that 5,064 men (Officers,
N.C.O's and O.R's) be added to the 120,000 effectives as laid down for
the land forces.



224


 

					
				
				


OBSERVATIONS ON DRAFT PEACE TREATIES



  b) As regards the Roumanian Navy, an establishment of 4,565 to
man the existing tonnage of 6,500 is quite inadequate.
  The draft Peace Treaty provides a personnel of 5,000 men for a total
tonnage of 15,000 tons. This means that Roumania would have only
435 additional men for the remaining 8,500 tons.
  Roumania, therefore, requests that the strength of the Roumanian
Navy be raised to the irreducible minimum of 6,320 men (Officers,
Petty Officers and Seamen) instead of the 5,000 permitted.
  c) Roumania would point out that it is not her intention that her
armed forces should embark on any aggressive plan or scheme against
anyone, but that she is sincerely anxious and firmly determined to
preserve internal order and to co-operate in the establishment of uni-
versal peace within the framework of the United Nations.
  Although its numbers are to be reduced the future Roumanian Army
must receive thorough modern training, which will enable it to dis-
charge the above-mentioned task.
  While Roumania has been allowed to retain, for her land forces,
modern methods of training, she has, by contrast, been deprived of
bombers, which means that she cannot train personnel in one of the
essential departments of air training.
  In their present condition Roumanian bomber aircraft could not
undertake any kind of offensive action, but they could easily be used
for the training of specialist personnel.
  Therefore, the Roumanian Delegation requests that the 36 Bomber
Aircraft which are now in service with the Roumanian Air Force
should be added, as training machines, to the 150 provided for in this
Article.
Article 14
  In order to complete the training of crews the Roumanian Delega-
tion requests that the only submarine still in Roumania's possession
should be left to her as a training-ship. The present condition of this
vessel, which is little better than that of the bombers, makes it impos-
sible for it to undertake any action beyond a very short distance from
its base.
Article 15
  Most of the war material which Roumania possesses today is obso-
lete. If Roumania is to be allowed to have a properly equipped army,
she should be enabled to keep this equipment in condition and to re-
place any of it which becomes obsolete.
If Roumania is forbidden to maintain any plant for the supervision,
repair or replacement of worn-out or condemned material this will
entail an additional burden on the Roumanian budget which will
aggravate the economic condition of the country and make it even more



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FOREIGN RELATIONS, 1946, VOLUME IV



difficult to fulfil the obligations which are imposed by the draft Peace
Treaty itself.
  Roumania has no intention of manufacturing in her arsenals any
arms in excess of the minimum necessary for the personnel which she
has been allowed to retain, but she considers it essential that she
should not be deprived of equipment which would enable her to repair
worn-out or condemned material, or to replace any munition expended
in the training of her army.
  It is, therefore, absolutely necessary that Rourania should be per-
mitted to keep, in the condition in which they now are, the following
installations:
  a) one arsenal, for the repair of war material;
  b) one shop in each of the former armamrent factories which are
to-day practically entirely converted to peace-time requirements, in
order to replace war material which is either defective or condemned;
  c) a factory for propellant or pyrotechnic purposes for re-testing
existing ammunition and for replacing ammunition expended in the
course of any year for the training of the armed forces;
  d) a naval dockyard for the repair and maintenance of the naval
vessels which are permitted under the present draft Treaty.
Article 16
  a) For an army reduced as the Roumanian Army has been and
lacking the equipment which would allow of the immediate replace-
ment of faulty or condemned material, the necessary minimumn of war
material cannot be in exact proportion to the effective strength.
Otherwise every weapon lost or damaged would mean one trained
soldier less.
  In the position in which the future Roumanian army will be placed,
and in view of the absolute inadequacy of industrial equipment the
necessary minimum just referred to should be determined so as to make
allowance not only for allocations to active units, but also for a reserve.
  As regards the armaments and balance of war material at present
in use. Roumnania estimates this reserve at 25%o of the strictly necessary
miniwvum.
  In the case of ammunition it is impossible to determine the quantity
which is strictly necessary, since expenditure depends on requirements
and the degree of efficiency of the units under training.
  Roumania does not propose to make or store ammunition beyond the
amount necessary for the training of her troops and for building up
a reserve to enable her to discharge the obligations laid upon her by
the Treaty.
  The Roumanian Delegation believes that the amount of ammunition
which she would be entitled to retain should be determined on the
following basis:



226


 

					
				
				
OBSERVATIONS ON DRAFT PEACE TREATIES 227

Ammunition required for training purposes for a period of 10 years
and, in addition:

—a reserve of three items of ammunition for all categories of arma-
ments necessary for the maintenance of internal order and the defence
of the frontiers (obligations laid upon the Army under the provisions
of the present draft Treaty).

6b) In regard to excess war material the Roumanian Delegation
would like to point out that:

—the Roumanian Army as at present equipped has a certain amount
of war material of either Allied or German origin which was bought
and therefore paid for by Roumania;

If this war material were put at the disposal of the Allies it would
mean that the Roumanian contribution to the war effort would be
increased by an amount equal to the cost of that material, as 1t has
already been paid for.

The same would apply to war material of Roumanian origin, manu-
factured in Roumania and for her account.

The Roumanian Delegation, therefore, requests that:

War material captured during the war by the Roumanian Army
after August 23rd, 1944, and which the Allied Control Commission has
authorised Roumania to retain as war booty, should be left in her
possession 3

Excess war material of Allied or German origin, which has been
paid for by the Roumanian Government, should be placed at the dis-
posal of the Allies and the value thereof credited to the Roumanian
Government;

Excess war material of Allied or German origin, not paid for by the
Roumanian Government, and war material manufactured in Rou-
mania, should be dismantled and converted into raw material and put
at the disposal of the genera] economy of the country.

If this proposal were adopted, not only would an unjust clause be
eliminated, but Roumania would be given the possibility of improving,
in however small a measure, the difficult situation mn which she finds
herself to-day.

Article 20

The delay in returning Roumanian prisoners of war who have
remained abroad helps to create and maintain a state of depression
both among the population and the army.

Roumania is sure that these prisoners are being well treated. Never-
theless, for the moral rehabilitation of the country and to ensure a
return to normal conditions, a date should be fixed for the return of
prisoners of war at the earliest possible date.

These are the amendments which the Roumanian Government feels
should be asked for in the military clauses of the draft Peace Treaty.

					
				
				


FOREIGN RELATIONS, 1946, VOLUME IV



  These amendments would fill a number of very serious gaps which
have already become apparent in implementing military laws concern-
ing the re-organisation of the army on a new basis in accordance with
the provisions of the present draft Treaty.
  If these proposals were adopted by the Peace Conference in their
entirety, it would not only provide real evidence of the Allies' con-
sideration for a country whose sacrifices on the battlefields have been
borne with complete conviction and entire disinterestedness for the
sake of final victory, but it would at the same time transform the
Roumanian Army into an instrument serving only the cause of democ-
racy and peace, and well equipped in all respects-moral, professional
and material.
  Firmly embarked on the new path of democracy, and peace, the
Roumanian Army asks that it should in future be given all the con-
fidence which it has already shown it merits both by the spontaneous,
united and unanimous action it took on the night of 23rd/24th Au-
gust, 1944, and by its achievements on the battlefield shoulder to
shoulder with the Allies since that date and up to the final destruction
of Hitlerite Germany.
  The Roumanian Army requests that it should be given in peacetime
the facilities which enabled it to fight and shed its blood for the com-
mon cause of the Allies in the supreme test of war.
OBSERVATIONS OF THE ROUMANIAN GOVERNMENT ON PART V OF THE
  DRArr PEACE    TREATY  WITH iROUMANIA    (REPARATION  AND
  RESTITUTION)
Article 22
  [Line of points appears in source text.]
Article 23
  Paragraphs 1 and 2:
  Romnania accepts the principles of the London Declaration of Jan-
uary 5, 1943.
  Paragraph 2 of Article 23, providing the obligation to make restitu-
tion irrespective of any subsequent transactions by which the present
holder of any such property has secured possession, i.e. even if he
acted in good faith, goes beyond the provisions of the Declaration of
January 5, 1943. Roumania would thus be assuming additional
obligations, even though she had scrupulously observed the principles
laid down in this Declaration.
  Roumania does, in fact, hold property which she acquired by bona
fide and not fictitious means, as a result of transactions which not only
have the appearance of legality, as mentioned in the Allied Declara-
tion of January 5, 1943, but which are legal by their very substance.
These transactions, which had an indisputably bona fide basis, in-



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OBSERVATIONS ON DRAFT PEACE TREATIES



volved the actual supply of goods as a counterpart for services ren-
dered and were concluded under agreements and conventions of a
strictly commercial or financial character.
  Roumania, being thus a bona fide purchaser of the goods in ques-
tion, will take advantage of this status, as the principle of good faith
is recognised in international relations.
  The point of view we have just stated is, moreover, consonant with
the spirit of the text of the "Explanatory Note", attached to the
Allied
Declaration of January 5, according to which the rules of equity will
apply in determining the validity of the transactions, covered by this
Declaration.
  True, this appeal to equity is explicitly foreseen only in the relations
inter se of the United Nations. But equity is not an isolated con-
sideration to be admitted in some cases and excluded from others. If
the conditions under which looted property was acquired are con-
sidered "ex aequo et bono", the State acquiring the property is,
eo ipso,
entitled to put forward the plea of good faith which is unanimously
recognised by all legislations as the most elementary equity.
  For the reasons stated above, the Roumanian Government feels it
should ask for a modification of paragraph 2 of Article 23, so as to
exempt from the application of this Article property acquired in good
faith under a deed of legal transfer.
  The text of paragraph 2 also states that the obligation to make
restitution applies to "property at present in Roumania". We sug-
gest the insertion before "Rournania" of words "the possession
of".
In our opinion, the absence of these additional words can only be due
to an oversight.
  At the same time, it should be pointed out that the text of paragraph
2 might be construed to mean that restitution applies also to property
transferred under commercial agreements or direct commercial trans-
actions concluded by the Roumanian Government or its nationals with
the authorities or inhabitants of territories occupied by the Axis-
Powers. But, as, firstly, such transfers could not have been effected
by force or duress and, secondly, Roumania has provided equivalent
material consideration, these observations should be borne in mind
when finally drafting paragraph 2.
  It should be observed, as regards this same paragraph: that restitu-
tion of rolling stock presents a very complicated problem.
  The foreign rolling stock on the Roumanian railways represents
mostly material which by force of circumstances was held up in Rou-
mania while almost all the Roumanian rolling stock in other countries
was put at the disposal of the Allied Armies by the Roumanian Gov-
ernment, for joint military operations after August 24, 1944.



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FOREIGN RELATIONS, 1946, VOLUME IV



  The figures of the Roumanian Railways' Administration show that:
  a) Some 178 locomotives and 42,000 trucks, belonging to Allied and
other countries, are operating on the national railways: of these, some
135 locomotives and 20,000 trucks must, after repairs, be handed over
to the U.S.S.R. within about one year.
  b) 274 locomotives and some 26,000 Roumanian trucks are being used
on foreign railways.
  The restitution of foreign rolling stock without the corresponding
return of Roumanian rolling stock would paralyse Roumania's rail-
way communications and greatly disorganise her economic system.
  This problem needs to be settled as a whole, particularly as other
States are in a similar position.
  Paragraph 4:
  This paragraph provides for the restitution "in good order" of
property removed by the Axis Powers by force or duress from the
territory of any United Nation.
  Such an obligation, though, cannot apply to property which was
removed by an Axis Power from the territory of a United Nation and
later handed over to Roumania against payment.
  As this is a case of property paid for by Roumania, the most that
could be expected would be restitution in the condition in which it is
being used by the present owner. This would imply Roumania losing
the value of this property, but there should be no contingent liability
to recondition such property, as that would mean an additional burden
on Roumania.
  We consider, therefore, that the words "in good order" should
be
replaced by the words "in the condition in which it is being used by
the present owner".
  Paragraph 6:
  As the wording of this paragraph might, in certain cases, involve
the Roumanian Government in pecuniary burdens if it were, for rea-
sons beyond its control, unable to take the measures in question, it
should be made clear that the Roumanian Government is only obliged
to take such measures as lie in its power for the restitution of the
property.
  Paragraph 8:
  This paragraph, under which the burden of proving that the prop-
erty was not removed by force or duress, rests on the Roumanian Gov-
ernment, is not only contrary to the principles of common law, but
constitutes an obligation which, in most cases, cannot be fulfilled,
seeing that the Roumanian Government is unaware of the circum-
stances under which such property was acquired by the Axis Powers.
  The Roumanian Government ventures to suggest that a new text
be drafted making it the duty of the claimant Government to identify



230


 

					
				
				


OBSERVATIONS ON DRAFT PEACE TREATIES



the property, to prove its ownership and show that it was removed by
force or duress.
OBSERVATIONS OF THE RUMANIAN GOVERNMENT ON PART VI (ECO-
    NOMIC CLAUSES) OF THE DRAFT PEACE TREATY WITH RUMANIA
Aerticle !34
  Paragraph 1
  The obligation, provided by this paragraph, to restore all the legal
rights and interests and return all property, should only apply in
favour of the Allied and Associated Powers and their nationals. Con-
sidering that this obligation derives from acts of war, to make na-
tionals of a country which has not been at war with Rumania, benefit
from this obligation would create for those nationals an umjustifiably
privileged status.
  While recognising that Rumania is obliged to satisfy the require-
ments of paragraph 1, we deem it necessary to observe that, in our
opinion, this obligation should mean the re-establishment of legal
rights and interests as they existed at the moment of the entry into
war of each of the Allied and Associated Powers against Rumania.
Otherwise, Rumania would find herself burdened with obligations not
legitimately arising out of a state of war.
  Paragraph 1, as it is worded, seems to oblige the Rumanian Govern-
nment to repeal in favour of the nationals of Allied and Associated
Powers all the legal provisions which applied to them under laws
enacted after 22 June, 1941 and even-an unexpected result-after
24 August, 1944, regardless of the fact that this legislation did not
discriminate against them.
  It is evident that Rumania is prepared, so far as she has not already
clone so, to repeal all discriminatory legislation affecting the nationals
of Allied and Associated Powers. However, to keep the text as it
stands at present, would have the effect of setting up on one and the
same territory two legal systems, and this would be contrary to the
general principles of law and the notion of national sovereignty.
  Moreover, the application of this text might lead to such conse-
quences that the legislator would find himself finally obliged to per-
petuate legal situations calculated to place the nationals of Allied and
Associated Powers in an exceptionally privileged position.
  At the same time, innumerable claims for damages from injured
parties would be anticipated. This would entail heavy burdens on the
Rumanian State and, consequently, lessen its capacity to compensate
the Allied and Associated Powers.
  Moreover, there is a noticeable absence of a reference, which would
seem natural as it is inherent in the spirit of the text: the words: "and
which are in the possession of the Rumanian State or its nationals".



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FOREIGN RELATIONS, 1946, VOLUME IV



should be interpolated after the words: "in Rumania '. The absence
of these words seems to be due to an oversight.
  Finally, a last and important observation: as the U.S.S.R., which
has suffered direct losses as the result of war on its own territory, has
made allowance for the fact that Rumania has not only withdrawn
from the war against the United Nations, but has declared war against
Germany and Hungary and has fought against these two countries
with substantial forces, and has reduced its reparation claims to a sum
which can be assessed at a fifth of the total damages incurred, we deem
it equitable to ask for the same treatment from the Allied and Asso-
ciated Powers. The more so, as by its action, Rumania shortened the
war and thus enabled the Allied and Associated Powers to reduce their
losses and their sacrifices.
  Considering that, some nationals of the Allied and Associated
Powers have been enabled, thanks to credits given or facilitated by the
Rumanian State or subsidies granted by it, to make good at least some
of the losses they sustained, it would be equitable that the amount of
losses to be compensated should be computed only on the outstanding
reparations, the credits granted or given on easy terms, by the State
for this purpose being still borne by the latter, without prejudice, of
course, to the reduction mentioned in the preceding paragraph.
  Paragraph 6
  Considering the de facto situation in Rumania, paragraph 6 appears
to be unnecessary.
  In the first place, Rumania has not imposed a tax on capital.
  Secondly, even if certain taxes could possibly be considered as of an
exceptional character, it should be observed that, as a result of price-
control and the special circumstances prevailing in Rumania, those
taxes are borne entirely by the consumer.
  Finally, no fiscal regulation of a discriminatory character have been
enacted.
  Paragraph 8
  In order to avoid certain possible abuses consequent on change of
nationality effected during the war, the Rumanian Delegation con-
siders that it would be advisable at the end of subparagraph a, to
replace the words "date of the Armistice with Rumania" by the words
"date at which the loss or damage was suffered."
  The benefit of this text, as it now stands, could be claimed by per-
sons who were nationals of the Allied and Associated Powers at the
date of the Armistice, but did not possess such nationality at the time
the damage was caused. The authors of the texts can hardly have
wished to create such a situation.
  The second paragraph of sub-paragraph a is in contradiction with
the principles laid down in the preceding paragraph, as well as with



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OBSERVATIONS ON DRAFT PEACE TREATIES



the general principles of law, universally accepted, concerning na-
tionality regulations.
  The fact that certain security measures were taken against persons
who seemed to endanger the security of the State, cannot affect their
personal status.
Article 26
  The Rumanian Government ventures to explain why it cannot ac-
cept the principle laid down in this Article.
  As the property, rights and interests, referred to in this Article,
were transferred by their owners to the territory of the Allied and
Associated Powers, they thus contributed to the war effort of these
powers, while at the same time depriving the Axis Powers of the cor-
responding financial resources. The omission of this text is intended
to avoid punishing Rumanian nationals who, because they believed in
the victory of the Allied and Associated Powers, transferred their
assets to the territory of these Powers.
  The provisions of this Article are still less justified inasmuch as
Rumanian nationals who had assets in Axis countries would seem to
retain the possibility of recovering them.
  Moreover, if owners are allowed to dispose freely of their property,
rights and interests, mentioned in Article 26, it would encourage the
revival of international trade and thus contribute to the efforts made
to restore the country's equipment and rehabilitate the national
economy.
  In support of these considerations, we would point to the solution
proposed by the U.S.S.R. Delegation in the draft Treaties with Bul-
garia and Hungary, and adopted in the Peace Treaty with Finland
by the United Kingdom and the U.S.S.R.
Article 27
  Rumania wishes to retain for herself and her nationals, her full
rights vis-a-vis Germany, Hungary and the nationals of those States,
in connection with property, debts and interests.
  In view of her sacrifices and the extent of her contribution to the
common victory over the Axis Powers, Rumania also intends to main-
tain her claim to just reparation from Germany and Hungary.
  The Rumanian Delegation will submit a special memorandum on
this latter point.
Article 29
  The provisions of Article 29 obliging Rumania to waive all claims
against the Allied and Associated Powers "arising directly out of the
war or out of actions taken because of the existence of a state of war-
after September 1st, 1939" seem to be unfair.
     219-115-7a ---16



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FOREIGN RELATIONS, 1946, VOLUME IV



  Rumania remained neutral until 22 JuTne, 1941 and was only in a
state of war with certain Allied and Associated Powers after that
date. It wsould, therefore be unfair, if she. were prevented from put-
ting forward claims arising out of mneasures taken by the Allied and
Associated Powers during the period of her neutrality.
  Consequently, if the Article is to be maintained, it appears necessary
to replace the date of 1st September 1939 by that of 22 June 1941.
  As for point e), it should be stressed that the renunciation by
Rumiania of her claims in respect of the decrees of the Prize Courts of
the Allied and Associated Powers concerning a period when she was
neutral, would constitute for her an unwarranted loss.
  It would therefore seem logical that the date of the 1st September
stated in point c) should also be changed to the 22nid June 1941.
  Paragraph 2
  The provisions of the part of this paragraph, beginning with the
words "the Rumanian Government agrees", impair the sovereign right
of the Rumanian State to allow for the general interests, the country's
possibilities and the equitable application of the principle of equality
of burdens, in the settlement of claims of Rumanian nationals arising
from facts of war.
  Discrimination would thus be established between the Rumanian
nationals who, in virtue of this article would be subject to two dif-
ferent legal regimes: whereas some would be indemnified under the
exceptional provisions of the above-mentioned paragraph, others
would be subject to provisions of internal law in the matter of
reparations.
  It is all the more necessary to eliminate the provisions of this part
of paragraph 2 as, by their application, they might establish in favour
of the German State and its nationals, debts against Rumania, arising
from the facts covered by the present Article.
  Paragrcapi 4
  The Rumanian Delegation ventures to draw attention to the fact
that the final passage, from the words "including all such currency"
up
to the end, is useless, considering that in practice and law, this question
has been completely settled in Rumania; the exchange of currencies
mentioned in this paragraph is terminated and the holdilng, of such
currency is regarded as a breach of Rumanian law.
  The maintenance of this paragraph would thus offer to holders of
such currencies the means of asserting illicit claims.
  Paragraph .5
  The period during which the waiver of claims by Rumania should
apply, should be from the 22nd June 1941 to the 24th August 1944,
and not, as stipulated in the draft Treaty, from the 1st September
1939 to the date of the coming into force of the said Treaty.



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OBSERVATIONS ON DRAFT PEACE TREATIES



Article 30
  The Rumanian Government cannot raise any objections to the ap-
plication of most-favoured-nation treatment in anly international eco-
nomic relations that may be entered into in the future.
  Nevertheless, so long as a considerable part of Rumania's annual
production has to be applied to the f ulfilment of obligations already
undertaken, and of those provided for in the Peace Treaty, she desires
to retain complete freedom of action in respect of her economic policy,
in order to be able to employ the limited resources which are left to her
to the best advantage.
  In such circumstances, the Rumanian Government consider that the
most-favoured-nation clause should be applied in her international
economic relations, not as a general obligation imposed by the Peace
Treaty, but as a conventional provision, freely subscribed by means
of bilateral negotiation.
  Having concluded its remarks on each of the clauses of the Peace
Treaty, the Rumanian Delegation considers it essential to add some
observations on the position as a whole.
  First, in view of the complexity of the problem created for Rumania
by these clauses, the divergences which exist between their different
versions, and the various interpretations to which they may give rise,
the Rumanian Delegation reserves the right to amplify its observa-
tions or later to clarify its views according to the development of the
debate.
  Secondly, it should be stated that, whatever the final decisions in
respect of the clauses of the Treaty, the latter will impose on Rumania
very heavy burdens over a long period of years. Added to the losses
suffered by Rumania as a result of the war, the important efforts she
has made and has still to make, and the imperative necessity of restor-
ing her equipment and re-establishing her national economy at the
earliest moment on which the execution of her obligations..above all
depends-Rumania may find herself faced with charges which as a
whole will be greater, possibly much greater, than her capacity to pay
or her transfer facilities.
  In her desire loyally to fulfil the obligations she is about to enter
into, Rumania cannot ignore this aspect of the problem.
  Therefore, the Rumanian Delegation would be grateful for an op-
portunity of explaining Rumiania's present economic position to the
Economic Commission.
  Runanian proposal in respect of certain Annexes
  The Rumanian Delegation considers that Annexes 4, B, C, D, which
do not, in their opinion, correspond to the modifications suggested by
the Delegation to the Articles to which these Annexes refer, should be
withdrawn.



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FOREIGN RELATIONS, 1946, VOLUME IV



  A supplementary note in respect of these Annexes will be presented
later if necessary.


OBSERVATIONS OF THE ROUMANIAN GoVERNM3ENT CONCERNING ANNEX
          6 TO THE DRAFT PEACE TREATY WITH ROUMANIA
A. Prize Court&.
  A provision such as the one contemplated in this Annex is not in
conformity with the principle of the international effect of judgments
of prize courts. 'When it is a case of estimating the international
responsibility actually incurred by a State as a result of erroneous or
unjust prize court judgments, international practice is at present
usually determined by the following considerations:
  There is general agreement in recognising that prize court judg-
ments shall enjoy the authority of the res judicata, when they are in
remn (in the sense that they have full effect and are legally enforceable
against States being Third parties as regards transfer in the property
of the vessel or the cargo), but not in personamn (which implies that
the State by which the vessel has been captured is internationally
liable for any faults committed by its own Prize Courts, either by
omission, or as a result of any breach of international law, and that
such default shall entail, in accordance with the generally accepted
principles of law, the obligation to compensate the injured party).
  Expressed in ordinary language, this principle signifies that, once
a Prize Court has rendered judgment, that is when the successive
judicial instances have been exhausted, such a judgment becomes irrev-
ocable, and can only be reopened by diplomatic or other procedure.
Wheaton rightly saw in this rule "a principle of public law undeniable
in itself and necessary for peace and trade" (Wheaton's Argument:
Danish Indemnity, see Moore "Arbitrations". Vol. V. p. 4555).
  In support of this principle, conventional law can be invoked, and
the authority of the res judicata in rem enjoyed by prize court judg-
ments, confirmed as these are by former Treaties of Commerce and
Navigation (exchange of declarations between Great Britain and
Colombia; Art. 12 of the Treaty of 2nd April 1831 between France
and Haiti; Art. 14 of the Treaty of 9th December 1834 between France
and Bolivia; Treaty of 8th March 1848 between France and Guate-
mala; Art. 13 the Treaty of 12th March 1848 between France and
Costa Rica; Treaty of 22nd February 1856 between France and Hon-
duras, etc.) and by Treaties of Peace (Art. 19 of the Treaty of 14th
January 1814) between Denmark and Sweden; Treaty of Zurich of
10th November 1859 between France, Sardinia and Austria-Hungary;
Art. 13 of the Treaty of Frankfort of 10th May 1871; Art. 27 of the



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OBSERVATIONS ON DRAFT PEACE TREATIES



Treaty of Peace signed at Berlin on 7th MIarch 1918 between Germany
and Finland, etc.).
  The only exception to these general principles concerns the Peace
Treaties of 1919-20. Art. 440 of the Treaty of Versailles-provisions
reproduced in the other treaties signed at the same period (Art. 378 of
the Treaty of Saint Germain, Art. 296 of the Treaty of Neuilly, Art.
361 of the Treaty of Trianon)-established a differential regime by
which Germany undertook definitely to recognise all prizes seized by
the Allied Powers, the latter reserving to themselves the right to ex-
amine (under conditions to be determined at their own discretion
between themselves) the judgments of German prize. courts, even in
the case of neutral prizes. But this exceptional provision was not, in
fact, effectively applied; and it is difficult to accept it as the expression
of positive law on this subject. But it is nevertheless this discrimina-
tory clause, contrary to all previous legal doctrine, which it is sought
to insert to-day in the draft Peace Treaty submitted to Roumania.
  b) Internal Prize Court Jurisprudence is in the same sense; see, in
particular, British Prize Courts in Egypt 28th June, 1918, German
ship "LUitzow" (Fauchille et Basdevant, Jurisprudence britannique
en
matiere de prises maritimes, volume II, 1927, pp. 492-498); Belgian
Prize Courts 17th October 1919, ex-Dutch steamship "Midsland"
(Verzijl, Le droit des prises de la Grande Guerre, Leyden, 1924, pp.
1289-1290) and 8th December, Dutch sailing ship "Agiena" (ibid.,
p.
1291).
  c) Lastly, international jurisprudence confirms the views expressed
above. See the judgment of 30th June, 1930 rendered by the special
Germano-Portuguese Arbitration Tribunal in the matter of the Portu-
guese claims against Germany (Portuguese vessel "Cysno" and
French vessels "Guadeloupe" and "Florida", decision,
Lausanne, 1930,
pp. 24-28; Revue de droit international, 1934, p. 3 & 5.)
  Consequently, the Roumanian Government is of opinion that an in-
dependent State cannot be required, without injuring the prestige of
its courts and without ignoring the principle of res judicata, to review
certain judgments rendered by its Prize Courts. The only normal
legal method (which the Roumanian Government would for its part
be prepared to accept) would be to engage a diplomatic or arbitration
procedure applicable only to judgments deliberately contrary to in-
ternational law and in which the international responsibility of Rou-
mania is involved. In this hypothesis, and provided it was agreed
that judgments previously rendered should be accepted as final, the
Roumanian Government would be prepared to pay pecuniary com-
pensation, in as far as it was recognised that its responsibility was
involved.
  It would seem, therefore, that Section A of Annex 6 should provide
that each of the Allied and Associated Powers should reserve its right



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FOREIGN RELATIONS, 1946, VOLUME IV



to examine, in accordance with a procedure to be agreed upon with
the Roumanian Governmient, all judcgments and orders of Prize Courts
affecting the property rights of its nationals. If an Allied or Associ-
ated Power considers that a judgment or order of a Roumanian Prize
Court is contrary to international law, and if Roumanian constitu-
tional law does not allow or only allows to a limited extent that the
consequences of such judgment or order should be nullified by admin-
istrative action, the said Allied or Associated Power and the Rou-
manian Government should agree mutually to fix the amount of
pecuniary compensation payable by Roumania. In case of differences
of opinion on any of the above points, the question should be referred
for decision to an arbitrator, designated by mutual agreement by the
parties concerned. If within a period of . . . the said parties fail
to agree upon the appointment of an arbitrator, the latter shall be
designated by....
B. Judgments.
  The Roumanian Governmnelnt wishes to call attention to the obliga-
tion which would be imposed to revise all judgments rendered by its
own Courts since 22nd June 1941 in connection with any lawsuit in
which a national of any of the United Nations should not have had
the opportunity of stating his case adequately. Such a procedure.
which is tantamount to imposing by authority a review of judgments
which have acquired the force of res yudicata, is not in accordance with
the general principles of lax [lex].
  The Roumanian Government therefore prefers the proposal sub-
mitted by the United States Delegation, and supported by that of the
U.S.S.R., but specifies, that the obligation to review judgments ren-
dered against a national of one of the United Nations shall only apply
to judgments which have been rendered in a court before which the
national in question was unable to defend his case.


OBSERVATIONS ON THE DRAFT PEACE TREATY WITH BULGARIA
               BY THE BULGARIAN GOVERNMENT
CFM Files
Observations on the Draft Peace Treaty With Bulgaria Submitted by
                    the Bulgarian Delegation

C. P. (Gen) Doc. 4                         PARIS, August 26, 1946.
                              TABLE
                 I. POLITICAL AND TERRITORIAL CLAUSES
                 II. MILITARY CLAUSES
               III. REPARATION
               IV. ECONOMIC CLAUSES



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OBSERVATIONS ON DRAFT PEACE TREATIES



I. AMENDMENTS TO AND OBSERVATIONS ON THE PREAMBLE TO THE
              DRAFT PEACE TREATY WITH BULGARIA
  1) The Bulgarian Delegation proposes to include in the Preamble
a reminder that Bulgaria started military operations against German
troops, not after the signing of the armistice on October 28, 1944, as
appears from the text of the present Preamble, but as early as Sep-
tember 10, 1944, as soon as the Fascist Government was overturned
and power taken over by the Fatherland Front.
  2) The Delegation proposes that Bulgaria be recognised as a co-
belligerent inl the anti-Hitler coalition and that this recognition be
included in the Preamble to the Peace Treaty.
  3) Without proposing to change the text of the Preamble at this
point, the Bulgarian Delegation declares that Bulgaria's participa-
tion in the war on Germany's side can be summed up in the following
paragraphs:
  a) Bulgaria signed an alliance with Hitlerite Germany and agreed
that her territory be transformed into a German military base;
  b) On the cessation of military operations in this region she held
a part of the Aegean region of Greece in occupation by Bulgarian
troops, as well as part of Yugoslavia's territory where she put down
uprisings organised by the resistance movement;
  e) She declared war on Great Britain and the United States and
forced the U.S.S.R. and other United Nations to declare war on her;
  d) Bulgarian forces of occupation participated on several occasions
in the operations undertaken by the German trops against the Na-
tional Army of Liberation of Yugoslavia.
These criminal acts performed by pro-Hitlerite leaders to whom the
Bulgarian People's Court has meted out a severe punishment, char-
acterise Bulgaria's participation in the war against the United Nations
and must be considered as Butlgaria's maximum responsibility in this
war.
  4) Without proposing any amendment to the text of the Preamble
at this point either, the Bulgarian delegation declares that long before
breaking off the alliance with Germany, and long before Bulgaria's
participation in the war on the side of the United Nations men-
tioned in the Preamble, the Bulgarian people pursued a fierce fight
against the Fascist dictatorship and the German occupation. As far
back as 1923, there were three armed uprisings against the Fascist
Governments. During the war an important resistance movement
sprang up under the leadership of the Fatherland Front, and a strong
partisan army was active behind the German lines.
  Thanks to the resistance of the leople and the army and in spite of
a strong pressure on the part of Hitler no Bulgarian troops were sent
to the Eastern front. The fascist Governmnents were also compelled
to refrain from sending any troops against Great Britain and the



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FOREIGN RELATIONS, 1946, VOLUME IV



United States. For the same reasons, the campaign aimied at sending
"volunteers" against Soviet Russia was a complete failure. The
op-
positions of the people and the army were a serious obstacle in the way
to a fuller participation of the Bulgarian troops in the operations
undertaken by Germany against the Yugoslav Army of Liberation.
When the Red Army entered Bulgaria, the people and the army re-
volted and after overturning the pro-Hitlerite Government on Sep-
tember 9, 1944, sided with the U.S.S.R., Great Britain and the U.S.A.
  Without waiting for the Armistice to be formally signed, the Gov-
ernment of the Fatherland's Front immediately undertook operations
against Germany, at the same time ordering the drafting of its entire
armed force which reached the figure of 418.000 men. Several Bul-
garian armies totalling 250.000 fighters fought against the German
troops in Yugoslavia, Hungary and Austria. For eight months the
Bulgarian Army was a part of the 3rd Ukrainian Front and acted in
close collaboration with the Yugoslav Army of Liberation.
  Through these operations, Bulgaria hastened the evacuation of
Greece and contributed to the liberation of Yugoslavia and to the final
defeat of Hitlerite Germany. In this war Bulgaria lost more than
32.000 killed and wounded and suffered material losses exceeding 290
million dollars.
  Although not formally recognised as a co-belligerent, Bulgaria
nevertheless exhibited every characteristic of a co-belligerent state.
II. AMENDMENT TO ARTICLE I OF THE DRAFT PEACE TREATY WITH
                BULGARIA (TERRITORIAL CLAUSES)
  The Bulgarian Delegation proposes that Article I of the Draft
Peace Treaty be amended in such a way that the Greco-Bulgarian
frontier, fixed by the Treaty of Bucharest of August 10, 1913, is
re-established.
  This frontier left Bulgaria in possession of Western Thrace, al-
though it was drawn after a war which had an unfortunate end for
Bulgaria. In this manner, Bulgaria would keep a natural outlet to
the Aegean Sea which is of vital importance for her national economy.
  The separation of Western Thrace from Bulgaria which took place
later created an abnormal situation by dividing regions which form
an indivisible geographical and economic whole. This decision was,
moreover, imposed against the opinion of certain delegation to the
Peace Conference of 1919 and in the absence of certain Great Powers.
Since then, the problem of Western Thrace and Bulgaria's outlet to
the Aegean Sea has remained open and unsolved.
  The return to Bulgaria of Western Thrace would remove a grave
injustice committed against the Bulgarian people. This solution
would, at the same time, create f avourable conditions by which not



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OBSERVATIONS ON DRAFT PEACE TREATIES 241

only Bulgaria but neighbouring countries would profit and would
help in the establishment of true and lasting collaboration among
Balkan peoples.

The Bulgarian delegation therefore proposes that Article 1 of the
draft Peace Treaty with Bulgaria be amended and worded as follows:

“The frontiers of Bulgaria, as shown on the map attached to the
present Treaty (Annex 1) shall be the same as existed on Ist January
1941, with the exception of the Greco-Bulgarian frontier which shall
be the same as was established by the Treaty of Bucharest of 10th
August 1913.”

IIT. OBSERVATIONS ON THE Pouitican CLAUSES

The Bulgarian Delegation can here and now declare that Bulgaria
has already applied, is now applying and will continue to apply the
principles underlying the political clauses of the Treaty, particularly
since these principles form the basis of the policy of the democratic
regime now obtaining in the country.

ITV. OBSERVATIONS ON THE MuiLiTrary CLAUSES

New Bulgaria is resolved to be a pacific country which for its future
security counts in the first place upon the protection and strength of
the United Nations Organisation and upon the good understanding
and collaboration with her neighbours. The Bulgarian Government
has already on its own initiative, considerably reduced her armed
forces by bringing them down to below pre-war strength. A further
and even more important reduction is planned and will result in
bringing these forces down to approximately the strength provided
for in the Draft Peace Treaty.

Bulgaria does not therefore in principle object to the reduction of
her armed forces.

However, it would be unjust to impose on Bulgaria various military
restrictions because she has never taken any active part in the war
against the United Nations but on the contrary, mobilised all her
forces in order actively and efficiently to contribute to the defeat. of
Hitler’s Germany. Her contribution is acknowledged in the Pre-
amble to the Draft Peace Treaty.

The loss of many lives and the considerable sacrifices borne in the
fight against Germany together with the numerous proofs which the
Bulgarian people and Government have given of their devotion to the
cause of peace and the principles of democracy would make such
restrictions seem gravely unjust. The Bulgarian people would not
understand the reasons underlying these measures and would regard
them as an unjustifiable humiliation.

For this reason the Bulgarian Delegation considers that it is fully
justified in requesting that the provisions in question be deleted from

					
				
				


FOREIGN RELATIONS, 1946, VOLUME IV



the Draft Peace Treaty as they may lhurt the dignity of the Bulgarian
people.
V. SUMMARY OF OBSERVATIONS ON THLE QUESTION OF REPARATIONS
                          (ARTICLE 20)
  In view of Bulguaiars effective participation in the war against
Germany, Article 20 of the Draft Peace Treaty stipulates that Bul-
garia would be liable to only a partial compensation of the losses
suffered by Yugoslavia and Greece as a result of military operations
and of the occupation by Bulgaria of the territory of these states.
  As regards Bulgaria's participation in the war on Germany's side,
we refer to our observations on the Preamble.
  Claims brought forward by Greece for compensation exceeding 708
million dollars are in open contradiction with the provisions of Article
20, and considered objectively quite arbitrary and groundless. Many
fantastic demands such as claims for the return of railway, rolling
stock, cattle, etc. . . in quantities which before the war never existed
in the territory occupied by Bulgarian troops.
  If we compare these Greek claims with the budgetary resources of
the Bulgarian state and with her capacity for export, the fantastic
character of these claims becomes at once apparent. T he entire
revenue from taxes which normally amounts to about 25 mnilliard leva
a year (about 80 million dollars) would be required over a period of
ten years in order to meet the Greek claims for compensation. If one
half of Bulgaria's exports, which, in normal time amount to 15 milliard
leva a year (50 million dollars) were reserved for reparations, a period
of 30 years would be necessary to satisfy the Greek claims.
  In bringing forward those claims, the Greek government took no
notice of the following important considerations:
  (a) Since no Bulgarian troops took part in the invasion or fought
with the German Army in Greece, they could not have caused the
destruction for which the Greek Gouvernment blames them. On the
contrary, a considerable amount of construction was carried out on
Greek territory occupied by the Bulgarian authorities.
  (b) Since from October 1940 onwards, Greece was at war with
Italy her economic resources were already considerably impaired.
The intrusion of the German A-rmy into Thrace in April 1941, re-
sulted in the complete economic exhaustion of the occupied territory.
Not only the Bulgarian forces of occupation but also the native
population were eventually maintained on supplies imported from
Bulgaria.
  A fact of primary importance is the maintenaince in regilons occu-
pied by the Bulgarian troops from the moment of their entry and
until their evacuation in 1944 of an absolutely identical economic and
financial regime with that of Bulgaria. i.e. the same method of carry-



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OBSERVATIONS ON DRAFT PEACE TREATIES



ing out transactions, the samne prices for goods, the same means of
payment, no exceptional fiscal changes, but in 1941, exemption from
payment of all direct taxes.
  By her direct and effective cooperation with the United Nations in
the war against Germany and by her close collaboration with the Yugo-
slav People's Army of Liberation, Bulgaria contributed to the libera-
tion of the territory of Yugoslavia and hastened the evacuation of
Greek territory by German troops. Retreating German troops were
thus prevented from carrying out mass destructions and devastations
in Greece. This co-belligerency cost Bulgaria more than 32.500 lives
and material losses totaling 290 million dollars.
  Being an essentially agricultural country, Bulgaria came out of the
ordeal of the war and the German occupation with the principal re-
sources of her national economy seriously impaired. Even before
the war the standard of life in Bulgaria was very low, her national
income of 60 or 80 dollars per head per year being the second lowest
in Europe.
  With an even smaller national income (50 dollars per head per year)
with her agricultural and industrial equipment worn out with the
serious destruction wrought by air-raids her finances showing a deficit
and with a passive commercial balance, Bulgarian national economy
can now carry only a modest share of the burden of reparations.
  The disastrous drought of 1945 struck the economic as well as the
agricultural life of the country. The drought of 1946 destroyed a
high proportion of the harvest of Indian corn, sunflower seed, cotton
and even tobacco.
  In these circumstances, any disbursements by way of reparation
would lead to disastrous results, since they will hinder the economic
reconstruction of the country and the restoration of finances, still
further reduce the miserable standard of life of the Bulgarian peas-
ants, workmen and public officials for many years to come and paralyse
the development of the commercial relations with the United Nations.
VI. AMENDMENTS TO THE ECONOMIC CLAUSES OF THE DRAFT PEACE
                    TREATY W7ITH BULGARIA
Article 8
  1. Each Allied or Associated Power of the one part, and Bulgaria
of the other part, will notify within a period of six months of the
coming into force of the present Treaty, which pre-war bilateral trea-
ties they have decided by common agreement to keep in force or revive.
Any provisions not in conformity with the present Treaty shall how-
ever be deleted . . .
Article ?2
  1. Paragraph 2: The restoration. of legal rights and interests shall
imply the annulment of the effects of all discriminatory or restrictive



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FOREIGN RELATIONS, 19 4 6, VOLUME IV



rmeasures introduced during the war and not the complete restoration
of the pre-war situation, regardless of eventual changes arising from
the general legislation of the country.
  4. U.S.S.R. proposal.
  The Bulgarian Delegation accepts this proposal.
  6. United Nations nationals and their property shall be exempted
from any exceptional taxes, levies or imposts in excess of those imposed
on Bulgarian nationals and their property, etc.
Article 23
  Paragraph 2. The transfer of German assets shall be effected after
deduction of arrears of taxes, preferential claims or costs of manage-
ment and all other charges payable on the basic components of thes3e
assets, including all legitimate contractual rights of the forner Ger-
man owners of such assets.
Article 24
  U.S.S.R. proposal.
  The Bulgarian Delegation accepts the text of this proposal in its
entirety.
Article 25
  U.S.S.R. proposal.
  The Bulgarian Delegation accepts the text of this proposal with
the following proviso: after the word "property" add "arid
all other
assets".
Article 27
  1. Bulgaria waives all claims of any description against the Allied
and Associated Powers on behalf of the Bulgarian Government or
Bulgarian nationals arising directly out of the war or out of actions
taken because of the existence of a state of war between Bulgaria and
the Allied and Associated Powers.
  2. The provisions of this article will bar, completely and finally
all claims of the nature referred to herein, which will be hencefor-
ward extinguished, whoever may be the parties in interest. Persons
ewho furnished supplies or services on requisition to the forces of the
Allied and Associated Powers in Bulgarian territory, and those who
suffered non-combat damage in Bulgarian territory shall not be en-
titled to make any claim against the Arm)ed Forces of the Allied and
Associated Powers.
  Paragraphs 3 and 4 of Article 27 should be deleted.
Article 28
  The Bulgarian Delegation requests this article be deleted.
Article 32
  The Bulgarian Delegation requests that this article be deleted.



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OBSERVATIONS ON DRAFT PEACE TREATIES



Annex 4
  B. Inswrance
  U.K. proposal.
  The Bulgarian Delegation requests that this proposal be withdrawn.
Annex 6
  The Bulgarian Delegation requests that this Annex be deleted.
VII. OBSERVATIONS ON THE ECONOMIC CLAUSES OF DRAFT PEACE
                    TREATY WITH BULGARIA
Article 8
  The revival or keeping in force of pre-war bilateral Treaties be-
tween Bulgaria and Allied and Associated Powers should be by com-
mon consent of the contracting powers.
Article 22
  (a) It would be just and equitable to return any property belonging
to Allied and Associated Powers on April 24, 1941 in the state in which
it actually is.
  In any case the Bulgarian Delegation draws attention to the fact
that the restoration of rights and interests of the United Nations and
their nationals should be interpreted as the annulment of the effects
of all discriminatory or restrictive measures introduced during the
war and not as the complete restoration of the pre-war situation, re-
gardless of eventual changes arising from the general legislation of
the country.
  (b) Compensation for destroyed or damaged property (proposal
of the American Delegation, Art. 22 para. 4) should only be claimed
insofar as the damage results from acts on the part of Bulgarian au-
thorities or from illegal acts on the part of Bulgarian nationals.
  (c) Indemnity would only be paid up to one-third, at the current
rate of the leva (see proposal of the U.S.S.R. Delegation).
  (d) If the proposal of the United States Delegation is adopted as
it stands, no indemnity can be claimed for participation in corpora-
tions or associations of any nationality other than that of one of the
United Nations for, in this case, property and interests in fact belong
to legal persons and not to the physical persons participating in these
corporations. Furthermore, in case of participation in corporations
the capital of which is of ex-enemy e.g., German origin, any compensa-
tion to United Nations nationals corresponding to their participation
will, in practice, result in payment in favour of these corporations or
payment by Bulgaria of reparations to Germany.
  !(e) Exemption from any exceptional taxes, levies or imposts im-
posed by the Bulgarian Government or by Bulgarian authorities on
United Nations nationals and their capital assets (para. 6) is only



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FOREIGN RELATIONS, 19 4 6, VOLUME IV



acceptable inasmuch as this taxation is heavier than that which is
levied on Bulgarian nationals and their holdings.
Article 23
  A provision should be inserted Article 23, whereby German prop-
erty in Bulgaria is transferred to the U.S.S.R. free of payment of
arrears of taxes or any liabilities in favour of third persons, the claims
of German firms and establishments being compensated by claims of
Bulgarian firms and establishments.
  This principle was admitted in Article 6 of the Agreement drawn
up in Paris on 21st December 1945, concerning reparation to be re-
ceived from Germany.
A rticle 24
  (a) Measures of seizure of Bulgarian property, rights and interests
in territory of the United Nations in order to guarantee the payment
of their claims and those of their nationals are unreasonable and their
adoption would create the greatest confusion and numerous difficulties
in the economic relations between Bulgaria and the United Nations.
In this connection, it must never be forgotten that property of Bul-
garia and of her nationals in United Nations territory (with the ex-
ception of property to which the provisions of Article 24 do not apply,
paragraph 5 of the Article) mainly consists of assets of the Bul-
garian National Bank and generally speaking exceptional and pro-
visional economic assets (outstanding payments, etc.).
  (b) The conditions imposed by Article 24 are too severe as they.
demand the eventual liquidation of Bulgarian property to an extent
which exceeds the amount of comnpensation due to the United Nations
in respect of their claims on Bulgaria, as this liquidation may be
effected in a lump sum on condition that the excess over and above
the amount of the claim be repaid to the person entitled to it. In
particular, in the case of artistic and industrial property, this amounts
to confiscation pure and simple (Paragraph 4). This article, there-
fore, defeats its own object.
  (c) In view of the goodwill shown by the Bulgarian Government ill
meeting its obligations, it would be superfluous to look for indirect
guarantees in case these obligations were not satisfied by seizing Bul-
garian State property or even that of private persons which obliges
the Bulgarian State to compensate them. Besides only the Bulgarian
Government can decide whether and to what extent it shall compensate
Bulgarian nationals for any damage resulting from the war.
  (d) The Bulgarian Government would accept the full text of
Article 24 proposed by the Soviet Delegation. This proposal has also
been accepted by the other Delegations in tile case of the Draft Peace
Trreaty with Finland.



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OBSERVATIONS ON DRAFT PEACE TREATIES



Article 25
  (a) The transfer to the Soviet U,, nion of Germnan assets in Bulgaria
(Article 23 of the Draft Peace Treaty, relating to the provisions of
the Potsdam agreements), deprives Bulgaria of the possibility of
setting off her claims on Germany against German property in Bul-
garia. The waiving of all claims on Germany will therefore apply
not to the balance of Bulgaria's war-time account with that country,
but to the sum total of Bulgarian claims,-a heavy and unjustifiable
burden on the Bulgarian state.
  (b) The waiver in Article 25 (U.K., U.S. and French proposal)
concerns not only credits arising out of contracts but all claims arising
out of the war, and, consequently, claims in respect of reparation.
This matter will be dealt with in drawing up the Peace treaty with
Germany, but it should here and now be stressed that the proposed
solution is unjust since, comipared with Germany, Bulgaria is not a
conquered country but in the conquerors' camp.
  (c) Article 25 stipulates that Bulgaria shall waive all claims but
fails to explain in whose favour she must waive them. Since under
the Draft Peace Treaty, Yugoslavia and Greece are the only countries
entitled to claim reparations and since Article 20 provides for the satis-
faction of their claims in this respect, the countries which are to benefit
and the exact extent of the renunciation required of Bulgaria are not
clear, unless we are to understand that Germany is to benefit by the
Bulgarian reparations.
  (d) In the case of the Draft Peace Treaty with Finland the Soviet
proposal was agreed to inasmuch as any restrictions imposed in re-
spect of any Finnish property in Germany shall be removed after the
coming into force of the treaty in question. There is no reason why
Bulgaria should be more harshly treate(l than ainy other ex-satellite
of Germany.
  (e) The Soviet Draft of Article 25 appears to the Bulgarian Dele-
gation to be satisfactory. Bulgaria should in any case now be allowed
to reserve the right to claim reparations from Germany when the peace
treaty with the latter is being drawn up.
Article 27
  (a) The waiving of claims against the United Nations should apply
to claims arising out of the state of war between Bulgaria and any
one of the United Nations, and should not date from 1st September
1939, since on that date relations between Bulgaria and all the United
Nations were normal and peaceful.
  (b) Paragraph 2, which obliges the Bulgarian Government to com-
pensate Bulgarian nationals for damages suffered either through any
requisition of supplies or services or as the result of military oper-
ations, should be deleted.



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FOREIGN RELATIONS, 19 4 6, VOLUME IV



  (c) Paragraph 3, which provides that Bulgaria shall likewise waive
all claims against countries with which she was not at war is
unjustified.
  (d) Paragraph 4 should also be deleted. Under Article 16 of the
Armistice Convention, Bulgarian merchant ships were in the general
interest of the Allies placed under the Allied (Soviet) High Com-
mand. Instead of confiscation, Bulgarian merchant ships were, there-
fore, merely placed under Allied control. Furthermore, paragraph
4 provides for the waiving of all claims arising out of action taken
by the Allies with respect to merchant ships irrespective of the nature
of such action. The provisions of the Peace Treaty should not be
any harder than those of the Armistice Convention.
Article 28
  Under Article 8, each Allied or Associated Power will notify Bul-
garia within a period of six months of the coming into force of the
present Treaty, which pre-war bilateral treaties it desires to keep in
force or revive. Since pre-war trade agreements and treaties between
Bulgaria and Members of the United Nations contained clauses for
the mutual granting of most-favoured-nation treatment, a further
reference to the most-favoured-nation principle in another article
of the Peace Treaty is superfluous, more particularly in the case of
Article 28, since the appropriate provisions of that Article would
remain in force for only 18 months.
  Furthermore, the provisions of Article 28, inasmuch as they relate
to cases not covered by the above-mentioned treaties would interfere
with the freedom of Bulgarian economic legislation during a period
of 18 months from the coming into force of the Peace Treaty.
Article 32
  Bulgaria being a Danubian country, it would be in her interest if
navigation on the Danube were regulated by a Conference on which
Bulgaria would be represented on equal terms with the other Danubian
countries.
Annex 4
B. Nsuwrance
  U.K. proposal
  In view of the proposed amendment to Article 22, paragraph 1 this
proposal should be entirely deleted, since its adoption would frustrate
the application of the law under which all insurance is nationalised.
Annexo6
  As revision of judgments rendered by default is a universally rec-
ognised principle of law, and as its application is fully ensured by
Bulgarian legislation, there can be no object in inserting a provision



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OBSERVATIONS ON DRAFT PEACE TREATIES



for the revision of judgments rendered by default in the Bulgarian
courts against United Nations nationals.


OBSERVATIONS ON THE DRAFT PEACE TREATY WITH HUNGARY BY
                THE HUNGARIAN GOVERNMENT
CFM Files
Observatioms on the Draft Peace Treaty With Hungary Submitted by
                   the Hungarian Delegation

C. P. (Gen) Doc. 5                        PARIS, August 26, 1946.
                             TABLE
                       I. POLITICAL CLAUSES
                       II. MILITARY CLAUSES
                     III. ECONOMIC CLAUSES
       ANNEXES REFERRED TO IN THE ATTACHED OBSERVATIONS
  Annex 1, "The Hungarian problem in relation to Roumania" has
been circulated in French to each of the Delegations.
  The maps contained in Annex 2 are on file in the General Secre-
tariat, where they may be consulted by the Delegations.
  Annexes 3, 4,5 and 6 are attached to the present memorandum.
  Annexes 7, 8 and 9 have been circulated in French and English to
each of the Delegations.
  I. TERRITORIAL AND POLITICAL PROVISIONS OF THE DRAFT PEACE
                   TREATY WITH HUNGARY
Preamble.
  The Hungarian Delegation has the honour to present the following
observations concerning the territorial and political provisions of the
draft Peace Treaty with Hungary.
  Whereas Marshal Voroshilov has, in the note handed to the Hun-
garian Government, expressed the appreciation of the Soviet Union
to Hungary, not only for having declared war on Germany but also
for having contributed effectively to the success of the war waged by
the United Nations against Germany, the Hungarian Delegation has
the honour to propose that, at the end of the third paragraph of the
Preamble, after the words ". . . with Hungary; and", the words:
"That she contributed to the final success of the war against Germany"
shall be added.
  The Hungarian Delegation has no observations to make concerning
the Article 1; paragraph 1 of the draft Treaty.
Observations of the Hungarian Government, Article 1, para. (2)).
  Concerning paragraph 2 of the said article, the Hungarian Delega-
tion has the honour of declaring as follows:
  The Delegation takes note of the annulment of the arbitration
award of Vienna of August 30th 1940. In this connection, the Dele-
    219-115-70  17



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FOREIGN RELATIONS, 1946, VOLUME IV



gation only wishes to remark that the initiative for this arbitration
came from the Roumanian Government of the time. However, as
the Hungarian Delegation argued in the Plenary Session of the Con-
ference, this annulment is not in itself a solution to the serious and
delicate problems at issue between Hungary and Roumania.
  In fact, more than a million and a half Hungarians are actually
living in Roumanian territory. However great may be the goodwill
displayed towards them by the Roumanian Government, they are
nevertheless subject to all kinds of ill treatment and molestation by
the local authorities or by nationalist organizations. Hungarians
capable of bearing arms are compelled to undertake forced labour,
while the administrations and the officials of the territories inhabited
by Hungarians, systematically refuse to learn their language. Hun-
garians must submit to requisitions and confiscations of every kind.
Hungarian schools are hampered in their activity, or forced to close
down. The land reform of 1946 has defrauded Hungarian peasants,
for a Royal Decree of 1943, No. 645, authorises Roumanians to cancel
the contracts made between 1940 and 1944 with Hungarians. Hun-
garian commercial and industrial undertakings are compelled to ac-
cept Roumanians as administrators or managers. Ecclesiastical au-
thorities are subject to every kind of persecution, etc. Full details
concerning the complaints by Hungarians against Roumanians will be
found in a book entitled "The Hungarian Problem with regard to
Roumania", issued by the Hungarian Ministry of Foreign Affairs
(see Annex I).
  The Hungarian Government urgently appeals for the suppression of
these abuses, and proposes a solution which is just as well as practical.
As proposed at the Council of Ministers of Foreign Affairs, the Hun-
garian Government considers that part of Transylvanian territory
should be restored to Hungary; namely, an area of 22,000 square kilo-
meters, little more than one-fifth of the whole of Transylvania amount-
ing to 103,000 square kilometers.
Annexes 2 and 3
  According to the provisions of this settlement, the number of the
Roumanians in Hungarian Territory is estimated at 880,000, whereas
1,060,000 Hungarians would remain under Roumanian sovereignty.
Under these conditions, both States would necessarily be induced to
adopt an identical attitude of toleration towards their minorities.
  Annexes 4 and 5
  The Hungarian Government does not wish to insist on the economic
necessities which also point towards such a solution. This moun-
tainous and well wooded territory, sparsely inhabited, would give
Hungary the territory it lacks (Annex 6).
  The Hungarian Governmentfs note of April 27th 1946 was conceived
in this spirit, as well as the aide-mmemoire to the Council of Foreign



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OBSERVATIONS ON DRAFT PEACE TREATIES



Ministers in Paris. It was also with this idea in mind that the Presi-
dent of the Hungarian Delegation expressed the desire, in his expose
before the Peace Conference, that direct negotiations between Hun-
gary and Roumania should be undertaken before the final drafting
and signature of the Peace Treaties, with a view to arriving by mutual
agreement, at a settlement based on ethnic realities.
  In any case, such a solution, if adopted, should be accompanied by
measures calculated to facilitate reconciliation between Roumania and
Hungary. This is what we have already proposed in our note 80/Be
of 27th April 1946, in which we referred to the guarantees which
should be granted to minorities, in conformity with the principles of
the Atlantic Charter, and the policy of Lenin and Stalin.
Observation8 of the Hungarian Government, Article 1, para. (3).
  The Hungarian Delegation has no observations to present concern-
ing paragraph 3. However, in case a new text is adopted, instead of
paragraph 2 of the draft, attention is drawn to the necessity of examin-
ing to what extent paragraph 3 should be modified, provided such
alteration does not affect Soviet territory.
Observations of the Hungarian Governnent, Article 1, para. (4).
  The Hungarian Government takes note of the annulment of the
Vienna award of 2nd November, 1938, and of the re-establishment of
a common frontier between Hungary and Czechoslovakia as it existed
on 1st January, 1938. Only on condition, however, that the return to
the territorial stattus _quo would at the same time entail a return to the
legal and ethnic status quo of the Hungarian population, which, ac-
cording to the data of the Statisticky Zpravoday 18th year, number
VI, amounted in 1945 to 650,000 persons. What is aimed at is the
restoration of citizenship rights to members of the Hungarian mi-
nority, and the abrogation of discriminatory laws against them, and
at providing guarantees for their national existence.
  Should Czechoslovakia propose modifications to the frontier as it
existed 1st January, 1938, or should she not be prepared to grant
guarantees for the return to the legal and ethnic status quo of 1st
January, 1938, Hungary requests that the Czechoslovak proposals
should be communicated to her in sufficient time for comment.
  The Government of the Hungarian Republic has the honour of
drawing the attention of the Peace Conference to the fact that the
boundary posts intended to mark the line of the former frontier have
been removed or destroyed as a result of the war. It would be desir-
able to complete Article 1 by a provision stating that the frontier
shall be delimited by Mixed Commissions working on the spot. A
similar procedure would be necessary if the Conference decided to
establish frontiers differing from the former ones.



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Observations of the Hungarian Government, Article 2.
  The Government of the Hungarian Republic is willing to carry out
the provisions of Article 2 of the Draft, and takes note of the fact that
similar provisions are contained in the Draft Treaty with Roumania.
  But the Hungarian Government wishes to point out that the rights
and freedoms enumerated in Article 2 do not contain all the "Rights
of
Man", and refers to the expose the President of the Hungarian Dele-
gation [gave?] to the Plenary Session of the Conference. The enu-
meration of the rights in question should be completed by an exact
description of these rights, such as "the right to elect domicile, freedom
to choose school language, freedom to work and to engage in a calling".
The words "without distinction of race, sex, language, or religion"
should be completed by the insertion of "of nationality".
  The Hungarian Delegation wishes to point out that the mere refer-
ence to the "Rights of Man" does not seem sufficient when defining
the
statute of minorities, which would require more detailed regulation.
  The Government of the Hungarian Republic has exposed its views
on this point in an Aide-Me{moire presented on 11th June, 1946 to
the Council of Foreign Ministers in Paris. It requests that corre-
sponding provisions should be included in the Peace Treaty with
Roumania.
  Annex 7.
  The Hungarian Delegation has the honour to annex a copy of this
Aide-fnimoire (Annex No. 7); and declares its readiness, on a basis
of reciprocity, to enter into the same engagements with regard to
minorities living in Hungarian Territory.
  The Hungarian Government, as regards Czechoslovakia, takes note
of the fact that this country being one of the United Nations is bound
by the provisions contained in the Charter of the United Nations.
The Hungarian Government, in this connection, recalls the interpre-
tation of paragraph 4 of Article 1, which makes the maintenance of
the status quo, as far as frontiers are concerned, depend on the main-
tenance of the status quo concerning the rights of the Hungarian
minority in Czechoslovakia.
  The Hungarian Government also hopes that in the event of ad-
mission to membership of the United Nations, it will have the oppor-
tunity of raising the question of the defense of minorities before the
appropriate body.
  Concerning minorities, the Hungarian Delegation wishes to draw the
attention of the Conference to another important question. It is ex-
tremely regrettable that the countries of south-eastern Europe at
present contain a large number of persons without nationality, which
permits the State in which they are living to restrict the application of
the "Rights of Man" in their favour. The origin of this state of



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OBSERVATIONS ON DRAFT PEACE TREATIES



things is, on the one hand, the complicated and frequently contra-
dictory provisions of the Peace Treaties concluded after the previous
world war, which enabled certain States to deny citizenship to the
members of an undesirable minority or, on the other, to make regula-
tions, such as those recently adopted by certain States like Czechoslo-
vakia and Roumania, by which members of a "national" minority
living on their territory have forfeited the citizenship previously con-
ferred on them, or have had fresh obstacles placed in the way of the
recognition of this citizenship.
  The Hungarian Delegation, wishing effectively to guarantee the
"Rights 6f Man" and to bring about appeasement among the peoples
of the Danube Basin, deems it necessary to complete the Draft Peace
Treaty by provisions compelling the States concerned to recognize
Awitholit reservations the right of citizenship to persons domiciled in
their territory.
  The Hungarian Delegation refers for more ample details concerning
the proposed solution, to the note of Occtober 31st 1945 addressed to the
representatives of the Great Powers at Budapest, a copy of which is
enclosed herewith.
  Annex 8.
  With reference to the Czechoslovak and Roumanian provisions men-
tioned above, the Hungarian Delegation wishes to point out that it
refers more precisely to the Czechoslovak Presidential Decree promul-
gated on 3rd August, 1945, by which Hungarian inhabitants of Czecho-
slovakia are declared to have forfeited Czechoslovak citizenship. As
for Roumania, the Hungarian Delegation refers to the note of 15th
July, 1946 handed by the Hungarian Republic to the representatives
of the Great Powers accredited in Budapest, copy of which is attached
(Annex 9).
  Annex 9.
  The Hungarian Delegation has no comment to make on the provi-
sions of Part II, namely Articles 3, 4, 5, 6, 7, 8 and 9.
Observations of the Hungarian Government, Article 34.
  Concerning part VIII of the Draft Treaty (Final Clauses), the
Hungarian Delegation has the honour of making the following
observations.
  After paragraph (2) of Article 34, add "The Hungarian Govern-
ment shall accredit to the three heads of Missions, plenipotentiaries
whose function would be to transmit to the Hungarian Government
messages addressed to it, and to give to the heads of these Missions all
necessary information."
The object of this suggestion is the need for designating special
agents to ensure adequate liaison between the different organs
concerned.



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FOREIGN RELATIONS, 1946, VOLUME IV



Observations of the Hungarian Government, Article 36.
  As regards Article 36, the Hungarian Government considers that
in order to avoid uncertainty, a limit of one year from the signing of
the Treaty should be specified for the purpose of acceding to it.
Observations of the Hungarian Government, Article 37.
  Concerning this Article, the Government of the Hungarian Republic
has the honour to point out that it would be more in keeping with
international usage for the Treaty to come into force, not only after
it has been ratified by the Great Powers mentioned, but also by
Hungary.
  In conclusion, the Government of the Hungarian Republic hopes to
be allowed to present, if necessary, such further observations or com-
ments as may be required to make known its point of view concerning
any solutions which may be proposed.
II. OBSERVATIONS OF THE HUNGARIAN DELEGATION CONCERNING THE
  MILITARY CLAUSES OF THE DRAF PEACE TREATY WITH HUNGARY
  Concerning these clauses the following comments are submitted:
  Articles 10 to 12. No conmments.
  Article 13. The Hungarian Delegation requests that the restric-
tions contained in the draft should not apply to "self-propelled or
guided missiles or apparatus" with an effective range of less than 100
metres. Such weapons are intended solely for defensive purposes.
  Article 14. The Hungarian Delegation requests that the war ma-
terial necessary for the maintenance of the armed forces authorised
in Article 10 shall not include the material required for replacing
material deteriorated through ordinary wear and tear, nor material
used for purposes of military training.
  Article 15. The Delegation requests that the exact meaning of the
expression "of German origin" should be specified: since the Hun-
garian army, as well as the armies of other States, was supplied with
-material which, although patented in Germany, should be regarded
as material of international type. Should the term "of German origin"'
be interpreted in such a wide sense that it would apply to such inter-
national types of war material, Hungary would be faced with an in-
soluble financial problem, since it would necessitate re-equiping the
aarmy with entirely fresh types of war material.
  A rticles 16 to 18. No comments.
  Article 19. The Delegation requests that instead of the words "as
soon as possible", the following should be adopted: "within a period
of six consecutive months following the signature of the present
Treaty". In support of this request, it is sufficient to refer to the
anxiety prevailing among families of prisoners of war. A fixed period



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OBSERVATIONS ON DRAFT PEACE TREATIES



for the repatriation of prisoners of war would contribute greatly to
tranquillize these anxieties.
  Annexes 2 and 3. No comments.
III. OBSERVATIONS OF THE HUNGARIAN DELEGATION ON THE ECONOMIC
             CLAUSES OF THE DRAFT PEACE TREATY
  The economic policy of a country is chiefly dependent on its geo-
graphical position. This doctrine is applicable to the countries of
the Danube basin, whose economic policy must be based on their joint
interests.
  At the present time, when the conclusion of the Peace Treaties
brings the second World War to an end, all countries, whether vic-
torious or vanquished, are at one in their hope that Peace will heal
their wounds and give that impulse to economic activity which is un-
doubtedly the essential factor in any kind of political reconciliation.
This is why it is desirable that the essential economic requirements of
the Danube Basin, including Hungary, should be taken into account
in the Peace Treaty.
  The Hungarian Delegation submits detailed proposals concerning
the clauses of the Draft Treaty, reserving its right to make further
proposals in due course. The Hungarian Delegation ventures to in-
troduce its proposals by the following observations on the economic
problems raised by the Draft Treaty.
       THE ECONOMIC AND FINANCIAL POSITION OF HUNGARY
Prelinminary remarks.
  Even before the war, Hungaryfs position after the Treaty of Tria-
non was that of one of the poorest countries of Europe, with a very
low standard of living andl public expenditure absorbing a large pro-
portion of private wealth. The density of the population had made it
necessary to proceed with the industrialization of the country, in spite
of the lack of raw materials required for this purpose.
  In 1938, the last year of Peace, the national income amounted to 5,2
milliard pengoes, equivalent to 1 milliard dollars, barely 112 dollars
per annum per head of population, on which 24 dollars were levied to
cover public expenditure.
  In these circumstances, it is obvious that accumulation of capital
was bound to be limited. Even during the most favourable years,
savings did not exceed 7.4 whereas in the western countries savings
amounted to as much as 15.
  Owing to the fundamentally agricultural character of Hungarian
economy, the country was unable to react efficiently to the World Crisis
in 1931. It was forced to proclaim a moratorium and to grant; facili-
ties to agricultural debtors.



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FOREIGN RELATIONS, 19 4 6, VOLUME IV



The economirc consequences of the war.
  The German High Command proceeded to occupy Hungary on
March 19th, 1944, thus laying the country open to Allied air attack,
and afterwards caused it to become an actual theatre of operations.
As early as the beginning of the summer, the Germans began to remove
the moveable goods of the country. As matters grew worse and worse
for Germany, this operation assumed the character of a complete
evacuation. The economic position of Hungary, further aggravated
by the destruction resulting from warfare, was as follows when liber-
ated by the Red Army:
  Out of the 52 milliard pengoes (10 milliard dollars) at which the
national capital was estimated, the losses amounted to between 35 and
40, including 6,7 milliards on actual production equipment and 6,1
milliards on trade. Agricultural wealth was reduced by 25% and
live-stock by over 50%. Industry lost a third of its fixed capital; 63%
of the rolling-stock was destroyed or taken away by the Germans; 25%0
of the living accommodation in Budapest had become unfit for use,
and there were even some towns where damage to dwellings reached
88%o.
  Such is the devastation caused by the war in the productive capacity
and the material wealth of the country.
  The Government administrative machinery was completely dis-
organized, communications entirely paralysed, trade between town
and country held up, causing scarcity and famine in the big urban
districts.
  The result was that, for the year following the Liberation, national
income fell to approximately 2,6 milliard pre-war pengoes, equivalent
to 500 million dollars.
Inflation.
  The lack of balance between production and consumption, and the
paralysis of state machinery compelled the Government to tolerate the
resumption of free trading. Moreover, the obligations contained in
the Armistice Treaty have made it necessary to rehabilitate at least
a portion of industrial production, which entails refusing priority to
the requirements of the home market. Moreover, for long months,
the Government found it impossible to proceed with the assessment or
collection of taxes. In any case, there would have been no solvent tax-
payers as economic activity was only very slowly reviving. It is
this chain of circumstances that resulted in an inflation which might
be called unique in economic history. In the financial year from July
1st, 1945 to June 30, 1946, expenditure amounted to roughly 514A4
million pre-war pengoes. During this period, revenue barely attained
54,7 million pengoes, which means that only 10.6% of the expenditure
was covered.



256


 

					
				
				


OBSERVATIONS ON DRAFT PEACE TREATIES



  The financing of most of the State's expenditure was therefore dealt
with by the issue of more banknotes and by June 1946, one month be-
fore stabilisation, the note circulation had reached the astronomic
figure of 6,277 trillion pengoes.
  Anyone acquainted with the effects of inflation will know that it is
the working classes who suffer from it. Such was also the case in
Hungary. In spite of increases given to nominal salaries, their pur-
chasing power fell, first from week to week, then from day to day and
in the end, from hour to hour. There were days and weeks when the
salaries given to wage earners of all types did not exceed 2 or 3% of
the real value of their wages in 1938. Even during the most favour-
able spells, which were relatively brief, the wage-earners never re-
ceived a salary representing more than 20 to 257o of their purchasing
power in 1938.
  The above figures allow for such arrangements as direct systems of
barter resorted to by the peasants and factory workers so that the
latter could obtain food.
  It was therefore natural that money should have rapidly ceased to
function as a unit of value and even as a means of payment. And so
it is that in the middle of the 20th century we find in the very heart of
Europe a country which has reverted to the original forms of trade.
Stabilisation.
  All those responsible for Hungarian economic activity and the
masses themselves plainly realised that the inflation had reached its
utmost limits and that stabilisation must be attempted at any price
and whatever the sacrifices.
  The experts had, of course, hesitated. They considered that the
national income was not yet sufficient to support the re-adjustment
of the budget and the taxes to meet international commitments. Pro-
duction was still inadequate to demand, and Hungary still lacked the
foreign exchange which seemed absolutely necessary in order to main-
tain the value of the pengoe on the foreign market. Notwithstanding
these fears, stabilisation was imperative for the reasons previously
mentioned. It had to be attempted at the first opportunity and that
seemed to arise at the beginning of the new harvest.
  The agrarian reform which many people thought would entail a
fall in production, actually proved, in these exceptional circumstances,
the essential factor for the preservation of agricultural production.
This was due to the fact that whereas large estates would have felt a
shortage of labour, machinery and draught animals, the Hungarian
peasant set himself to tilling the soil allotted to him, one might almost
say with his bare hands, and, according to statistics, produced in 1946,
9.9 million quintals of wheat, 3.5 million quintals of rye, 4.1 million
quintals of barley, 1.7 million quintals of oats, 19.9 million quintals of



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FOREIGN RELATIONS, 1946, VOLUME IV



maize, and 19 million quintals of potatoes. This harvest, as compared
with 1936, represents the following percentages: Wheat 36%, Rye
43.7%c, Barley 56.9%, Oats 54.8%, Potatoes 88.7%.
  The harvest in 1946 is thus rather poor, but it is better than last
year. The bread supply is only partially ensured, because the 9.5
million quintals of wheat and rye required for the people's consump-
tion, and the 1.4 million quintals destined to meet international com-
mitments absorb practically the whole harvest. This entails the use of
maize and potatoes as substitutes in order to retain the necessary
quantities for sowing.
  For the period from January to March, Hungarian industry has,
for its part, produced the following percentages as compared with
the corresponding period in 1938. Metal-working and machinery,
94.3%; leather and rubber 12.6%; wood, bone and plastics 11.9%;
textiles 24.3%; clothing 12.3%; processed food 36.7%. Notwithstand-
ing these figures, the Hungarian Government considered that the situa-
tion required, without further delay, either an increase in production
or some external assistance. On August 1st a new currency, the florin,
was introduced. This unit is based on gold and its value defined as
follows: 1 kilog. of pure gold equals 13.210 florins, which represents
the value of this currency as 11.74 florins to 1 dollar. At the same time,
the Government has incorporated price levels and salaries in a ration-
ing scheme.
  The rationing system covered only a certain number of foodstuffs.
It was not possible to provide a rationing scheme for industrial prod-
ucts as the output was inadequate.
  Compared with 1938, price variations are as follows: The index for
foodstuffs stands at 4.1 florins to 1 pre-war pengoe, for industrial
products it amounts to 5, rents, on an average, stand at 3, whereas,
taken as a whole, wages and salaries only represent 25 to 50% of their
pre-war value.
  In order to illustrate the standard of living, an outline of the food
problem must be given. The rationing scheme provides for the supply
of 1,077 calories per day for town-dwellers, 1,084 calories for office
workers, 1,481 for light manual labourers and 1,957 for heavy manual
workers. Even these rations were only possible with the assistance
of U.N.R.R.A.
  The greater part of the calories are supplied by bread and flour. It
will be sufficient to point out that the standard number in Hungary
should be 3,080 calories and that, during the war years 1942 and 1943,
the minimum ration never included less than 1,528 calories for the
least favoured sections of the population.
  Seasonal products which may be bought in the free market, includ-
ing vegetables, fruit, poultry and eggs, ease the situation to some
extent, but in this connection it must be remembered that excessively



258


 

					
				
				


OBSERVATIONS ON DRAFT PEACE TREATIES



low wages scarcely allow large masses of the people to raise the stand-
ard of living by purchases in the free market. It is the shortage of
fats which is specially felt, not to speak of meat which has almost
completely disappeared from the market since the latter years of the
war. At present the slaughtering of animals for food is forbidden on
account of the great reduction of the livestock.
The budget of the Hungarian State.
  It is important at this juncture to consider the taxes which the Hun-
garian State levies on its nationals in order to meet its home and for-
eicgn commitments.
  The Hungarian budget shows a revenue of 610 million pre-war
pengoes and an expenditure of 710 millions. Expenditure is divided
into three categories:
    275 millions for staff salaries and pensions;
    125 millions for ordinary maintenance costs;
    310 millions for extraordinary maintenance costs,
including 70 millions for reconstruction and 240 millions for liabilities
deriving from the armistice treaty (30 millions for the cost of inter-
national supervisory bodies and 210 millions for reparations).
  In order to cover the 100 millions deficit, the Government intends to
make full use of its right of issue, which it can do by recourse to
fiduciary loans, without the inflation which does invariably accompany
currency stabilisation measures. It must be pointed out moreover,
that for the financial year 1946-1947 the approximate income of the
nation will be 3.2 milliard prewar pengoes and that, consequently,
State taxes alone will comprise 19%o of the national income. The cost
of local administration, amounting to 180 million pre-war pengoes,
entails the addition of a further 6%v to taxation which therefore
amounts to 350 pengoes per head. When these taxes have been de-
ducted there remains an income of 263 pengoes (050 dollars) per capita
of the population, a figure which makes any further taxation quite
impossible. It is for this reason that the budget makes no provision
for the payment of internal or foreign debts, or for financial liabilities
deriving from the Draft Peace Treaty now under consideration. In
this connection attention must be called to the fact that as payment
towards the national debt (2 milliard gold pengoes or 400 million
dollars) and foreign debts (900 million pengoes) a sum of 33.5 million
pengoes, entails the addition of la further 6% to taxation which there-
fore amounts to 350 pengoes per head. When these taxes have been de-
with creditors. As for the sums necessary for the reparation of dam-
age to Allied property in Hungary, it is impossible to make any esti-
mate, even approximate, as no data are available. But as we have
already seen, the budget with its 100 million deficit is for our nationals
a burden which cannot be f urther increased.



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FOREIGN RELATIONS, 19 4 6, VOLUME IV



  In these circumstances, it is impossible for the national income to
increase at a more rapid rate. In view of the very low standard of
living which Hungary will have to accept as a result of currency sta-
bilisation, there can be no question of allocating more than the 240
million pengoes set aside to cover international obligations.
  The international obligations of Hungary may be attributed partly
to the war which has been lost and partly to debts contracted before
the war.
  From a chronological standpoint, our international debts take prece-
tdence over our war debts but from the standpoint of international law
and political requirements, priority must be given to war debts.
Since the coming into force of the Moscow Armistice Treaty, the Hun-
garian Government has had frequent proof of the generosity of the
U.S.S.R. which, in view of Hungary's extremely weak economic posi-
tion, has shown herself disposed to grant facilities as regards repara-
tion payments. While convinced that, where necessary, the U.S.S.R.
will not refuse to reduce reparation payments, the Hungarian Gov-
ernment feels obliged to state its views on the obligations in question,
so as to give a true picture of all aspects of the country's economic and
financial potentialities.
  In April of this year, the Government of the U.S.S.R. agreed that
reparations payable during the next 6 years could be paid over a
period of 8 years. Shortly afterwards, the U.S.S.R. further agreed
that reparation payments could be progressively spaced out. By this
agreement, the reparations payable to the U.S.S.R. during 1946 were
reduced from $27.3 to $21.8 million and those for 1947 to $23 million.
At the same time Moscow cancelled penalties previously incurred by us
to the amount of $6,000,000. Under another concession made at the
request of the Hungarian Government, permission was given to Hun-
gary to deduct from the reparations payable, in two equal parts, in
1946 and 1947, the value of a batch of securities representing Hun-
garian investments in an important foreign mining concern. The
actual value of these bonds will be assessed by a joint Russo-Hun-
garian commission.
  The principle of progressive deferment has also been adopted by
Yugoslavia and, for the first year at any rate, by Czechoslovakia.
Hungary's reparation obligations thus amount to $33 million for the
year 1946, but the transfer of the batch of securities will reduce
this amount to a considerable extent.
  These repeated concessions provide evidence of the generosity of
the U.S.S.R., on which we count also in the future. We hope that
the U.S.S.R. will always allow for our capacity and our economic
effort and that she will not refuse her indulgence for delays for which
we are not really responsible.



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OBSERVATIONS ON DRAFT PEACE TREATIES



  A second war liability is that of the cost of maintenance of the army
of occupation. According to very modest estimates, it has been cal-
culated that this will amount to 188 million pre-war pengoes for the
last 9 months of 1945. When representatives of our Government
visited Moscow they obtained formal promises from the proper au-
thorities there that a considerable reduction would be made in the
strength of the army of occupation. Moreover, we hope that the
Soviet Government will continue to assume responsibility for a certain
part of the maintenance cost of its troops in Hungary as it has done
in the past and that it will increase its participation in these costs.
  As for the cost of the Inter-allied Control Commission, this
amounted to 11 million pre-war pengoes for a period of 9 months.
  It is among obligations of this kind that must be classified the rep-
arations provided for in Article 23 of the draft Peace Treaty. Ac-
cording to this Article, Hungary must restore all the legal rights and
interests in Hungary of the United Nations and their nationals as
they existed before the war, restore to these nations and their nationals
all property belonging to them in the state in which it is at present,
and compensate the owners for any damage caused to the property in
question.
  Hungary has not yet made any payment towards these liabilities,
which are also prescribed in the Armistice Treaty; for the moment,
we do not know the amount due under Article 23.
  Nevertheless, the figures and the data which the Hungarian Delega-
tion has just quoted are sufficient to prove to everyone the accuracy
of the statement made above to the effect that, despite the generosity
of the Soviet Union, the international liabilities of Hungary as laid
down in the draft Treaty are far beyond her capacity of payment.
Conclusions.
  To sum up, Hungary begs the Conference to take account of the
efforts made by the Government of the Hungarian Republic to meet
her liabilities up to the extreme limit of her nationals' capacity. Hun-
gary, therefore, hopes that the final draft of the Treaty will not include
any fresh stipulations likely to make her economic position more
difficult, as for example, reparations, the liquidation of Hungarian
property abroad, the renunciation of her rights and claims against
Germany and her ex-allies. The same applies, also, to claims which,
we are informed, have been made against us outside the framework of
the draft by certain Powers-the justification of which, moreover,
Hungary contests.
  Hungary will, therefore, ask the Conference to grant it facilities
for reconstructing her economic life. One of the fundamental condi-
tions of our economic restoration is the restitution of our property
taken westwards by the Hitlerite forces and their Hungarian accom-



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plices. The detailed list which the Government of the Hungarian
Republic has transmitted to the Allied Powers is far from complete.
  This property, which represents a very large part of our national
patrimony, is absolutely essential for the productive capacity of the
country. Without it, neither the efforts of the Hungarian workers
nor the mobility of the capital still in our possession will suffice to raise
the standard of living of the country to the level at which it was be-
tween the two wars. We are grateful to the Government of the
United States for having handed back to us the gold carried off to the
West and for their promises concerning the restitution of property
removed since January 20, 1945 (date of the Armistice) or since Octo-
ber 1a, 1945 (the date when the "Crossed Arrows" came into power).
It would, however, be desirable that the initial date of the restitution
should be ante-dated to the cessation of Hungarian sovereignty, that
is to say, to March 19, 1944, and that the application of relevant meas-
ures should not encounter any technical difficulties. Without this
property, Hungary would remain not only in a permanent state of
poverty but in the direst state of distress. For these reasons, the
restoration of the property removed, is as important for the whole
Danube basin and for the peace of Europe as it is for Hungary itself.
  The Hungarian Delegation ventures to draw attention to the great
hardships which will inevitably result for Hungary from the pro-
posed territorial changes. These would involve the loss of certain
sources of power, the severance of certain communications and impor-
tant relations, and the dislocation of certain economic entities. It is
in the interest of the Powers concerned to establish international
agreements designed to regulate these questions. In this connection,
the Hungarian Delegation is making concrete proposals for the settle-
ment of these problems.
  Hungary is animated with the sincere desire to fulfil her interna-
tional commitments as loyally and fully as possible. With this object
in view, she hopes that the total amount of her obligations will be
definitely fixed, that a certain amount of latitude will be given her to
meet these obligations, and that her liabilities will be assessed on the
basis of the country's capacity of payment.
OBSERVATIONS BY THE HUNGARIAN DELEGATION ON ARTICLES 21 TO 33 OF
  THE DRAFT PEACE TREATY (STATEMENT OF REASONS FOR THE AMEND-
  MENTS PROPOSED)'
Article 22
  Under the provisions of paragraph 1 of this Article Hungary is
obliged to return all property removed from the United Nations'
territory.

  For amendments proposed, see p. 276.



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OBSERVATIONS ON DRAFT PEACE TREATIES



  As worded the draft would invalidate, without any compensation,
transactions under which, without resort to direct or indirect duress,
Hungary or Hungarian nationals purchased such property, from
persons entitled to sell it, on the basis of the principle of freedom of
contract, and against payment of its full value.
  Therefore, as in paragraph 2, and as presumably intended by the
authors of Ithe text, the Hungarian Delegation requests that after the
word "removed" the terms "by force or duress" be inserted.
  Paragraph 2 of Article 22 obliges Hungary to return all property
originating from the territory of any United Nation, regardless of
whether the original Hungarian purchaser had paid in full for the
property removed by force or duress from the country of origin by
an Axis Power.
  In the view of the Hungarian Delegation, some protection should
be given to the original bona fide Hungarian purchaser-the responsi-
bility of proving such fides resting with Hungary-so that he should
not be at a loss.
  Hungary would also ask to be granted a right of recourse against
the Axis Power which removed the property in question from its
country of origin. If there is to be no restriction provided for the
obligation that property-shall be returned, there should be recognition
of this right of recourse in accordance with the actual principles of
private international law.
  Under Paragraph 6 of Article 22, Hungary accepts the obligation to
return rolling stock of foreign origin located on Hungarian territory.
She would, however, ask for reciprocity in the application of this
principle. As a result of shortage of the necessary rolling stock,
railway traffic in Hungary is already subject to very serious difficulties,
and if Hungary is compelled to return rolling stock of foreign origin,
without having her own rolling stock returned there is a risk of com-
munications being completely paralysed.
  Since under the rules of international law, rolling stock is not re-
garded as booty, both economic and legal motives militate in favour
of this claim for restitution.
  As a consequence of war events and military operations, rolling stock
has been lost on both sides; territorial changes have likewise made big
differences in the distribution of rolling stock. In the interests of
economic and political justice in this sphere, we would suggest that a
conference of railway experts be convened to proceed to a fair and just
redistribution of rolling stock.
Article 23
  Concerning the paragraphs which have been jointly agreed by the
Foreign Ministers of the Four Great Powers, the Hungarian Delega-



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FOREIGN RELATIONS, 1946, VOLUME IV



tion, apart from a few draft amendments of minor importance which
she ventures to indicate below, has no remarks to make.
  Hungary, however, feels herself seriously prejudiced by paragraph
4 of Article 23 providing that Hungary shall be responsible for all
injury done "as a result of the war" to ex-enemy property (including,
under Article 31, French property, as well as that of States who severed
diplomatic relations with Hungary). According to clause (d) of the
American proposal in regard to paragraph 4, the expression "as a
result of the war" includes the consequences not only of any action
taken by the Hungarian Government or its agencies, but also of any
action taken by one of the belligerents and of any action or failure
to act caused by the existence of a state of war.
  Such an extension of responsibility seems, in the view of the Hun-
garian Delegation, excessive. In this respect, it would seem advisable
to take into account the fact that under Article 21, Hungary is obliged
to make reparation for losses caused through her participation in the
war. These reparation charges completely exhaust Hungary's finan-
cial possibilities.
  The Hungarian Delegation considers that, as regards losses caused
by factors other than the operations of the Hungarian forces or the
action or failure to act of the Hungarian Government or their agencies,
it would be unfair to exact reparation from Hungary for two reasons;
  1. The losses sustained by Allied property on Hungarian territory
occurred almost exclusively after March 19th, 1944, i.e. the date when
the country was occupied by Hitler's forces. Since during the period
of German occupation, Hungary was unable to exercise her full sover-
eignty, the supreme power being in the hands of the German High
Command, Germany, according to general principles of international
law as well as justice, should be liable for the losses which occurred
as a result of the war. Consequently, the Hungarian Delegation is of
opinion that the losses inflicted on the Allied and Associated Powers
by German military operations on Hungarian territory should be con-
sidered as forming part of German reparations.
  2. The damage inflicted on the Allied Powers by German military
operations represents a very large proportion of the losses, amounting
to about 35 to 40% of the national wealth of Hungary. They resulted
in a very great decrease in the productive capacities of Hungary in
the field of industry and agriculture, on the one hand, and a substantial
impoverishment of the population, on the other. Most of the losses
sustained by the Allied Powers affected industrial and agricultural
plant, but the economic life of Hungary was also impaired. She felt
these losses just as much as those inflicted on the property of Hun-
garian nationals. The U.S.S.R. proposal takes these circumstances
into account by suggesting that in view of the losses sustained by



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OBSERVATIONS ON DRAFT PEACE TREATIES



Hungary in the course of military operations against Germany on
Hungarian territory, compensation should be made in art, to the ex-
tent of one-third of the losses sustained.
  3. Considering that, under Article 21, the U.S.S.R., Czechoslovakia
and Yugoslavia will obtain compensation in the aggregate for the
losses they sustained through Hungary, to pay special compensation
to these three Powers for the losses they suffered on Hungarian ter-
ritory would, in the view of the Hungarian Delegation, mean paying
twice for the same loss.
  4. Reparation for the losses concerned would weigh so heavily on
the budget of the State, that, as already explained by the head of the
Hungarian Delegation at the plenary meeting, and as set out more
fully in the Delegation's memorandum, it would be impossible to find
the funds necessary to cover such reparation. By making a tremen-
dous effort and by reducing the standard of living of the Hungarian
population to the lowest possible level, the Hungarian Government has
been trying since 1st August, 1946, to stop the disastrous inflation by
creating a stable currency. The primary condition for financial sta-
bility is, of course, to balance the State budget, or at least reduce the
deficit to a level where it can be covered without the risk of fresh infla-
tion. In the light of these considerations, the budget estimates the
expenditure at 710 million pre-war pengi6s, and revenue at 610 mil-
lions. The revenue required for the needs of the State, and govern-
ment payments to autonomous administrations absorb, in round fig-
ures, 25%o of the national revenue, assessed at 3.2 milliards of pre-war
peng6s for the year 1946-1947. Thus, the proportion of the revenue
not earmarked for public expenditure is 263 peng6s, or 50 dollars per
capita for 1946-47. To add to the State budget fresh liabilities which
in all probability would be considerable, would mean jeopardizing the
success of stabilisation. It should moreover, be noted that, in order to
secure the financial equilibrium alluded to above, the stabilisation
budget has earmarked only very modest sums for the chief depart-
ments of State. Quite apart from the fact that salaries and material
expenditure are so low that they cannot possibly be kept on that level
very long, the sums earmarked for reconstruction are so small, that
they could not cover the more urgent needs of economic recovery.
  In consideration of these facts, the Hungarian Delegation would
ask the Conference to limit the liability of Hungary to the losses
sustained by Allied property in Hungarian territory as a result of
measures taken by the Hungarian Government or their agencies.
Should this principle be agreed, the Hungarian Delegation would be
able to accept any of the alternatives contained in the draft Treaty
which the Conference liked to adopt.
  If the Conference found it impossible to accept this proposal by the
Hungarian Government, the Hungarian Delegation would then ask
     219-115-70  18



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FOREIGN RELATIONS, 19 4 6, VOLUME IV



for the proposal of the I.TS.S.Th. Delegation to be adopted. Under
this proposal compensation would be made in part to the extent of
one-third of the damage sustained.
  On the details of Article 23, the Hungarian Delegation ventures to
suggest amendments to paragraphs 3 and 9.
  1. In the case of Paragraph 3 the Hungarian Delegation thinks
that a bona fide third party, should be protected where it can be proved
that he acquired the property against payment of its full value.
  In any case, the Hungarian Delegation feels that right of recourse
should be accorded against the Axis Power whose measures of force or
duress resulted in the transfer of certain property belonging to United
Nations nationals to nationals of Axis Powers.
  2. Regarding Paragraph 9, the Hungarian Delegation would state
that there are no grounds for any special agreement about the bonds
held by the Committee of Bondholders of the Danube-Sava-Adriatica
Railway, since debtor-creditor relationships are regulated, in a general
way, by the provisions of Article 27. The other creditors of Hungary
would undoubtedly consider it prejudicial to their interests if special
treatment were granted to a group of specific creditors. The Rome
Agreement of 29th March, 1923, moreover, laid such heavy burdens
on the debtor States, that after the world crisis of 1933, they were no
longer able to fulfil their obligations. The settlement of relations
between the debtor States and the Committee of Bondholders of the
Danube-Sava-Adriatica Railway Company will call for direct nego-
tiations between debtors and creditors in th.i same way as the settle-
ment of other foreign debts. Should the Conference, nevertheless,
agree to the French proposal, the Hungarian Delegation is of opinion
that the wording of the Article should allow for a possible modifica-
tion of the obligations arising under the Rome Agreement, in order to
adjust them not merely to the changes consequent on the redistribution
of the lines over the territories of various States, but also to the capac-
ity of payment of the States concerned. The Hungarian Delegation
has the honour to submit to the Conference in Annex A draft
amendment.
  3. The Hungarian Delegation considers it necessary, in any case
in the clauses concerning losses sustained as a result of the war, to
exclude definitely any expression which might be construed to mean
that Hungary would also have to compensate nationals of Allied
Powers for losses sustained as a result of the currency inflation which
prevailed in Hungary before 1st August, 1946, or losses which are of
the nature of loss of profit. It was natural to expect that foreigners
with interests in Hungarian currency should not have escaped the
ravages of war and its dire consequences, including inflation. But
it would clearly be unjust to hold the general population which has



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OBSERVTATIONS ON DRAFT PEACE TREATIES



paid for the inflation by an almost incredible reduction in their stand-
ard of living, responsible for any losses foreign interests may have
sustained through inflation. Similarly, the Peace Conference cer-
tainly does not propose to extend the obligation to compensate to
cover loss of profits. In order that there should be no misunderstand-
ing, the Hungarian Delegation would like to suggest that this should
be stated in the text of the Treaty itself and ventures to submit a draft
amendment to the Conference on this point.
Article 24
  This article provides that the U.S.S.R. has a right to all German
"holdings" located in Hungary. Since the term "holding"
is not usual
in the text of the Treaty and may be a source of confusion as regards
the property to be restored, the Hungarian Delegation considers that
it would be desirable, in this Article also, to employ the usual term of
"property, rights and interests" which comprises all holdings.
  Further to prevent misunderstandings, it should be expressly speci-
fied that such property, rights and interests pass to the U.S.S.R. with
the charges attaching thereto. This results from general principles
of private law (nemo plas juris ad alium transfers potest, quam ipse
habet "-no one can transmit more rights to another person than he
has himself"). The U.S.S.R. is the successor of Germany as the
owner of this property. It is not from Hungary therefore that the
U.S.S.R. will acquire certain property rights under this Article. If
Hungary was therefore obliged to liberate such German property, the
provisions of the present Article would not apply to the German
owner or to him exclusively, but also to Hungary, which was certainly
not the intention of the authors of the Article.
  In this connection it must be pointed out that several States have
made claims concerning the transfer of property stated to be German
(e.g. France, Austria), but regarded by them as their property or the
property of their nationals.
Article 25
  Property, rights and interests located in territory of the Allied and
Associated Powers falls into two categories:
  On the one hand, property situated in territory of creditor states
(U.S.A., Great Britain, etc.).
  On the other, property, rights and interests situated in territory of
neighbouring states (U.S.S.R., Czechoslovakia, Yugoslavia).
  1. Hungarian property, rights and interests situated in the territory
of creditor states are the result, in great part, of financial transactions
between these states and Hungary; they consist, mainly of credits
intended to finance our imports and meet payments resulting from
financial liabilities.



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FOREIGN RELATIONS, 1946, VOLUME IV



  The import of raw materials is all the more essential for the exist-
ence of the country because our stocks have been destroyed and de-
pleted, and the country lacks raw materials. It is therefore absolutely
necessary to ensure a minimum of imports. The economic develop-
ment of the country also requires other imports, to meet on the one
hand, the requirements of reconstruction work and on the other the
need for additional supplies of food due to falling off in agricultural
production.
  Export possibilities only allow us to cover 20 per cent of our import
requirements, which does not guarantee the indispensable minimum of
raw materials.
  This being the case, Hungary has a vital interest in obtaining for-
eign currency; and therefore cannot forego the free disposal of her
foreign currency holdings in creditor states.
  These credits date from a period subsequent to the conclusion of the
"standstill agreements"; and were granted on the understanding
that
they would not be used for the payment of previous debts. Without
these agreements, Hungarians could not have received credits of this
kind, which would otherwise have been liable to seizure by the credi-
tors. The Hungarian Government has no objection to making pay-
ments by mutual agreement, provided they are proportionate to the
financial capacity of the State.
  At present, however, while Hungary is in no position to meet claims
from abroad, the Hungarian Delegation cannot admit that these sums
should be used for the repayment of capital, i.e. in a way which is not
consistent with the financial capacity of the State. The Hungarian
Delegation also wishes to point out that it would be contrary to the
principle of equal treatment of creditors, to pay such debts out of the
sums in question. By confiscating these credits, certain creditors
would perhaps obtain a hundred per cent refund, whereas others,
particularly neutral States, would receive nothing. It is quite clear
that such provisions would seriously threaten the foundations of
Hungarian credit, and render it difficult to obtain the foreign loans
which are indispensable to the economic rehabilitation of the country.
  2. Property, rights and interests in the territory of neighbouring
States originated in most cases in the relations between Hungary and
the territories previously belonging to it, which were ceded to other
States as a result of the last war. Though such property, rights and
interests constitute a by no means negligible share of Hungary's for-
eign assets, since that country is particularly lacking in capital, they
are at the same time one of the mainstays of the welfare and normal
development of Hungarian minorities in neighbouring countries.
  The Hungarian Delegation does not exactly know which liabilities
should be met from property situated in her territory. After examin-
ing the different Articles of the draft Peace Treaty, it considers:



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OBSERVATIONS ON DRAFT PEACE TREATIES



  1. That Article 21 on reparations does not provide for the seizure of
Hungarian property abroad for this purpose.
  2. That it cannot come under the heading of restitution of property
under Article 22, since claims against them do not require that Hun-
garian property should be used for this purpose.
  3. As far as claims for restitution specified in Article 23 are con-
cerned, the American proposal provides for the indemnification of
owners by payments in Hungarian currency, without any necessity for
the use of Hungarian property abroad.
  This being the case the property in question should only be used for
the payment of private debts and liabilities. In this connection, the
Hungarian Delegation draws attention to the fact that such a one-sided
liquidation would be a most unjust and costly method of meeting pri-
vate debts. Should this liquidation be carried out on a non-commer-
cial basis, it would result in fresh losses, involving an appreciable loss
in the assets available for the payment of debts. It is sufficient to
recall what occurred in carrying out similar clauses of the Treaty of
Trianon to show that this is the case.
  The Hungarian Delegation believes that the best way of settling
this problem would be by a mutual agreement between debtors and
creditors, perhaps subject to the control of a "clearing office".
  The Hungarian Delegation is therefore compelled to move the adop-
tion of the proposal of the U.S.S.R. The only amendment proposed
is that Hungary, in accordance with the obvious object of this proposal,
should have the right freely to dispose of all property in United
Nations territory, regardless of what restrictions they may have been
subject to during the war. It is of special interest for Hungary that
the wording of the text should clearly stress the need for restoring
property seized by the Nazis, and now situated in United Nations ter-
ritory (i.e. Czechoslovakia and Poland).
  Should the Conference decide, contrary to the expectations of the
Hungarian Delegation, to adopt the proposal of the U.S.A., the U.K.,
and France, the Hungarian Delegation suggests several subsidiary
amendments as follows:
  1. The Hungarian Delegation proposes that the income from Hun-
garian property in Allied Nations territory should first of all be used
to cover liabilities arising from the Peace Treaty, and that, should
this income be insufficient, the liquidation of property should be car-
ried out in an established order and according to a valuation mutually
agreed upon with the Hungarian Government. In this way, the Hun-
garian Government could arrange that property of lesser value should
be liquidated first, so that any balance should be returned to the owner
after payment of liabilities. In any case, the liabilities to be paid by
liquidation should not include those of a private character referred to
in Art. 27 of the draft Treaty.



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  2. Hungarian owners should b)e guaranteed a right of pre-emption
for the liquidation of their property.
  3. It would be unjust to confiscate rights and interests arising out
of industrial, literary, and artistic property without compensation.
  In this respect, the Hungarian Delegation suggests that compensa-
tion should be determined by mutual agreement with the Hungarian
Government, and that to obviate legal uncertainty, the Allied Power
should notify, within six months, what industrial, literary and artistic
property it is proposed to confiscate.
  4. It is in any case necessary to specify that the right of detention
and liquidation should only apply to property seized during hostilities,
so that the restrictions imposed after the cessation of hostilities should
not give rise to the application of such measures.
  5. It would be equitable that the property of Hungarian physical
persons, who, owing to persecution in Hungary, took refuge in the ter-
ritory of one of the United Nations should be exempted from seizure
and liquidation, even if they were living without permission in the
country in question.
Article 26
  According to the proposal of the U.K., U.S. and French Delegations
to Article 26 of the draft Treaty, Hungary renounces all claims, in-
cluding debts, against Germany and German nationals arising out of
contracts and other obligations entered into before September 1, 1939.
This renunciation would apply equally to all losses or damage which
occurred during the war. On the other hand, neither this article, nor
any other, contains clauses restoring to Hungary the right to dispose
of Hungarian property situated in Germany, Austria, or other coun-
tries formerly allies of Germany.
  1. As regards claims subsequent to September 1, 1939, these arose,
in most cases, from commercial transactions between Germany and
Hungary. For, even before the second world war, Germany played
a predominant part in Hungarian foreign trade; the deliveries of
goods on which Hungarian assets are based cannot therefore be
regarded as exclusively arising from war conditions.
  During the years preceding the second world war, imports of Ger-
man and Austrian origin formed approximately 40% of total Hun-
garian imports. Exports to Germany and Austria constituted 46.6%
in 1934, approximately 40% in 1936 and 1937, and 45.7% in 1938 of
Hungarian exports.
  During the war years, imports from Germany and Austria amounted
to 52.9% in 1940, 58.5%, in 1941, 51.2% in 1942, and 53.3% in 1943 of
hungarian imports. Exports to Germany and Austria amounted to
49.4% in 1940, 59.9% in 1941, 54.9% in 1942 and 60.2%o inL 1943 of
total Hungarian exports.



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OBSERVATIONS ON DRAFT PEACE TREATIES



  Hungarian credits resulting from such deliveries therefore constitute
assets resulting from former trade relations with Germany, in ex-
change for which Germany should have supplied Hungary with goods
during or after the war. The fact that the German economic system
was not in a position ito fulfil its obligations to Hungary and to Hun-
garian nationals in this respect, should not have as a consequence that
Hungarian debts should not be paid when, after a certain period has
elapsed, the increase in German capacity to export would render this
possible. If, on the other hand, our claims against Germany were
to be transferred to the Allied Powers, this would result in a serious
increase of the charges Hungary is called upon to bear by way of
reparation.
  2. It is certain that, as a result of the delivery of war material,
Hungary is owed certain amounts by Germany. Most of these credits,
however, date from the period subsequent to March 19, 1944, the date
on which Hungary was occupied by the Nazis. Hungary cannot re-
nounce either such claims, or the right to demand reparation from
Germany for the damage which the Hungarian economic system has
suffered as a result of German military operation on Hungarian ter-
ritory. The Hungarian Government has already drawn up a general
schedule of the damage caused: (1) directly by the German armed
forces (forced transport, destruction, etc.) (2) by events of war due
to German military operations.
  Since May 1945, the Hungarian Government has notified the Inter-
Allied Control Commission at Budapest of its intention to formulate
claims and demand reparation from Germany, and to submit a de-
tailed schedule of damages, together with a statement of the reasons
for its claims, when peace with Germany is being negotiated. Hun-
gary, whic.h has inflicted exemplary punishment on its war criminals,
would be seriously affected, both from a moral and material point of
view, if she were compelled to renounce a priori all reparation claims
against Germany, the principal war culprit.
  3. Since, if Article 26 is adopted in the form proposed by the U.S.A.,
U.K. and France, no article of the draft Treaty would dispose of the
Hungarian property, rights and interests situated on German or Aus-
trian territory, or on that of ex-allied States of Germany, the Hun-
garian Delegation wishes to stress the following facts:
  Hungarian property situated in Germany comes under two head-
ings: (1) property which prior to 1944 was situated in German ter-
ritory; (2) property which the Nazis or their accomplices the "Crossed-
Arrows" transferred to Germany during 1944 and 1945.
  The amount of the property coming under the first heading is less
than that of the property removed, but is by no means a negligible
quantity. The Hungarian Delegation therefore requests that the!



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FOREIGN RELATIONS, 19 4 6, VOLUME IV



right of Hungary to dispose of Hungarian property situated in Ger-
man territory should be explicitly recognised.
  As to property removed by the Nazis and the "Crossed Arrows",
the Hungarian Government thinks it is legitimate to claim its restitu-
tion. It also wishes to point out that the list already submitted to the
Allied Powers cannot be regarded as complete. This property, repre-
senting as it does a considerable part of the national patrimony, is
essential for the restoration of the productive capacity of the country.
If it is not restored, neither the efforts of the Hungarian workers nor
the mobilisation of remaining Hungarian capital would suffice to raise
the standard of living in Hungary to the level prevailing between the
two wars. The Hungarian Government is extremely grateful to the
Government of the U.S.A. for having restored the gold reserves re-
moved to the West, and for having promised to restore the property
removed since January 20,1945, on which the Armistice was concluded,
and as well as the property removed since October 15, 1944. It would,
however, be desirable that the latter date should be altered to March 19,
1944, the date on which Hungarian sovereignty de facto came to an
end, and that the restitution of such property should not encounter
any technical obstacles.
  4. With regard to property removed from Hungary, and at present
situated in the territory of Austria or of States former allies of Ger-
many (particularly Italy), Hungary requests, in accordance with the
reasons set forth above, that such property should also be restored.
  5. With regard to Hungarian property situated in the territory of
ex-allied States of Germany, the Hungarian Delegation wishes to
draw attention to the fact that in certain countries (e.g. Roumania)
such property has been confiscated. The confiscation and the condi-
tions in which such property has been dealt with, have frequently re-
sulted in serious deterioration. Without going into details, the Hun-
garian Delegation feels compelled to express the wish that the Peace
Treaty should guarantee Hungary the right of disposing of Hun-
garian property situated in the territory of ex-allies of Germany.
  To sum up, the Hungarian Delegation agrees with the views ex-
pressed by the U.S.S.R., which take account of what has been set forth
above, but proposes the following modifications:
  (1) The restitution of property should be guaranteed, not only in
the case of Germany, but also as regards Austria and ex-allies of
Germany;
  (2) The date January 20, 1945, should be altered to March 19, 1944;
  (3) The war material necessary for the equipment of the armed
forces which Hungary is authorised to retain should also be restored;
  (4) Hungary should be guaranteed the right freely to dispose of
all Hungarian property situated in German and Austrian territory,
and in that of ex-allies of Germany.



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OBSERVATIONS ON DRAFT PEACE TREATIES



Article 28
  Under this Article, Hungary waives all claims of any description
against the Allied and Associated Powers on behalf of the Hungarian
Government or Hungarian nationals arising directly out of the war or
of actions taken because of the existence of a state of war.
  The second sentence of paragraph 2 would compel the Hungarian
Government to make equitable compensation to persons who furnished
supplies or services on requisition to the forces of the Allied and As-
sociated Powers in Hungary and in satisfaction of non-combat damage
claims against the forces of the Allied and Associated Powers arising
in Hungarian territory. The Hungarian Government is not in a posi-
tion to pay equitable compensation for the war damage of the in-
habitants of Hungary. Apart from this financial consideration of
decisive importance, the Hungarian Delegation proposes the deletion
of this stipulation, for the additional reason that it considers it unfair
to discriminate between different categories of war damage, and to
nave to compensate persons who suffered losses as a result of requisi-
tions independently of actions of war, when compensation is refused
for damage resulting from acts of war properly so-called.
  According to the words of the second sentence of this paragraph,
Hungarian prisoners of war-in contradiction of the relevant provi-
sions of the Hague and Geneva Conventions-cannot ask the Allied
and Associated Powers even for the payment of arrears due to them as
remuneration for work executed by them. The Hungarian Delega-
tion proposes to delete this phrase, as, in order to prevent possible
escapes, a large number of prisoners did not receive their wages in
cash, but under deferred payment schemes. It would be unjust and
inequitable to invalidate Article 6 of the Hague Convention of October
18, 1907 and Article 5 of the Geneva Convention of July 27, 1929, un-
der which prisoners of war are entitled to collect their wage arrears
on being freed from captivity.
Article 30
  With regard to this article, whose provisions deal essentially with
questions of procedure, Hungary agrees to the U.S.S.R. proposal, and
to the U.S. supplementary clause, which provide for the shortest and
swiftest procedure. The U.S. supplementary clause is all the more
important since it guarantees that questions in dispute shall be actu-
ally decided.
Article 32 b18
  In declaring null and void the territorial changes to Hungary's ad-
vantage which have occurred from 1938 to 1941, the Draft Treaty re-
stores the frontiers as they were in 1938. In this connection we should
like to draw attention to the fact (without prejudice to the Hungarian



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FOREIGN RELATIONS, 19 4 6, VOLUME IV



proposals submitted to the Territorial Commission) that Hungary
will be obliged to make certain claims of an economic or financial
character on the, neighbouring States, for reasons which include the
problem created by the investment of capital in these territories, the
taking over by Hungary of part of the Public Debt, the question of
civil servants and pensioners, and the operations of banks and other
economic bodies, insurance companies and    national insurance
schemes, etc.
  In order to give a fair solution to these problems, it is essential that
the States concerned should at a given moment begin direct negotia-
tions among themselves. This is why the Hungarian Delegation has
the honour to propose the insertion of an article stipulating that nego-
tiations for the settlement of these questions should begin within six
months from the coming into force of the Peace Treaty. Should the
conversations of the interested parties not result in their coming to a
common agreement, the Hungarian Delegation proposes that the dis-
putes be submitted to a Conciliation Commission in accordance with
the Article 30 of the Treaty.
Article 32 ter
  Based on the system of the draft Treaty, the proposed article adopts,
as a general principle that the countries of the Danube Basin should
conclude suitable arrangements facilitating a solution of certain eco-
nomic questions to their mutual advantage.
  In proposing the adoption of this Article, the Hungarian Delegation
is inspired by the following considerations:
  The greater part of Hungarian territory includes the lowest regions
of the Carpathian Basin where the cultivated areas are to a great ex-
tent liable to be flooded. The cost of protective works against this
danger constitutes a heavy burden, and is an important factor in in-
creasing costs of production, without any corresponding advantage
from the use of the water. Reservoirs for irrigation, and hydraulic
power plants could only be erected on the other side of the mountain
ranges, situated across the frontier.
  Defense against floods can only be successful if adequate installa-
tions are established and maintained on the other side of the frontier,
if a common hydrographic and meteorological service is in operation
for the territory as a whole which constitutes a hydrographical unit,
and last, if the territory in question has the benefit of a rational
forestry system and of measures for the control of soil erosion.
  The importance of a proper water control system was realised by
the authors of the Treaty of Trianon, and twenty-six of its articles
deal with hydraulic questions; but the measures adopted were not
sufficiently effective.



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  The Hungarian Delegate welcomes the initiative of the Yugoslav
Delegation and adheres, in principle, to the Yugoslav proposal, under
which Hungary and Yugoslavia should settle hydraulic questions af-
fecting both countries by an agreement. It wishes to point out, how-
ever, that the matter has a wider scope, and that a satisfactory solution
can only be arrived at if the countries of the Carpathian Basin settle
these questions by joint action. It feels that the Conference would
reach the desired results if all the Danubian countries were to par.
ticipate in this settlement.
  The first questions requiring settlement are the following:
  A. Existing hydraulic plant should be properly maintained so as
not to endanger results already obtained.
  An efficient hydrographic and meteorological service should be
organised and maintained for the territory forming a hydrographic
unit.
  The necessary supply of water for the lower regions of the Carpa-
thian Basin should be guaranteed by mutual agreements.
  A part of the hydraulic power from the upper fluvial regions should
be ensured by mutual agreements, as a set off against the heavy cost
of protection against floods, which are a heavy charge on the lower
regions of the Carpathian Basin.
  Existing future rights to the use of water should be recognised.
  Other questions connected with the water regime (e.g. fishing rights)
must be settled.
  There should be a common forestry policy, and used for the control
of soil erosion.
  B. Hungary is cut off from the sea. Her only possible maritime
traffic is compelled to make use of a round-about route by the Danube.
It is important for the economic development of the country that
Hungarian import and export should enjoy special rates on the rail-
ways which connect with the sea; their free ports, and docks, should
be assigned to her. The Treaty of Trianon provided that Hungary
should have an outlet to the sea. But these provisions were not satis-
factory because they could be nullified by an unfavourable rate policy.
  C. The frontier cuts across the railway and road net so that railway
lines and roads connected with each other and with main railway lines
and roads on the other side of the frontier, make communication
almost impossible between districts which are economically interde-
pendent. It will be long before Hungary can build new connecting
lines. It is therefore necessary that the use of these lines and roads
should be guaranteed by adequate arrangements.
  D. The third group of agreements would ensure the existence of
undertakings dependent on each other, but situated in different coun-
tries. Blast furnaces located on Hungarian territory receive ore from



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FOREIGN RELATIONS, 1946, VOLUME IV



neighbouring mines situated across the frontier. The governments
concerned took these facts into account during the inter-war period.
Czechoslovakia, even independent Slovakia, guaranteed plants located
in their territory the delivery of supplies of ore from mines belonging
to these concerns, but situated in foreign territory, as well as transport
for these materials at reduced rates. Hungary assumed similar obliga-
tions by way of reciprocity in the frontier districts where the position
was the converse.
  The same position existed with regard to Austria. Both govern-
ments had ensured by bilateral agreements the rational exploitation of
a great coal field situated on both sides of the frontier. It is of vital
interest for Hungary, which lacks iron ore, to obtain this ore, which
cannot bear heavy transport charges. It is therefore desirable for the
Peace Treaties to compel the States concerned to conclude similar
agreements.
  We have only cited these facts as examples. There may be other
cases where the frontier line cuts economic unities in two, and where
the States concerned should conclude agreements to secure their
mutual interests.
AMENDMENTS PROPOSED BY THE HUNGARIAN DELEGATION TO ARTICLES 21
                 TO 3 3 OF THE DRAFT PEACE TREATY
                            Article 22
Para. 1.
  Para. 1 would be replaced by the following text:
  "Hungary accepts the principles of the United Nations Declaration
of January 5, 1943, and will return property removed by force or
duress from United Nations' territories".
Para. 2.
  To Para. 2 should be added a second sub-paragraph:
  "The said obligation will not apply to property acquired by Hun-
gary in good faith, that is to say, for payment of the full value of the
property in question. The burden of proof will rest on Hungary".
Para. 6.
  To Para. 6 should be added a second sub-paragraph:
  "The United Nations, in their turn, will restore to Hungary the
rolling stock of Hungarian origin located in their respective
territories".
  There should also be added a third sub-paragraph:
  "Within a period of six months from the coming into force of the
present Treaty, an international railway Conference will be convened
by the Governments of the U.S.S.R., the United Kingdom, the United
States and France, with the participation of the States concerned in



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OBSERVATIONS ON DRAFT PEACE TREATIES



the distribution of rolling-stock. This conference may, if necessary,
take decisions differing from the above-mentioned provisions".
Para. 8.
  The following text should be inserted as Para. 8:
  "Hungary retains the right of recourse against the Axis Power by
whose action property referred to in this Article was removed from
the territory of one of the United Nations".

                            Article 23
Para. 3.
  A second sub-paragraph should be added to paragraph 3, reading as
follows:
  "The said obligation shall not apply to property, rights and interests
acquired by Hungary in good faith, i.e. against payment of the full
value of the said property, rights and interests. The burden of proof
shall rest on Hungary".
  A third sub-paragraph should be added to paragraph 3, reading as
follows:
  "Hungary retains the right of recourse against the Axis Power
whose measures of force or duress resulted in the tra nsfers referred to
in the present Article".
Para. 4.
  Amendments proposed to Para. 4.
First alternative
  Sub-paragraph d. of the U.S. proposal would be replaced by the
following text:
  "As used in this Article, the phrase "as a result of the war"
includes
the consequences of any action taken by the Hungarian Government
or of any action or failure to act by its organs during the existence of
a
state of war".
Second alternative
  Sub-paragraph a) would be replaced by the following text:
  "Where, as a result of any action taken by the Hungarian Govern-
ment or any action or failure to act by its organs, during the existence
of a state of war, the property cannot be returned or . . . damage
suffered".
  Sub-paragraph c) would be replaced by the following text:
  "Where a corporation or association of any nationality other than
that of one of the United Nations has suffered a loss of its property as
a result of any action taken by the Hungarian Government or of any
action or failure to act by its organs during the existence of a state of
war, compensation . . . United Nations national".
  Sub-paragraph a) would be deleted.



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FOREIGN RELATIONS, 1946, VOLUME IV



In addition
   The Hungarian Delegation asks for the adoption of the U.S.S.R.
proposal.
New Para. 8a.
  The following should be inserted after Para. 8 as a new Para. 8 a:
  "Loss or damage due to the general economic situation in Hungary
or as a special consequence of the currency inflation prevailing in
Hungary up to 1st August, 1946 or which amounts to loss of profits
will in no case be deemed liable to be compensated for by Hungary.
Para. 9.
  The Hungarian Delegation requests that this paragraph be deleted.
If this paragraph is maintained, the Hungarian Delegation suggests
that it be replaced by the following text:
  "A new agreement shall be negotiated between the Danube-Sava-
Adriatica Railway Company, the Governments concerned, and the
Committee of Bondholders of the Company, in order to determine the
method of applying the provisions of the Rome Agreement of March
29, 1923, laying down the Company's Articles of Association, and to
determine the modifications required in that Agreement".
                            Article 24
  Article 24 should be replaced by the following text:
  "Hungary recognises that the U.S.S.R. is entitled to all German
property, rights and interests in Hungary transferred to the U.S.S.R.
by the Control Council for Germany and undertakes to take all neces-
sary measures to facilitate the transfer of such property, rights and
interests.
  "The property, rights and interests referred to in this Article shall
be transferred to the U.S.S.R. together with all liabilities and mort-
gages encumbering them at the date of the Armistice".
                            Article 25
  The Hungarian Delegation accepts the proposals made by the
U.S.S.R. Delegation, with the following modification:
       on the territory of Allied and Associated Powers even if such
rights were limited in consequence of the participation of Hungary
in the war on the side of Germany."
  Should the U.S.S.R. proposal not be adopted by the Conference, the
Hungarian Delegation would suggest the following amendments to
the proposals submitted by the U.S.A., United Kingdom and France.
1st para.
  Paragraph 1 to be replaced by the following text:
  Each of the Allied and Associated Powers shall have the right to
seize all property, rights and interests within its territory, which on



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OBSERVATIONS ON DRAFT PEACE TREATIES



the date of the coming into force of the present Treaty belong to Hun-
gary or to Hungarian nationals and to apply the net proceeds thereof
to settle its claims or the claims of its nationals against Hungary or
Hungarian nationals deriving from the present Treaty, to the exclu-
sion, however, of claims covered by Article 27 of the Treaty.
  Should the net proceeds of seized property not be sufficient for
settling the claims covered by the preceding sub-paragraph, the Allied
and Associated Powers shall have the right to retain or liquidate all
property, rights and interests, in a rotation fixed by mutual agreement
with the Hungarian Government. The value of property, rights and
interests retained shall also be fixed by mutual agreement with the
Hungarian Government. All Hungarian property or the proceeds
thereof, in excess of the amount of such claims as above determined,
shall be returned.
2nd para.
  Paragraph 2 should be amplified as follows:
  . . .on the understanding that the Hungarian owner shall have a
priority right to acquire the property referred to.
4th para.
  Paragraph 4 to be replaced by the following text:
  No obligation is created by this article on any Allied or Associated
Power to return industrial, literary or artistic property to the Hun-
garian Government or Hungarian nationals. The equivalent value of
these claims shall be fixed by mutual agreement with the Hungarian
Government and shall be included in determining the sums which may
be retained under paragraph 1 of the present Article. The Govern-
ment of each of the Allied and Associated Powers . . . in the na-
tional interest.
  Each of the Allied and Associated Powers shall notify the Hun-
garian Government, within six months from the date of the coming
into force of the present Treaty which rights with respect to industrial,
literary or artistic property it intends to retain and the limitations,
conditions and restrictions it intends to impose on these rights. In
default of such notification, the rights in question, in respect of indus-
trial, literary or artistic property, shall be considered as restored to
the Hungarian Government or Hungarian nationals.
5th para.
  Paragraph 5 should be replaced by the following text:
  The property covered by paragraph 1 of this Article shall be re-
warded as Hungarian property which has been subject to control dur-
ing the period of hostilities by reason of a state of war existing between



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FOREIGN RELATIONS, 1946, VOLUME IV



Hungary and the Allied or Associated Powers having jurisdiction
over the property, but shall not include:
  (a) Property of the Hungarian Government used for consular or
diplomatic purposes or for the maintenance of a cultural or social
institution;
  (b) Property belonging to religious bodies or private cultural or
social institutions and used for religious, cultural or social purposes.
  (c) Property of natural persons who are Hungarian nationals re-
siding within Hungarian territory . . . since January 20, 1945.
                            Article 26
  The Hungarian Delegation accepts the proposal of the LU.S.S.R., but
suggests that it be amended as follows:
Para. 2
  Paragraph 2 should be replaced by the following text:
  Hungary shall have the right of restitution of any identifiable prop-
erty at present located in Germany, Austria or in the territory of other
former allies of Germany and which was removed from Hungary
after March 19, 1944, including army equipment authorised by the
present Treaty, even if this equipment should be considered as war
material.
  The restitution of any Hungarian property now located in German
or Austrian territory or in the territory of the other former allies of
Germany will be carried out under the direction of the military au-
thorities of the occupying Powers.
                            Article 28
Para. 2
  The Hungarian Delegation requests the deletion of the second
sentence.
Para. 5
  Paragraph 5 should be replaced by the following text:
  The waiver of claims by Hungary under this Article includes any
claims arising out of actions taken by any of the Allied and Associated
Powers with respect to Hungarian ships between September 1, 1939,
and the date of the entry into force of the present Treaty.

                        New Article 32 (a)
  The following to be inserted after Article 32:
  "Any economic or financial problems arising out of the annulment of
territorial changes which have taken place since 1938 shall be the sub-
ject of direct negotiations between the States concerned. Such nego-
tiations shall be entered into within six months of the coming into
force of the present Treaty. If no agreement is reached, the case



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            OBSERVATIONS ON DRAFT PEACE TREATIES             281

shall be referred to a Conciliation Commission to be set up under
Article 30, it being understood that the Commission shall be composed
in the first place of representatives of the States concerned."

                       New Article 32 (b)
  The following to be inserted after Article 32 (a).
  "Should the Hungarian frontiers as determined in the present
Treaty cut across any economic unit or interfere with the mutual utili-
sation of any natural resources, or should any means of communica-
tion constitute an obstacle to flood protection, the Parties concerned
shall under the aegis of the U.S.S.R., U.S. and U.K. Governments,
conclude agreements for the permanent elimination of any such diffi-
culties in the general interest."
                            ANNEXES
  The Hungarian Delegation reserves the right to submit amendments
and comments at a later date.
                             ANNEX 3
  [There follows Annex 3, Detailed Description of Modifications in
the Frontiers between Hungary and Rumania; for text, see Depart-
mient of State Publication 2868, Paris Peace Conference 1946, Selected
Documents, p. 1097.]
                             ANNEX 4
  Ethnical distribution in 1930 and 1941 of the population in the ter-
ritory to be ceded to Hungary (22,000 sq. kms.)
                          1930                   1O 1941               %
Hungarians ..       .  495,106       31.8      594,822      36.8
Roumanians ..       .   865, 620     55. 7     833, 925     51. 9
Others ...........      194,062      12. 5     183, 251     11.3
      Total ..........1, 554, 788  100. -  1, 617, 996  100. -
  References:
  1. For the year 1930: General Census of the population of Rou-
mania. Vol. II. Mother tongues.
  2. For the year 1941: General Census of Hungary for the year 1941.
Facts concerning mother tongues.
  (General census of Roumania in 1941. Ethnic origins).
  Ethnical distribution of the population in the territory detached
from Hungary in 1920 and ceded to Roumania. Area: 103,000 sq. kms.
                  1910 t  %        1930      %      1941     %
Hungarians.. 1, 661,805  31.6 1,480,721 26.7  1,749,907 29.6
Roumanians.. 2, 829, 454 53. 8 3, 234, 157 58. 3 3, 303,983 55.8
Oithers.766,208           14. 6   834, 928 15. 0   869, 294 14. 6
     Total.. 5,257,467 100.- 5,549,806 100.- 5,923,184 100.-
     219-115 70  19


 

					
				
				


FOREIGN RELATIONS, 19 4 6, VOLUME IV



                             ANNEX 5
  [Annex 5 does not appear in the source text.]

                             ANNEX 6
  The Hungarian Delegation wishes to explain the economic reasons
which have influenced its decision to formulate claims for the modifica-
tion of the frontier between Hungary and Roumania.
  In the first place, consideration should be given to the fact that 25%
of the territory claimed by Hungary is wooded country and this could
solve the problem arising from the shortage of wood for fuel and
reconstruction in Hungary and particularly in the Great Hungarian
Plain. These forest areas are of incomparably less value to Roumania.
  As regards hydraulic power, this area could provide large supplies
which would make it possible to arrange for the electrification of the
Great Plain.
  The territory to be ceded would be large enough for all the construc-
tion works required to protect the Plain against floods and for the
draining and irrigation of this area.
  With regard to mineral resources, the area claimed would supply
raw materials essential to Hungarian industry such as lignite, bauxite,
asphalt, limestone and precious metals. All these materials are less
valuable to Roumania as she has adequate deposits of them in other
areas.
  The area in question would complete and unify the road and rail
network of the Great Plain. The new frontier would give rise to no
difficulties as regards communications. As for the economic interests
of the population, these are, in every case, bound up much more closely
with those of Hungary than of Roumania.


OBSERVATIONS ON THE DRAFT PEACE TREATY WITH FINLAND BY
                   THE FINNISH GOVERNMENT

CFM Files
Observations on the Draft Peace Treaty With Finland Submitted by
                      the Finnish Delegation

C. P. (Gen) Doc. 6                          PARIS, August 26, 1946.
                              TABLE
                  I. Political and Territorial Clauses
                           Part II
                           .Part VI
                 II. Military Clauses
                           (Part III)
                 III. Reparation and Restitution
                            (Part IV)



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OBSERVATIONS ON DRAFT PEACE TREATIES 283

IV. Economic Clauses
Part V
Annex 4
Annex 5

Part II: PortrricaLn CLAUSES

SECTION 2
Article 6.

In the statement it made before the General Assembly of the Peace
Conference the Finnish Delegation had the opportunity of pointing
out that present Finnish legislation recognizes the high principles ex-
pressed in Article 6 of the Peace Treaty. Finland accordingly has but
to guarantee that she will follow these principles in the future.

Article 7.

The Delegation begs to observe that Finland, as has been noted in
the Draft Peace Treaty, has already fulfilled the obligations laid on
her by this article, and that she undertakes to fulfil them in the future
too.

Article 8.

The Delegation declares that Finland, having taken steps in accord-
ance with the Armistice Agreement to dissolve organizations of a
Fascist type on Finnish territory whether political, military or para-
military, as well as other organizations conducting propaganda hostile
to the Soviet Union or to any other of the United Nations, is prepared
in the future too not to permit any organization to conduct propa-
ganda as aforementioned.

Article 9.

The Finnish Delegation fully approves the purpose aimed at by the
provision of this article, i.e. the surrender for trial of war criminals
and such persons as in one way or other have committed crimes against
peace and humanity. In this respect Finland has conscientiously ful-
filled the stipulations of the Armistice Agreement, in respect whereof
she has received due acknowledgement from the Allied Powers, last
in the preamble of the Draft Peace Treaty. By virtue of the Armi-
stice Agreement she has taken all possible steps in order to commit
for trial both war criminals proper and the so-called war responsibles.

The Finnish authorities and courts have carefully and thoroughly
examined all cases of war crime which have been submitted to them
and most of which have already been brought to a close.

With regard to the cases of persons having committed crimes against
peace and humanity it is considered in Finland that the question of
punishing the war responsibles was definitely settled by a special trial
in a manner which satisfied the Allied Powers.

					
				
				


FOREIGN RELATIONS, 19 4 6, VOLUME IV



  As regards paragraph (a) of Article 1, the Delegation wishes to
draw attention to the fact that it would make it possible to demand
that Finnish citizens be surrendered for trial by foreign courts. No
such demand has been made since the Armistice and such a procedure
would be contrary to the principle expressed in the Form of Govern-
mnent according to which a Finnish citizen may not be tried before any
other court than that within whose jurisdiction he stands by the law.
  With regard to the last paragraph of the article the Delegation
would like to mention that in Finnish opinion a uniform procedure
should be agreed upon for settling all disagreements arising out of
the interpretation and execution of the Peace Treaty, in the manner
proposed under article 33.
                     PART VI: FINAL CLAUSES
Article 32.
  The Finnish Delegation begs to refer to the wish it expresses under
Article 33 in respect of achieving a uniform procedure for the settle-
ment of disputes arising out of the execution and interpretation of
the Treaty.
Article 33.
  The Finnish Delegation hopes that disputes concerning the interpre-
tation or execution of the Peace Treaty, excepting the cases mentioned
under Article 29, should be settled by a uniform procedure to be agreed
upon. In the opinion of the Delegation such disputes should in the
first place be tried to be settled by diplomatic means, and, if the dis-
putes can not be settled in this manner and the parties do not agree
upon another procedure, they should be referred to a Court of Arbitra-
tion constituted in the manner provided by the Hague Convention
1907 regarding peaceful settlement of disputes.
           PART III: MILITARY, AIR AND NAVAL CLAUSES
Article 13.
  1. The maintenance of land, sea and air armaments and fortifica-
tions shall be closely restricted to those required for meeting tasks of
an internal character and local defence of frontiers. In accordance
with this principle Finland is authorized to have armed forces con-
sisting of not more than:
  (a) a land army including frontier troops with a total strength of
34,400 personnel;
  (b) a navy with a personnel strength of 4.500 including the person-
nel of the coastal artillery and a total tonnage of 20.000 tons [10,000];
  (c) an airforce, including naval air arm and reserve aircraft less
than 5 years old, of 120 aircraft with a total personnel strength of
3,000. Finland shall not possess or acquire aircraft designed pri-
marily as bombers with internal bomb-carrying facilities.



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OBSERVATIONS ON DRAFT PEACE TREATIES



  2. These strengths will in each case include combat, service and
overhead personnel.
[[he mmotives of changes to Article 13.
  (a) It is proposed that the words "anti-aircraft artillery" be
omit-
ted because units of anti-aircraft artillery are included and should
continually be included in land, naval and air force.
  (b) Because of the considerable length of Finland's coastal line-
about 1.500 kilometers-a navy of 10.000 tons is unable to defend it
and to protect the maritime trade in waters close to it even if auxiliary
and training vessels are not included.
  (c) For the reason of the extensiveness of Finland's territory-the
total area being about 340.000 square kilometers-the local points of
defence will be situated far apart from each other. Air scouting
must be territorially limited because of the denseness of the forests.
All this means that the air forces must be divided into small units foor
scouting and defence purposes, situated far from each other even if
local defence operations only are at issue. On account of woody and
hilly ground forced landings always result in destruction of material.
Our difficult weather conditions-especially cold and frequently un-
favourable flying weather-cause a great part of material to be con-
tinually under repair or attendance and this increases the need of
material even for peace time training.
  Aircraft over 5 years old have no fighting value. They could, how-
ever, be used in the first stages of training. Thus they would admit
training without representing any fighting value.
Interpretation.
  The Delegation begs to be informed as to how the expression "fortifi-
cations required for local defence of frontiers (coastal frontiers)"
is
to be interpreted.
Article 17.
  In order to make local defence possible, Finland is authorized, in
addition to the war material required for the maintenance of armed
forces permitted under article 13 above, to retain the present coastal
artillery, anti-aircraft and anti-tank material.
  Finland shall not retain, produce, otherwise acquire or maintain
facilities for the manufacture of war material in excess of material
permitted above.
The motives for changes to Article 17.
  It has been conceded that Finland's defence forces have the right to
execute tasks of internal character and of local defence of frontiers.
In a country, the area of which is about 340.000 square kilometers the
troops allowed by Article 13 have no possibility of using their right



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286



FOREIGN RELATIONS, 19466, VOLUME IV



for defence. The proposed coastal artillery, anti-aircraft and anti-
tank material is clearly of defensive character and in its main parts
locally and entirely bound beforehand.
Article 18.
  1. Excess war material of Allied origin shall be placed at the dis-
posal of the Allied Power concerned according to the instructions
given by that Allied Power.
  2. Excess Finnish war material shall be placed at the disposal of the
Governments of the Soviet Union and the United Kingdom.
  3. War material of German origin or design in excess of that re-
quired for the use of the army permitted in the Treaty will be placed
at the disposal of the Soviet. Union and the IUnited Kingdom.
  4. Excess war material mentioned in paragraphs 1, 2 and 3 and the
character of which is defined in annex 3, will be handed over or de-
stroyed within one year from the date Finland has received detailed
instructions regarding surrender or destruction.
  5. Finland relinquishes all her rights to war material which has
been handed over in accordance with the paragraphs 1, 2 and 3. The
value of this material which will be fixed by a commission of
experts of both parties, will constitute in regard to the material to be
handed over to the Soviet Union, a part payment of Finland's war
reparations to the Soviet Union, and, in regard to the material to be
handed over to the United Kingdom, part payment of Finland's debt
to England arising from earlier deliveries of war material.
  6. It is also considered to be destruction of war material if material
suitable or reconvertible to civilian use is given without delay to
civilian use and normally used up.
  7. Finland will not acquire or manufacture any war material of
German origin or design except equipment which is necessary for the
maintenance and use of that material of German design which accord-
ing to paragraph 3 of this Article remains in her possession.
  8. Finland will not employ or train any technicians, including mili-
tary and civil aviation personnel, who have been nationals of Germany.
The mnotives for changes to Article 18.
  Paragraph 4. The handing over and destroying of the material
can not begin before detailed instructions have been given. In respect
of the technical execution of the handing over and the destroying a
period of one year is requested. It is reasonable that this period of
one year begins to run first from the date when the detailed instruc-
tions have been given to Finland.
  Paragraph 5. Finland's payments of war reparations to the Soviet
Union are to be paid in commodities. It is natural and reasonable that
commodities owned and handed over by Finland are to be considered
as part payments of reparations even if they are war material.


 

					
				
				


OBSERVATIONS ON DRAFT PEACE TREATIES



  In regard to the material to be handed over to the United Kingdom
it is natural that this material is to be considered as part payment of
the Finnish debt caused by the earlier purchase of the same war ma-
terial from England.
  Paragraph 6. Finnish economic life and the civilian population
are in dire need of commodities. In order to relieve this need, it is to
be hoped that a suitable or convertible part of the war material could
be used in this manner.
  Paragraph 7. The proposed addition is necessary in order to avoid
incompatibility between paragraphs 3 and 7.
            PART IV: REPARATION AND RESTITUTION
Article 22.
  Finland's economic position, the influence brought on it by the repa-
rations provided in the Armistice Agreement, and the conditions
which must be considered in judging the real consequence of Finland's
present war reparation have been described in the appended memo-
randum. From the Finnish point of view it would be important if
the reparation sum of 300 million dollars fixed in the Armistice Agree-
ment could be reduced to 200 million dollars.
Article 23.
  On September 6, 1945, an agreement relative to Article 14 of the
Armistice Agreement was signed between the Finnish Government
and the Allied Control Commission in Finland concerning property
unrestituted before August 1, 1945, or compensation for it, amounting
to a total of 22 million dollars. On April 29, 1946 a notification in
writing was received from the U.S.S.R. authority concerned to the
effect that the Soviet Government in accordance with its decision made
in April 1946 considered that the obligations under the said article of
the Armistice Agreement were deemed to have been fulfilled. Conse-
quently, the deliveries which had taken place according to the afore-
mentioned special agreement were discontinued as from May 1, 1946.
                   FINLANDIS WAR REPARATIONS
  By virtue of the Armistice Agreement concluded on September
19th, 1944 between Finland and the Soviet Union, Finland was en-
joined to pay a war reparation in fulfilment of which she was to de-
liver commodities to the value of 300 million gold dollars over a period
of six years. After the close of the first reparation year the term of
delivery was prolonged by two years, and consequently reparations,
amounting to 50 million dollars during the first reparation year, will
be about 35.5 million dollars during each of the following seven years.
With regard to their value in dollars and the term of payment, repara-
tions imposed on Finland are thus equal to those to be paid by Rou-
mania and Hungary, but, when calculated after the size of the popula-



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FOREIGN RELATIONS, 19 4 6, VOLUME IV



tion, they are found to be more than two and a half times higher than
Hungary's and not less than five times higher than Roumania's.
  As Finland has to pay her war reparations in the form of commodi-
ties, the real significance of this burden appears from the prices with
which Finland is credited in respect to such goods. A special agree-
ment concluded on December 17th, 1944 established that the latter
are to be valued on the basis of world market prices in 1938, with an
increase of 15 per cent in respect of machinery, appliances and ships
to be built, and 10 per cent in respect of other goods. For this reason,
and considering the requirements regarding quality specified for the
individual items in the schedule of delivery established for each year,
the total value of goods delivered, provided no change will take place
in the principles adopted for pricing, will be about 417 million dollars
according to prices prevailing in the year (1944) when the Armistice
Agreement was signed. The value of reparations is actually higher
still if present dollar prices are to be considered.
  The Armistice Agreement further stipulated that Finland had to
restitute to the Soviet Union all property carried away from the
latter's territory during the war. As, however, original or corre-
sponding property could not always be delivered, it was agreed in
summer 1945 that Finland was to compensate such unrestituted prop-
erty by delivering products of her own instead. In regard to restitu-
tions no heed was paid to the considerable investments made in the
territories occupied by Finland troops after 1941. Excluding original
Russian property restituted, Finland has delivered under the Restitu-
tion Agreement, until the end of April 1946 when the Soviet Union
relieved Finland of further obligations in respect hereof, commodities
totalling 24 million dollars at 1944 prices.
  Besides this Finland has to stand for the expenses of the Allied
Control Commission, 4 million dollars in 1945, and hand over German
property and claims in Finland 44 million dollars in all. The latter
item need not have been paid under other circumstances, and Finland
is not even allowed to deduct from it Finnish nationals' claims against
German nationals. Furthermore, the costs for administrating and
for transporting to the Soviet Union the spoils of war taken from
Germans amounted to about 12 million dollars.
  In discharge of these burdens Finland has surrendered during the
first reparation year 23 million dollars worth of national wealth, not
accounting for the capital value of the ceded territories which it is
difficult to estimate, but should be about 13 per cent of the country's
whole national wealth. The major part of the burden has to be paid
out of annual national income, i.e. about 76 million dollars in the first
reparation year, about 60 million dollars in the second, and about 370
million dollars over the remaining six years, or 506 million dollars all
told at the price level of 1944.



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OBSERVATIONS ON DRAFT PEACE TREATIES



  It is doubtful whether Finland could have acquitted herself of this
burden had she even been in possession of her full capacity of produc-
tion such as it was before World War II. It is true that the foreign
payments balance, for instance under the favourable conditions in
1934-1938, gave an average net annual surplus of about 20 million
dollars, but even such a surplus would have been scarcely sufficient
to cover an appreciable part of the annual expenses for reparations,
etc. evenly divided over the eight years. But, in fact, Finland's
economic resources have further greatly deteriorated on account of
the war.
  Thus Finland has been obliged to cede roughly 13 per cent of her
territory with all real property situated there. In 1938, these ceded
areas accounted for 10 per cent of the whole country's industrial, farm-
ing and forestry production About one-third of Finland's water-
power, both exploited and under construction, was to be found there.
German devastation in Northern Finland in autumn 1944 rose to about
107 million dollars. In other parts of the country damages caused
by bombings and other direct acts of war were 210 million dollars.
Inner communications have been badly upset and the merchant fleet
has been reduced by two-thirds. Fields have fallen into decay and
farm, industrial and town buildings are in bad repair. Railways and
roads, machinery and productive plants are in a bad state and have
become technically obsolete, and their efficiency has consequently
greatly declined. The automobile park is practically worn out.
Stocks of raw materials, dealers' stocks and private stocks of con-
sumers' goods such as clothing, household articles, etc., are either small
or inexistent. Finland's material national wealth is estimated to have
fallen by at least 1,000 million dollars at 1944 prices, which makes
about 25 per cent of her national wealth before the war.
  Finland's resources of physical labour have also diminished during
the war. She lost 85,500 men in killed and missing, or 7.2%o of the
able, male population in 1938. Besides this Finland has more than
50,000 invalids whose ability is substantially reduced. The labour
-crisis would have been greater still if the whole population of the
ceded territories, about 436,000 people, had not moved over to Finland's
present territory; but on the other hand the re-establishment of a dis-
placed population of more than 10 per cent of all inhabitants in the
country, and the task of providing these people, who were torn off
from their homes and their occupations, with productive occupations
corresponding to their capacities, have caused the country enormous
difficulties and expenses and cannot be carried through within the
space of a few years.
  Lastly, prevailing conditions have not even allowed Finland to
make the best of these essentially reduced productive forces. This



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FOREIGN RELATIONS, 1946, VOLUME IV



was in the first place due to limited trade possibilities, in consequence
whereof it was necessary to replace the efficient fuel coal by labour-
wasting firewood, to use unprofitable substitutes in numerous other
branches, and so forth. The existing capacity of many industries can-
not be fully utilized on account of the shortage of raw materials and
electric power.
  In result of these facts the real national income in 1945 was only
about 500 million post-war dollars, that is roughly 60 per cent of what
it was before the war. In the second year of peace somewhat better
results will evidently be obtained in industry and transportation, but
on the other hand the output of farmers' produce cannot be raised
owing mainly to lack of fertilizers and fodder. The value of all
production in 1946 can be estimated at about 585 million dollars, which
is 70 percent of the pre-war level accounting for the depreciation of
money value. The first reparation year's total uncompensated exports
rose to 76 million dollars, or 15 per cent of the national income in 1945,
and the second reparation year's corresponding expenditure is about
60 million dollars, or 11 percent of the estimated national income in
1946. It may be interesting to note, for the sake of comparison, that
the reparations Germany had to pay in the late 1920's, and which
were found to be too high, on the average were only 2.3 per cent of Ger-
many's annual national income.
  The fact that Finland has fulfilled entirely, and on the whole
punctually too, the first year's reparations and other financial obliga-
tions might give the impression that she will be able to discharge her-
self, by her own means, of these commitments even such as they are
now. Actually, this is not the case.
  Firstly, there were still stocks of raw materials, requisites and
finished goods in 1945 which could be used for fulfilling reparation
and restitution deliveries. These stocks are depleted now, and they
have to be refilled alone with a view of maintaining the continuity
of production. It should thus be remembered that the first year's
reparations included, for instance, floating ships for 18 million dollars.
  Secondly, the relative importance of machine shop manufactures in
reparation deliveries is much greater in the second reparation year
and will be still more so during the following years; but heretofore
the metal working industries have mainly served the purpose of sup-
plying other Finnish industries with necessary manufactures without
producing practically anything for exports-in fact, imports of ma-
chinery and appliances have always been large in Finland. This fact
alone makes it necessary to invest large sums in these industries, the
capacity of which must be raised about three times from the pre-war
level. Until June 1946, no more than about one-third of such total
investments of estimatedly 25 million dollars had as yet been affected.



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OBSERVATIONS ON DRAFT PEACE TREATIES



Indirectly too, war reparations and cession of territory have created.
a great need of investments. Thus, for instance, the output of water
power must be increased during the next four years by 2.450 million
KWH, or practically by the same amount as previously over a period
of 25 years.
  But investments in the so-called old home market industries, in ex-
pert industries, in transportation and in farming can be postponed no
longer, as has been done ever since 1939. If the most urgent repairs
to machinery, installations and buildings are not done now, the whole
country's capacity of production instead of rising, as it ought to, will
very soon decline catastrophically.
  For these reasons productive investments in 1946 and the next few
years will call for a much greater share, estimatedly 20-25 per cent,
of the national income than in 1945. If war reparations and other
uncompensated outlays be added to this, barely two-thirds of the
present, reduced national income will be available for general con-
sumption. Is it, in fact, possible to go so far?
  Such a curtailment of consumption might be temporarily possible
under conditions of exceptional wealth. In fact, it is considered to
be a very good achievement even in the wealthiest countries if 15 per
cent of the national income can be saved, or in other words if only
85 percent of it can be reserved for general consumption. But Fin-
land is a poor country now, and her standard of consumption has
steeply declined during the war. Food rations can be reduced no
further without impairing the peoples' working capacity, and the
clothing situation must necessarily be improved now if the imminent
crisis shall be avoided. This applies likewise to the housing situation
which has been aggravated not only by the stagnation of building
operations during the war, but also by the displaced population's need
for dwellings.
  The question of war reparations can therefore be solved neither by
means of a further reduction of the present standard of consumption,
nor in desisting from indispensable repairs or ignoring the needs for
renewal of productive capital.
  One solution would of course be that to extend the burden of repara-
tions over a longer period by means of foreign credits, provided such
can be had. Such a measure has, in fact, already been necessary in
order to enable Finland to pay reparations up to now. After the con-
clusion of Armistice, Finland has obtained foreign credits amounting
to a total of 120 million dollars, this sum being very little short of
that representing the value of payments made out of national income
during the first two reparation years.
  In excess of net incomes obtained from exports, etc. credits amount-
ing to no less than 100 million dollars, including loans already granted,



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FOREIGN RELATIONS, 19 4 6, VOLUME IV



are required for financing imports with a view of meeting the minimum
requirements mentioned above. At this condition production and
exports can be raised in a sufficient measure to allow the need of sup-
plementary foreign credits to be reduced to about 70 million dollars
in 1947. In the subsequent reparation years it should be possible to
gradually reach a state of balance in foreign payments.
  Finland is prepared to do all that is in her power in order to fulfil
her obligations in respect of war reparations. However, she fervently
hopes that the burden imposed on her be reduced so that the fulfilment
of her obligations does not exceed her economic capacity and destroy
the economic resources which, if they are preserved, can allow her to
make her best contribution not only to the reconstruction of her own
country, but also to that of the whole world.

                    PART V: ECONOMIC CLAUSES
Article 24.
  Paragraph 1.
  'With regard to the stipulation that Finland shall restore all the legal
rights and interests in Finland of the United Nations and their na-
tionals as they existed on June 22, 1941, the Delegation begs to remark
that the fact that the time fixed is counted to begin on June 21, 1941,
makes this stipulation more severe than that of article 13 of the Armis-
tice Agreement. In fact, Finland's state of war with several of the
United Nations began later, as for instance with England on Decem-
ber 6, 1941. In this respect the position adopted in the Appendices is
more equitable; in paragraphs 1(c) as well as 2 and 3 of Appendix
4 the time is calculated as from the date of the outbreak of war, and
paragraph 1 of Appendix 5 still more explicitly says that contracts
shall be deemed to have been dissolved as from the time when any of
the parties became an enemy. The delegation hopes that the afore-
mentioned effects of war in accordance with the last-mentioned stipula-
tion will be deemed to have begun in respect of each State and its
nationals as from the date when the state of war has actually begun
between the State concerned and Finland.
  Paragraph 2.
  It is understood that the charges referred to in this paragraph do not
include the administration fees collected by the Allied Property Custo-
dian for property kept in his custody, these fees being in conformity
with international usage and in no respect immoderate.
  It is also understood, in conformity with what seems to appear from
paragraph 1 (a.) of Appendix 4, that the charges referred to in this
paragraph, whilst including additional charges and other fines, do
not include such regular charges to be paid in peace time the payment
of which was deferred as long as the state of war lasted and which thus



292


 

					
				
				


OBSERVATIONS ON DRAFT PEACE TREATIES



have to be paid later. Annual patent fees can be mentioned as an
example of such charges.
  Paragraph 4.
  This clause actually implies a considerable increase of the Finnish
war reparation burden. Finland would have to pay compensation
for property which was destroyed or damaged for instance by bombs,
and according to the U.K. proposal also or such property as remained
in the territories ceded to the Soviet Union. Furthermore, Finland
should have to pay, at least according to the U.K. proposal, compensa-
tion in such cases too as a Finnish corporation whose shareholder is
a national of one of the United Nations has suffered losses through
the war. As damages according to article 30 shall be indemnified to
the Allied and Associated Powers and France and those of the United
Nations which have broken off diplomatic relations with Finland, as
well as to nationals of all these countries, i.e. on a very wide scale,
this considerably increases Finland's obligations in respect of
indemnification.
  It would be equitable if Finland's obligations in respect of indem-
nity were not extended further than what is established in article 11 of
the Armistice Agreement, by virtue of which Finland has to make
compensation for such losses only as she herself has caused. If her
obligations in respect of indemnity become muore extensive as com-
pared with the Armistice Agreement, Finland should be granted a
reduction on the amount of compensation in order to make it possible
for her to bear the additional burden thus arising. In all cases the
paragraph regarding payment of compensation should include a
clause corresponding to that expressed under paragraph (b) of the
U.K. proposal.
Article 27.
  The Finnish Delegation has no observations to make with retard
to this article provided paragraphs 1 (c) and 4 are interpreted ill such
manner that the Finnish State and Finnish nationals have the right
to look after their interests in matters concerning Finnish ships, Fin-
nish goods or payment of costs before Prize Courts of Allied or As-
sociated Powers and according to the procedure followed in the coun-
tries concerned, lay forth testimonies and in case of need appeal to a
superior Court for a decision on a judgement or decision made by an
inferior Prize Court.
Article 28.
  In the opinion of the Finnish Delegation it would be appropriate if
paragraphs 1(c) and 2 of this article were approved in the form pro-
posed by the Soviet Union.



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FOREIGN RELATIONS, 19 4 6, VOLUME IV



   ANNEX 4. SPECIAL PROVISIONS RELATING TO CERTAIN KINDS OF
                             PROPERTY
           A. INDUSTRIAL, LITERARY AND ARTISTIC PROPERTY
 Rights to induwtrial property.
   As the period of validity of a patent in Finland is exceptionally
long, for patents granted prior to 1.1.1944 20 years and thereafter 17
years, it would be desirable from the Finnish point of view if the
period of validity instead of being extended by a period corresponding
to the duration of war, would remain unchanged and the holders of
patents for this period would get compensation from the user of the
patent. In such case it would be an internal matter for Finland to
decide whether the State should pay the compensation owed by a
bona fide user.
  It is understood that the unpaid annual fees for patents should be
paid when the patent rights are re-established if it is meant that the
holder of a patent is entitled to compensation from the user of a
patented invention for the years during which the patent was lost.
  As during war practically all connections with the Allies were
severed, patent agents in Finland had hardly any possibilities of pur-
suing their clients' patent applications. According to the regulations
of the Finnish Patent Office these applications should have been con-
sidered void. Directly after the outbreak of war the patent office
adopted a procedure according to which the applications of Allies
were not considered void unless there was an absolutely compelling
reason for it. For this reason comparatively few patent applications
of Allies have become void, and the number of such cases to be taken
up again is by no means alarming. If patent applications have be-
come void, the same procedure should be applied to them as to patents,
i.e. they should not automatically have to be taken under consideration
unless the patent holder or his assignee applies for it. No protection
of utility models is in force in Finland.
  In Finland trade marks are registered for 10 years. The registra-
tion can be renewed for another 10 years if it is done before the expira-
tion of the previous period. A great number of the trade marks of
Allies which were registered in Finland on June 22, 1941, have ceased
to be valid because of the expiration of the registration period, and
renewals could not be applied for, all connections being cut off. The
Draft Peace Treaty cannot either purport that such trade marks as
have been deleted from the register should automatically be considered
to have been continually in force; the holder of the trade mark shall on
the contrary make an application in order to have the deletion can-
celled. It would seem reasonable if a system could be adopted ac-
cording to which the holder of the trade mark in so far as the 10-year



294


 

					
				
				
OBSERVATIONS ON DRAFT PEACE TREATIES 295

period expired between June 22, 1941, and the date of signature of the
Peace Treaty can apply for a renewal of the registration within a cer-
tain fixed time limit after the signing of Peace, in which connection a
fee for the renewal of the registration should be paid and the new
registration period would begin to run as from the date on which the
previous registration expired. It might be possible that the utility
mark thus renewed would be deceptively similar to that which in the
meantime has been registered in the name of the third party, but ac-
cording to general principles of law regarding utility marks the latter
would have to make way for the former. The number of possible con-
flicts arising out of this arrangement would evidently be very small,
because the Finnish Patent Office did what was possible in order to
prevent utility marks which expired during the war from being regis-
tered in the name of another person.

With regard to the so-called Union priority, Finland has acceded to
the Paris Convention such as it was revised in Washington in 1911,
and according to which the period of priority is four months. In the
opinion of the Finnish Patent Office the extension of priority, in re-
spect of utility marks, so far back as the roughly 514 years proposed
under paragraph 1 6) of annex 4 would lead to insurmountable diffi-
culties in Finland.

Rights in literary and artistic property.

Finland has strictly followed during the whole war the clauses of
the Berne Convention regarding protection of rights in hterary and
artistic property, naturally in respect of nationals of those countries
which have signed the Berne Convention. The rights in literary and
artistic property of nationals of such countries have by no measures
of legislation whatsoever been placed in the position of enemy prop-
erty, regardless of whether these countries were in a state of war with
Finland or not. Accordingly, performance retributions have been
collected in the normal manner on behalf of foreign composers, as for
instance Lyons, Coats, Kettelby, Elgar and others. These retribu-
tions in Finnish marks can thus be freely disposed of in Finland by
the composers, naturally in conformity with the foreign currency
regulations in force in Finland at every time, as it is suggested in the
U.K. proposal for paragraph 4 a) of article 24. Other rights in
literary and artistic property of foreigners are protected in the same
manner in respect of the duration of the war. Therefore, it seems as
if there were no reason to extend the duration of rights in literary and
artistic property for a further term corresponding to the duration of
the war, as proposed in paragraph 3, annex 4.

The holder of rights in literary and artistic property must naturally
be afforded a sufficient time for taking action against such persons as
have infringed his rights during the war and which action he was

					
				
				


2FOREIGN RELATIONS, 1946, VOLUME IV



unable to take earlier on account of obstacles due to the war. Such
a time limit being included under paragraph 1 c) of the annex, the
protection of holders of rights in literary and artistic property is duly
guaranteed without it being necessary to extend the provisions of para-
graph 3 to regard them too.
                          B. INSURANCES
  With regard to paragraph 1 the Delegation begs to point out that
United Nations Insurers according to Finnish laws in force even now
have every possibility of recovering their former portfolios of busi-
ness in Finland. As to legislative enactments more onerous than those
in force before the outbreak of war the stipulations contained in para-
graph I should be so construed that enactments in force at the
outbreak of war relating to the rights of foreign insurers to carry on
insurance in Finland which are unaltered, still shall remain in force
while amendments despite the aforesaid stipulation can be made in
common law, as for instance in the criminal or fiscal law and in com-
mon law dealing with all insurers (e.g. the penalty for failure for
preparing assessment forms for income return might be aggravated
or the tax increased).
  Paragraph 2 should be so construed that the words "insurance claims
arising out of war" only mean payment of claims arising out of the
war, not however, losses caused for instance by currency depreciation
or property transfer tax levied on account of the war.
  If paragraphs 1 and 2 are so construed, Finland has no observations
to make.
  The same applies to paragraph 3, all the more so as Finland has been
afforded the possibility of accepting the securities mentioned therein
as legal deposits or reserves at their value at the outbreak of war.
  Should the USSR proposal relating to this paragraph be accepted
and, consequently, article 24 be considered sufficient, Finland expects
that the stipulations concerning insurance in this article are not con-
strued in a manner more severe than has been said above of the U.K.
proposal.
  In the event of the U.K. proposal for Article 24, paragraph 4, of
the Peace Treaty being enforced, assets of United Nations nationals
in Finland and consequently also assets arising out of insurance trans-
actions, as for instance insurance funds, should be paid in original
currency. This is the more natural in insurance business as the
premium and claims reserves are offset by a liability of an equal
nominal amount in Finnish marks.
  Should the USSR proposal for paragraph 4 be accepted Finland
also expects that the construction put on the treaty will not in the
result be less favourable than has been said above of the construction
to be put on paragraph 4 of the U.K. proposal.



206


 

					
				
				
OBSERVATIONS ON DRAFT PEACE TREATIES 297

Aprenvix [Annex] 5. Contracts, Prescrrprions AND NEGOTIABLE:
INSTRUMENTS

1. CONTRACTS

Paragraph 1.

This paragraph should be construed so that the seller, upon dissolu-
tion of the contract, shall return to the buyer the money received from
him by virtue of such dissolved contract.

Paragraph &.

Section (e) seerns to be too indefinite, as according to it all such
contracts would remain in force one party of which is a state, munici-
pality or other similar juridical person charged with administrative.
functions.

Section (f) 1s vague as it leaves it open for deliberation to decide
when “general interest” demands the execution of a contract, and
when one of the parties is being caused “substantial prejudice”. It
would also be very important to have a definition of what is meant by:
“general interest”.

					
				
				
				
				








           III. REPORTS OF THE COMMISSIONS
       REPORTS ON THE DRAFT PEACE TREATY WITH ITALY
CFM Files
        Report of the Political and Territorial Comv,,nis&ion
                            for Italy

C.P. (Plen) Doe. 24                        PARIS, October 5, 1946.
                     RAPPORTE1TR'S PREFACE
  MR. CHAIRMAN: I formally present the report of the Political and
Territorial Commission for Italy. It records the work of 43 meetings.
during the course of which the Commission studied the various parts
of the treaty allocated to it, together with the large number of amend-
ments submitted by various delegations.
  The primary purpose of this document is to present to the Confer-
ence the positive decisions and recommendations of the Commission
insofar as these relate to the amended texts of the Articles of the
treaty.
  The material contained in the report is arranged in the following
manner:
  Chapter I covers the terms of reference, including the list of pro-
posed amendments submitted to the Commission.
  Chapter II sets out the manner in which the Commission disposed
of the Articles of the Draft Treaty allocated to it. The number of
votes by which the amended texts were adopted is recorded, and the
texts as amended are given in full. In certain instances, and in ac-
cordance with the Rules of Procedure, majority and minority view-
points are expressed. These majority and minority reports have been
submitted by delegations and are reproduced in the form in which they
were submitted.
  Chapter III contains the decisions and recommendations on the Free
Territory of Trieste. The reason for the segregation of this material
is a technical one arising from the fact that the earlier sections had
been prepared and translated before this section had been completed.
  Chapter IV. As a result of a decision of the Commission a Fourth
Chapter has been added containing the viewpoints of delegations on
certain of their proposed amendments which had not been adopted.
The purpose of this Chapter IV is to enable delegations to record and
                                                         299


 

					
				
				
300 FOREIGN RELATIONS, 1946, VOLUME IV

to convey to the Plenary Conference this information on questions to
which they attach particular importance. These comments have
been reproduced in the form and language in which they have been
submitted.

Chapter V records the votes taken on proposals relating to the Free
Territory of Trieste, and on certain other important items referred to
in the final paragraph of the conclusion.

The concluding section contains a summary of results of the Com-
mission’s labours in a form which it is hoped will be most convenient
for the consideration of the Plenary Conference.

In short, the report: is a working document and is arranged as such,
and it is in no sense a narrative of the course of discussions.

Cuapter I. Terms or REFERENCE OF THE COMMISSION

The Political and Territorial Commission for Italy held 48 meet-
ings, under the Chairmanship of Mr. Leif Egeland, Delegate of the
Union of South Africa. It elected as Vice-Chairman M. Manuilsky,
Delegate of Ukraine, in whose absence M. Baranovsky assumed the
functions of Vice-President and as rapporteur, Mr. McIntosh, Dele-
gate of New Zealand.

The Commission was composed of Delegates of 20 countries, as
follows: Australia, Belgium, Brazil, Byelorussia, Canada, China,
Czechoslovakia, Ethiopia, France, Greece, India, Netherlands, New
Zealand, Poland, Ukraine, United Kingdom, Union of South Africa,
U.S.A., U.S.S.R., Yugoslavia; the representatives of Albania, Egypt
and Italy were invited to state before the Commission their points of
view on the relevant sections of the Draft Peace Treaty with Italy.

The Commission had the task of considering certain parts of the
Draft Peace Treaty between the Allied and Associated Powers and
Italy, drawn up by the Council of Foreign Ministers and of submit-
ting, eventually, recommendations to the Plenary Conference.

The parts of the Draft Treaty studied by the Commission were as
follows:

Preamble

Part I —Territorial clauses (Articles 1 to 13, Annexes 1 and 2)
Part II —Political clauses (Articles 14 to 37, Annex 9)

Part IJ I—War Criminals (Article 38)

Part V —Withdrawal of Allied Forces (Article 63)

Part [X—Settlement of disputes (Article 72)

Part XI—Final clauses (Articles 75 and 78)

					
				
				


REPORTS OF THE COMMISSIONS



  In the course of its work the Commission took into consideration the
following amendments, proposals and resolutions:
IPreamble:        1 Yugoslav amendment (C.P. (IT/P) Doc.5)
                   2 Netherlands amendments (C.P. (IT/P) DocA6
                       and Doc.8)
                   1 Amendment submitted by the Chinese delega-
                      tion in the name of the Belgian, Brazilian,
                      Canadian, Chinese and Netherlands Delega-
                      tions (C.P. (IT/P) Doc.14)
                   1 Australian amendment (C.P. (GEN) Doc.1.
                       B.1)
                   1 Yugoslav amendment (C.P. (GEN) Doc.1.U.1)
Part I
Articles 1 to 12:
                   1 Australian amendment (C.P. (GEN) Doc.1.B.
                       1)
         Art. 1   1 Yugoslav amendment (C.P. (GEN) Doc.l.U.2)
         Art. 2   1 Australian proposal (See record of Decisions
                      of the 8th meeting, III b)
                   1 French proposal (see record of Decisions of the
                      10th meeting, II d, and record of Decisions
                      of the 11th meeting, Rev.1, I)
     Art. 3 & 4   1 Brazilian amendment (C.P. (GEN) Doc.1.E.2)
                   1 Brazilian amendment (C.P. (IT/P) Doc.23)
                   2 Czechoslovak proposals (see records of Deci-
                      sions of the 20th and 27th meetings)
                   1 Yugoslav amendment (C.P. (GEN) Doc.1.U.3)
                   1 Byelorussian amendment (C.P.(GEN)Doc.l.
                      D.1)
                   1 South African amendment (C.P. (IT/P) Dc.
                      21 Rev. 1)
                   1 Yugoslav proposal (C.P. (IT/ P) Doc.98)
     Art. 4 & 5   1 Yugoslav amendment (C.P. (GEN) Doc.1.U.4)
         Art. 5   1 Australian amendment (C.P.(GEN)Doc.1.B.
                      3)
Art. 9 &Annex 2    1 French proposal (see record of Decisions of
                      the 11th meeting, Rev.1, III c)
       Art. lOa   1 Joint proposal of the Belgium and Nether-
                      lands Delegations (C.P. (IT/P) Doc.44)
Section IV (Special Clauses and Art. 11.)
                  1 Yugoslav amendment (C.P. (GEN) Doc.L.U.5)
      Art. 1al
           11b    1 Yugoslav proposal (C.P.(CGEN)Doc.1.U.6)

        Art. 12   1 Greek amendment (C.P. (IT/P) Doc.60)
                   1 Ukrainian  amendment   (C.P. (GEN) Doc.1.
                      IR.1)
        Art.. 13  1 Australian amendment (C.P.(GEN)Doc.1.B.
                      4)
                  1 Brazilian amendment (C.P. (GEN)Doc.1.E.3)



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FOREIGN RELATIONS, 1946, VOLUME IV



1
1



Greek amendment (C.P. (GEN) Doc.1.J.2)
Yugoslav amendment (C.P. (GEN) Doc.1.U.
7)



Art. 13a    1 Yugoslav proposal (C.P. (GEN) Doc.1.U.8)



Part 11



Art. 14     1 Australian amendment (C.P.(GEN)Doc.1.B.
              5)
          1 Greek proposal (C.P.(IT/P)Doc.79)
          1 Yugoslav amendment (C.P. (GEN) Doc.l.I.T9)
Art. 14a    1 Yugoslav amendment (C.P. (GEN) Doc.1.U.9)
          1 Joint draft, Polish-Ukrainian (C.P.(IT/P)
            Doc.69)
ection II   1 Yugoslav amendment (C.P.(GEN)Doc.1.U.
              10)
Art. 16     1 Australian amendment (C.P.(GEN)Doc.1.B.
              6)
          1 Byelorussian amendment (C.P. (GEN) Doc.1.
              D.2)
          1 Brazilian amendment (C.P. (GEN) Doc.l.E.4)
          1 Greek proposal (C.P. (IT/P) Doc.1.J.3)
          1 Yugoslav amendment (C.P.(GEN)Doc.1.U.
              10)
          1 Yugoslav amendment (C.P. (GEN) Doc.1.U.
              11)
          1 Yugoslav amendment (C.P. (IT/P) Doe.103)
          1 French proposal (C.P.(IT/P)Doc.105, Rev.



Art. 16



1
1
1



1.)
United States proposal (C.P. (IT/P) Doc.16.)
USSR proposal (C.P. (IT/P) Doc.46.)
Polish resolution (C.P. (IT/P) Doc.106.)



Annex 9     Yugoslav proposals (C.P. (GEN) Doc.1.U.27,
              1.U.28 and 1.U.29)
Art. 17     1 South African amendment (C.P.(GEN)Doe.
              1.S.1)
           1 Australian amendment (C.P. (GEN) Doc.1.B.
              7)
           1 Chinese amendment (C.P. (GEN) Doc.l.G.1.)
           1 Ethiopian amendment (C.P. (GEN) Doc.1.H.
              1.)
           1 Greek amendment (C.P. (GEN) Doc.l.J.4.)
           1 Brazilian amendment (C.P. (IT/P) Doc.73)
           1 New Zealand amendment (C.P. (GEN)Doc.l.
              M.1)
Art. 18
    19    1 Chinese amendment (C.P. (GEN) Doc.1.G.2)
    20
Art. 21     1 Yugoslav amendment (C.P.(GEN)Doc.1.U.
              12)
          1 Polish amendment (C.P. (GEN) Doc.1.0.3)
Art. 22     1 Greek amendment (C.P.(GEN)Doc.1.J.5)
Art. 25a    1 Yuiaoslav amendment (C.P.(GEN)I)oc.1.UT.
              13)



302



zS(


 

					
				
				


REPORTS OF THE COMMISSIONS



1 Ethiopian amendment (C.P. (GEN) Doc.l.M.
   2)
1 Ethiopian amendment ( C.P. (GEN) Doc.l.M.
   3)



Art. 38    1
          1
          1



Polish amendment (C.P. (GEN) Doc.1.0.4)
Greek amendment (C.P. (GEN) Doc.l.J.6)
Yugoslav amendment (taken from Albanian
proposal, (C.P. (GEN)Doc.7)



          1 Australian amendment (C.P. (GEN) Doc.1.B.
              13)
          1 New Zealand proposal (C.P. (IT/P) Doc.95)

Art. 75   1 Australian amendment (C.P. (GEN) Doc.1.B.
              15)
Art. 76   1 Australian amendment (C.P.(GEN)Doc.1.B.
              16)
          1 Anglo-French-American proposal (D r a f t
              Peace Treaty, page 53)
          1 U.S.S.R. proposal (Draft Peace Treaty, page
              54)
          1 Greek amendment (C.P. (GEN) Doc.l.J.19)
Art. 77   1 Yugoslav amendment (C.P. (IT/P) Doc.97)



1



Art.78    1



U.S.A. proposal (C.P. (IT/P) Doc.92)
Yugoslav amendment (C.P. (IT/P) Doc.93
and 96)



New Part XII
                   1 Australian amendment (C.P. (IT/P) Doc.88)
  The observations of the Italian Delegation (C.P. (IT/P)Doc.1 and
12), oral statements of Italian, Albanian and Egyptian representatives
and the memorandum of the Albanian Delegation (C.P. (GEN)Doc.7)
were also taken into consideration in so far as they concerned articles
within the competence of the Commission and were taken up by one
of the Delegations member of this Commission.
  The Members of the Council of Foreign Ministers had agreed in
advance upon most of the articles submitted for the consideration of
the Commission.
  However, the Four Powers were not able to reach prior agreement
in the case of the Statute of the Free Territory of Trieste, and sub-
mitted to the Conference four different texts on that question. On
Article 76, also, the Commission had to make a choice between a French-



Art. 28

Art. 31



Part III



New Part X



Part XI



ANew article
between 77
& 78



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FOREIGN RELATIONS, 19 4 6, VOLUME IV



United Kingdom-United States proposal and a proposal sponsored
by the U.S.S.R.

'(HArPTER II. DECISIONS OF THE COMMISSION ON THE ARTICLES OF THE
              DRAFT PEACE TREATY ALLOCATED TO IT
  The Commission disposed of the Articles of the Draft Treaty al-
lotted to it in the following manner:
  SECTION I. Articles Referred to Other Caminissmons or Adopted
                      Without Modification
  (1) Articles 15-32-33-34-35-36-77 and 78 were referred to
the Legal and Drafting Commission for consideration and decision.
  Article 72 and Annexes 9 and 13 were referred likewise to the Eco-
nomic Commission.
  (2) Articles 6-7-10-14-23-24-25--26-27-29-30-37-63
and 75 were adopted unanimously.
  (3) Article 17 was adopted unanimously with 2 abstentions, (Aus-
tralia and Brazil), the Chinese, South African, Australian, Ethi-
opian and Greek Delegations having withdrawn their respective
amendments, in consideration of the assurances contained in the decla-
ration of the Four Powers (C.P. (IT/P)Doc. 65), which is to be at-
tached to the Treaty in the form of an Annex. Article 22 was adopted
by 15 votes to 1 with 4 abstentions, Articles 3 (Frontier between Italy
lnd Yugoslavia), 4 (Frontier between Italy and the Free Territory of
'Trieste) and 16 paragraph 1 by 12 votes to 5 with 3 abstentions.
  The majority and minority reports on Articles 3, 4 and 16 will be
Tound in Chapter III of this report.
      SECTION II. Modifications Proposed by the Commission
Preamble:
  As regards the preamble:
  a) Para. 1 was adopted unanimously.
  b) Para. 2 was adopted unanimously as amended by the Nether-
lands Delegation (C.P. (IT/P) 5th meeting) and reads as follows:
  "Whereas Italy under the Fascist regime became a party to the Tri-
partite Pact with Germany and Japan, undertook a war of aggression
and thereby provoked a state of war with all the Allied and Associated
Powers and with other United Nations, and bears her share of respon-
sibility for the war; and"
  c) Para. 3 as amended by the proposal submitted by the Chinese
Delegation in the name of the Belgian, Brazilian, Canadian, Chinese
and Netherlands Delegations (C.P. (IT/P) Doc. 14), slightly modi-
fied, was unanimously adopted. The amended paragraph reads as
follows:



:3()4


 

					
				
				


REPORTS OF THE COMMISSIONS



  "Whereas, in consequence of the victories of the Allied forces, and
with the assistance of the democratic elements of the Italian people,
the Fascist regime in Italy was overthrown, on July 25, 1943, and
Italy, having surrendered unconditionally, signed terms of Armistice
on September 3 and 29 of the same year; and"
  d) Para. 4 as amended in terms of the proposal of the Netherlands
(C.P.(IT/P)Doc. 8) (which was modified in the meeting) was
adopted unanimously, with one abstention (Yugoslavia). The
amended paragraph 4 reads as follows:
  "Whereas after the said Armistice the Italian armed forces, both of
the Government and of the Resistance Movement, took an active part
in the war against Germany and Italy declared war on Germany as
from October 13, 1943, and thereby became a co-belligerent against
Germany, and"
  e) Para. 5. Following a discussion on the Australian amendment to
para. 5 (C.P. (IT/P) Doc. 15), a motion by the Chairman was adopted
by the Commission, Yugoslavia alone voting against it, and para. 5 as
amended reads as follows:
  "Whereas the Allied and Associated Powers and Italy are respec-
tively desirous of concluding a treaty of peace which, in conformity
with the principles of justice, will settle questions still outstanding as
a result of the events hereinbefore recited and will formn the basis of
friendly relations between them, thereby enabling the Allied and As-
sociated Powers to support Italy's application to become a member of
the United Nations and also to adhere to any convention concluded
under the auspices of the United Nations;"
  The Preamble as amended was formally adopted as a whole on
October 1, 1946.
Art. 1.'
  Article 1, as amended by the second part of the Yugoslav amend-
mient (C.P. (GEN) Doc. 1.U.2), slightly modified, was adopted unani-
mously. Article 1 should therefore read:
  "The frontiers of Italy shall be those existing on January 1, 1938,
subject to the modifications set out in articles 2, 3 .....1 These fron-
tiers are traced on the maps attached to the present treaty. In case of
a discrepancy between the textual description of the frontiers and the
maps. the text shall be deemed to be authentic."
  The Yugoslav Delegation agreed to withdraw the first part of its
amendment on condition that the following text was adopted by the
Commission:
  "The Commission assumed that adequate and sufficiently detailed
maps corresponding to the various territorial clauses will be annexed
to the treaty".
1 Marks of ellipsis throughout the commission reports occur in the source
texts.



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FOREIGN RELATIONS, 1946, VOLUME IV



  This text was adopted without discussion.
Art. 2.
  As regards Art. 2:
  a) Para. 1 (Little St. Bernard Pass) was unanimously adopted.
  b) Para. 2 (Mont Cenis Plateau) was adopted by 15 votes, 5 Delega-
tions abstaining.
  c) Para. 3 (Mont Thabor-Chaberton) was adopted unanimously,
subject to frontier adjustments in the region of Mont Thabor to be
examined by the Legal and Drafting Commission, in accordance with
the terms of the following statement by the French Delegation:
  "The French Delegation is ready to modify the text of the detailed
description of the frontier in the Mont Thabor region, leaving to Italy
the dam and the water catchment situated in this region."
  d) Para. 4 (Upper Tinee, Wsubie and Roya Valleys) was unani-
mously adopted, subject to the frontier adjustments to be examined
by the Legal and Drafting Commission, according to the following text
adopted by the Commission:
  "The French Delegation having agreed to leave the village of Oli-
vetta under Italian sovereignty, the Drafting Commission shall make
the necessary changes in the relevant annex of the draft peace treaty".
  e) It was decided that the detailed description of the Franco-Italian
frontier (C.P. (IT/P) Doc.20) and the corresponding maps should be
annexed to the Draft Peace Treaty and that the Legal and Drafting
Commission should mention the annex and the corresponding maps in
Article 2.
Art. 5.
  Paragraphs 1, 2 and 3 of the U.S. proposal having been withdrawn
Article 5 was adopted unanimously with the addition of a new para-
graph 5 proposed by the Yugoslav Delegation (C.P. (GEN) Doc.l.U.4)
as revised according to the Chairman's suggestion (C.P. (IT/P) 2ith
meeting). The new paragraph 5 of the article 5 reads as follows:
  "For the purpose of determining on the spot the exact frontier laid
down in articles 3, 4 and 16, the Commissioners shall be allowed to de-
part by 0.5 kilometer from the line laid down in the present treaty in
order to adjust the boundary to local geographical and economic con-
ditions, provided that no village or town of more than 500 inhabitants,
no important railroads or highways, and no major power or water sup-
plies are placed under a sovereignty contrary to the delimitationm laid
down in the present treaty".
Art. 8.
  Article 8 was unanimously adopted with the following modification,
proposed by the Delegation for France: addition of the words "the



306


 

					
				
				


REPORTS OF THE COMMISSIONS



necessary arrangements shall be concluded in due time between the two
Governments" at the end of sub-para. 2 of article 8.
Art. 9.
  As regards Article 9 which was adopted unanimously and the An-
nex 2 to which it refers, the Commission decided to refer section IV of
annex 2 to the Legal and Drafting Commission, who should modify it
according to the following statement made by the Delegate for France
at the 11th meeting:
  "The Delegate for France has stated that he would have no objection
to the addition of a phrase in section IV of annex 2 which would give
Italy guarantees as to the security conditions applying to the dam of
Mont Cenis. This phrase would make clear that it would be the task
of the technical supervisory Commission to cooperate with the appro-
priate French technical authorities to ensure that the safety of the
lower valleys is not endangered".
Art. 1la.
  As regards article i0a, a joint proposal by the Belgian and Nether-
lands Delegations for the addition of Article lOa (C.P. (IT/P) Doc.44
iRev.1) was adopted by 13 votes to 6 and one abstention.
  The text of article lOa is as follows:
  "The Allied and Associated Powers have taken note of the provi-
sions (of which the text is annexed to the present treaty) agreed upon
by the Auwstrian and Italian Governmwnts on September 5,1946, giving
certain guarantees to the German speaking inhabitants of the province
of Boizano and the neighbouring bilingual townships of the province
.of Trente".
  According to the resolution issued by the General Secretariat (C.P.
(Sec.) N.S. 131), the two following reports putting the respective point
of view of the majority and of the minority are submitted to the
Conference.
  a) Majority report by Belgian and Netherlands Delegations
  "On September 5, 1946, in Paris, the Premier of the Italian Republic
and the Foreign Minister of the Austrian Republic agreed on a text
regarding the status of the German speaking inhabitants of the
Province of Bolzano and the bilingual border communes of the Prov-
ince of Trente. This agreement, communicated to the Conference in
letter of 6 September from the two signatories and circulated to mem-
hers of the Conference by the Secretariat General (Doc.C.P. (SEC.)
N.S. 119) guarantees to German-speaking citizens complete equality of
rights with Italian-speaking citizens, to safeguard their ethnical char-
acter and cultural and economic development.
  With this object in view, the Italian Government promises to grant
them autonomous regional legislative and executive power. It under-
takes further to review the question of the options for citizenship re-
sulting from the 1939 agreements, to seek agreement on the mutual



307


 

					
				
				


FOREIGN RELATIONS, 19 4 6, VOLUME IV



recognition of the validity of certain university diplomas, to draw up
a convention for free transit between the Northern and Eastern Tyrol
and to make special agreements to facilitate traffic across the frontier
between the two countries.
  The Belgian and Netherlands Delegations believed that this agree-
ment, by obviating certain difficulties in the South Tyrol, makes an
important contribution to the development of peaceful and friendly
relations between Austria and Italy. They therefore considered it
appropriate that the Allied and Associated Powers should take note of
the agreement in a special article of the Peace Treaty with Italy and
should annex the text of the Austro-Italian agreement to the Treaty.
The Belgian and Netherlands Delegations therefore tabled a draft
amendment (Doc. 44, Rev. 1) for insertion in Section III of Part I of
the Peace Treaty, under the heading AUSTRIA."
  b) Minority report by the U.S.S.R. Delegation:
  The following is the point of view of the minority:
  1. This Agreement has no connection whatsoever with the Peace
Treaty with Italy as the task of the Conference is to study the Draft
Peace Treaties which are to regulate the relations between the United
Nations and the country in question.
  The Agreement between Italy and Austria does not fall within these
terms of reference as it is a bilateral agreement concluded between
States which were in one and the same camp in the war against the
United Nations; it should not therefore be included in the documents
of this Conference.
  2. The Council of Foreign Ministers accepted Article 10 which pro-
vides for the conclusion of an agreement between Italy and Austria
guaranteeing the free movement of passenger and freight traffic be-
tween North and South Tyrol. The Italo-Austrian Agreement of 5th
September does not deal with this question and has nothing in com-
mon with Article 10.
  3. Moreover, it has been stated that the Agreement in question does
not supply a satisfactory solution of the problem of the national rights
of the German-speaking population of the South Tyrol.
  4. No concrete measures are laid down in the Agreement to secure
a review of the system of option which was introduced under the
Hitler-Mussolini Agreement of 1939 and which has had a very un-
favourable effect on the life of the German-speaking population of
the South Tyrol.
  5. The Agreement of September 5, 1946 is to be put into effect not
on a broad democratic basis but mainly with an eye to the interests and
views of a narrow circle of persons indicated by the authorities. The
question of the frontiers of the autonomous territory remains open,
as do the means by which the autonomy desired by the people of South
Tyrol will be realized.
  6. The terms of the Agreement are too vague and it, is not exactly
clear to which territory it is applicable.
  7. The insertion of the Austro-Italian Agreement in the Peace
Treaty with Italy would create the undesirable and even harmful il-
lusion that the Agreement constitutes even in a small degree a solution
of the problem of the national rights of the German-speaking popimla-
tion of the South Tyrol, whereas in reality this is not the case."



308


 

					
				
				


REPORTS OF THE COMMISSIONS



309



Heading of ASection IV.
  The heading of Section IV was modified, with unanimous consent,
by the adoption of the proposal contained in the Yugoslav amendment
(C.P. (GEN) Doe. 1.U.5). The heading should therefore read:
  "Section IV, People's Federative Republic of Yugoslavia (Special
Clauses)
Art. 11.
  Article 11 was unanimously adopted following the acceptance of the
report from a sub-commission of two (France and Yugoslavia) (C.P.
(IT/P) Doc. 62 revised) which revised the proposals in the Yugoslav
amendment (C.P. (GEN) Doe. 1.U.5).
  Paragraph b) of article 11 was therefore replaced by the following
text:
    "b) The area bounded
        On the north by parallel 45017' N.
           9"  south        "    44023' N.
                west by a line connecting the following points:
            1) 45017k N-13027' E
            2) 44051' N-13037' E
            3) 44023' N-14018'30" E
        On the east by the west coast of Istria, the islands and the
    mainland of Yugoslavia".
Art. 11a.
  As regards Article 11a, the proposed Yugoslav amendment to add
four new articles (11a, iib, lie and 11d) (C.P. (GEN) Doc.i.U.6) hav-
ing been revised by the sub-commission of three (Belgium, France and
Yugoslavia) (C.P. (IT/P) Doc.100), the new article 11a was adopted
by the Commission by 19 votes to 1 together with the first paragraph
of Ann. 3, which was adopted unanimously and referred to the Eco-
nomic Commission for Italy for observations.
  Article 11a as amended by the Commission reads as follows:
  "1. Italy shall restore to Yugoslavia all objects of artistic, historical,
scientific, educational or religious value (including all deeds, manu-
scripts, documents and bibliographical material) as well as adminis-
trative archives (files, registers, plans or documents of any kind)
which, as the result of the Italian occupation, were removed between
November 4, 1918 and March 2, 1924, from the territories ceded to
Yugoslavia under the treaties signed in Rapallo, on November 12 1920,
and in Rome on January 27, 1924. Italy shall also restore all objects
belonging to those territories and falling into the above categories,
removed by the Italian Armistice Mission which operated in Vienna
after the First World War.
  2. Italy shall deliver to Yugoslavia all objects of public legal charac-
ter coming uwithin the categories in paragraph 1 of the present article
removed since November 4, 1918 from the territory which under the


 

					
				
				


FOREIGN RELATIONS, 19 4 6, VOLUME IV



present treaty is ceded to Yugoslavia, and those connected with the
said territory which Italy received fronm Austria and Hungary under
the Peace Treaties signed in St-Gerinain on Septemher 10, 1919 and in
Trianon on June 4, 1920, and under the convention signed between
Austria and Italy in Vienna on May 4,1920.
  3. If, in particular cases, Italy is unable to restore or hand over to
Yugoslavia the objects coming under paragraph 1 and 2 of the present
Article, she undertakes to hand over to Yugoslavia similar objects, in
accordance with the provisions of para. 9 of article 65 of the present
treaty.
Annex 3. Economic and Financial Provisions relating to ceded
territories.
  1. The Successor State shall receive, without payment, Italian State
and para-statal property within territory ceded to it under the present
Treaty, as well as all relevant archives of an administrative character
or historical value concerning the territory in question.
  The following are considered are [as] State or parastatal property.

Art. 12.
  Article 12 was amended in terms of the proposal put forward by the
Greek Delegation (C.P. (IT/P) Doc. 60), which was unanimously
adopted as modified by the Commission.
  The Ukrainian amendment to the second sentence of para. 1 of Arti-
cle 12 (C.P. (GEN.) Doc. 11.R.1) was withdrawn.
  Article 12, as amended is as follows:
  "Italy hereby cedes to Greece in full sovereignty the Dodecanese Is-
lands indicated hereafter, viz. Astypaloa, Rhodes, Chalk, Scarpanto,
Cassos, Piscopi (Tilos), Nisyros, Calymnos, Leros, Patmos, Lipsos,
Symi, Cos and Castelloriso as well as the islets depending from all
the above islands. These islands shall be and shall remain demili-
tarized.
  The procedure and the technical conditions governing the transfer
of these islands to Greece will be determined by agreement between
the Government of the United Kingdom and Greece and arrangement
shall be made for the withdrawal of foreign troops not later than 90
days from the date of coming into force of the present Treaty."
  The Commission proposed that the Greek Delegation should prepare
a text and map defining the draft maritime frontier of Greece in the
region of the Dodecanese Islands and that such text and map should
be submitted to the Plenary Conference for approval.
  The Commission decided likewise to refer to the Legal and Drafting
Commission the consideration of the text and map of the draft mari-
time frontier of Greece in the region of the Dodecanese Islands to be
prepared by the Greek Delegation, such observations as the Legal and
Drafting Commission might make thereon to be submitted direct to
the Plenary Conference.



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REPORTS OF THE COMMISSIONS



Art. 13.
  Article 13 as amended by the addition of a new para. 4, proposed by
the Australian Delegation (See C.P. (GEN.) Doc.L.BA), and identical
with the U.S. proposal contained in the Draft Peace Treaty with Italy
as U.S. proposal, was adopted by the Commission by 12 votes to 2 with
6 abstentions. With a slight drafting alteration, it reads as follows:
  "The State to which the territory is transferred shall secure to all
persons within the territory, without distinction as to race, sex, lan-
guage or religion, the enjoyment of human rights and of the funda-
mental freedoms including freedom of expression, of press and publi-
cation, of religious worship, of opinion and public meeting."
  According to the resolution issued by the General Secretariat (C.P.
(SEC) N.S.131), the two following reports, putting the respecting
[respective] points of view of the majority and of