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.