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.