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-