FOREIGN RELATIONS, 1946, VOLUME VI



deficit and thut only hope for substantial reduction deficit lies in sub-
stantial reduction occupation costs.
  F. As regards general question Rumanian Govt intervention in
private business, U.S. representatives should not take position that
U.S. opposes it as matter of principle (since this is primarily an
internal Rumanian affair), but that U.S. attitude depends entirely on
whether in individual cases Govt control is likely promote or hinder
production or distribution of essential commodities and services. In
general, Dept feels this issue should not be overstressed and the U.S.
representatives should emphasize their willingness participate in prep-
aration tripartite economic recovery program and avoid as far as
possible assuming position of mere critics of Soviet or Rumanian Govt
action.
  5. For your confidential information, Dept's policy is not to grant
credit to reparations paying country unless reparations and other eco-
nomic armistice obligations have been clearly defined and fixed at size
which permits country to earn foreign exchange sufficient to pay for
essential imports and to service credit. In addition no U.S. economic
assistance for Rumania could be considered unless economic recovery
program which clearly satisfied objectives outlined in para. 3A above
had received tripartite approval and had been accepted by Rumanian
Govt. If conversations proceed favorably and there appears to be
some possibility of tripartite agreement on recovery program which
meets these conditions and if question of credits is raised you may
inform ACC and Rumanian Govt along these lines.
  6. Your detailed comment requested.
                                                         ACHEsoN,
701.7111/7-2346
Alemoranduim, by the Acting Secretary of State to President Truman

SECRET                                WASHINGTON, June 21, 1946.
Subject: Request for Agreement to Appointanent of Mihail Ralea as
    Rumanian Minister to the United States
  On June 8, 1946 our Political Representative in Bucharest received
a letter from the Rumanian Foreign Minister stating that Dr. Dumitru
Bagdasar, whose appointment as Rumanian Envoy Extraordinary and
Minister Plenipotentiary to the United States you approved in April of
this year, is unable to proceed to his post and proposed in his stead,
Dr. Mihail Ralea. We have learned informally that Dr. Bagdasar
is critically ill.
  Dr. Ralea was born in Bucharest in 1896, the son of a Rumanian
judge. After studying at the Rumanian universities of Iasi and
Bucharest, he received his LL.D. and Litt.D. degrees from the Univer-
sity of Paris. He has been Professor of Esthetics, Sociology and



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