Pauley Files

No. 1097
British Text of a Draft Report by the Economic Subcommittee1

Draft Report of the Economic Sub-Committee of the Foreign Secretaries on the Subject of the Liability to Reparations of Italy and Austria

The Sub-Committee have regarded it as outside their competence to discuss the question whether reparations should or should not be exacted from Italy and Austria on political grounds. From the economic point of view, the Committee make the following report.

A. Italy

Italy is at present indebted to the United States Government and the U. K. Government for relief supplies for the civilian population and for supplies to the Italian Forces. The debt at present stands at about $500 million and the debt will be further increased before the existing arrangements can be terminated. The discharge of this debt would, in the view of the Sub-Committee exceed the capacity of Italy to make external payments for many years to come. Neither the United States Government nor the U. K. Government are prepared to grant financial facilities to Italy for the purpose of enabling her to pay reparations. It is also certain that UNRRA will not be prepared to send supplies to Italy free of cost in order to enable Italy to pay reparations.

2. The Committee suggest that further consideration should be given to the question of Italy making compensation in other ways to the Allied countries chiefly concerned, including Greece and Yugoslavia. [Page 1090] Italy might, for example, be required to contribute, free of charge, anything needed by UNRRA for these Allied countries.

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S. D. W[aley]
  1. Printed from the ribbon copy, which bears only uncertified typed initials.
  2. For the section of this draft dealing with Austria, see document No. 765.