Foreign Relations of the United States: Diplomatic Papers, 1945, General: Political and Economic Matters, Volume II

Council of Foreign Ministers Files: Lot M–88: London CFM Documents

Memorandum by the United States Delegation to the Council of Foreign Ministers

C.F.M.(45) 40

London, 21 September, 1945.

Suggested Directive to the Deputies From the Council of Foreign Ministers To Govern Them in the Drafting of a Treaty of Peace With Hungary

i. territorial provisions

1. The frontiers of Hungary shall be, except as modified below, those which existed prior to the Vienna Arbitration Award of November 2, 1938, and the Vienna Award of August 30, 1940.⁵³

2. The frontier with Roumania shall be, in general, the frontier existing in 1938, except that, as regards Transylvania determination regarding the whole or the greater part to go to Roumania shall be made after examining the respective claims of the two states.

II., III., IV. [These articles are the same, mutatis mutandis, as articles III, V, and VI in Suggested Directive for Bulgaria (C.F.M.(45) 35), page 263.]

v. reparations

The treaty should provide for the delivery to the U.S.S.R., Czechoslovakia and Jugoslavia of reparations in kind as stipulated in Article 12 of the Armistice. It should also provide for the determination of the compensation payable to other countries, and for completing the restoration of Allied property in Hungary to its owners or payment therefor, when the property is not returned in good order, as required by Article 13 of the Armistice.

The determination of the amounts payable by Hungary on account of claims for property in Hungary, and the supervisions of Hungary’s execution of the treaty provisions with regard to reparations, restoration of Allied property and compensation for damage should be vested in an Allied Commission composed of representatives of the U.S.S.R., the United Kingdom, the United States, France, Czechoslovakia; and Jugoslavia.

The satisfaction of claims against Hungary on the part of countries other than the U.S.S.R., Czechoslovakia and Jugoslavia should be made primarily from Hungarian assets abroad. Consequently, the Hungarian Government shall authorise each of the United Nations to take over and apply to their respective reparation claims such of the assets of the Hungarian Government (excluding diplomatic and consular premises) and of Hungarian nationals as are within the jurisdiction of the respective United Nations. Similarly, the Hungarian Government shall undertake to transfer to the United Nations, other than the U.S.S.R., Hungarian government and private property in the neutral countries. The Hungarian Government will undertake to indemnify, in accordance with Hungarian law, the Hungarian nationals whose property will thus have been requisitioned. Each of the United Nations will be free to allocate the amount received from Hungary to the indemnification of the State or its nationals, or the payment of debts, as it may determine, as a matter of national policy.

The Hungarian Government shall be required to recognise the transfer to the U.S.S.R., in accordance with paragraphs one and nine of the Potsdam declaration on German reparations,⁵⁴ of German assets in Hungary. (This transfer shall be made by the Allied Control Council in Germany).

vi. economic and financial matters

Provisions shall be included in the treaty implementing the United States proposal which was accepted in principle in Article XXI of the Potsdam Protocol,⁵⁵ including guarantees to Allied Nationals of access, on equal terms, to Hungarian trade, raw materials and industry. Similar provision should be made for equality of access to the use of Hungarian waterways and aviation facilities. These provisions might be limited in their duration for a period of five years.

International agreements for the control of the Danube should be confirmed by the treaty.

Whether provisions respecting other economic and financial relations should be included in the treaty should be left for later consideration. In view of the complexities raised and the large number of states involved, these might preferably be left to separate treaties.

vii. the sovereign position of hungary

The treaty should provide for the restoration of Hungarian Sovereignty and the nations party to the treaty should have no rights or controls within Hungary except as may be specifically provided in the treaty.

53. For text of the arbitral award by the Italian-German Commission regarding the cession of certain territories by Czechoslovakia to Hungary, made at Vienna, November 2, 1938, see Department of State, Documents on German Foreign Policy, 1918–1945, series D, vol. iv, p. 125. For text of the arbitral award by the Italian-German Commission regarding the transfer of northern Transylvania from Rumania to Hungary, made at Vienna on August 30, 1940, see ibid., vol. x, p. 587.
54. For text of the Berlin Conference declaration on reparations from Germany, see Section IV of the Report on the Tripartite Conference of Berlin, August 2, 1945, Conference of Berlin (Potsdam), vol. ii, p. 1505.
55. ibid., p. 1497.