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

Budapest Legation Files: 711.9 Peace Treaty

Memorandum by Mr. Cavendish W. Cannon, Political Adviser to the United States Delegation at the Council of Foreign Ministers, to the Secretary of State ¹³

[London,] September 14, 1945.

Subject: Soviet draft proposals for treaties with Rumania, Bulgaria and Hungary (and Finland).

Attached hereto are the texts of the Soviet proposals, to which are attached in turn the respective armistice agreements to which they refer.

General Comment. The Soviet proposals briefly amount to a project to compose treaties by lifting certain specified articles out of the armistice terms “subject to necessary drafting changes”, to be used “as a basis” for the peace treaties, with the addition of one article which would incorporate paragraphs 1 and 9 of the Berlin decisions on reparations from Germany (German assets located in the respective countries), and the further addition of an article regarding membership in the UNO and cooperation for the maintenance of peace.

It is hard to find in this project anything which meets our ideas of what a peace treaty should be. The necessary “drafting changes” would be so considerable that the most that can be said for it is that it gives an idea of the topics to which the Soviet Government attaches special importance, i.e., the project may be considered as an outline of the Soviet desiderata. In effect it reserves to the Soviet Government, and gives a permanent character to, all the advantages of the surrender instruments, thus substituting, particularly in the case of Hungary, bilateral arrangements (economic topics) for the present method where at least some small measure of joint Allied participation exists.

It may be that in presenting a document which in appearance would simplify the preparation of the treaties the Soviet Government hopes to obtain earlier and more expeditious handling of the Balkan treaties, with priority over the more elaborate procedure contemplated for Italy. From this point of view the presentation of these proposals is a manoeuvre rather than a serious set of principles for permanent good relations with these states.

It should be noted, of course, that the armistice agreements did in fact cover various points somewhat in excess of the military necessities of surrender.

Presumably the Soviet troops would be withdrawn and military control terminated, as inherent in the acceptance of a treaty. There is no definite provision for this, and the continuance of Soviet organs of control, for the fulfilment of reparations obligations or supervision of disarmament, for example, may amount to an undercover control not much less effective than the open presence of troops.

The acceptance of anything along these lines would have the effect of confirming the present situation under which these countries are under effective Soviet domination and would mean the abandonment of the opportunity for establishing democratic governments in these countries. Moreover, from the viewpoint of direct American economic interests, the proposals would make no effective provision for the settlement of substantial claims and debts owed to us by these countries, including those arising from Soviet removals of American property. There is still another economic consideration, namely, whether treaties of this type would constitute an abandonment of the agreement reached in principle at Potsdam for equality of economic opportunity in these countries.

A good idea of the Soviet proposal can be got from assembling the articles, taking Rumania as an example. The Soviet draft would then look something like this:

• Article 1. Redraft of Article 1 of the armistice, presumably as a sort of preamble.
• Article 2. Article 4 of the armistice, acknowledging the transfer of Bessarabia and Northern Bukovina to the U.S.S.R. We would probably not be in a position to have this question re-examined.
• Article 3. This would retain Article 5 of the armistice (prisoners of war, displaced persons) which seems hardly necessary in a peace treaty and which incidentally perpetuates the authority of the Soviet High Command.
• Article 4. This would be Article 6 of the armistice (release of persons friendly to the Allies and removal of discriminatory legislation). Hardly necessary in a treaty if these obligations were effectively discharged during the armistice regime.
• Article 5. This would be Article 9 of the armistice (Rumanian ships). The present language is really applicable chiefly to the period of hostilities against Germany and Hungary.
• Article 6. This is the reparations article (Number 11 of the armistice). The Soviet Union is the sole beneficiary of the amounts now fixed, other Allied states to receive compensation for losses, the amounts “to be fixed at a later date”.
• Article 7. This is the restitution article (Number 12 of the armistice). The Soviet Union being the sole beneficiary.
• Article 8. This is a more general restitution article, (Article 13 of the armistice, for “legal rights and interests of the United Nations”). This could be combined with Article 7.
• Article 9. (Article 14 of the armistice). Collaboration for prosecution of war crimes.
• Article 10. (Article 15 of the armistice). Dissolution of Fascist organizations. This Article contains a phrase making particular mention of the Soviet Union which we tried unsuccessfully to have modified at the time of the armistice negotiation.
• Article 11, would be a new provision, incorporating paragraphs 1 and 9 of the Berlin decision concerning the use of German assets in Rumania for reparations. In the final draft it would probably follow the other reparation article.
• Article 12, a new Article (probably to be inserted after the territorial provisions of Article 2) would provide for the transfer to Rumania of the whole of Transylvania, The armistice (Article 19) used the language “Transylvania or the greater part thereof …” subject to confirmation at the peace settlement. We should prefer to leave certain border districts within Hungary, for which excellent arguments can be adduced.
• Article 13, a new text, would provide for supporting Rumania’s candidacy for membership in the UNO, with a Rumanian obligation to cooperate in measures for the maintenance of peace.

As for the Articles of the armistice which are not carried over into the treaty draft, Articles 2, 3, 7, 10 and 17 are obviously identified with the surrender and subsequent military operations against Germany. Article 8 is replaced by the new Article 11. Article 16 was a censorship provision which of course could not be made permanent. Article 18 was the provision for the Allied Control Commission which thus goes out of existence with no provision for subsequent supervision of Rumania except as reserved to the Soviet Union under the agreements for reparations, etc.

The Rumanian treaty would also include an article taken from the protocol which accompanied the armistice. The text found on file in London is the first draft of the protocol, and may not be exact. This is in process of verification.

The treaty would make no mention of armament limitation, except as Article 1 mentions the “not less than 12 infantry divisions with corps troops” to be used against Germany, which provision is now patently obsolete, though for some reason it is retained.

On this matter it is important to note that the Bulgarian treaty likewise does not provide for armament limitation, whereas the treaty with Hungary is obscure on this point, since it takes over an armistice provision for demobilization and “peace footing”, though the Soviet authorities are showing special interest in the development of the “new” Hungarian army.

13. A memorandum of October 11, 1945, from Leslie Squires, Secretary of the American Mission in Hungary, for H. F. Arthur Schoenfeld, the Representative in Hungary, throws some light on the origin of this memorandum to the Secretary. Mr. Squires, who arrived in London on September 13 to work with the United States delegation to the Council of Foreign Ministers, wrote in part as follows:

    “My opinion on preliminary analysis of the proposals referred to above [C.F.M. (45) 4, September 12, p. 147] was that they represented a bilateral peace treaty between Russia and Hungary in which other Allied nations would have little or no part. The effect of the proposals would be to continue the conditions of the armistice period without even the nominal American participation provided under the ACC.

    “It appeared to me that the proposal, and the similar proposals submitted in the case of Rumania and Bulgaria, would eliminate American participation in the reconstruction of the Balkans and would guarantee to the USSR an even more important role than her physical position and power would insure.

    “This opinion was confirmed by further consideration and was found to be identical with that of Mr. Berry, as regarded Rumania, and Mr. Barnes, as regarded Bulgaria.

    “In a discussion with Mr. Barnes, Mr. Berry and Mr. Cannon it was agreed that urgent steps would have to be taken to impress the Secretary and his advisers with the reality of the Soviet ‘trap’ and the necessity of preventing acceptance of the Soviet proposals.” (Budapest Legation Files: 711.9 Peace Treaty)