C.F.M. Files: Lot M–88: Box 2063: US Delegation Minutes
United States Delegation Record, Council of Foreign Ministers, Second Session, Fourth Informal Meeting, Paris, May 11, 1946, 11 a.m.
Present
| U.S.S.R. | ||
| M. Molotov (Chairman) | ||
| M. Vyshinsky | ||
| Two Interpreters | ||
| U.S.A | U.K. | |
| Mr. Byrnes | Mr. E. Bevin | |
| Senator Connally | Mr. Jebb | |
| Senator Vandenberg | Sir Oliver Harvey | |
| Mr. Bohlen | Interpreter | |
| France | ||
| M. Bidault | ||
| M. Couve de Murville | ||
| M. Courcel | ||
| Interpreter |
Reparations From Italy
M. Molotov, who was presiding, stated that yesterday they had not settled the question of reparations. He added that the Soviet Delegation had nothing to add to its views, which had been set forth in writing.
Mr. Byrnes replied that the views of the United States had been fully stated, and he would not repeat them here. He said that he thought it wise to have a clear understanding as to what was meant by reparations. We were all in agreement that in the matter of reparations Italy should not be treated any more harshly than Germany. He said that he had been most impressed by the earnest appeal of the Soviet Delegation that $100 million in reparations be allocated to the Soviet Union. He thought it would be possible to send a directive to the Deputies to report on a program which would produce the equivalent of $100 Trillion from the following four sources: (1) capital [Page 342] equipment in war-making industry, (2) foreign assets of Italy in Hungary, Rumania, and Bulgaria, (3) surplus naval vessels to be received by the Soviet Union—which were war booty captured by the United States and Great Britain which could be turned over to Russia as reparation, and (4) two merchant vessels, the Vulcania and Saturnia, which were captured by the Allies and now are being used by the United States for troop transport. These vessels range from twenty-four thousand to twenty-five thousand tons, and with a little repair were estimated to be worth from twenty to twenty-five million dollars. He said that according to the estimates which had been received from the Italian Embassy in Washington, the Italian external assets in the three countries named would be nearly seventy-five million dollars, and if the Soviet share of surplus naval vessels were included, it would be possible for the four sources to find an equivalent of a hundred million dollars for the Soviet Union. He said he thought a directive along these lines could be sent to the Deputies and a satisfactory solution found. He concluded that we were still opposed to reparations from current production for the following two reasons: (1) the economic condition of Italy, which would require financial assistance abroad, particularly the United States, for some time to come, (2) that a continuing obligation extending over a number of years would be a source of irritation and argument among the Allied countries and with Italy. It would be better to dispose of the question of reparation once and for all. He said if his suggestion were adopted he thought it would be possible to fix now the sum of one hundred million dollars for the Soviet Union.
M. Molotov replied that the Soviet Delegation would be in sympathy with any settlement which would not prolong the payment of reparation, but it was necessary to deal with actual possibilities. If that were not possible, then some other means might be found, even though it involved spreading the payment over six to eight years. He did not understand why there was objection to reparations from current production. He said the amount involved was so small that it would constitute no substantial burden upon Italian economy, and that it could be paid by Italy and not at the expense of assistance from abroad. Therefore it would not adversely affect the interests of the countries rendering such assistance. He said, if spread over six to eight years, the annual amount would only be from ten to twelve million dollars. He pointed out that they had not yet reached agreement as to sources. That might require more study by the Deputies. He said he felt there was general agreement on the sum of one [hundred] million dollars to the Soviet Union. If that was the case, a positive result had already been achieved. Thus there remained primarily only the question of reparations for other countries invaded by Italy [Page 343] who were not represented here, namely, Yugoslavia, Greece, and Albania. To sum up, he suggested that the Deputies be given the following directive: (1) that one hundred million dollars should go to the Soviet Union; (2) as to sources to be studied by the Deputies, the Soviet Delegation could not accept the inclusion of naval vessels since, as decided at Potsdam, these were regarded as war booty; and (3) the Deputies should study the question of reparation for Yugoslavia, Greece, and Albania.
Mr. Byrnes replied that there seemed to be a misunderstanding. He had said that he thought from the four sources named a hundred million dollars could be found for the Soviet Union, that we could not agree to fix that sum unless it was agreed that it should come from these four sources. He said on the subject of war booty there was no general agreement that he knew of to divide it among the Allies. War booty was generally recognized as weapons of war captured from the enemy and so constituting the property of the capturing country. For example, no claim had been put in for any war booty captured by the Soviet Government. At Potsdam there had been a special agreement in regard to the naval vessels.3 He said, however, if the United States had had a claim for reparations on any of the defeated countries, and the Soviet Government had offered to make available in lieu thereof some of its war booty, we would not question as to whether it was reparations or not. He wished to add one thing further, namely, that in case the sources listed were inadequate, the Deputies might restudy the question of other sources.
M. Molotov said on the question of the naval vessels, the view that they were not reparations was not only that of the Soviet Government, but it had also been that of the other two Powers at Potsdam.
Mr. Byrnes repeated that if there was any general agreement to share war booty, it was the first he had heard of it. Potsdam had been a special case, and M. Molotov would recall that Mr. Churchill had defended the position that it was war booty captured by the Allies, and that as a special case, Mr. Attlee and Mr. Bevin had subsequently agreed to divide it with the Soviet Union.
M. Molotov stated that in view of the agreement that sources other than the four listed by Mr. Byrnes could be examined, the Deputies might be instructed to make a more detailed examination as to sources. According to Soviet estimates, Italian assets in Hungary, Bulgaria, [Page 344] and Rumania were considerably less than the United States estimate. He added that on January 13 they had received a note from the Italian Minister in Moscow expressing the desire of the Italian Government to conclude a commercial treaty with the Soviet Union pointing out that Italian industrial equipment was in sufficient state of repair to take orders for the delivery of certain types of equipment, such as shipbuilding, diesel engines, ships’ engines, electrical and steam locomotives, electrical equipment, precision and optical instruments, as well as machine tools. He said this indicated that the Italian industry was in a position to make deliveries of equipment, for which they would receive the materials from other countries, including the …4
Mr. Byrnes remarked that the Italian proposal seemed like that of a [promoter?] who had promised the Soviet Government equipment in return for raw materials, and would then come to the United States in order to obtain financial assistance necessary to start manufacturing. He said it looked like a very good proposition from the point of view of Italy and the Soviet Union, but not so good from the point of view of the United States. He asked M. Molotov to tell them the figure of the Soviet estimates of Italian assets in the three countries named.
M. Molotov replied that it was twenty-two million dollars, but he personally felt that that was too high. M. Molotov then inquired if they were all agreed that the Soviet Union should receive one hundred million dollars, and that the Deputies should examine the sources from which it could come.
Mr. Byrnes replied that the amounts from the four sources that he had indicated would be more than enough to make up the equivalent of one hundred million dollars, even taking the low Soviet estimate of the external assets, as follows:
| capital equipment | $10 | million |
| 2 merchant vessels | 20 | ” |
| external assets | 22 | ” |
| war vessels, in the neighborhood of | 50 | ” |
M. Molotov said the two specific merchant ships were a new factor, and he would have to consult his experts. As to the war vessels, the Soviet Delegation could not accept their inclusion as reparations.
Mr. Bevin stated that in looking for assets to be used for reparation, consideration must be given to the liabilities incurred by Italy for relief. He said he could not be a party to any arrangement which gave absolute priority to reparation and ignored the advances made to Italy, most of which Great Britain had had to borrow from foreign sources.
[Page 345]M. Molotov suggested that the Deputies be asked to examine the sources, but on the basis that a hundred million dollars should go to the Soviet Union.
Mr. Byrnes said he had no objection provided the sources were limited to the four he had named.
M. Molotov pointed out that Mr. Byrnes had agreed to the possibility of other sources being used.
Mr. Byrnes said that was true, but that unless the naval vessels were included, he could not agree to a sum. If there were not, the entire question would have to be restudied by the Deputies.
M. Molotov proposed that his suggested directive be amended to read that the Deputies should fix a sum of one hundred million dollars to the S.…,5 bearing in mind the necessity of determining the sources from which the amount is to come, and that reparations for Yugoslavia, Greece, and Albania should be considered at a later stage.
Mr. Byrnes replied that he had already made his position clear, and he reiterated the four sources of possible reparation, adding, however, that if an insufficient sum were available from these sources, the Deputies could look into other sources.
M. Molotov agreed that this would be acceptable, but with the Soviet reservation concerning naval vessels.
No agreement having been reached on the question of reparations, it was passed over.
Bilateral Treaties With Italy
The next question was that of bilateral treaties. At Mr. Byrnes’ request, Mr. Vyshinsky restated the so-called Soviet compromise proposal.
M. Vyshinsky said that Article 104 could be adopted with the following addition, namely, that each Allied Government may declare its desire to retain in force any pre-war treaty on the condition that there is no objection from any major Ally. He said this condition was due to the fact that there was no list of such treaties available, but that if such a list was obtained and studied, the condition might not be necessary.
Mr. Byrnes inquired why the Deputies could not get such a list, either from the Italian Government or elsewhere.
M. Molotov agreed.
Mr. Bevin stated that he felt this matter affected the sovereignty of countries, and he could not accept any suggestion that bilateral relations were subject to multilateral examination. He pointed out that under the Soviet proposal if Australia wished to review its treaty [Page 346] with Italy, it could not do so if there was an objection on the part of any one of the principal Allies.
Mr. Byrnes said he did not see why the treaties could not remain in force, since all treaties contained a termination clause.
M. Bidault said it would be difficult to renew all treaties which the war had terminated, but he agreed that bilateral treaties could not be affected by countries not party to them. He thought it would be a good idea to get a list of the treaties and see where we stood. He felt that most of these treaties related to commerce, and he foresaw no great difficulty on the subject.
M. Vyshinsky said he fully agreed with M. Bidault’s view, which was that of the Soviet Government, and suggested that they obtain a list of the treaties, study them, and then decide whether or not to leave Article 104 as it stands.
Mr. Bevin said the clause as it now stands would leave to each Allied Power the right to renew its bilateral treaties with Italy but would impose the obligation on Italy as a defeated country to accept the decision of the Allied Power concerned. It put all Allied Powers on the same footing. He suggested that the matter be left to the legal experts to find a formula. He pointed out that all treaties were registered with the League of Nations, but there might be a few which had been renewed after the last war which had not been registered.
- Regarding the tripartite agreement on the disposal of the German Navy and merchant marine, see Part IV of the Protocol of the Proceedings of the Berlin Conference, August 1, 1945, Foreign Relations, The Conference of Berlin (The Potsdam Conference), 1945, vol. ii, p. 1487. For additional documentation regarding the consideration of this subject at the Potsdam Conference, see ibid., index, p. 1616, s. v. “Germany, German Navy and Merchant Marine, disposal and distribution of”.↩
- Omission indicated in the source text.↩
- Omission indicated in the source text.↩