Foreign Relations of the United States, 1946, Council of Foreign Ministers, Volume II

C.F.M. Files: Lot M–88: Box 2061: CFM Documents

Report by the Committee on Reparations to the Council of Foreign Ministers⁶⁴

secret
C.F.M.(46) 87

Paris, 15 May, 1946.

In accordance with instructions received from the Council of Foreign Ministers the Reparation Committee has given further consideration to the various sources of Reparation Payments from Italy to the Soviet Union. In this connection the United States Representative stated that Reparation Payments to the U.S.S.R. to the sum of Dollars 100 millions could be met from the following four sources:

1) Italian assets in Roumania, Hungary and Bulgaria.

2) Two Italian passenger vessels, the Vulcania and the Saturnia which are at present being operated by the U.S. authorities;

3) The factory and tool equipment designed for the manufacture of war implements which is not required for the permitted military establishments and is not readily susceptible of conversion to civilian purposes;

4) The part of the Italian Navy which will be transferred to the U.S.S.R.

The U.K. Representative, while lacking precise information on the value of these various assetsbelieves it to be substantial; having regard to all the circumstances, he considers that warships transferred to the U.S.S.R. should be accounted for as a Reparation delivery.

The Soviet Representative stated his disagreement to considering the Italian warships as a source of reparation since they are booty of war. At the same time the Soviet representative considers it necessary to include the current production of Italian industry as one of the main sources of Reparation.

The French Representative shares the opinion of the Soviet Representative as regard current production in accordance with the French memorandum C.F.M. (46) 20.⁶⁵

The U.K. Representative saw no reason to revise the views already expressed by him on the question of deliveries from current production.

In the opinion of the U.S. Representative, the four sources mentionned by him would provide more than 100 million dollars and therefore, it would not be necessary to consider reparations from current production. As to the use of current production as a source of reparation, he maintained the views he has previously expressed.

The following questions were considered:

1. Italian assets in Roumania, Hungary and Bulgaria may be used to cover reparation payments to the Soviet Union.

The data on the total sum of these assets submitted to the Committee by the Soviet and U.S. Representatives differ considerably. According to the information of the Soviet Representative, the Italian assets in Roumania, Hungary and Bulgaria are valued at approximately $22 million. According to the information of the U.S. Representative, the Italian Assets in these countries are valued at approximately $75 million. The British and French Representatives stated that they had no figures to put forward on this question.

2. The Italian passenger vessels Vulcania and Saturnia might be transferred to the Soviet Union on account of reparation payments. The U.S. Experts stated that the value of the above mentioned vessels after reconversion for peace time purposes would amount to $25 million. However, the Soviet Representative considers that the decision whether the vessels might be included on account of reparation payments can be arrived at only after assessment of their value and present condition.

3. The removal of factory and tool equipment designed for the manufacture of war implements which is not required for the permitted military establishments and is not readily susceptible of conversion to civilian purposes may be an additional source of reparation payments to the Soviet Union.

64. This report was considered by the Council of Foreign Ministers at its 18th Meeting, May 15, 1946, 5 p.m.; see the United States Delegation Record and the Record of Decisions of that meeting, pp. 402 and 420, respectively.
65. The text of C.F.M. (46) 20, May 2, 1946, is included as Section IV of the Report of the Committee on Reparations, C.F.M. (46) 53, May 7, 1946, p. 286.