CFM Files
Memorandum of Conversation, by Mr. Jacques J. Reinstein of the United States, Delegation
Mr. Zilber is the second-ranking official of the Rumanian economic staff. He is a Communist. He called to discuss in general terms the economic provisions of the Rumanian Treaty.
Mr. Zilber asked for information on American claims against Rumania, with particular reference to provisions of Article 26 regarding Rumanian property in Allied countries. He was informed that the United States has until recently not solicited the filing of claims by American citizens and that we are not in a position to state at the present time how extensive these claims are. He was informed that they probably relate principally to American property in Rumania, although there might be some claims for personal injury suffered by American citizens.
Mr. Zilber thought that any claims of this character would not be likely to amount to more than $5,000,000, as compared to the total of Rumanian assets in the United States of about $20,000,000. He asked what would happen to Rumanian assets and was informed that any assets of Rumania after the satisfaction of American claims would be returned to Rumania. Mr. Zilber asked whether the assets taken for satisfaction of claims would be those of the Rumanian Government or Rumanian private individuals. He was informed that the United States Government would undoubtedly wish to obtain the views of the Rumanian Government regarding this subject and, in general, to work out the arrangements for the satisfaction of claims on some mutually agreeable basis within the framework of the Treaty to the greatest extent possible. It was explained to him that our principal interest is in obtaining satisfaction for the claims of private individuals, for settling the claims promptly and for obtaining some method of arbitration which would permit a fair and prompt resolution of the disputes.
Mr. Zilber indicated that this general approach was understood and appreciated by the Rumanian Government. He went on to say that the Rumanian Government considers the provisions of the American proposal regarding compensation for damage to Allied property as fair, with two exceptions. The first is that the Rumanian Government feels that any damage sustained by Allied nationals after the Rumanian armistice should be settled on the same basis as the war damage claims of Rumanian nationals. The second point relates to paragraph 4, D, of Article 24 of the Rumanian Treaty (U.S. proposal). [Page 43] Mr. Zilber said that this provision, which defines the damages connected with the war for which compensation is to be made, goes much too far. He thought that it should include such matters as loss of profits and similar claims, some of which are included in the British annex on petroleum.
Mr. Zilber said that the Rumanian Government had in mind proposing a compromise between the United States and Soviet proposals which would adopt the United States proposal with the exception of the two points mentioned above. He asked whether the United States would give consideration to such a proposal. He was informed that, while we would of course give consideration to any proposal submitted to us, the draft provisions to which he had referred affected the interests of countries other than the United States and had been proposed in all of the treaties. They are not specifically directed at Rumania. He was informed that, in so far as his first point was concerned, the United States would find it difficult to make any distinction based upon the date of the armistice or which omitted damages which our property suffered under the armistice regime. With regard to the second point, he was told that, while subparagraph D of the American draft of Article 26, paragraph 4, is broadly phrased, we did not consider that it would place any unreasonable obligations on Rumania; in particular, we think it is entirely reasonable that injuries suffered by our property as a result of the action of the Rumanian Government should be compensated for and that the exact definition of what constitutes injury will necessarily have to be worked out in the application and interpretation of the Treaty provisions.
In the course of the discussion, reference was frequently made to the position of the oil companies. It was made clear to Mr. Zilber that the United States Government is not satisfied with the treatment which the Rumanian Government is according to the oil companies and that this matter would undoubtedly be taken into account in working out the disposition of Rumanian property in the United States. Mr. Zilber claimed that all measures which had been taken regarding the oil companies had been taken on a non-discriminatory basis as between foreign and domestic companies. He alleged that the American companies would have no further interest in Rumania and would not take any particular pains to maintain and develop their properties. He did not blame them for this, as he considered that the production of petroleum in Rumania is on the decline and has little future in the long run as compared with other areas.
There was a brief discussion of the question of the Rumanian bonded indebtedness in connection with Article 26 of the Treaty. Mr. Zilber was asked what the intentions of the Rumanian Government [Page 44] are with respect to Rumanian bonded indebtedness. He said that the Rumanian Government would pay its obligations to American bond holders, if some arrangement could be worked out under which the obligations could be refunded. However, he said that the Rumanian Government would not wish to agree to any arrangements under which bonds held in other countries could be made eligible for such treatment. He was told that in so far as dollar bonds are concerned, any refunding arrangements would necessitate the taking of certain steps with the Securities and Exchange Commission and that it would be difficult to make any distinction in these arrangements on the basis of the nationality of the bond holder.