CFM Files
United States Delegation Journal
USDel (PC) (Journal) 59
The French Delegation withdrew its proposal for Annex 4B (Insurance) in view of the discussion of the question in the Commission’s previous meeting. The U.K. representative put forward a new proposal under which Bulgaria would be required to enter into direct negotiations with the United Nations concerned regarding the compensation to be paid for those UN insurance interests which were nationalized by Bulgaria. M. Gerashchenko (U.S.S.R.) opposed the provision on the ground that a provision providing for settlement outside the treaty should not be included in the treaty and that the provision was unnecessary. The Soviet proposal to reject an insurance annex was defeated by 7 votes to 5 with two abstentions and the U.K. proposal was adopted by 6 votes to 5 (Byelorussia, Czechoslovakia, Ukraine, U.S.S.R. and Yugoslavia) with three abstentions (U.S., France, and India).
The Commission considered a new French proposal (CP(B&F/EC) Doc 60) providing that Bulgaria should facilitate rail transit through its territory and negotiate reciprocal agreements with its neighbors on this subject.69 M. Gerashchenko opposed the proposal as not suitable for inclusion in a treaty of peace. The Yugoslav representative also opposed the proposal and the Greek representative supported it. The Commission approved the proposal by 9 votes to 4 with one abstention.
The Chairman read a letter from the Secretary General regarding the admissibility of the U.S. amendment to Article 21 (Reparation),70 [Page 634] in which the Secretary General stated that there was no absolute rule preventing the Commission from admitting such an amendment introduced in the course of the debate. The Secretary General noted that the practice of the Commissions had been very liberal in such matters. M. Gusev again spoke at some length against the admission of the amendment, basing his argument on the Plenary Conference decision of September 26 regarding the speeding up of the work of the Commissions.71 Mr. Thorp (U.S.) noted briefly that it would be extraordinary if the Commission did not discuss Hungarian reparation and that the discussion would not be prolonged because of this amendment. M. Bartos (Yugoslavia) spoke against the admission of the amendment and proposed that the matter be referred to the CFM (as had been done by the Italian Economic Commission in the case of Annex 3 of the Italian treaty), for a discussion of the substance of the problem would completely upset the Commission’s plan of work. In reply to the Chair’s question as to whether he would accept the Yugoslav proposal and reserve his right to reopen the question of the amount in, the CFM, Mr. Thorp said that the amendment had been put forward in the hope that it would facilitate agreement. If the amendment were withdrawn, those who agreed that $300 million was too heavy an obligation would have no choice but to vote against the Article. If it was the will of the Commission that a decision should be taken on the basis of these extreme alternatives, the U.S. Delegation would withdraw its amendment. The U.S. Delegation believed that Hungary should pay reparation, and should pay heavily, but that it should not pay $300 million. He stated that he thought the Commission should decide whether the amendment should be admitted. The Commission then voted to admit the amendment by 8 votes to 5, with one abstention.
M. Hajdu (Czechoslovakia) asserted that Hungary’s difficult economic position was not a result of the burden of reparation but of the deliberate and voluntary actions of the Hungarian Government which had induced its own difficulties in order to win the pity of the world. He challenged anyone’s right, by a simple vote, to upset the bilateral agreement voluntarily concluded by Hungary and Czechoslovakia and providing for the payment of $30 million to Czechoslovakia over a period of six years.
M. Gusev (U.S.S.R.) spoke at length in opposition to the U.S. amendment. He concentrated his attack on the large quantities of Hungarian property which were located in the U.S. zone of Germany and Austria, stating that there were 1,320 locomotives, 4,964 railroad [Page 635] passenger coaches, more than 50,000 freight cars, the entire equipment and raw materials of 415 important Hungarian factories, and large numbers of livestock. If the U.S. Government really wished to help Hungary to reconstruct its economy, it would return this property but it was unable to cite any data on the restitution of the property to Hungary. The U.S. Government had freely accepted the Armistice Agreement, the terms of which were reproduced in Article 21 of the treaty, reserving only the right to raise the question of reparation if it appeared that the interests of the U.S. were suffering under this settlement. The U.S. Government had made no proposals whatsoever as to measures to facilitate Hungarian reconstruction, although the Soviet Government had indicated its willingness to have such proposals submitted to the ACC. He challenged the data on the value of reparation in current dollars. He referred to the Soviet-Hungarian agreement lightening the burden of reparation by prolonging the period of payment and asserted that the Hungarian Government had not objected to the reparation settlement. He concluded by discussing present economic conditions in Hungary and stated that heavy industries were now operating at 70–90 percent of pre-war production and that the Hungarians had good possibilities of economic development.
Mr. Walker (Australia) regretted that it was not possible to investigate carefully Hungary’s capacity to pay, described the reparation settlement as modest by comparison with damages suffered by occupied countries, but stated that the result of such inquiries as had been possible indicated that the U.S. proposal more closely approximated Hungarian capacity to pay than the original proposal and should be supported.
M. Bartos spoke against the U.S. proposal on the grounds that it was prejudicial to good relations between Hungary and its neighbors and that the settlement of this problem should be left to those who were concerned, stressing in this connection that Yugoslavia and Hungary had freely concluded an agreement regulating the payment of reparation by Hungary.
The Commission adjourned at 1:55 a.m.
- For text, see C.P.(Plen) Doc. 31, Report of the Commission on the Draft Peace Treaty with Bulgaria, ibid., pp. 486, 495.↩
- Regarding the United States amendment, see the United States Delegation Journal account of the 39th Meeting, October 2, p. 626, and footnote 57, p. 627.↩
- See the United States Delegation Journal account of the 27th Plenary Meeting September 26, p. 569.↩