CFM Files
United States Delegation Journal
USDel (PC) (Journal) 60–61
The Commission began to consider the sources of reparation in Part B of Article 64 as recommended by the four drafting powers (CP(IT/R) Doc. 34) [C.P.(IT/EC) R. Doc. 34].99 The first source mentioned was factory and tool equipment used for war purposes but not convertible to civilian use. M. Politis (Greece) mentioned that [Page 652] this source would be useless so far as Greece was concerned and M. Rueff (France) explained that Greece did not have to draw from this source. This source (paragraph 2a) was adopted unanimously.
The second source, reparation from current industrial production (paragraph 2b) was adopted unanimously. The third source “all other categories of capital goods or services” (paragraph 2c) was criticized by M. Politis on the grounds that it did not include agricultural or mining products. He recommended the insertion of the word “products” after capital goods. Mr. Thorp (U.S.) explained that the U.S. Delegation considered the problem as to how it would be possible to make reparation from Italy practical was a most important one. Italy he pointed out had not been a large exporting country and had suffered heavy losses during the war of its invisible export items necessary to its balance of payments. The formula adopted in connection with Part A regarding reparation to the Soviet Union, had been devised so that Italy would be exporting its labor on reparation account. This formula providing that raw materials would be supplied by the U.S.S.R. would have no adverse effects on the balance of payments. He pointed out that this concept had already been extended somewhat in Part B (paragraph 2 (c)) to allow reparation from capital goods and services. The addition of the word “products” he feared, would shift to reparation those goods normally exported. This would have an adverse effect on the balance of payments and thus bring about the very situation which had been avoided before. M. Aroutiunian (U.S.S.R.) said that mining products were covered by the term “current industrial production”. He also suggested the Commission defer this point and try to find some language which would cover the wishes of all Delegations. This procedure was agreed to.
Mr. Thorp commented on the U.S. and U.K. (paragraph 2(d)) recommendation, that the ownership interest held by Italian state and parastatal organizations in commercial enterprises in ceded territories should be considered a source of reparation. Both Yugoslavia and Greece were receiving ceded territories under the treaty. However, he pointed out that there were a lot more revenue producing assets in the Julian March than in the Dodecanese. Such properties as coal fields, mercury mines and similar commercial enterprises owned by Italy were located in the Julian March. For this reason the U.K. and U.S. Delegations believed that the allocation of total reparation between all claimants would be fairer if these assets were included in the reparation account. He added that the Italian assets in certain countries which had been given to Russia had been included as part of Soviet reparation. The Yugoslav and Greek representatives both opposed the addition of these properties as part of the reparation account. [Page 653] The Czech representative said that Italy had received these territories from the Austro-Hungarian Empire after the last war without having it deducted from its reparation account.
M. Aroutiunian (U.S.S.R.) then made a long speech against the U.S.-U.K. proposal for including as a reparation source ownership interests of Italian state or parastatal organizations in commercial enterprises in ceded territories. He said it was difficult to distinguish state property from private property at the present time when the state had invaded so many branches of commerce and industry. He asked how the value of such assets could begin to compare with the damage inflicted on the invaded countries by Italy. Referring to Mr. Thorp’s argument regarding the unequal distribution of these assets, he said this had not prevented the Greek Delegation from opposing the U.S. proposal. Furthermore damage was unequally distributed also. As for Italian assets in the Balkans, the Soviet Union had only agreed to accept these because they were in the territory of third countries. M. Rueff (France) expressed agreement with the Soviet viewpoint, and Mr. Summerville-Smith (U.K.) agreed with Mr. Thorp’s statement of the case.
Mr. Thorp (U.S.) replied that it would not be difficult to single out state and parastatal property in this situation. The successor state would merely have to point out to the Italian Government the property in which it was interested. He also pointed out that there had doubtless been very little state or parastatal commercial property in the Julian March during the period of Austro-Hungarian rule. Only since Italy had taken over the area had state enterprise developed. Mr. Thorp recognized that all possible sources of reparation would not be sufficient to cover damage, but he could not see why all possible sources should not be used so as to make the total payment as high as possible. The main problem was not that of determining total reparation—it was allocating the total to the several countries. It would be unfair not to take into account, in allocating reparation, the fact that territories containing valuable revenue-producing property were being ceded to some states, while others were not getting any.
The U.S.-U.K. proposal was then rejected by a vote of 13 to 7 (voting for it were the U.S., Australia, Brazil, Canada, U.K., New Zealand and South Africa).
The Commission then returned to consideration of subparagraph (c) in the quadripartite draft, and M. Rueff reported that the drafting Powers had agreed to amend the first phrase to read “All other categories of capital goods, seeds or services”. It was also proposed to add at the end of the paragraph, in order to meet the point previously raised by the Yugoslav Delegation, the following: “but excluding [Page 654] Italian assets subject under Article 69 to the jurisdiction of the Powers enumerated in para 1, Part B of this Article”. Since this might lead to doubt regarding the possibility of these countries covering their surplus reparation claims with the assets, M. Rueff proposed a new paragraph to be added at the end of Part B stating that such surplus claims would be satisfied out of the assets specified in Article 69. The drafting Powers had also agreed that “current industrial production” included mining. The Commission approved the paragraph, including these changes in principle, subject to final drafting.
The Commission then considered paragraph 3 of the draft article referring to the agreements between the Italian Government and the beneficiary governments regarding the quantities and types of goods and services to be delivered. Mr. Walker (Australia) proposed an amendment to provide for a Reparation Commission to supervise the execution of this part of the treaty. The Commission decided to consider this further at the next meeting.1
- For text, see ibid., p. 792.↩
- The amendment was proposed in C.P.(IT/EC) Doc. 94; for text, see vol. iv, p. 794.↩