Foreign Relations of the United States, 1946, Paris Peace Conference: Proceedings, Volume III

CFM Files

United States Delegation Journal

October 4, 1946, 3:30 p.m.

USDel (PC) (Journal) 61

The Commission resumed consideration of the 4 Power draft on reparation for countries other than the Soviet Union.¹¹ Paragraph 4 providing that the reparation receiving country should furnish raw materials for Italian manufactures for reparation deliveries, was approved unanimously after the Greek representative had pointed out that Greece, having few raw materials, would not be able to make much use of the provision. Paragraph 5 (definition of dollars) was also approved unanimously. The Australian representative then proposed that para 6, which in the draft stated that the Four Ambassadors should determine the value of Italian assets to be transferred to the beneficiary governments, should be amended to give this function to the Reparation Commission. M. Aroutiunian (U.S.S.R.) objected vigorously and charged the Australian Delegation had tried from the very beginning to undermine the agreement of the CFM on this Article, and had succeeded in doing so at this morning’s meeting because of the support given the Australian proposal by some members of the CFM. Mr. Thorp (U.S.) said that in this particular instance the Soviet representative was right (i.e. the provision regarding evaluation of assets by the Four Ambassadors was an agreed provision) and he would vote against it. The Australian amendment was defeated by a vote of 11 to 8, and paragraph 6 was approved unanimously.

The Commission at Mr. Thorp’s suggestion reconsidered the changes approved in principle at the night session on October 3, in paras 2 (b) and (c), and agreed to change (b) to read: “Italian current production including production by extractive industries”. It was also agreed to make a comparable change in Part A of the Article. The Commission also approved adding at the end of (c): “The delivery of capital goods under this paragraph may include seeds”. (This replaced the amendment tentatively approved at the October 3 night meeting; the other amendments, to subparagraph (c) and for an additional paragraph 7, were not modified).

Part C, a U.S.-French-U.S.S.R. proposal providing that deliveries from current production might be made during the first two years if made in accordance with agreements between Italy and the other governments, was then considered. Mr. Summerville-Smith (U.K.) said this was contrary to the spirit of the CFM agreement on Part A, and said he was opposed to any further weakening of the protection afforded the Italian economy by the two-year moratorium. M. Aroutiunian said the CFM had merely agreed to refer this provision to the Conference as a proposal of the U.S., U.S.S.R. and French Delegations, the U.K. Minister having been opposed to the provision. He said the provision would be in the interest of Italy as well as the receiving countries and emphasized its application depended on the agreement of Italy. Mr. Thorp said it was entirely consistent to propose to give this option to Italy to make earlier deliveries if it so wished, and stressed that Italy was fully protected by paragraphs 3 of Parts A and B. Mr. Wilgress (Canada) opposed the new proposal, stating he feared the Italian Government might not be strong enough to resist offers which might be made and might agree to deliveries earlier than was desirable.

With a drafting amendment, Part C was approved by a vote of 14 to 6.

Paragraphs 1 and 2 of Part D were approved unanimously. (These referred to claims of Powers other than those specified in Parts A and B and provided these claims would be met out of assets subject to their jurisdiction under Article 69 and out of ownership interests of Italian nationals resident in Italy.)

The last paragraph (CP IT/R Doc 34) [CP(IT/EC) R.Doc.34] as amended by the U.S., which provided that rights granted under Articles 64 and 69 covered all claims of the Allied and Associated Powers against Italy except those based on Articles 65 and 68, was approved unanimously by the Commission with a reservation on the part of the Greek Delegation. M. Politis (Greece) recommended an amendment to this paragraph to cover the case of the Italian debt to Greece contracted during the war over and above occupation costs. In view of opinion expressed by the drafting powers that the recommendation was too extensive and imprecise, M. Politis withdrew his amendment and made a general Greek reservation to Article 70 of the treaty.¹²

Discussion was then opened on paragraph 1 of Part B (CP IT/R Doc 34). Mr. Summerville-Smith said the drafting powers had had a great deal of difficulty evaluating the claims of the nations having suffered Italian occupation and relating the claims to the realities of the Italian economic situation. The British Delegation, however, recommended the following allocations, Albania, nil; Ethiopia, $25 million; Greece, $100 million; and Yugoslavia $100 million. He emphasized that he could only justify his recommendation on the grounds that he wished to reach agreement quickly. He really considered Greece should receive a higher figure relative to Yugoslavia in view of the fact that Greece had been the first country attacked, that the Italian assets in Greece were not as valuable as those in Yugoslavia, and that Greek recovery not so rapid. However, he wished to reach an early settlement and had, therefore, recommended equal figures.

Mr. Thorp explained that his feelings coincided with those of Mr. Smith on reparation and that he had hoped he would be able to present an agreed recommendation with the British representative. However, as he had pointed out during the previous evening’s discussion, the U.S. Delegation felt very strongly that Italian assets in the ceded territories should be taken into consideration in assessing the claims. The assets in these territories ceded to Yugoslavia were considerable, much greater than those in Greece whereas Albania and Ethiopia were receiving no territory from Italy. While fully realizing that the reparation would only be a fraction of total damage the U.S. Delegation recommended no reparation to Albania, in view of the very extensive Italian investments in Albania, $25 million to Ethiopia, $100 million to Greece and $80 million to Yugoslavia. M. Manuilsky (Ukraine) suggested that U.S. and U.K. denial of reparation to Albania was most unjust. He did not know of any figures which indicated Italian assets in Albania were greater than those in Ethiopia. The recommendation for Yugoslavia, a country which it had been estimated at the Paris Reparation Conference,¹³ had suffered twice the damage suffered by Greece, was manifestly unjust. He asked that “unfortunate incidents” between the U.S. and Yugoslavia should not be allowed to interfere with a considered judgment of the true merits of the case.¹⁴ This question he said should not be decided in a hurry.

M. Bartos (Yugoslavia) said the recommendations made by the U.S. and U.K. were disastrous, incomprehensible and unjust. Allied statesmen had promised the reconstruction of Yugoslavia for its sacrifices during the war. The Yugoslav Delegation could not accept the result of the recommendation of the U.K. and U.S. and wished to formally state its claim of $400 million as a minimum claim.

The representative of Albania emphasized Albania’s sacrifices, struggles and suffering and reminded the Commission of promises to make good the damage suffered. He said he did not feel the U.S. and U.K. statements were seriously considered.

M. Politis indicated that the theory behind reparation was concern on the part of the U.S. and U.K. to protect the economic recovery of Italy rather than any concern over consideration for Greece. He cited statements of Italian authorities which indicated how little Italy had suffered as a result of the war and how much better off Italy was than Greece.

11. For the draft, C.P.(IT/EC) R. Doc. 34, see vol. iv, p. 792.
12. See C.P.(Plen) Doc. 26, report of the Commission, vol. iv, pp. 338, 364.
13. Regarding the Paris Reparations Conference, see footnote 65, p. 170.
14. Presumably a reference to the forcing down of United States aircraft by Yugoslavia in August, 1946; for documentation, see vol. vi, pp. 867–978 passim.