CFM Files
United States Delegation Journal
USDel (PC) (Journal) 69
Mr. Beasley (Australia) said that the Australian Delegation could not agree to a forced transfer of thousands of persons against the [Page 820] wishes of the receiving country. He hoped for the success of the Czech-Hungarian negotiations. Australia, Mr. Beasley said, felt there was danger in carrying bilateral economic agreements with the ex-enemy states too far. The ex-enemy states should be encouraged to trade with countries all over the world. There should be no attempt to create regional self-sufficiency artificially. No victorious neighbor should be put in a position to dominate the economy of an ex-enemy state. Australia would support the clauses of the treaty which would prevent economic discrimination.
Mr. Beasley said that the Danube should serve not only to unify the countries along its banks but should form a canal for the commerce of the whole world. The principle of international control of Danube navigation should be accepted by the Conference and plans made for such control as soon as possible. Mr. Beasley said that no definite figure for reparations payments by Hungary could be accepted by Australia. The figure suggested for Finnish, as well as Hungarian, reparations was also too high and needed to be reconsidered. Mr. Beasley thought that bilateral agreements on reparations were dangerous and regretted that the reparation authority suggested by his Delegation had not been accepted. However, he hoped that the system adopted by the Economic Commission for Italy by a 12–9 vote could be applied, in the case of Hungary. If prices of products for reparations payments were set too low by bilateral agreement, it would result in reparations much higher than those agreed to. Mr. Beasley concluded by saying that there should be provision for revision of the treaties should it seem necessary.
M. Gousev (USSR) spoke for the Soviet Delegation on the Treaty with Hungary. The main point of his discourse was that the Germans and Szalasists had taken $3 billion worth of property out of Hungary as the Red Army advanced into the country. He gave some detailed statistics to show what property had been removed. He said that he had recalled these facts so that the Conference could understand the basis of current economic conditions in Hungary. He said that the Soviet Union had been unable to accept the United States proposal for a commission composed of the UK, the USSR, USA and Hungary to plan for the reconstruction of Hungary because it would have deprived the Hungarian Government of the right to direct the economic life of their country. He asked the United States to return the property taken from Hungary which he had mentioned above. He wondered if the refusal of the United States and others of the Economic Commission to accept the Soviet proposal for Article 26 on the restitution of Hungarian property meant that this property would be used as an instrument of political pressure on the democratic government of Hungary.
[Page 821]He said in rebuttal of the United States argument that the reparations claims against Hungary were too heavy, that in 1945 Hungary had sent 10.5 million worth of goods to the USSR and had received in return $6.3 million worth of goods. This meant that Hungary was only paying $4.2 million worth of goods to the Soviet Union. He said that furthermore there were excellent and well-established understandings between the USSR and Hungary on the question of reparations and that they should not be disturbed. He asked the Conference to accept the Soviet proposal for Article 25. He would not repeat the arguments previously put forward with regard to navigation on the Danube but said that his Delegation would oppose the UK and US proposals for Article 33.
Mr. Thorp (US) said that the figure of $3 million fixed for reparations to be paid by Hungary was too high and that the US Delegation would vote against Article 21, although it would not press its amendment to reduce the figure to $2 million. He said that the responsibility undertaken by the USSR, the UK and USA at the Yalta Conference to solve the economic problems of the former Axis satellites had not been met in the case of Hungary. Mr. Thorp referred to the expression used by M. Spaak “collective prosperity”. He subscribed to the idea put forward in this expression. He showed by a comparison of the levels of production in six key industries of the year 1938 and the present that the economy of Hungary was still far from its former condition.
Mr. Thorp showed that there was no further need to state the damage done to Allied countries as a basis for reparation claims. He said that it would not affect the situation if the damages could be proved to be twice the amount asserted or if they were reduced one half. He opposed the idea that the Armistice and other agreements established the final right to reparation. He said that if they did, there would be no need for a reparation article in the peace treaty. He showed that the Soviet argument that the failure of the US to restore the property taken from Hungary was the chief cause of Hungary’s economic difficulties was without basis. He asked how the figure of $3 billion claimed as the value of this property could be justified when the total wealth of Hungary was considerably less than $10 billion, most of which was in land and buildings. The circumstances under which this amount of property was alleged to have been removed made it impossible to believe the estimate of such a large figure.
He thought that a modification of the reparation agreement would help international good will rather than hurt it as had been stated. He concluded by saying that the US vote against Article 21 would [Page 822] represent the unwillingness of the US to approve the Article in its present form rather than opposition to the principle of reparation.47
Mr. Alexander (UK) drew the attention of the Conference to the speeches of the Czechoslovak, United States and Australian Delegates on the Hungarian Treaty. He said that those speeches disclosed sentiments with which Great Britain agreed heartily. He said that the UK would support a transfer of the Hungarian minority from Czechoslovakia which did not transgress humanitarian principles. He agreed with the statement of the US Delegate to the effect that an improvement in the economic health of Hungary would contribute to the general prosperity of Europe and elsewhere in the world.
- For text of Thorp’s statement, see Department of State Bulletin, October 27, 1946, p. 746.↩