740.00119 Council/7–1346: Telegram
The Acting Secretary of State to the Ambassador in France (Caffery)
3436. Secdel 473. Subject is Czech, Yugo, Hungarian, Rumanian Danube River Craft.
1. In Jan ACC Ger reached agreement on general restitution United Nations property removed from such nations to Ger during occupation. Incident to this Agreement and previous JCS directive [Page 267](WARX 85965)67a Nov 1945 which instructed OMGUS and USFA to restitute such UN property, Czech and Yugo crews, upon invitation from OMGUS and USFA took possession of some craft. Vessels were immovable at that time.
In Mar Hungary and Rumania, among others, were brought under restitution program by JCS directive WARX 99226. Also in Mar JCS directive WARX 82436 instructed OMGUS and USFA to suspend restitution barges pending further instructions. This directive based on view that Czech, Yugo, Hungarian, and Rumanian barges constituted bargaining lever vis-à-vis Soviets in US attempts to open Danube to safe and free navigation. Transfers to owning govts were suspended and permission to move vessels on which Czech and Yugo crews were already present was denied.
2. Since Mar Czechs, Yugos and Hungs have insistently requested return of barges. Protests have taken form of notes to Govt, notes to and calls on American missions in Belgrade and Praha, official press charge in Belgrade, and representations to American military authorities. Yugo charges in particular have become quite heated culminating in FonOff note of July 4 stating Yugos resolved refer to international authority matter unjustified retention Yugos barges by US Govt unless within reasonable time Yugos restitution mission Frankfurt reports possible all Yugos vessels sail unhindered to Yugos ports (Belgrade’s tel 653, July 668). Anti US press particularly in Yugo, and Austria have had field day over this alleged manifestation of US indifference to transport crises of Danubian countries. US replies to note representation ranged from statement matter would be investigated to fol Dept instruction to Embassy, Belgrade:
“US Govt recognizes in principle that property of this nature should be returned to rightful owners. There are, however, various problems involved in implementation of this policy for which satisfactory solutions must be found and to which consideration is currently being given.”
US has not explicitly stated to Soviets, Czech, and Yugo that restitution is being withheld pending agreement with Soviets which establishes freedom of movement of vessels on Danube without danger of seizure.
However memorandum handed by Acting Secretary to Hungarian Prime Minister69 on June 14 stated: “The US military authorities have been directed to defer restitution of commercial inland water craft on Danube pending the outcome of discussions which are currently [Page 268]taking place between them and Soviet authorities in Vienna with view towards establishing principles of freedom of movement of vessels on Danube under flags which they now fly without danger of seizure.” Hung PriMin’s comments this provision are contained in Budapest’s 1210, June 29  rpt to Paris as 221.70
3. Fol is text in full of Murphy tel to Dept of June 28:
“Yugoslav Military Mission has presented communication to Control Council asking for restitution of Danube barges in US zone. Communication lists steps taken in attempt to have craft restored and gives statement of Yugoslav war losses and contribution to war effort. Asks Control Council to take steps to effect their restitution.
Paper will be discussed shortly in RDR directorate. Dept will realize possibility of acrimonious debate. Urgent comments desired.”
4. Since Danubian negotiations now underway in Paris, it is suggested you advise Clay of position to take in forthcoming sessions. If you decide on frank statement along lines last two sentences para 2, above, suggest you point out that interim proposals for opening safe Danube traffic presented informally to Soviets on May 16 has not received reply. Vienna cable to Dept summarizing proposals is reptd as Part 2 this message.
5. In connection Vienna cable, note that item (3) should be changed to permit all vessels except Ger to sail under their own flag, since upon acceptance of agreement by Soviets, US would restitute Hungarian and Rumanian as well as Czech and Yugo vessels.
6. Dept not certain Secdel is informed re these negotiations which were directed to narrow point of resumption river traffic under conditions of safety and did not purport to replace discussion river regimes. Secdel may wish to refer to this US approach and, in view of Soviet press campaign, might wish to make knowledge of approach public.
7. Fol. is rept of Berlin tel to Dept dated June 19 for ur info:
“OMGUS personnel returning from Czechoslovakia where they attended ceremonies celebrating restitution of property from US zone Ger indicate that US prohibition to restitution of barges to Czechoslovakia causing adverse political developments there and seem to feel that conditions which led to this prohibition have substantially changed insofar as Czechoslovakia is concerned.
Suggested that Praha and Vienna inform Dept and Berlin of any recent developments bearing on problem.”
Sent to Secdel, Paris, rptd to USPolAd, Berlin 1516, AusPolAd, Vienna 651.