Office of the Historian

740.00119 Council/10–1246: Telegram

The Acting Secretary of State to the Ambassador in France (Caffery)

secret
us urgent
Washington, October 12, 1946—1 p.m.

5502. Secdel 1112. Personal for Matthews79 from Hickerson.80 The action of the conference81 in approving by two-thirds majority clause in Rumanian and Bulgarian treaty providing for free Danube navigation and establishment of permanent Commission suggests possibility that we should take advantage of this development to settle Danube barge question, at least to the extent of returning Zecho, Yugo, Hungarian, Rumanian and Bulgarian vessels now held in US zone. It may be that we have extracted the maximum bargaining value from our retention and we could perhaps capitalize on return of barges to a greater extent now than we can at some later date. Winant tells me that our position in ECOSOC was none too popular and the favorable votes obtained with some difficulty. Furthermore, we are on the receiving end of considerable criticism in the press because of shortage transportation and need of barges whether or not Danubian agreement reached.

The restitution envisaged would still leave approximately 400 exenemy vessels including Austrian under our control for use in later negotiations. Furthermore, Yugo assets now in US greatly exceed US claims and retention of Yugo vessels for this purpose is unnecessary as we could state that Yugo gold assets in US are being kept blocked against claims.

I realize that Soviets may eventually veto Danube clauses irrespective of conference rules thereby leaving us with a noble gesture and no result. Also this plan might be interpreted as a weakening of our general position and thereby affect the treaties. If there is danger of that, I would favor holding the barges until Hell freezes over. Frankly, however, in this question we have a bear by the tail and if we have exhausted bargaining power of barges we should be thinking of a satisfactory way to get out from under. Eur thinks this may be a good time and there may be no other opportunity for a long while. This telegram is a suggestion and not a recommendation since we here haven’t the whole picture. If you agree and the Secretary approves we think action should be taken immediately. Because of President’s previous interest, we would clear with him. [Hickerson.]

Acheson
  1. H. Freeman Matthews, Director, Office of European Affairs, Political Adviser at the Paris Peace Conference.↩
  2. John D. Hickerson, Deputy Director, Office of European Affairs.↩
  3. This is a reference to the Paris Peace Conference, July 29–October 15, 1946.↩