740.00119 Control (Italy)/12–1046

The Chargé in Italy (Key) to the Secretary of State

No. 4426

Sir: I have the honor to refer to my telegram No. 4347 of December 10, 1946,67 regarding the termination of Allied Commission, Allied Military Government Venezia-Giulia, the Allied Supply Accounting Agency and the Allied Financial Agency, upon ratification of the Treaty of Peace with Italy and to transmit a copy of Allied Force instructions to these agencies on this matter.

Respectfully yours,

David McK. Key
[Page 871]
allied force headquarters
g–5 section
apo 512
G–5: 910.13–3 P

Subject: Post Treaty Liquidation of Alcom/AMG Functions

  • To: Chief Commissioner,
  • Allied Commission,
  • APO 794, U.S. Army.
  • Senior Civil Affairs Officer,
  • Venezia Giulia,
  • APO 88, U.S. Army.
  • Allied Supply Accounting Agency,
  • ℅ Allied Commission.
  • Allied Financial Agency,
  • ℅ Allied Commission.
With the ratification of the Peace Treaty, all rights, duties, privileges, and responsibilities of the Allied Forces will cease. Active steps are being taken to secure sufficient rights for the Allied Forces so that evacuation may be completed during the ninety days subsequent to the Peace Treaty ratification.
All functions now being performed by the Allied Commission, including the Service Sub-Commissions; by ASAA, by AFA, and by AMG must either be terminated or transferred to permanent Civil Authorities prior to the completion of evacuation. It is probable that the full extent and complexity of terminating and transferring of these functions may not be fully known or appreciated at AFHQ. It is therefore desired that each addressee analyze the problems to be solved before his organisation may be finally deactivated, and make prompt recommendations to hasten the procedure. It is regretted that no information as to the governmental set-up for Trieste Free State can be given. It will be assumed, however, that the French line will become the international boundaries. When further assumptions are made by addressees in submitting their plans, such assumptions will be clearly stated. When recommendations are made that either the British and United States Embassies in Rome, assume duties previously performed by the Military Authorities, the views of the respective Embassies will be secured. When such views are not readily available, however, the recommendations will not be delayed beyond the limiting date. All plans and recommendations will be addressed to G–5, AFHQ and will be despatched not later than 25 December 1946.
There is attached hereto an entirely incomplete list detailing a few of the more obvious problems.
Certain special instructions of the subject of planning for the run-down of MMIA are being issued separately.

List of Obvious Problems Connected With the Liquidation of Alcom/AMG Functions

1. Disposal of funds, records, and effects held by Allied Financial Agency.

2. Maintenance of present AMG Territory.

When should shipment of CCAC supplies cease? Who handles those arriving after “R” (Ratification) Day, keeping in mind that territory now maintained will be Italian, Jugoslav, and Free State.

3. Legal.

What becomes of records of trials of those under sentence, considering that those under sentence will be in Italian, Jugoslav, and Free Territories? What undertaking, if any, will be taken by Italy, Jugoslavia, and Free State to carry out sentences imposed by present courts including AMG Courts?

4. Funds in Venezia Giulia.

What disposition made of funds now in AMG (so called State Treasury) custody? Presumably the right of AMG to collect or disburse funds, to hire and purchase, and to cover payrolls ceases on R Day except from national funds provided by the Allies. Therefore, all employees, including public servants, paid from Allied (AMG) funds must be discharged or their pay otherwise obtained.

5. Service Sub-Commissions.

You will work on the assumption that these will cease on R Day.

6. Liaison with Italian Government.

Presumably this will no longer be an Allied function, and each military high command will have direct liaison with the Italian Government only in connection with the rights which may be granted in national agreements, somewhat on the order of the previous Military and Civil Affairs Agreements.

7. Displaced Persons.

This subject is under active consideration at all levels and no recommendations need be made in this respect at this time.

8. Allied Supply Accounting Agency.

Close down or transfer duties.

  1. Not printed.