Memorandum by the Assistant Chief of the Division of British Commonwealth Affairs ( Fales ) to the Chief of the Division of British Commonwealth Affairs ( Wailes )

There is attached copy of an Aide-Mémoire 1 left by the British with General Hilldring,2 stating that after June 30 they will no longer be able to pay for their share of civilian supplies now being furnished to the population of Udine and Venezia Giulia. The British add that they would be prepared to contribute their agreed share through the United Nations to the Free Territory of Trieste (which comes into being only after the Italian treaty is implemented).

At a meeting in General Hilldring’s office on May 7, the following questions were raised:

Is the British position firm, or should we endeavor to obtain further British financial participation.
Should we suggest that the British provide commodities or participate financially on the basis of their UN contribution instead of the present fifty-fifty dollar basis.
Should the United States discontinue aid to the civilian population.
If the United States assumes one hundred percent of the civilian costs, do we desire that British troops remain and continue to share the policing responsibilities.
If the British troops remain, as they are apparently prepared to do, do we desire a change in the joint command from British to US.
Until the treaty is implemented and the Free Territory of Trieste is established under UN, there is no responsibility of UN. An agreement reached in Moscow provides that the Governor of Trieste (who is not yet appointed) can request the Secretary General of UN for funds to meet a deficit, but there apparently is no prospect of enlisting UN aid until the treaty is implemented.

Recommendation. The present arrangement of sharing the cost on the fifty-fifty basis covers the year 1947. In 1946 Britain paid one quarter of the cost. It is recommended that we go back at the British in a attempt to get them to agree to sharing the cost either on a one to four basis, or on some formula to be worked out on the basis of their UN contribution with reference to US contributions to UN. Their present contribution to UN is in the nature of three to our ten.

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Your views would be apppreciated as General Hilldring will shortly call another meeting with a view to preparing a memorandum to the Secretary.3

Herbert P. Fales
  1. Not printed.
  2. Maj. Gen. John H. Hilldring, Assistant Secretary of State for Occupied Areas.
  3. Handwritten notations at the end of this document read:

    “J D H—I feel (1) It is our duty to the American taxpayer to make at least a small effort to get the British to contribute on the 1946 basis (about $ 4 million); (2) If this fails, and I think it will, we should then assume the financial burden as we have in Greece; (3) British troops should remain; (4) Command of joint troops might be shifted to U.S. if our War Dept wants it. T[om] W[ailes]”

    “I concur W[alter] D[owling].” “I concur J[ohn] D. H[ickerson]”