CFM Files: Lot M–88: Box 105

Paper Prepared in the Department of State 1

secret

Subject: US. policy in respect to the implementation of the peace treaties with Bulgaria, Hungary, and Rumania.

problem

The Balkan peace treaties went into effect September 15. From past experience in these countries and as indicated by the current attitude and conduct of their communist-controlled governments, we can hardly expect any satisfactory execution of the treaties from the US point of view. In fact, it is to be anticipated that the treaties will be violated both in letter and in spirit. We also have reason to believe that the USSR will exercise a veto, (presumably in connection with the obligation of the Heads of Mission to “act in concert”) during the preliminary eighteen months of the treaties in order to prevent any action being taken by other treaty signatories detrimental to the interests of the Soviets or their satellites. The human rights clauses of the treaties are already being ignored. Futhermore, we expect little or no cooperation from the Balkan Governments or the USSR in our efforts to carry out our commitments in respect to the military clauses.

As long as there appears a possibility that the US will sometime release the ex-enemies’ assets now blocked in this country, there may [Page 324]be some efforts on their part to settle American claims. However, the treaty countries will not hesitate to discriminate against us in favor of the USSR in economic matters and they will not permit the existence of American business interests in Eastern Europe to stand in the way of current programs towards complete nationalization of their economies. For that matter US companies still operating in the Balkans, albeit unprofitably, are fast coming to the realization that their properties will sooner or later be seized by the state and that a claim for adequate compensation for expropriation is now their sole recourse.

action taken

(1)
In accordance with our obligations under Part 4 of the Treaties we have withdrawn our forces (Allied Control Commission contingents) and have so notified the governments concerned. We have also returned our representatives’ unused local currencies and are in the process of restituting both diplomatic and private property in accordance with the Treaty’s terms.
The Soviet Government has publicly announced withdrawal of occupational troops from Bulgaria, and we have no evidence at the moment to prove conclusively the contrary, although there are indications that Soviet Army personnel have remained in a civilian capacity.
(2)
We have pointed out to the Bulgarian Government that dissolution of the Agrarian Party by legislative action is a denial of the fundamental freedoms guaranteed in Treaty Article 2 and expressed our “expectation” that the Government will repeal the law which in our opinion violates the treaty.2 A completely unsatisfactory reply was received on December 6.
(3)
We have taken similar action in Rumania, and expressed the opinion that the trial and sentence of Maniu and members of the Peasant Party is a violation of the treaty. The Rumanian Government has refused to entertain our protest on the grounds that it is an interference in the country’s internal affairs.3
(4)
Questionnaires have been submitted to the three governments requesting information on the status of and the future plans for military, air and naval establishments. The Bulgarian Government has twice refused to supply this information unless it is requested by the three Heads of Mission acting in concert. Hungary has done likewise, [Page 325]but Rumania has evidenced a willingness to give military information “when available.” We have asked the Bulgarians to assure us that their armed forces are not over treaty limits and have received an indirect and unsatisfactory reply. We have attempted to carry out our obligation under Article 12 of the Bulgarian Treaty (inspection of the Greco-Bulgarian frontier), but the Soviets have rejected our invitation to participate in an inspection and the Bulgarians have refused to cooperate in the inspection on the subterfuge that we are not acting in concert with the USSR.
(5)
The Department has dispatched full guidance to the field for implementation of the economic clauses, and legal experts have been sent to each Mission. Meanwhile, private US war damage claims are being prepared and filed.
(6)
The three governments have been notified of the pre-war treaties we wish to retain in force.4
(7)
A Treaty Committee has been established in the Department for the purpose of coordinating policies for implementing the treaties.

conclusion

The US is neither in a position where it can effectively force the satellite governments to live up to their obligations under the peace treaties, nor can it from a realistic point of view continue to maintain much longer, under present conditions, the concept of American business enterprises as economic outposts in these countries. However, the fact that the US is carefully observing treaty fulfillment or lack of it will help to extend the record of Soviet and satellite violation of agreements and may to some extent, as a harassment, deter the achievement of Soviet objectives.

recommendations

The Department should

(1)
continue its efforts to obtain fulfillment of treaty obligations in respect to all clauses, but keep fluid its approach to treaty violation in each instance. Emphasis should be placed on satisfaction of American claims, and fulfillment of the political and military clauses as distinct from the general economic clauses.
(2)
vigorously prosecute claims of US citizens for war damage while continuing to freeze ex-enemy assets in the US until (a) claims are satisfactorily met and (b) adequate compensation assured for any expropriation of American property.
(3)
protest and publicly condemn violations of the treaties, keeping before world opinion the continued efforts of the satellites and the [Page 326]USSR to evade their obligations under the treaties, whether in letter or in spirit.

  1. The source text bears the handwritten notation: “approved by Sec”. A copy of the identical text bears a cover sheet with the following notation: “Prepared in SE and approved by the Secretary April 15, 1948”. (Lot M–88, Box 105, Treaties, General) An earlier and slightly different draft of this paper was submitted by the Division of Southern European Affairs to the Committee for Implementing Treaties of Peace with Countries of Southern Europe (Treaty Committee) as document TIC D–5, March 26, 1948. TIC D–5 was considered by the Treaty Committee at its 3rd Meeting, March 31, 1948. The substance of paper was included in the April 7, 1948, issue of Current Foreign Relations, the classified policy-information summary prepared in the Executive Secretariat of the Department of State and circulated in the Department and to Missions abroad.
  2. Regarding the note under reference here, see telegram 445, October 18, 1947, to Sofia, Foreign Relations, 1947, vol. iv, p. 185.
  3. For documentation regarding the concern of the United States over the arrest, trial, and subsequent conviction of Iuliu Maniu, leader of the Romanian National Peasant Party, for alleged conspiracy against the Romanian state, see ibid., pp. 493 ff.
  4. See the editorial note, p. 302.