CFM Files
United States Delegation Journal
USDel (PC) (Journal) 39
The Representatives of Canada, South Africa, India, Australia and China spoke briefly, indicating the extent of war damage caused to them by Italy and stating that they were not claiming any reparation payments from Italy. All of them recognized Italy’s limited capacity [Page 426] to pay reparation, as compared to the claims against Italy and emphasized the dangers of overtaxing that capacity, particularly in view of the claims which had been submitted by the countries which had suffered most severely from Italian aggression.
Mr. Thorp stated that the United States was not requesting any reparation from Italy although the direct war cost of the United States) was estimated at $335 billions and perhaps as much as $20 billions of this might be allocated against Italy. The total war cost incurred by the U.S. Government was approximately equal to the entire pre-war national wealth of the U.S. These costs included primarily those expenditures incurred for the subsistence and maintenance of personnel of the American armed forces, the cost of producing armaments and other military equipment, and the cost of certain measures to increase the military strength of our Allies. They did not include interest on borrowed funds, pensions and other expenses related in some way to budgetary war costs, or allowances for the disturbance of the national economy. Mr. Thorp said that the U.S. agreed that the treaty should provide for the payment of reparation to certain countries in limited amounts. He pointed out that no possible reparation arrangement could be fully compensatory, providing an offset to the costs and burdens of war. He said that reparation should not be regarded as punitive; it should be a payment by the ex-enemy countries in recognition of the tremendous costs of war for which they were responsible and the needs for reconstruction in the Allied countries resulting from the acts of the aggressors. Mr. Thorp went on to say that as an occupying power the U.S. felt certain special responsibilities and that since the Armistice, close to $1 billion had gone to Italy from the U.S. in one form or another, assisting the Italian civilian economy through this difficult period. The interest of the U.S. went beyond the point of renouncing reparation claims for the U.S. asked in return that the burden of reparation should not be transferred to it. The U.S. did not wish its assistance to Italy merely to pass through Italy and go out to other countries as reparation. The U.S. had renounced its claim but not its interest in the reparation problem. It was concerned with finding a fair and equitable balance between tremendous claims on the one hand and exceedingly limited resources on the other. The U.S. recognized that its position was not always similar to other countries at the Conference and was not suggesting that all other countries should likewise renounce their claims. Mr. Thorpe also pointed out that in some cases the U.S. would not wish to take full advantage of certain treaty provisions and referred to occupation costs as an example. He said that [Page 427] the U.S. had paid the Italian Government more than $100 million for expenditures by American troops in Italy, although Italy could be required to bear this cost under the Armistice. The U.S. realized that other nations which maintained large occupation forces in various countries might not be in the same financial position as the U.S. It had not asked other countries to take similar steps. In closing, Mr. Thorp said that the United States was withholding any claim for reparation against Italy in the interest of easing the heavy burdens which Fascism and its consequences had placed on the Italian people. The imposition upon Italy of a crushing reparation burden would militate against the restoration of international economic stability, which is an essential basis for the maintenance of peace and no country which had fought the war had any economic interest which compared with its interest in creating the conditions essential to an enduring peace.81
The Italian Representative (M. Tarchiani) then spoke at some length on his Delegation’s view of the reparation claims. He said that the Italian people had been deeply disappointed when they had heard they must pay reparation but that this news was softened when it became known the sum would not exceed $300 million. Now there were “fabulous” claims. M. Tarchiani defined the term “reparation” and named some countries that were overlooking the treaty principle that reparation should be so arranged as to avoid interference with the economic reconstruction of Italy. He gave an account of the present economic situation in Italy and then requested the Allied and Associated Powers in making their decisions: (1) to limit the right to reparation to those countries which suffered direct, actual and large-scale damages as a consequence of Italian military operations, (2) not to grant reparation claims presented by countries, to the economic development of which Italy had contributed enough to compensate for any damage, (3) to exclude the possibility of giving the economic clauses, other than Article 64 such an extensive interpretation and application as to transform other obligations of the treaty into reparation payments, (4) to determine the exact sum to which each country has a right as reparation, this sum not to jeopardize Italian economy and to come within the limits of $200 or $300 million, (5) to establish clearly for each country the ways and means of payment, giving preference to the supply of manufactured goods, and (6) to divide payment over an appropriate number of years, and above all, to grant a moratorium of at least five years.
- The text of Thorp’s statement was released to the press September 11, 1946.↩