CFM Files
United States Delegation Journal
USDel (PC) (Journal) 59
The Commission voted on Article 28 (General Economic Relations) of the Bulgarian treaty, the result being identical with that for Rumania. Paragraphs 1a and 1b were unanimously adopted. The U.S.-U.K.-French proposal for paragraph 1c was adopted by 9 votes to 5 and the French amendment regarding civil aviation was adopted by 7 votes to 5 with two abstentions. The U.S.-U.K.-French proposal for paragraph 2 of Article 28 was adopted by 9 votes to 5.54
The U.K. proposal for Article 29 (Settlement of Disputes) was adopted by 8 votes to 5 with one abstention, the Soviet proposal having been rejected by 9 votes to 5.
The French proposal for Article 32 (Danube),55 which was identical with the proposal adopted for the Rumanian treaty, was adopted by 8 votes to 5 (Byelorussia, Czechoslovakia, Ukraine, U.S.S.R., and Yugoslavia), with one abstention (India), the Soviet proposal having previously been rejected by the same vote.
Consideration of Annex 4B (Insurance) was adjourned until the next meeting in order that a new U.K. amendment, relating to the nationalization of insurance by Bulgaria, could be circulated and considered.
Mr. Reinstein (U.S.) spoke in opposition to the inclusion in the Rapporteur’s Report to the Plenary Conference of the comments of the [Page 627] Rumanian Delegation (CP (B&F/EC) Doc 48) on the U.S. proposal to insert a new Article 24 bis dealing with the restoration of rights and interests to persons and groups who had been subjected to discrimination of a racial and religious character.56 M. Gerashchenko (U.S.S.R.) asked the U.S. Delegation to reconsider its position in view of the Rumanian observations and to withdraw its proposal. Mr. Smith (U.K.) supported the U.S. view and thought that it would be an unwise precedent to withdraw an article approved by a majority of the Commission because of the observations of an ex-enemy. The Commission approved a suggestion by the Chairman that the Rapporteur be asked to take the Rumanian observations into consideration in a condensed form in preparing his report.
The Commission then turned to the Hungarian treaty. Mr. Thorp (U.S.) spoke on the question of Hungarian reparation, and moved an amendment to Article 21 providing for the reduction of the amount of reparation to be paid by Hungary from $300 million to $200 million and for proportionate reductions in the shares to be paid to the Soviet Union, Czechoslovakia and Yugoslavia.57 He referred to the joint undertaking by the U.S.S.R., U.K., and U.S. to assist the former Axis satellites to solve their economic problems and said that Hungary’s economic problems had not been solved. He recalled that the U.S. Government had sent three notes to the Soviet Government on this problem.58 The present condition of the Hungarian economy was briefly discussed and was attributed to Hungary’s activity as an Axis satellite, which had led to serious destruction of productive capacity and to heavy Armistice obligations. It was noted that the Hungarian national income had fallen by half.
For the year ended March 31, 1946 the costs of the Army of occupation were put at about $70 million, reparation deliveries at $40 million in current prices, and requisitions at $70 million. The total, which did not include war booty removals or restitution deliveries, was $180 million, or about 35 percent of the national income for the period. With such burdens it was not surprising that Hungary’s budget was far out of balance. It was to the mutual interest of all that no econnomy, whether that of an enemy or an ally, should so deteriorate as to jeopardize even minimum living standards.
[Page 628]Mr. Thorp digressed briefly to demonstrate the absurdity of the much-publicized statement that there was three billion dollars of Hungarian property in the American zones in Austria and Germany.
The interest of the U.S. Government was in the general state of the Hungarian economy, but, as it had not been possible to work out, in accordance with Yalta, a joint program for Hungarian recovery, the U.S. Delegation wished to review the economic clauses of the treaty with the purpose of making the treaty more bearable. The U.S. Delegation was convinced of the accuracy of the statement by the Hungarian Delegation that the obligations on Hungary far exceeded its capacity to pay. The U.S. Delegation would therefore urge at the appropriate time that compensation for damage to UN property in Hungary be limited to 25 percent. The U.S. Delegation had reserved the right to reopen the question of Hungary’s reparation obligation and, convinced that this burden, which exceeded $450 million in current prices, was intolerable, now proposed an adjustment in the treaty. By comparison with the Rumanian economy, it appeared that approximate equality in burden on the two countries would be achieved if the Hungarian reparation obligation were reduced to $200 million. For both countries there would be heavy burdens, but the U.S. Delegation hoped that if constructive steps were taken to re-habilitate the Hungarian economy, it should be able to meet its obligation.59
M. Gusev (U.S.S.R.) urged that the Commission refuse to consider the amendment on the ground that the Plenary Conference had ruled that all amendments should have been submitted by August 20th.60 Mr. Thorp referred to the U.S. reservation of its right to reopen this question, stated that he had brought the matter up as soon as the Commission had taken up the Hungarian treaty, and said that it would be a great injustice to attempt to rule out an amendment on this important subject on a technicality. The representatives of Yugoslavia and Czechoslovakia supported the Soviet view and the representatives of U.K. and Greece supported the right of the U.S. Delegation to introduce its amendment. The Chairman read the relevant decision of the Plenary Conference at its meeting on August 15, stated that the amendment was not, in his opinion, such as to facilitate the work of the Commission, and asked the U.S. representative whether he would not reconsider his position and withdraw his amendment. The Commission then accepted a suggestion by M. de Carbonnel that the question be adjourned and that the Chairman consult the competent authorities of the Conference.
- Regarding the action of the Commission on article 28, see C.P. (Plen) Doc. 31, Report of the Commission on the Draft Peace Treaty with Bugaria, vol. iv, pp. 486, 494.↩
- For text, see ibid., p. 496.↩
- C.P. (B&F/EC) Doc. 48 is not printed; regarding the United States proposal, see the United States Delegation Journal account of the 28th Meeting, September 25, and footnote 46, p. 555.↩
- For substance of the United States proposal, see C.P. (Plen) Doc. 34, Report of the Commission on the Draft Peace Treaty with Hungary, vol. iv. pp. 535, 537.↩
- The notes under reference are those of March 2, July 23, and September 21, 1946. For text of the note of March 2, see vol. vi, p. 265. For texts of the notes of July 23 and September 21, see Department of State Bulletin, August 4, 1946, p. 229 and ibid., October 6, 1946, p. 638, respectively.↩
- The text of Thorp’s statement was released to the press October 2, 1946.↩
- Regarding the deadline on amendments, see the Verbatim Record of the 19th Plenary Meeting, August 15, p. 236.↩