CFM Files
Memorandum of Conversation, by Mr. Robert D. Baum of the United States Delegation
| Participants: | M. Coste, Opposition Rumanian Group |
| Mr. Thorp and Mr. Reinstein |
Subject: Reparations and General Economic Relations Articles of Rumanian Treaty
Mr. Coste presented his group’s views on the Reparation and General Economic Relations articles of the Rumanian Treaty. He said that Mr. Molotov had forbidden any Rumanian criticism in public of treaty matters affecting the U.S.S.R., even such problems as a more [Page 266] exact definition of German property or compensation for transit privileges mentioned in Article 21.
Reparations. Mr. Coste urged that Rumania not be left by the Treaty to deal with her creditors individually. He favored a provision for the creation of a Reparation Commission similar to the one created after World War I, to deal with the reparation-restitution question as a whole. It should review the whole subject of deliveries and payments made since the Armistice and determine whether some of those made on other accounts should be credited against Rumania’s reparation obligation.
He pointed to some of the devices of interpretation whereby the Soviet Union, in the absence of an international reviewing authority, had created a crushing financial burden on Rumania. The establishment of the reparation obligation, for instance, on the basis of 1938 prices had resulted in Rumania’s paying $90 million in current dollars during the first year, almost twice the amount specified in the Armistice. In handing over “German” property, Rumania not only had lost much that was actually Rumanian but also had to pay for the repair and packing of such property and even for its transportation within Russia. Under the restitution provisions the Soviets, after agreeing in 1945 that the goods already returned were worth 348 billion lei, later set their value at only 170 billion lei and required Rumania to make additional deliveries to fill the difference.
Mr. Reinstein asked how far the Rumanian Government was willing to make the facts on such matters available to the United States. Mr. Coste, referring to Mr. Molotov’s objections mentioned above, indicated that Rumania under its present Communist Government would not disclose much information. Mr. Thorp asked whether the Rumanian representatives, if they appeared before the Economic Commission and were asked concerning deliveries, would make a satisfactory reply. Mr. Coste said that their answer would probably be general and evasive.
Mr. Reinstein indicated that inasmuch as Rumania’s only reparation obligation was to the Soviet Union, one could not argue for a reparations commission by use of an analogy to the situation after World War I, when there were many countries which had to deal with Germany. He said, however, that there would probably be expert committees organized under the committee of three ambassadors provided for in the treaty.
Mr. Coste said that he was thinking of a commission which would deal with restitution and restoration of property as well as reparation. Mr. Thorp felt that one difficulty with a reparation commission would be that it might unduly prolong the final settlement by lengthy investigations. The United States was anxious for a quick, final settlement. [Page 267] Mr. Reinstein said that at one time such a commission had been envisaged but that it had been lost in the process of negotiations.
Mr. Coste, in reply to Mr. Reinstein’s statement that it would be difficult for the United States to propose the establishment of the reparations commission, said that he believed the proposal would be made by some other delegation. Mr. Thorp said that the United States would certainly not seriously oppose the suggestion of such a body which would bring out in the open the facts on Soviet action.
General Economic Relations. Mr. Coste said that his group hoped that the most-favored-nation provision would be retained in the treaty in a form which would apply more generally than simply to trade relations. They also hoped it would be retroactive so that it would apply to the Soviet economic agreements, thereby giving Rumania grounds for freeing herself from obligations made during an armistice period when her full sovereignty to make an agreement might be questioned. Mr. Reinstein indicated that the most-favored-nation provision applied to existing as well as to future agreements. To the extent that they did not conform to the general principle, they could be attacked.
Mr. Thorp indicated that although the United States was in favor of the suggestions made by Mr. Coste they were in an area of fighting beyond which the United States believed its aim could be achieved. Mr. Reinstein said that the big problem was that in public the Rumanians never objected to the arrangements with the U.S.S.R. Without formal complaints or data which are agreed to by Rumania, the United States had little on which to work. Mr. Coste said that was why his proposal for a reparation commission would be valuable. It would enable the participants to examine all the facts.