Foreign Relations of the United States, 1946, Council of Foreign Ministers, Volume II

C.F.M. Files: Lot M–88: Box 2080: CFM Minutes

United States Delegation Minutes, Council of Foreign Ministers, Third Session, Second Meeting, Waldorf-Astoria Hotel, New York, November 5, 1946, 3:30 p.m.²¹

November 5, 1946, 3:30 p.m.

secret
USDEL(CFM) (46) (NY) 2d Meeting

(The meeting convened at 3:35 p.m.)

Hearing of the Yugoslav and Italian Representatives

M. Couve de Murville: The Secretary General has informed me that the Yugoslav representative, Mr. Simic, is ready to appear before the Council tomorrow, Wednesday, at 10:30 a.m., if that date and time are agreeable to the Council. The Italian Ambassador Tarchiani is also ready to state his case before the Council tomorrow afternoon at 2:30 or 3:00 p.m., and will also be agreeable to attend the meeting tomorrow morning when the Yugoslav representative will state his case.

Does the Council agree to the suggestions of the Secretary General, namely to hear Mr. Simic tomorrow morning at 10:30 and Italian Ambassador Tarchiani tomorrow afternoon at 3 o’clock?

Soviet Request Regarding Meetings on November 6, 7

Mr. Molotov: The Soviet Delegation has a request which concerns our meetings tomorrow and the day after tomorrow. Owing to the fact that we have our national holiday on the 7th of November and I personally shall have to attend a reception in Washington, we should like to ask you not to hold, if there is no pressing necessity for this, our meeting on November 7, and as to our meeting tomorrow we should like to ask you that this meeting be held from, say 10:30 until 2 o’clock. If, however, it is found necessary to hold the meeting on November 7, then I should like to ask that Mr. Vishinsky be permitted to carry out my duties as the member of the Council.

M. Couve de Murville: I think that we should first lay down tomorrow’s agenda. Would there be any objection to Mr. Molotov’s suggestion, namely to have the meeting at 10:30 in the morning and the meeting will last long enough to hear, first, the Yugoslav representative, Mr. Simic, and after that the Italian Ambassador, Mr. Tarchiani.

Secretary Byrnes: Mr. Chairman, I think we should agree with the request of Mr. Molotov as to Thursday. I think as to tomorrow that we should agree to that request, that we stay in session until 2 o’clock. If for any reason the Italian representative, well, I can think of no reason, if he can be ready at 3 o’clock he can be ready at 1 o’clock, and we ought to meet at 10:30 and stay in session until he has had a chance to be heard. It is all right.

M. Couve de Murville: Does the British Delegation also agree to this agenda for tomorrow and the day after?

(Mr. Bevin nodded his head affirmatively.)

M. Couve de Murville: Then, I’d like to add, on behalf of the Secretary General, considering the limited capacity of this table, each delegation should confine itself to four representatives around the table instead of five.

This is settled. We can go on with our work already begun yesterday, namely consideration of the recommendations of the Paris Conference concerning the Italian peace treaty.

Article 64, Part B (Italian Treaty) (Reparations Commission)

M. Couve de Murville: We have considered Part B of Article 64, relating to amounts of reparations to be paid by Italy, and we have left this question. Now we arrive at point C of Article 64, dealing with Australian proposal with a view to setting up a reparations commission.²² This proposal has been adopted by 12 votes against 9.²³

Mr. Molotov: As far as I understand, not all the countries that are concerned are in sympathy with the proposal.

M. Couve de Murville: At the Paris Conference, regarding the countries represented here, the United States and the United Kingdom voted for this proposal and France and Russia against it.

Mr. Bevin: On the part of the United Kingdom Delegation, we are so strongly in favor of it that we think without some machinery of this kind, reparations might produce very great difficulties. We think this ought to be written into the treaty. I think a piece of machinery like this set up will facilitate the implementation of the reparations obligations. Without it one agreement may cut across another agreement, while the great powers, having reparations treaties in front of them will be enabled to insist upon the agreement handed out. We think it is a good thing. It will enable us to see that the obligation imposed by the treaty is faithfully adhered to.

M. Couve de Murville: As regards the French Delegation, if we voted against the proposal it is not because we were opposed to the idea of the necessity of having such machinery to control the implementation of the program of reparations, but the French vote was cast for two other reasons: first of all, because we consider that the problem was already covered by agreement between the four powers. Moreover, it seemed to us that the four Ambassadors were quite competent to insure the control and implementation of the program of reparations and I wonder whether we couldn’t settle this question now by stating more precisely what the powers of those four Ambassadors shall be.

Mr. Molotov: The Soviet Delegation voted against this proposal for the very same reasons which have just been mentioned by the French Delegation. We hold the view that we ought to take into account also the fact that not all the countries immediately interested in this question are sympathetic with the proposal and that they do not find it necessary to set up a commission to deal with that problem, and therefore, we think it will be possible, we hope it will be possible for us to reach an understanding as to the settlement of these questions through the four Ambassadors—the disputable questions.

Secretary Byrnes: Mr. Chairman, the United States Delegation was of the opinion that some such machinery must be provided for the execution of the terms of the treaty. We provide that reparations shall be made from various sources, for instance, a share of the Italian factory and tool equipment which is not required by the military establishment. The Soviet Government should say that they would like to have a certain plant manufacturing certain tools turned over to them on account of reparations, and the Yugoslavs might say well, we’d like to have the same plant, we also claim it. I don’t see how Italy is going to decide. Somebody would have to determine a question of that kind and this amendment provides it shall be determined by the four governments here represented; but you are providing for a representative of the four governments here represented, they shall constitute the reparations committee. I don’t care whether they have that committee, a reparations committee, or the Ambassadors if they are given the power, but it you are going to give it to the Ambassadors the only provision in here now for the supervision of the Ambassadors is restricted to eighteen months. It would have to be amended in that particular. I was going to say that if the Council decides to substitute the Ambassadors that we could say the Italian Reparations Commission shall consist of the four Ambassadors together with the representatives of each of the other countries entitled to reparations under the provisions of Part B of this Article, and give to the Commission thus constituted the powers that are given by this recommendation. I think it would be entirely satisfactory.

Mr. Bevin: The difficulty about this is that this kind of problem is bound up in the Article referred to by you, Mr. Chairman, and in all of the other clauses dealing with disputes, the one concerned with the mixed tribunal or the other articles (Articles 72, 75 and 76²⁴) and there is no agreement on them. We will have to settle this or we shall come back on it again immediately under the other articles which are disputed.

While Article 75 is agreed for its limited purpose, directly you expand it you are bringing in all the difficulties found elsewhere for final decision.

M. Couve de Murville: Of course, this question of powers conferred on the four Ambassadors is extremely complex and complicated since it appears that several articles of the Treaty, in the powers conferred in each of the articles, are slightly different as regards the time for which those powers shall be conferred on the Ambassadors, and even regarding the functions of themselves.

Moreover, Article 75 is a general provision which has been agreed upon and which we have not come back to, conferring certain powers for eighteen months on the Ambassadors. It depends upon if Article 64, paragraph 6, would find that the Ambassadors have certain powers with a view to determining the value assets. We wonder whether we couldn’t state more precisely the powers which should be conferred on the four Ambassadors as regards the control and implementation of the reparations program.

The French delegation would suggest something along those lines: “The four Ambassadors in consultation with the heads of the diplomatic missions of the interested countries shall coordinate and control the implementation of the provisions of Part B of the present Article.” This might be inserted in Article 64.

Mr. Molotov: I should like to add that the establishment of such a commission will hardly be helpful in the settlement of the question of reparations because this commission is to have only advisory powers. On the other hand, the Council of Ambassadors will be able to carry out its functions with the same amount of success because its work will be better organized, because this Council will deal not only with this question alone, but it will enjoy prestige in Italy. It seems to me that the settlement of the reparations question between Italy and the countries themselves is entirely possible within eighteen months, and therefore it is not necessary to extend the term of the work of the Council.

Mr. Bevin: I think Mr. Molotov will agree that the program of reparations is to go on for seven years. How will eighteen months settle it?

Then there is the question which will come up in the next clause, the question which involves competition between countries if there are agreements to be made for deliveries during the period of the moratorium. That also arises. That goes for two years. The thing hasn’t been reconciled.

Then with regard to the Chairman, I understand Mr. Molotov said that you could rotate the four Ambassadors as we do here. I agree, but supposing they don’t agree. Are they to go on having meetings like this Council does and never agree, or what is to happen? We therefore are anxious that there shall be finality if there is a dispute. I think in all these articles that really wants to be cleared up.

In all these Articles, from 72 onwards, it really wants tying up and have one broad method of dealing with it. We are agreed on nothing. It doesn’t seem to me that by trying to adapt this one, giving up the Commission at this stage and substituting something else, really settles the problem. We will have to debate it all again at each stage. We are in the same difficulty under each heading.

I don’t make it a fundamental principle about the Ambassadors, but I can’t support, as Mr. Byrnes suggested, substituting Ambassadors for other persons within the reparations Commission. I raise the fundamental objection, trying to clear the whole of this thing up on Article 64.

But the Chairman’s suggestion does not give them (the four Ambassadors) the power to really settle differences unless the word “control” means that, which I don’t think he claims, and with this short time of study I couldn’t really say “yea” or “nay.” As to adhering strictly to the principle of not using the Ambassadors instead of other persons I would not hold the Council of Foreign Ministers up for a minute on that one point. But I can’t give up that part of the decision of the Conference unless I see the whole thing in its proper setting.

Mr. Byrnes: Mr. Chairman, I think we can agree that Article 75 does not give to the Ambassadors the power to settle disputes.

It says that the Ambassadors shall give to the Italian Government such guidance, advice, and clarification as may be necessary to insure compliance with the treaty. It does not say that the Italian Government need accept the advice or the guidance.

It certainly does not say what shall be done in case Greece and Yugoslavia did not agree as to the allotment of either current production or capital assets.

And it does not say what would be done in case the Ambassadors did not agree.

It says that the period in which they have even the right to advise shall not exceed eighteen months, and then it says in another place in the treaty that current production does not begin until two years will have elapsed. Therefore, they will have lost any powers that they have before any production is started.

If I understood Mr. Molotov correctly, he was under the impression that in the eighteen months they could—the Ambassadors could make decisions as to fundamental matters, but I submit to him that they might not do it. Furthermore, even if they would make some agreement as to the current production which would begin six months after the Ambassadors lose their powers, if the Soviet Government a year or two years afterward, wanted to change its reparations from the production of machinery to something else, and Greece wanted it, and Italy did not know what to do about the claims, there is no machinery provided to settle a dispute of that kind.

I do not care what machinery is adopted. I would be disposed to agree with the suggestion made by the representative of France, which is really in accordance with the suggestion I made a while ago, that instead of appointing members, independent members, of a Reparations Commission, give to the Ambassadors the power to make the decision so that we will not leave a source of irritation among the several claimants who are granted reparations under the treaty.

Mr. Molotov: As to the Soviet Union, the question of the establishment of a Reparations Commission does not, as we know, concern the reparations for the Soviet Union, but this concerns a number of other countries.

As to the term of duty of the four Ambassadors, that has been fixed at eighteen months. This term could be extended in the case of reparations to seven years, but the Soviet Delegation has believed that it will be possible to make settlements regarding reparations between the interested Governments and Italy within the period of eighteen months, and these agreements will remain in operation for seven years.

In the long run, as far as this particular question of reparations is concerned, the term of the four Ambassadors could be extended to seven years, and this was exactly the case, the proposal we made when we discussed Article 76. The difficulties which we have pointed out, difficulties Which may be encountered in the work of the council of the four Ambassadors will not be removed if the Reparation Commission is set up. They will remain. Otherwise, we shall have to arrive at the conclusion that the commission should make its decision by a majority vote, decisions for other countries involved. If the Commission is to make its decisions on the principle of unanimity, the difficulties far from being diminished will on the contrary increase as there would be more people on the Commission. And, to sum up, I think that it will be a good thing for us to adopt the proposal made by the French representative and to instruct our deputies to work out the details of this question, in particular the term of office of the four Ambassadors as far as this Reparations case is concerned.

Mr. Bevin: Mr. Chairman, I would like to ask Mr. Molotov whether I understood right. I thought that he said that if this Committee of the four Ambassadors vote by a majority vote, then the matter would be simplified, but if it has to have unanimity that then the difficulties would be increased.

Mr. Molotov: I did not say that. What I said was that the Ambassadors should make their decisions on the principle of unanimity, and if a Commission is set up, the Commission should also make its decision unanimously, but if someone thinks that the Commission could make its decisions by a majority vote, then this will be entirely unacceptable.

Mr. Bevin: In the first translation it did not sound that way and I wanted to be quite clear as to what was said. I wanted to be quite clear.

Mr. Molotov: We have understood each other well.

Mr. Bevin: I want to be quite clear.

M. Couve de Murville: I think we have covered the question as far as it was possible here. Are there any objections to Mr. Molotov’s proposal to refer this question to the deputies with a view to studying it with reference in particular to the French proposal?

Mr. Molotov: It is not quite the suggestion I have made. What I have suggested is that we should take as a basis the French proposal and that we instruct our deputies to work out the details of the questions, in particular to settle the question, to consider the question of the term of office of the four Ambassadors in respect to this reparations question.

M. Couve de Murville: I have no objection whatever.

Mr. Byrnes: I have no objection to it. I am entirely satisfied with the recommendation of the Conference and would prefer to see that recommendation adopted, but I have no objection to sending it to the deputies under the circumstances.

Mr. Bevin: Mr. Chairman, I have no objection to this going to the deputies, but perhaps I have a misunderstanding about words. I do not want it to be taken I have absolutely agreed to the French proposal until I see it as it comes back from the deputies in relation to the Article. It may have perhaps a new approach, a more simple approach, than the Commission, and if it works in, I shall not stand in the way. I have not had time to study it in relation to all the other Articles, 64 and so on, and I am quite willing to send it to the deputies on that preliminary view and express the hope that we might get a solution from them.

Article 64, Part C

M. Couve de Murville: Of course everyone has a right to reserve his position until he sees the final wording and I think that under the circumstances we might pass on to the following question in Article 64 dealing with early deliveries.²⁵

We have a recommendation of the conference on this point, which was adopted by 14 votes against 7. I think that the objections were mostly on the part of the United Kingdom Delegation.

Mr. Bevin: The clause acquired authority through a two-thirds vote in the Conference. I withdraw the objection.

M. Couve de Murville: Then we may consider that this recommendation is accepted by the Council of Ministers?

Mr. Bevin: I was very—I ought to say that I was very strong on this in Paris. I do not propose to stand in the way in spite of that. I confess that it will impose great difficulties on Italy, but in spite of that I withdraw the objection.

Secretary Byrnes: Mr. Chairman, I think it might be noted that this is the first recommendation of the Conference to be adopted.

Mr. Bevin: Britain still leads in some things.

Mr. Molotov: We wish her as much success in the future.

Article 67, Paragraph 2

M. Couve de Murville: We welcome this happy event and pass on to the following recommendation which deals with Article 67. May I come back for a moment and ask about 64, Section D. There is a paragraph 2 which was adopted by the Conference unanimously, but the Conference expressed the wish that this paragraph 2 should be the subject of a more thorough consideration by the Council, and I think there is no reason to come back to it, but we might simply refer this paragraph 2 to the Economic Committee.

Secretary Byrnes: I’d like to ask the Chairman whether the Conference adopted a recommendation that this particular Article receive further study.

M. Couve de Murville: No, it’s not the Conference. It’s the Drafting Committee.

Secretary Byrnes: I am sure that it was. We agreed to take up the recommendations first, then return to other matters.

M. Couve de Murville: Mr. Byrnes is right. We will come back to this point when we wish to deal with questions that haven’t been the subject of recommendations by the Conference. Under those conditions, the next recommendation of the conference deals with Article 67, paragraph 2, dealing with German assets in Italy.²⁶ This Article has been adopted by the Conference by 14 votes for, 4 against, and 3 abstentions.

Mr. Molotov: The Soviet Delegation objected to this item at the Paris Conference, but the Soviet Delegation considers it possible to accept this item if my colleagues are insistent on it, with the following amendment. Namely, I suggest that at the end of this paragraph, the following words be added, “in accordance with paragraphs 3 and 8 of the decision of the Berlin Conference regarding the reparations from Germany.” If we add those words, which recall the decisions already adopted by us in the past, the Soviet Delegation is prepared to accept this paragraph in this article and hopes that it will be possible for to reach agreement on this paragraph.

Secretary Byrnes: What is the object of the amendment?

Mr. Molotov: The object is to avoid contradiction between the decision of the Berlin Conference and this Article.

Secretary Byrnes: Well, Mr. Chairman, I would want to read, then, from the Potsdam Agreement, to see what the contradiction is.

Mr. Bevin: Couldn’t we know which part of the Potsdam Agreement it is?

Mr. Molotov: Reparations from Germany, paragraphs 3 and 8. I can explain how the matter stands. This Article 67 refers to the Western Powers occupying Germany whereas paragraph 3 of the decision regarding reparations from Germany on the same subject refers both to the Western occupying powers as well as to other countries entitled to reparations. I think, therefore, that as far as substance is concerned, apart from this amendment, what was contemplated is exactly the same thing that is stated in paragraph 3 of the Berlin decisions regarding reparations from Germany. However, in spite of this, this Article 67 is somewhat differently worded than paragraph 3 of the Berlin decisions, and therefore it will be useful for the sake of accuracy to have a reference to paragraph 3 as well as to paragraph 8 of the Berlin decision which states that the USSR is not concerned in those matters.

Mr. Bevin: I think this raises a very difficult decision and one can’t see all the ramifications at the moment. The Potsdam Agreement lays it down where the U.S. and U.K. and other countries are entitled to receive reparations from, that is, the Western Zone but the responsibility for distribution of those assets is up to the occupying powers. Now, if these words were inserted here, it extends or at least limits the power of the occupying powers as far as I can see as to the distributors of the assets, doesn’t it? The meaning of these words runs contrary to the position as taken at the Paris Conference in which all these reparations in the Western Zone were worked out. I should have no objection to giving these words to the deputies so that we might have an opportunity to look into the implications of it, but I wouldn’t like to adopt it right away. When we agreed to this at Potsdam, I understood that relatively we were in the same position in the Western Zone—that the U.S., the U.K., and France would handle these reparations and dispose of them in exactly the same way the Soviet Government takes its reparations and deals with them in the Eastern Zone. Therefore, I wouldn’t like to see an insertion of words which puts us in an inferior position in the Western Zone in determining the disposition of these things than there is the Eastern Zone, because the spirit of this thing intended was that we would rank equally in our methods and have freedom in our methods of dealing with them.

Mr. Molotov: The proposal of the Soviet Delegation does not affect in any way the rights of the Western powers occupying Germany that are contemplated by the Potsdam Agreement. Moreover, our proposal is intended to keep entirely intact the language of Article 67 which says that the distribution of assets in Italy may be determined by those of the powers occupying Germany which are involved to dispose of German assets in Italy, and this Article keeps the wording of Article 67 entirely intact and all the rights will be reserved to Great Britain and other Western powers occupying Germany. Our proposal does not introduce any new restrictions. It only recalls the decisions of the Potsdam Conference contained in paragraphs 3 and 8.

Mr. Bevin: I am sorry to press this, but in the other treaties, I see there is no reference to Potsdam at all, and it does mark this one up.

Mr. Molotov: Article 25 of the Rumania treaty contains a reference to the Allied Control Council in Germany, as well as Article 23 of the Bulgarian treaty contains a reference to this and I do not suggest that such references be made as are not required.

Secretary Byrnes: Mr. Chairman, I must confess that I do not understand the necessity for the amendment. All that this provision says is that Italy agrees to facilitate, to hasten, the transfer of German assets in Italy which are determined by the occupying power and it doesn’t attempt to change anything that is in the Potsdam agreement. It simply says that Italy shall turn over, and turn over promptly, the assets determined by those occupying powers. Now, I am sure we agree, if it has nothing to do with the Potsdam agreement, what is the necessity for citing certain provisions of the Potsdam Agreement? We don’t intend to change it—no one of us. We have many agreements among ourselves and the Potsdam agreement is one of them. Italy is not a party to the Potsdam agreement and I just don’t see the relevancy here of referring to certain sections of the Potsdam agreement in a treaty with Italy. I am just afraid it would be confusing. It would lead one to think that by this language we are seeking to place a different interpretation upon the language of the Potsdam agreement when we have no such intention.

Mr. Molotov: I should like to state, in order to explain our proposal, as follows: this Article does not affect the interests of the Soviet Union, but it affects the interests of certain small states which are mentioned in paragraph 3 of the Potsdam decision but which are not mentioned in Article 67 of the treaty and we have heard statements to the effect that relevant decisions of the Potsdam Conference will be strictly observed, and therefore, the Soviet Delegation withdraws its proposal for amending this Article and the Soviet Delegation does not wish to lag behind Great Britain and therefore hopes we shall be able to reach agreement.

Article 68, Paragraph 4

M. Couve de Murville: Then we may consider that paragraph 2 of Article 67 has been accepted by the Council and pass on to the following recommendation. This recommendation deals with paragraph 4 of Article 68, namely the question of compensation for damages inflicted on United Nations property in Italy.²⁷ I have here a recommendation which has been adopted by 13 votes to 6 with two abstentions. It is the question of the percentage of compensation which shall be accorded for damage inflicted on United Nations property.

Mr. Molotov: If, in the previous paragraph we took the part of Great Britain, then in this paragraph we take that of the United States.

Mr. Bevin: Of course, Mr. Chairman, I appreciate the generosity of these two great powers. I understand the Soviet Union is not affected by this clause here and in the case of the United States they have far more assets than the damage, so they are both not affected. But in our case, we were also attacked by the enemy and United Nations nationals property was damaged in London and elsewhere We are levying on our people in the villages and the hamlets in the country where they weren’t bombed—and in addition we are paying the taxation of the country, and altogether for our own nationals and foreign nationals the bill runs into nearly 2,000 million pounds. We have to rebuild all our homes and we are rebuilding other people’s property at postwar prices. If we only get a partial compensation where our nationals had their property destroyed abroad, then I suppose we should be expected to pay the difference and that, I think, is a very unfair proposition and I want to assure my two colleagues who are taking this very generous view that there is nothing in our country that there is greater resentment about than there is over this compensation that we shall be called upon from our taxpayers to finance in foreign currency for our nationals in another country. While I appreciate the merit of the generosity of UNRRA, it is well to remind my colleagues that while our country suffered so much for six years of war, our contribution to UNRRA is equal to one and four pence on the pound. That is a tremendous weight on our people’s wages.

We have also been approached by Italy to deal with the relief debts which we are sympathetically considering and many other things that they are desirous to write off.

On this particular point there is great soreness because they feel they have been singled out to be treated differently than they are called upon to treat foreign nationals in our own country.

We pressed for the 100% with the Conference but the majority voted for 75%. I announced from the rostrum that I would accept, on behalf of the British Government, the figure voted for. Therefore, with the vote of 13 to 6, with 2 abstentions, we voted for the figure of 75%, and with the British Government’s willingness to accept the decision of the Conference I hope the Council of Foreign Ministers will endorse it.

M. Couve de Murville: I must say that the French Delegation has exactly the same position as the United Kingdom Delegation and this for the same reasons. We had for a very long time insisted on the full compensation of 100%. When this proved impossible, we proposed ourselves an intermediate solution of 75% compensation for damage. This proposal has received, maybe not a two-thirds majority, but anyway an important majority, and we insist very strongly on its acceptance by the Council of Ministers.

Mr. Molotov: When the Soviet Union raised the question of reparations from Italy then it was a question of compensation to the amount of 5% of the actual damage cost to our country. The proposal for 25% compensation is many times higher than the one allotted to the Soviet Union by way of reparations. Moreover, Great Britain is to receive Italian assets which may be used by her to compensate far and away above 25% and this means that Great Britain is better off in this case, much better off than the Soviet Union with her insignificant reparations.

Mr. Bevin: If we take the money involved in compensation for our nation’s cities, the total damage done to Great Britain the cost of the reparations we could have taken is about a thousandth of one per cent. We have written off all claims, practically, except these. I would remind the Council that monies left in Italy as compensation for our own nationals create assets in Italy.

Secretary Byrnes: Mr. Chairman, we have discussed this matter many times and we cannot agree. I suggest that we pass it.

M. Couve de Murville: I think there is nothing else to do if we cannot reach agreement now.

Mr. Bevin: I must, however, point out that because of feeling in Great Britain on this subject I must ask my colleagues for reconsideration before we reach the end of the treaty. We too have elections.

Article 69

M. Couve de Murville: The next question is Article 69. There was a recommendation with a view to adding three paragraphs, E, F and G to this Article. I suggest that we leave aside paragraphs F and G which relate to a question which was not discussed by the Conference, namely, Annex 3 dealing with property in ceded territories. We might dispose now of paragraph E regarding literary and artistic property rights on which the Conference has reached a unanimous decision except for an abstention of the United States Delegation.²⁸

Secretary Byrnes: Mr. Chairman, I join the concession class.

Article 71

M. Couve de Murville: We may then consider that paragraph E has been adopted by the Council and pass on to the recommendation dealing with Article 71. This question has already been discussed several times by the Council. It deals with an exception to the most favored nation treatment in the case of state enterprises.²⁹

Mr. Bevin: Mr. Chairman, there is the question of duration.

Mr. Molotov: The Soviet Delegation suggests that we adhere to the decision which has been agreed to in the Council of Foreign Ministers, namely, 18 months. Any change made in this respect will raise a lot of new questions and will complicate the consideration of the Treaty after the lengthy discussions that have taken place. It seems to us more appropriate to adhere to the decision which has already been agreed upon.

Secretary Byrnes: Mr. Chairman, may I submit to the representative of the Soviet Government this view: In this matter the four members of the Council voted against the proposal. Notwithstanding, the Conference obtained 12 votes for it. That shows that there must have been very strong sentiment among our allies for it, and I wonder if we couldn’t agree to compromise that difference and instead of 18 months make it 2 years.

Mr. Molotov: One has to pay attention to the results of the vote that was taken on this question. The results were 12 votes as against 4 and 9 abstaining. If two who voted for had changed their minds, the results would have been just the opposite.

Secretary Byrnes: And if two had changed their minds the other way it would have been a two-thirds vote. I maintain that whenever anybody can get 12 votes for a proposal which was opposed by the Soviet Republic, United Kingdom, France and the United States they are doing pretty good and are entitled to some consideration.

Mr. Bevin: When this was originally discussed somebody suggested 3 years, somebody one year, and we compromised at 18 months. I suggest that we make a really accurate compromise by making it 2 years and please the Conference. Canada took a very strong position on this matter and I thought that Canada was very helpful in the conference. It would please Canada to make it 2 years.

Secretary Byrnes: I confess I do not recall the United States position on this question. But unless there is some very strong reason against it I will go along and add 6 months in order to make the Conference feel a little better.

Mr. Molotov: At one time we insisted on 1 year and now we consider 18 months as thoroughly sufficient.

Article 71, Paragraph C

M. Couve de Murville: Since we do not agree I think we should pass on to the next question, namely, paragraph C of the same Article. Two recommendations have been voted upon by the Conference regarding this paragraph.³⁰ The first paragraph by 12 votes to 5 with 4 abstentions, and the second subparagraph received 15 votes to 5, with one abstention.

The first paragraph deals with monopolies in general and the second with the particular question of civil aviation.

Mr. Molotov: The Soviet Delegation supports the proposals that it made in the past. We had occasion to point out that the question of civil aviation, as it is raised in the draft treaties, touches upon the sovereignty of a state. We think that we should avoid anything in the Treaty which is likely to impair or to affect the sovereignty of Italy, more particularly in such questions as civil aviation, which is connected with the defence of the country. Of course, it will be natural and proper, as far as the rights of a foreign state in another country are concerned, to leave the solution of this question to the discretion of the state in question and not to settle it by giving orders.

Inasmuch as we recognize the fact that Italy shall join the United Nations, we should display reserve as far as the question of defence is concerned and should pay attention to the needs and rights of Italy. We think it is not possible to settle the question of civil aviation without affecting the sovereign right of the Italian State.

As to the branches of Italian economy, where there is no private enterprise it is clear that we should not present any requirements or any demands which will be considered by Italy as unacceptable. In any event, we should leave the settlement of this question to Italy’s discretion and we should not require Italy to grant any rights to any foreign state.

I should like to add that if we look at the actual situation as it is now, we see that Italy has already concluded air agreements both with America and Great Britain, and Italy concluded those agreements with America and England without being forced to do so. Italy also has made an offer to the Soviet Union to establish a Soviet-Italian air line. Such being the situation, there is no reason to write a provision into the treaty that Italy should grant rights to operate air services to any country that may wish to have them. It is sufficient that Italy has been willing to conclude such agreements without being forced to do so, and we think it will be incorrect to force, to compel, Italy as far as this question is concerned since this question is connected with the defense of the country.

As to the branches of Italian industry, where there is no private enterprise, we should not impair the right of Italy to act as she sees fit. It will be incorrect to force Italy to obey orders from foreign countries. There is no reason to suppose, to assume that Italy will display any reluctance in this respect, and therefore the Soviet Delegation declares in favor of its proposal, namely, that the principle of the most favored treatment should not apply to those branches of industry where there is no private enterprise and that it is the legitimate right of Italy to act in this case at her own discretion.

Mr. Byrnes: Mr. Chairman, first I must say that in this treaty there are many things that impair the sovereignty of Italy. I do not think it can properly be said that this is an interference with the sovereignty of Italy because we do not require Italy to do anything. We simply provide that she shall not discriminate against any country.

When we say that Italy shall not grant an exclusive or discriminatory right as to aviation, we think that is absolutely right. When the United States is granted a right, we think Italy should be required then to grant an equal right to the Soviet Republic, or to the United Kingdom, or to France, or to any other Government. That is all that we have sought to do by this civil aviation provision.

My friend says that equal rights were granted to France and the United Kingdom and that Italy offered the Soviet Republic the same rights. That is all right for France and the United Kingdom, the Soviet Republic and the United States, but how about the little Governments? Fifteen of them voted for this recommendation. Those little states might not be granted the same rights. Therefore, we ought to provide that Italy should be required to do it. If she grants rights to the Big Four she should grant similar rights to others.

I call attention to only two other things: First, that by the language in the treaty this provision is enforced for only 18 months, and the other point is that Italy, when it came before the Conference, never once complained about a provision requiring it to treat all alike.

Mr. Bevin: Mr. Chairman, wouldn’t it be better to stop at the word “Italy” rather than to include the qualification at the end. The first words are sufficient. It says: “…Nationals of the United Nations including juridical persons shall be granted national and most favored nation treatment in all matters pertaining to commerce, industry, shipping and other forms of business activity in Italy.”³¹ If we could leave it at that, it would be much better. If we nationalize an industry and it belongs exclusively to a state, then the situation is quite clear. As far as Great Britain is concerned, we are nationalizing industries and we are relying on similar words.

Mr. Molotov: What passage have you in mind?

Mr. Bevin: The USSR proposal and the UK, USA and French proposals are exactly the same in the beginning. Then we proceed to insert qualifying words about nationalized industry.³²

Mr. Molotov: But it is these two lines that constitute the amendment which we are discussing.

Mr. Bevin: There are two amendments. I was suggesting that both parties drop them.

Mr. Molotov: We cannot agree to that.

Mr. Bevin: The other difference is that everybody has agreed that if Italy wishes to nationalize anything she can do so. The difference is that if she brings in foreign nationals in connection with her nationalization, then there should be no discrimination between the nationals. In view of our determination to get unanimity, it is a very good foundation to base it on equality. It might even lead to fraternity.

Mr. Molotov: Does Mr. Bevin agree to apply this principle of equality and fraternity to the dominions and the colonies of Great Britain, and to India?

M. Couve de Murville: I think we shall be unable to reach agreement today on these two provisions of Article 71, and the best course would be to go on to the next recommendation.

Mr. Molotov: I should like to ask if this principle is considered to be so good, why is it suggested that it be restricted only to 18 months?

Secretary Byrnes: Mr. Chairman, we were trying to please the Soviet representative.

Mr. Molotov: But you did not suggest for some reason or other more than 3 years.

Secretary Byrnes: The purpose was that Italy in that time could go ahead and make commercial agreements.

Article 72

M. Couve de Murville: Shall we go on to the next recommendation? It relates to Article 72, Settlement of Disputes Regarding the Economic Provisions of the Peace Treaty.³³ The proposal of the U.S. Delegation was adopted by the Conference by 15 votes to 6.

Mr. Molotov: We consider that the proposals made by the Soviet Delegation in the draft treaty³⁴ are quite sufficient.

Mr. Bevin: We accept the decision of the Conference.

Secretary Byrnes: We accept the decision of the Conference.

M. Couve de Murville: I take it the Soviet Delegation doesn’t agree to the recommendation voted on by the Conference?

Mr. Molotov: We maintain our view.

Article 74 A

M. Couve de Murville: The only thing to do is to go on to the next recommendation. There is a new Article suggested, Article 74 A, voted by the Conference by 11 votes to 6, and with 4 abstentions.³⁵

Mr. Molotov: We do not understand the objective of Article 74. This Article is unacceptable to us because it implies indirectly that foreign control is to continue in Greece and that Greece is not quite an independent country. There is an international financial commission consisting of Great Britain, France and Italy. If Italy is excluded from this commission, then this commission will have only Great Britain and France as its members. The question arises whether the existence of that commission is necessary. Would it not be possible to rid Greece of that commission and the exercise of financial control by foreign powers.

Mr. Bevin: I really do not know what this is all about. The Commission has been in operation since 1897. I assume we do not get any money out of Greece.

Mr. Molotov: Let us put an end to this.

Mr. Bevin: I think the Deputies might find out whether it is necessary to include this Article. I’d like to add that we had better have a word with the French so that we can become pallbearers together.

Mr. Molotov: It is not understandable why the Conference adopted this decision by 12 votes. The Conference has to be pitied.

Mr. Bevin: I think probably it is a good thing.

M. Couve de Murville: As far as the French Delegation is concerned, we have no objection to deleting this paragraph from the treaty. We think it is useless. Do we defer a decision on this question, or can we reach an agreement right now?

Mr. Bevin: When the Conference voted on this Article it was clear that Italy, a belligerent country, should not have a seat on the international financial commission. I have no objection to seeing whether the commission itself could not be abolished.

Secretary Byrnes: The United States voted for it for the reason just stated by the representative of the United Kingdom. The representatives of Greece attach importance to it. We think they were right and we would object to it being dropped from the treaty unless the UK representatives can show us that the commission is to be abolished.

M. Couve de Murville: I think that the French and British delegations might consult with a view to finding out what the factual situation is and whether such provision would serve a useful purpose or not. As far as I am concerned, I think that it would not, but we might consult on it.

Mr. Bevin: And report to the Conference.

Article 76

M. Couve de Murville: The next question is Article 76.³⁶ It is the proposal which was adopted by 15 votes to 6.

Mr. Molotov: The Soviet Delegation maintains its attitude that was recorded in the draft treaty.³⁷

Article 77

M. Couve de Murville: Then we might leave this question for the moment and go on to the next recommendation. This next recommendation is Article 77, which was adopted by the Conference by 13 votes to 8.³⁸

Mr. Molotov: The Soviet Delegation sees no necessity for this Article.

Secretary Byrnes: The United States Delegation insists upon its retention in the treaty. It was voted 13 votes to 8, and it certainly should commend itself to the Council as being a wise and proper provision that we should not confer rights and benefits on any state named in the preamble unless such a state becomes a partner to the treaty.

Mr. Molotov: The question is that Article 77 A contains the same provision as Article 78. The fact is that Article 78 was agreed upon by us whereas Article 77 on the same subject appeared rather unexpectedly at the Conference and in spite of the previous agreement reached on Article 77. We think that this constitutes a violation of the agreement that was reached before the Conference, and it is not clear to us why the American Delegation chose to violate an agreed decision. In any event, we have an agreed decision on this subject. There is no reason in our minds to depart from the previous decision.

Secretary Byrnes: There are no grounds, of course, for stating that the American Delegation violated its agreement. With reference to this proposal, it is not covered by the language of 78 which has two conflicting provisions in the last two paragraphs. It leaves entirely in doubt whether a state would become the beneficiary of the provisions of the treaty without being a party to the treaty. The first paragraph provides that the treaty shall come in force immediately upon the ratification of France, United Kingdom, United States, and the Union of Soviet Socialist Republics. Under that language, Yugoslavia would be entitled to reparation, be entitled to territory. But at the same time, Yugoslavia can announce to the Conference and to the Council that it will refuse to sign the treaty. The United States is opposed to any government becoming the beneficiary of the treaty unless it is a party to it.

I have nothing more to say, I have no desire to argue, I shall insist upon it.

M. Couve de Murville: Are there any other observations regarding this Article?

Mr. Molotov: I want only to note that this new Article contains nothing new as compared with Article 78, nevertheless the American Delegation presents an ultimatum demanding the acceptance of this Article. This is hard to understand. This is characteristic, not so much of the purpose, as of the method.

Secretary Byrnes: Mr. Chairman, the United States has said nothing in the way of an ultimatum. The United States has expressed its view as to one proposal. It has listened to the Soviet Delegation for two days making the statement that it will not agree to proposals which have received two-thirds vote of the Conference. I have not called them ultimatums, I regard them as the expression or the views of the Soviet representative in the same way the United States claims the right to express its view about this Article.

Mr. Molotov: I want to indicate that not only the Soviet Union but also France voted against the proposal at the Conference—two of four of us.

M. Couve de Murville: Yes, that is entirely correct. The French Delegation voted against the proposal. I think it would be useless to continue this discussion now. The consideration of this Article concludes the survey of the recommendations of the Conference as regards the Italian peace treaty, subject, of course, to the Annexes. Perhaps it is the wish of the Council to adjourn its session now.

The next meeting shall be tomorrow morning at 10:30.

(The meeting adjourned at 7:40 p.m.)

21. For a list of persons present at this meeting, see Record of Decisions, infra.
22. The proposal tinder reference here is the addition to article 64, Part B, paragraph 3, submitted by the Australian Delegation to the Paris Peace Conference. The text, which was included in Part II of the Record of Recommendations by the Conference on the Draft Peace Treaty with Italy, is printed in vol. iv, p. 915.
23. The Australian amendment was adopted in a vote of the 36th Plenary Meeting of the Paris Peace Conference, October 9, 1946; see the Verbatim Record of that meeting, vol. iii, p. 727.
24. Article 72 was a new text recommended by the Paris Peace Conference; it is printed in vol. iv, p. 905. Article 75 and the United States–United Kingdom–France proposal for article 76, included in the Draft Peace Treaty with Italy ibid., p. 35), were adopted by the Peace Conference without modification.
25. Vol. iv, p. 902.
26. Vol. iv, p. 904.
27. Under consideration at this point is article 68, paragraph 4a and b; for text, see vol. iv, p. 916.
28. Vol. iv, p. 904.
29. The modification in the wording of article 71, paragraph 1, is printed ibid., p. 916.
30. The portion of article 71, paragraph 1, subparagraph c, dealing with civil aviation, and adopted by two-thirds majority of the Peace Conference is printed in vol. iv, p. 905. The portion of article 71, paragraph 1, subparagraph c, dealing with state monopolies, adopted by the Peace Conference by a simple majority is printed ibid., p. 916.
31. The language quoted here by Mr. Bevin is not identical with the text of article 71, paragraph c of the Draft Peace Treaty with Italy, vol. iv, p. 33. The difference presumably arose during the preparation of these minutes.
32. The Soviet proposal and the alternative proposal advanced by the United States, the United Kingdom, and the French Delegations were both included in the Draft Peace Treaty with Italy referred to the Paris Peace Conference; see ibid. The language proposed by the United States, United Kingdom, and France was adopted by the Peace Conference.
33. Vol. iv, p. 905.
34. ibid., p. 34.
35. ibid., p. 916.
36. The United States, United Kingdom, and French proposal for article 76, which was included in the Draft Peace Treaty for Italy referred to the Peace Conference, was adopted by the Conference without modification; for the text, see vol. iv, p. 35.
37. The Soviet proposal for article 76 is printed vol. iv, p. 36.
38. The article under consideration, 77A, is printed ibid., p. 916.