Foreign Relations of the United States, 1948, Eastern Europe; The Soviet Union, Volume IV

CFM Files: Lot M–88: Box 104

Report of the Conference on the Implementation of the Treaties of Peace, Rome, Italy, June 14–21, 1948¹

Rome, June 14-21, 1948

secret

Introductory Statements

remarks by ambassador dunn

The Ambassador welcomed the conferees to Rome, assuring them of every assistance the Embassy may be able to afford to them to make their stay a pleasant one and to assure a successful meeting. The Conference, he remarked, should result through the exchange of ideas and information in the stimulation of thought on the very difficult problems of implementation of the peace treaties; it was not to be expected, however, that the Conference would result in the formulation here of concrete solutions on all the many problems to be discussed. Although, the Ambassador continued, the political problems in the Balkans are dissimilar from those faced by the Embassy in Rome, the economic and legal problems arising from the Italian treaty are as difficult of solution as those engendered by the treaties with the countries behind the curtain. The discussions on those problems in this Conference should, therefore, prove of benefit to all.

The Ambassador then turned the meeting over to Mr. Thompson, who presided thereafter as Chairman of the Conference.

Political Background of Departmental Policy With Respect to the Implementation of the Balkan Treaties

remarks by mr. thompson

Mr. Thompson expressed to the Ambassador the appreciation of the Delegates for the very excellent arrangements which he and the Embassy Staff had made for the Conference itself and for the personal comfort of the conferees. He re-emphasized that the purpose of the Conference, as the Ambassador had indicated, was primarily for the exchange of views and information by the delegates on the great number of complex problems which have arisen in the implementation of the peace treaties.

The Department realized full well, Mr. Thompson continued, the frustrations which have attended the work of the officers stationed in the countries behind the curtain. It realized too that many of those officers feel that the Department has not given to them the support to which they are entitled. This is true, Mr. Thompson observed, due to a number of circumstances not subject to the control of the Department. The personnel problem, for example, is a serious one. The Department has not been able to expand to the extent necessary for the adequate handling of the numerous and complex problems before it, nor has it been able to find personnel trained for the consideration of those problems.

Another and very important factor in the Department’s problem is the political situation which prevails in the United States today. We have a Republican Congress, a Democratic President, and we are in the midst of a very hectic Presidential nomination campaign. Everything we do must be conditioned to these facts. Congressional Committees, stepping into the Executive field, have obliged many top officials in the Department to spend a great deal of their time testifying before them.

A third factor, Mr. Thompson continued, is the great lack of interest in the United States in Balkan questions. Palestine, Germany, Greece, and above all, Russia, absorb the interest of the American people, and this attitude very directly affects the position of the Department on each of the problems arising in the Balkan nations. If the Department were to take a stand on Balkan problems which would be challenged by Russia, and such a stand appeared to bring on a threat of war, the adverse reaction of the American people would soon place the Department in a most difficult position.

In this connection our relations with Russia offer the biggest problem of all. Many people in the Department have felt that the Russians, banking on the fact that this was an election year in the United States and that consequently we would be in a state of disorganization, would overplay their hands with the result that we would perhaps find our-solves involved, if not in war, in the next thing to it. In order to forestall such a possibility our Ambassador to the USSR presented a note to the Soviet Government clearly stating that the United States is prepared seriously to back up its policies.² Although the distortion by the Soviets of our motives in presenting the note resulted in their gaining a temporary propaganda advantage, the fact remains that the Soviets have been given a solemn statement of our position. They know now that the United States will back up its policies to the full but that, despite the aggressive talk in the American press and Congress, it is not our intention to move in on them with force. Our basic program in dealing with the Russian problem is, of course, the building up of Western Europe through, for one thing, the ERP. Until substantial economic recovery is effected in Western Europe we cannot push too far the problems arising in the curtain countries. Then there arises also the question of Western Union and the policy to be followed in Western European rearmament. It is too early to determine what our policy will be on the latter point, since it is difficult to calculate to what extent the United States can afford to assume these burdens, because of the tremendous cost involved in the ERP and our own rearmament program.

Mr. Thompson continued his remarks by explaining that United States policy with respect to the Balkan treaties is based on the realization that very little of a concrete nature can be achieved in the Balkans under present conditions. Although we hope to create some difficulty for our adversaries because of their failure to carry out the terms of the treaties, we do not wish to do anything which would be only of doubtful value in the Balkan countries but which might prejudice the accomplishment of important objectives in our Italian policy.

Mr. Thompson concluded by stating that after this brief sketch of the political background against which policy decisions on the implementation of peace treaties was determined, he wished to ask Mr. Reinstein to give a similar statement of the economic background. The conference could then proceed to organize its work and take up the items on the agenda.

Economic Background of Departmental Policy With Respect to the Implementation of the Treaties

remarks by mr. reinstein

Mr. Reinstein said that, particularly in the case of the Balkan Treaties, he thought that the general political context, rather than our general economic policies, tended to fix our economic objectives on treaty implementation. However, for purposes of background, he thought it might be useful to discuss briefly the present economic situation in the United States and trends in American foreign economic policy, particularly as concerns Europe.

With regard to the American economic situation, on the first point Mr. Reinstein pointed out that strains are beginning to appear in the economy, which is now operating at full tilt with almost complete utilization of resources and manpower. With the economy thus fully occupied, increasing concern is being felt in the executive branch of the Government regarding the possible effects of the rearmament program, which is just getting under way. The Congress has shown itself unwilling to authorize the imposition of economic controls, and there does not seem to be any great prospect that this situation will change in the near future. This may force the adaptation of what is desirable from a policy viewpoint to practical possibilities. Mr. Reinstein pointed out that this situation had an obvious bearing on such matters as the amount of the resources which could be devoted to and the priority which could be given to the supply of arms to Western European countries.

With respect to trends in our foreign economic policy, Mr. Reinstein pointed out that the broad framework of our policy had been elaborated during the war and that what had been done since in general conformed to that pattern. These policies looked to the reestablishment of a world trading system with relative freedom of trade and financial transactions after a period of transition from wartime controls. The broad institutional structure which had been conceived for the implementation of this policy had now been completed with the negotiation of the ITO charter. The European Recovery Program fits into this picture. Mr. Reinstein pointed out that, in particular, the ERP estimates are based on an assumption that something like the pre-war pattern of world trade between various regions can be reestablished. Of particular importance in the present discussion is the assumption made in the CEEC report that trade between Eastern and Western Europe will be maintained and expanded.

On the other hand, as a result of increasing tension in our political relations with the Soviet Union, the U.S. has taken steps through export control aimed at restriction of trade with the Soviet Union and its satellites. These restrictions are directed toward items which would increase the war potential of the Soviet orbit. The precise objectives which will be sought, particularly as to the commodities which it is desired to deny to the Soviets, have not been fully and satisfactorily worked out as yet. In addition to the steps being taken to restrict exports from the U.S., it will be necessary to seek parallel action by the Western European countries which constitute alternative sources of supply for Soviet imports. A mandate to take such action has been given to the administration by the Congress in the Economic Cooperation Act.

The two lines of policy indicated obviously involve contradictions, and it will be necessary to find some middle course between the two extremes. The Missions in the Eastern European countries can be helpful to the Department and other agencies in Washington in reporting the facts which are necessary for reaching intelligent decisions.

Turning to the treaties themselves, Mr. Reinstein remarked that when the treaties were under negotiation, there was some hope that the existence of American enterprises in the Eastern European countries might serve as a means of exerting American influence in that area and slowing down the process of Soviet economic penetration. The Department therefore encouraged American enterprises to stay in the Eastern European countries. The general trend of opinion in the Department is now that little can be done through American-owned enterprises, which are in fact rapidly disappearing under programs of nationalization and through various devices of economic strangulation. Accordingly, attention is now being given to the possibilities of obtaining some kind of compensation for the liquidation of these interests. It is hoped that, if the Department is wrong in its appraisal of the situation, the discussions in the Conference would bring this out.

In the case of Italy, the objectives with respect to the implementation of economic clauses again fit into our general political policies toward Italy. However, the questions requiring attention are mostly practical ones of how to operate within the framework of the Treaty. Mr. Reinstein remarked that great importance was attached in the Department to proceeding rapidly with the initiation and the settlement of claims for compensation for war damages to American property.

Violation of Human Eights Clause

Summaries of the situation in Hungary, Rumania and Bulgaria clearly demonstrated the widespread and continuous violation of the human rights clauses of the Balkan Treaties. These violations are inherent in the nature of the police-state governments of those nations and are denied or disregarded by those governments or defended by the peculiar semantics of their system.

The Conference acknowledged that these violations are not generally susceptible to the disputes clause of the Treaties for the reasons (a) lack of effective implementation machinery; (b) difficulty of documenting specific violations without jeopardizing sources of information or innocent parties; (c) unwillingness of other major Treaty signatories to undertake recognizably futile representations. On the other hand, it was agreed that in the main this is the only treaty issue of importance to Balkan public opinion.

Accordingly the Conference recommends:

(1) Maximum and continuing publicity in press and radio to violations of human rights, utilizing commercial agencies and such datelines as Vienna, Ankara and Trieste whenever possible. Specific applications of this recommendation are detailed in Item No. 19 regarding VOUSA programming.³

(2) Dispatch of few official notes of protest, the number and occasion variable with the situation and controlled by the realization that a series of futile protests might well serve only to demonstrate the impotence of the U.S. in influencing the course of Balkan affairs.

(3) Preparation of statements reviewing and documenting violations of these clauses—as well as similar violations from the non-treaty orbit—for possible use at the next General Assembly Meeting of the U.N.

Possible Violations or Military Clauses

The delegations reported that within the Soviet satellites violations of the military clauses have occurred and would continue to occur, particularly with reference to the gendarmerie and militia in Rumania and Bulgaria, respectively, and the air force of the latter country. Despite this fact there was general agreement that protests would be of doubtful value in view of the inability to secure documented evidence of violations.

The Conference also remarked that a protest in the Balkans might provoke Russian retaliatory action vis-à-vis Italy, which action inevitably would be more widely and effectively publicized. However, it was recognized that possible effect in Italy should not operate as a categorical block against protests in the Balkans; rather action in each instance of flagrant violation should be decided on its own merits.

Accordingly, the Conference recommends:

(a) That, as envisaged by paragraphs 15 and 16 of Appendix C of SANACC 244/9,⁴ the question of formal protests on specific well documented violations be aired with the Department and the other Missions concerned before taking action.

(b) That dossiers on violations, known and reported, be kept current for eventual use of the United States delegation during the forthcoming United Nations General Assembly discussions on the question of general disarmament.

Efforts To Obtain Military Information

The Conference reported that United States missions in the Soviet satellite countries have been thwarted in their efforts to obtain, through diplomatic channels, positive information on compliance with military clauses by:

(a) First, the satellite governments’ invocation of the “acting in concert” clause as sole basis for honoring requests for information.

(b) Subsequently, the Soviet Missions’ refusal to agree to a meeting of the three heads of mission.

Meanwhile, the state of relations between the United States and the satellite governments is such that the service attachés are unable to exploit governmental sources to obtain military information.

The Conference concluded that, so long as this situation obtains, the only practical course in these circumstances would be through action of the Security Council in requiring evidence of treaty compliance as condition prerequisite to admissibility to the United Nations. It realised that this represents a negative approach which would only establish grounds for continued exclusion of the satellite countries.

Paragraph 11, Appendix C of SANACC244/9, describing extent of military information to be solicited from satellite governments, was discussed briefly. Comparing the detailed data envisaged by the SANACC paper with the generic limitations imposed by, and the non-inclusion of enforcement machinery per se in the several treaties, the Conference membership was divided as to legal justification for demanding the former if objections were raised on grounds of national, security interests.

The Conference recommended:

(a) That, for the time being, no further representations be made to the satellite governments, or to the Soviet missions accredited to those governments, for the supply of military information in accordance with paragraph 11, Appendix C of SANACC 244/9.

(b) That, should the question of UN admission of the satellites be revived, the United States demand that full evidence of Treaty compliance be furnished to the Security Council.

Other Aspects of Military Clauses

a. rights to inspect for evidence of treaty violations

The Conference concluded that the United States position that inspections to insure treaty compliance should be performed in concert with British and Russian representatives, coupled with the Russians’ refusal to act in concert, will prohibit the carrying out of inspections in any of the satellite countries. The Conference also felt it would be inadvisable to attempt to carry out overt inspections unilaterally, especially in view of the veiled threat contained in the Bulgarian Foreign Office’s 26 March Note;⁵ at the same time the Conference regretted that this threat was not publicized.

b. freedom of travel

The delegations from Bucharest and Budapest reported that there were no formal restrictions on travel in their respective countries, including the areas occupied by Soviet line of communication troops; on the other hand, it was pointed out that in the latter areas, Soviet imposed bars to freedom of movement have been encountered without previous warning. The Sofia delegation confirmed the existence of prohibited frontier zones which negated the principle of freedom of movement.

[Here follow the following sections of the Report of the Conference: Attitude of Soviet Representatives and Balkan Governments Toward Implementation of the Treaties and Discussion of “Acting in Concert” Article and Its Interpretation; Conciliation Commissions and Impending Disputes; Secret Soviet-South Eastern Europe Economic Agreements; Secret Soviet-Satellite Military Agreements as Violations; U.S.-Balkan Commercial Treaties; Protection of Interests of Formerly Persecuted Persons; Possible Violations of Article on Freedom of Danube and Proposed Danube Conference (for documentation on this conference, see pages 593 ff.); Special Problems on Trieste (for additional documentation on the interest of the United States in the establishment of a Free Territory of Trieste, see volume III); Types of Material on Treaty Matters Desired by VOUSA; East-West Trade (for documentation on the attitude of the United States with respect to commercial relations with the countries of eastern Europe, see pages 489 ff.); Bulgarian Reparations; Restitution from the American Zones of Germany and Austria to the Countries Formerly Occupied by Germany; Italo-Yugoslav Boundary Disputes; Coordination from Department and Reporting on Treaty Implementation; United States Commercial Aviation Policy in Eastern Europe (for the text of this section of the Report, see page 448); Transfer to U.S.S.R. of German External Assets; Treaty Claims; Nationalization of United States Interests and Related Problems; Nationalization and Lump Sum Settlement; Use of Blocked Assets for the Payment of Nationalization Claims. Except as indicated in parenthetical notes, the sections identified here, which constituted approximately half of the Report in typescript, have not been printed.]

Maintenance of U.S. Interests in Eastern Europe as Economic Outposts

The Conference turned its attention first to the position of U.S. interests in various orbit countries:

1. In Poland, no U.S. or foreign interests continue to operate, though a steamship line and the M.P.E.A. still maintain representatives.

2. In Yugoslavia and Bulgaria, all U.S. commercial and industrial interests have been put out of business by nationalization.

3. In Rumania and Hungary, the attrition of U.S. economic interests by discriminatory and confiscatory measures has been proceeding rapidly; in Rumania this process has been capped by a nationalization program whose exact effects are not yet known; in Hungary the U.S. enterprises which have not yet been nationalized may soon be driven out of business.

4. While many United States industrial interests in Czechoslovakia have been taken over, under that government’s nationalization program, there are still a number of U.S. import-export and wholesale firms in operation, and the Prague Embassy believes that their presence there is useful to the United States.

On the basis of the situation described above, the Conference agreed with the view set forth in the Department’s paper (Conference Document No. 8),⁶ to the effect that with the exception of those foreign trade and wholesale houses still operating in Czechoslovakia, it did not appear possible in the foreseeable future to maintain U.S. economic interests in any of the Eastern European countries as economic outposts, and that the United States should not seek to encourage such interests as still exist to maintain their position within the orbit.

Political Objectives in Treaty Implementation

The Conference agreed that treaty implementation is not, and under existing conditions cannot be, a major element in the attainment of the political objectives of the U.S. in Eastern Europe. At the same time the Conference considered the retention of the treaties important and urged the rejection of proposals to denounce or revise them. Essentially, the treaties present a moral issue which in tangible and clear-cut terms may help world public opinion to understand the nature of the present political conflict with the Soviet Union. It follows, therefore, that matters of dispute as to the execution of the Treaties must always be kept on the plane of moral principle.

The Conference moreover held the opinion that the Treaties may serve the following useful purposes:

(1) Full publicity as to treaty violations will demonstrate the continuing concern of the American people in the fate of the people of Eastern Europe.

(2) Attribution of treaty violations to Soviet influence or the police state practices of the Balkan governments may assist in the eventual alienation of the Balkan peoples from their own governments and from their Soviet overseers.

(3) Reference to the Treaties provides both sufficient and consistent grounds for the continued opposition of the U.S. to membership in the United Nations by the Balkan Treaty States.

The Conference delegations generally wished to emphasize the desirability of their Missions being kept more fully and promptly informed of the politics and actions of the U.S. Government as these developments affect their areas in particular and American relations with the Soviet Union in general.

Military Objectives in Treaty Implementation

The Conference agreed that the military objective with respect the ex-enemy states remained as phrased in SANACC 244/9, namely to prevent those states from assuming an aggressive character or from attaining proportions such that they alone would present a threat to peaceful states or in alliances with other states, their military strength could contribute measurably to a war of aggression.

Regarding the implementation of the military objective, the Conference noted:

(a) That, as a result of the obstructionist tactics adopted by the ex-enemy governments in the Balkans and by the Soviet Missions in the same countries, the objective set forth in SANACC 244/9 and the procedures presented for implementation of the objective have become incompatible. Consequently there is little likelihood of positive action within the terms of SANACC 244/9 and therefore other methods, mainly undetermined, must be relied upon.

(b) That realization of the political objectives cited (Agenda Item 29) would contribute indirectly to the attainment of the military objective.

[The Report concludes with section entitled “Italian Reparations”.]

1. This Report was circulated to the Committee for Implementing Treaties of Peace with Countries of Southern Europe (Treaty Committee) as document TIC D–21/16, June 30, 1948. The Report was considered at length by the Treaty Committee at its 11th Meeting, July 7, 1948. The Committee adopted the Report with some reservations and comments on portions not here printed. The Committee’s reservations and comments are recorded in its Minutes, document M–11, July 7, 1948, not printed, CFM Files, Lot M–88, Box 104.

   The Conference, which was convened at the instruction of the Department of State on the recommendation of the Treaty Committee, was under the chairmanship of Llewellyn Thompson, Deputy Director, Office of European Affairs. Thirty-one officers attended the conference including economic counselors and military advisers from the Embassy in Rome, the Legations in Budapest, Bucharest, and Sofia, economic advisers from the missions in Belgrade, Trieste, Warsaw, Prague, and Bern, and officials from the Department of State and the Department of Commerce.

2. For the exchange between the American Ambassador in the Soviet Union, Walter Bedell Smith, and Soviet Foreign Minister Vyacheslav Mihailovich Molotov in May 1948 on American policies and purposes regarding the Soviet Union, see Department of State Bulletin, May 23, 1948, pp. 679 ff; for additional documentation on this topic, see pp. 845–857, passim.
3. The portion of this report headed “Types of Material on Treaty Matters Desired by VOUSA” is not here printed.
4. For the text of the paragraphs under reference here, see telegram 451, May 3, to Budapest, p. 330.
5. Regarding the Bulgarian note under reference here, see footnote 6, p. 285.
6. Not printed.