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FOREIGN RELATIONS, 1946,, VOLUME III
               THURSDAY, OCTOBER 3, 1946
FORTY-FIRST MEETING OF THE ECONOMIC COMMISSION FOR THE
        BALKANS AND FINLAND, OCTOBER 3, 1946, 10 A. M.
CFM Files
                United States Delegation Jouirnal
USDel (PC) (Journal) 60
  The Ukrainian and Byelo-Russian representatives spoke in opposi-
tion to the U.S. amendment to Article 21 (Reparation) of the Hun-
garian Treaty,72 emphasizing that the proposal considered the
difficulties of Hungary but not the difficulties of the countries which
had suffered from Hungarian action. The French Representative
stated that France had accepted the article as drafted by the CFM
and would maintain this position. The Greek representative said
that the Greek Delegation believed that the aggressors should pay to
the extent of their capacity and that, as it had no information on
Hungarian capacity to pay, the Greek Delegation would abstain
from voting. M. Gusev (USSR) said that the CFM had agreed to
take the Armistice as the basis of the Peace Treaty and that Czecho-
slovakia, Yugoslavia, and the Soviet Union had therefore concluded
bilateral agreements with Hungary regarding the discharge of Hun-
gary's obligation. The new and democratic Hungary recognized
and was willing to meet this obligation. The U.S. proposal aimed to
disturb the friendly relations between these countries and to support
the old reactionary Hungary. The obligation was well within Hun-
gary's capacity to pay; no one could prove that Hungary's economic
potential was inadequate to meet this burden. The United States was
generous at the expense of the devastated countries. If the United
States really desired to help the new Hungary, it would return the
immense quantities of Hungarian property in the U.S. zones of
Austria and Germany.
  Mr. Thorp (U.S.) exercised his right of final reply and answered
the various statements which had been made. (1) As to rationing,
Hungary did not have a functioning government until the summer of
1945, by which time supplies were so short that effective rationing
was not possible. Hungary now had a rationing system. (2) As to
the bilateral agreements, Hungary had not entered into these on a
fully voluntary basis but as agreements in accordance with the Armi-
stice. The Armistice was a temporary arrangement and did not and
could not determine the final settlement, which would be determined
by the Peace Treaty. (3) As to Hungarian property in the U.S.
72 Regarding the United States amendment, see the United States Delegation
Journal account of the 39th Meeting, October 2, p. 626, and footnote 57,
p. 627.
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