S/PV.345 Security Council

Thereare two items on the agenda:· the question of the' Free Territory of Trieste and the Palestine question. The first item is a continuation ·of the discussion· which took place at our last meeting. The second item was included on the agenda in consequence of a letter received from the representative of the State of Israel . cOilcen$lg . the question. of Jewishrefugees internedon the island of.Cyprus, and also aJetter received Irom the Truce Commission regarding the difficulty 'ofproviding Jerusalem. with an adequate water supply. , The Pl ,SIDENT (~ranslated from Russian) : It is undenll:ood that members of the Council, in the course of their observations on the documents llhich 1 mentioned, May also raise other ques~ tions. Th$ agenda was adopted. , 194. Continuc:ation of the discussion on ,'Ihe Tr'..te question On the invita:tion of the President, Mr. Villan" representative l'Jf Yugoslavia, took his place at the Council table. Mr. ]ESSUP (United States of ,America): As 1 informed th.e Security Council at its 344tb. meeting, during which it considered the note of the Yugoslav lrepresentative of 28 July [8/927] concerning the .administration of' the United Statei-pnited Kingdom zone of ,the Free Ter': ritory of TtieEl~e, my, Government çonsiders .the charges of thle Yugoslav Government as being ftom beginnin:g ta end, without any foundation whatsoever; (~verytbing seems toindicate that they were made for the sole purpose of distracting attention from the' flagrant maladtninistra~ tiono! the zone of the Freè Territory which is under the administration of the Yugoslav Milltary Commando 1 have Îloticed on various occasions that certam men1bers of, the Security Council~havèno hesitation in being quite dogrnatic in their assertjons concerning the motivation 'which, they allege, inspires Governments in ,taking certairicourses of conduct. Ipersonally do not pretend ta any skill inreading the mind of a foreign Government,.but on theevidence avà.ilabie, onemar' sp~c1.Ùate thatthe motivation for the Yugoslav c~mplain.tis twofold. ' .' The first. motive migh~be deduced. from.' the well-known YugQslav design to separate the Free Tenitory of, Tri~te frolll its, historic association with'Italyin violation of the desires of the popu- , la!Ïon of the Free, 'rcrritoryaildin,order ta incprporate the Territory,in Yugoslavia., ' ln the"~econd plaée,th~"complaintappears to be'another manifestation of whathasbecome à familiar tactic. This tactic is tOèharge others ' au tration période année bres aujourd'hui Conseil, date Conseil possibilité remettre dents. récapitulatif zone le .assumé obligations et ainsi sécurité distribuée represent~tiveson the Security Council have had an opportunity at least to glance at this latest report and to refresh their recollections of the tw.o previous reports, sinee 1 am confident that a review of the complete record of the history of the zone will convince them that the Allied Milltary Government has properly fulfilled its responsibilities in conformity with the fully aFcepted obligations of· the United Kingéiom anq,"'United States Governments, as announced to the SecurityCouncil in Mr. Austin's letter of Ig, November 1947,distributed as document 8/604.. For the convenience'of the Security Couneil, Ishould like to réad the closing paragraphs of that letter fro:ql Mr. Austin: "It is the view of 'the Government of the , membres Unit~d Stfltes that, pending theassumption of ,que,. office by th.e Governbr, the Commanders of the: verneur, United States- United .Kingdom zone and the anglo-américaine Yugoslav .zone of . the Free Territory are,· as Territoire trustees, obligated to administerthe Free Terri-. (trustees)', tory within their· respective zones in conformity chacun with th~ provisions of the Treaty: establis4ing tions the Free Territory of Trieste and insuch a way 'l:'ri~ste~ as toassistin the realization of its ultimate pur-.. son lClt· is recognized that the provisions of the Treaty require that,pending the assumption of office by. the Govemor, there shall be separate administrations within the two zones of the Free Teni.tory. It is ·the view of the Government of the UnIted States that they and·the Government of the United Kingdom in their zone, and the Government oÏ Yugoslavia in its zone, are clearly charged with ensuring that the areas undel' their respective ~dministration are so goyerned that there shalI be no' radical constitutioIial modifications such as must,make more difficult the future integrity and independenceof a united and prosperous Free Territory of Triestè. It is further the duty of the administration in each of the two zones to take no steps which will obstruct the proper application of these principles in t'.1e other zone. "In fulfilment of its obligations in this respect, the Government of the United States will from fune to time repott to the Security Council conceming its responsibillties in connexion with the a,dministration of the Free, Terr.itory of Tri~te, including fue;protection of the basic human rights of theinhabitants, and will ensure that public order and security are maintailled in the Free Territor.y in accordance with the purposes andprinciples of.the appliçable provisions of the Treat}r of Peacewith Italy." Although 1 am convmced that the' record 'whÎch has been submitted speaks for itself,' 1 sltalI presume on the patience of the members of th~ Securjty Council to explain in some detail the background of the arrangements referred to in the Yugoslavcharges and to demonstratethe falseIi~ of the specific aacusations made against us.. Let us look fust.at the legal basis of the charges. which have been levelled against the Allied Milltary Government in Trieste by Yugoslavia. Essentially, the charges, arethat the Allied Military Goyernment has violateq the provisions. of article 24, paragraph 4, 'ofthe Permanent Statute of dl~Free Territorj,of Trieste, Annex 60f the ItalianPeace Treaty: The paragraph to which L~av;e just referred rea~ as follows: ""cEcono~;c:union ·or associations· of an exclu" sive character. with any Stateare incompatible with ,thestatus :of the ,Free Territory." _ art~ applicable to this situation. Article 21 of that Treaty contains the general prov.isions regarding the cstablishmènt of the Free Territory of Trieste. Paragraph 3 of article 21 provides as folloWR: "On the termination of Italian sovereignty, the Free Territory of Trieste shall be governed in accordance with an Instrument·for a provisional regime drafted by the Council of Foreign Ministers and approved by the Security Council. This Instrument shall remain in force untll sucb date as the Security Council shall fix for .the coming into force of the Permanent Statute which shall have been approved by it. The Free Territory shall thenceforth be governed by the provisions of such Permanent Statute •.." .de This Permanent Statute is set forth in Annex VI of the Treaty, and the Instrument for the Previsional Regime is set forth in Annex VIL It is undisputed that th~ Free Terrîtory ('f -';'este is still govemed by· the terms of the ImtrtUllent for the Provisional Regime sinee the Permanent Statute has not yet èome into force. This Instru- . ment for the Provisional Regime set forth in Annex VII of the Treaty 'therefore determines. the legal l'ights·and duties of the Military Commanders who, under article 1, continue to administer their respective zones pending the . asSumption of office by the Governor. The provisions of the Permanent Statute are applicable during the Provisional Regime only in so far as they are incorpùratp-d by reference in article 2 of the Imtrunlent for the Provisional RegLtne~ This article contams a number of· sentences all of .which refer to the situation which will exist when the Governor ass~es office. Among the sentences is one which reads as follows: 1'Likewise all other provisiQnIS of the Permanent St~tute shall be .applicable duringthe period of th~ provisional regime as and when these provisidns prove to be applicable and in so far as they . ar/enot superseded by the present Instrument." l ' '1 The Yugoslav daim is that article 24~' par~­ graph 4, of the Permanent Statute, contamed m AImex VI, is one of the provisiom referred te ~ the sentence' which 1 h,ave just quoted from lirticle 2 of the' Instrument for the Provisional iegime. The Yugoslav position seems to be that paragraph 4 of article 24 of the Permanent ~tat,ute is "applicable" and has not been "super- ~eded" - l'use the two words from article 2 of, .jtbe Instr~ment.~or ,the Provisional Régime - by lany of the provisipns of that Instrument; and Ithat as a result, tp.e agreements entered into by 1the Allied Military Governme~t and the I~alian We do not deny that paragraph 4 of article 24 establishes a principle which should guide the Gaveroor during the period of the Pro~onal Regime. We do empha.tically reject the contention that tlùs paragraph is applicable to the actions of the Allied Milltary Governmen,t which are complamed ~f. It is clear that with reference to the subject matter deaIt with in the agreements between the -Nlied Mllitary Government and Italy, this provision has been totalIy superseded by the provisions of, articles 10 and 11 of the Instrument for. the PromonaI Regime. Not only is this clear from the text of the Treaty, but it is the position which has been taken as the proper interpretation of the Treaty by the Council of Foreign Ministers. Article 10 provides: "Existing Iaws and regulations shalI remain valid unless and j].ntil'revokedor suspended by the Goveroor." But article llis the çore of ~e legal situation, and the members of the Security Council will wish to have this text in· mind. It reads as, follows: "fending the·establishment of a separate currency regime for the Free Territory, the Italian lira shall contipue tob~ the legal tender within the Free Territory.The Italiail Governttlent shalIsupply the 'iQl'eign exchange and eurreney needs of the Free Territory undQ' conditions no l~ favourable than those applying' in ItaIy. "Italy and the Free 'rerritoryshalI enter into anagreeIl1ent to give effect to the above provisions as well as toprovide.for anY,settlement between the two Governments which may be required." '. .Thafisunder article 11, and nothing can be clearer•• It w<;>uId' seem, thcn, that a system in which .the. Italian lira 1s to continue to· be the legaI tenderwithin the .area of the Fre'e Territory is anexclusive· association within the mea$g ofparagraph 4 of. article 24 in Annex VI. It is likewise true ofa systeIl1 whereby Italyisto supply·.the foreign. exchaIlge and. eurreney -needs of the Free Teriitory under conditions no less f~vourableJ:b.an thoseapplymg ta Italy.Such a systeIIl is .necessarily an exclusive association,~ Since article l1requires thisexclusive. association, it seems clearbeyond the questionofa.dou,bt that the provisions of article!l of.Am1exVII sl1pers~de, asa màtterof law, the provisions of paragraph 4 of article•24 of Annex VI and that, asaresult,the latter are notapplicable to the prèsent situ~tion. finance~ currency, foreign exchange and customs in the Free Territory must dispe1 sucb doubt. The Council of Foreign Ministers in December 1946appointed the Trieste Commission of Inquiry with the following tfnns of reference: • "To investigate the general financial position and prospects of .the proposed Free Ten~tory of Trieste. Mter consultation with :the Yugoslav and ~talian Goyernments and any consultations which it deems appropriate, the Commission shaIl make recommendatioJ:l..s not later than 20 February 1947. 011 this matt~r and on any problems which may be involved.in the setting up of the IFree Territory as a·separate t~urrency and i:ustOlns union with. particular reference te any .initia! difliculties which may arise between the entryrnto force~ofthe Treaty of Peace with Italy and tht; end of 1947." Throughout the r~pbrtsubmitted by this Com- . , ~ 'il and in particular" in its conclusionsdeal.. ing with ,balances of payment; currency, foreign exchange and customs, if will be found that the representatives of the four Powers - France, the Union of Soviet Socialist Republics, the United Kingdom and. the United States - were in complete agreement that; pendmg the organiza-. tion by the Governor of a separate system of currency, finance, foreign exchange and customs, the existing arrangement should stand. The "Yugoslav Govermnent was inVited at the time to comment on this report, ànd itdid so. lts com- Inents rndicate· that .it clearly accepted the· fact that, .during the interval before the Governor couldset up a separate system for the .Free Territory, it would be necessary to continue the existing arrÇUlgements and that these c1early constit~ted exclusi~e arrangements with Italy. . . The Council of.Foreign Ministers, in fà"rward-. ing t1$ report to the Security Council~ made certain comments. The report of the Trieste Commission of Inquiry was circulated as an attachment to document S/577..Contrary to the al1egatiou of the Yugoslav Govemment, the comments of the' Couneil of Foreign Ministers It is true that they concluded that in the solu~ tion of the various economic queStions which had heen considered by the Commission, the eco~ nomic independence of the Free Territory should he provided for in accordance with l'aragraph 4 of article 24 of the Permanent Stèltute, but the sentence preceding this statement in the Foreign Ministern' decision is as follows: uUntil the coming into force of tJ.A~ Permanent Statute, the solution of these questions falls within the competence of the Governor and the Provi~ monaI Ccuncil of Govemment in accordance with the relevant articles of the Instrument for the Provisional Regime of the :lt'ree Territory of Trieste U (S/577]. Thus the Foreign Ministers confirmed rather than questioned the principle contained in article 11 of the Treaty, which was accepted by the Commission and the Governments concerned, na:rnely, mat pending the creation of the new economic regime by the Govemor, the existing exclusive arrangements with Italy must neces~ sarily be continued. It is thus seen mat while the underlying purpose of the Treaty was to ensure that the ultimate economic independence of the Free Territory of Trieste should be safeguarded, it is not inconsistent with this objective to con~ clude e:clusive arrangements of the type now in force, wmch would not be binding if the Gover~ nor set up an independent economic regime. It is clear that the Yugoslav charge is raised on an unsound legal foundation. We do not .believe that a serious legal decision is involved. If, however, after hearing the whole case, the Security Council still believes that there are legal issues unresolved which may affect its decision, the United States would of course be willing that the Powers administering Trieste should refer to the decisir.>n oi the International Court of Justice any questions outstanding among them on the legality of the allied administration of the Free Territory of Trieste under the Treaty. Having, demonstrated that there is no legal basis for the Yugoslav complaint in terms of the 'applicable Treaty pro lis~ùns, it if! appropriate to examine the situation in.terms of its financial The drafters of the financial and economic provisions of the Italian Peace Treaty were weIl aware of this situation. The provisions ultimately included in the Treaty envisaged a graduaI transi~on from an area which to all intents and purposes was a part of Italy, to an economically free, separate territory. The inclusion in the Treaty of an Instrument for ~ Provisional Regime is a simple but clear illustration of this point. The Treaty contemplated that this transitiùn would De accomplished in stages. At th€? outset, there would he a period in which the Allied Commands woUld continue to administer their respective zones. There would then be a period in which a Provisional Council of Government and a Governor in charg" v~ the Free Territory would continue to apply existing· economic arrangements pending. the establishment of a separate economic regime. Only later would there be a Popular Assembly, a Governor and a.Council of Government operating under the Permanent Statute. In fact, we hav~ not progressedbeyond the 'first stage of the transition process, for reasons which àre familiar· to all of us. In view of the fact that Trieste fu' still administered under the Allied Comina~ds ID their respective zones, it is l1atural that many economic ties with Italy should remain in force. It would be contrary ta the obvious intent of the Treaty ofPeace,if, during this period, the Allied·Military Government were to take such steps as the Treaty contemplated spould take place only during a later period of But the Yugoslav Gove.mment does not state how tlùs arrangement can possibly he accomplished without creating a financial association of a unique character between the Free Territory and ltaly. . ' . 1 should like to call a~ention to certain comments in ,this regard which were made by the Yugoslav Government ta the Council of Foreign Ministers in Moscow on 19 April 1947 respecting the report of the Trieste Commission of Inquiry which 1 havealready mentioned. The Yugoslav Government, in commenting on the period when the lira w01.ùd be the legal tender of .the Territory and lira currency would he supplied by Italy, stated that: USucb. currency unity between rthe Free Territory ma Italy would mean the absence of inde· penden.ce of the Free Territory in relation ta Italy, its economic dependence upon Italy's . currency policy, and tFg wouId amount to a relationship of an exclusive character between the Free Territory and Italy." The Yugoslav Government in effect objected to article 11. Now, in order to support their charges, they insist that lire· should be supplied ta the Free Territory, but in a way which would not involve exclusive association with Italy. A'pparently the Yugoslav Government is still opposed to the implementation of article 11 of the Treaty. . . However, an article of a treaty caIinot be deieted merely because orie party frowns at it. The article remains in the Treaty, even though the Yugqslav Government chooses in its oWn zone ta ignore its obligations under that article. The Allied Military Government intends ta COlltinue to act in accordance \vith this treaty obliga- 1should like to discuss each of the agreements cited by the Yugoslav Govemment and demonstrate that they a..-e direct implementations of the obligations pertaining to the Provisional Regime, principally article 11. If they are not in consonance withthe theory of paragraph 4 of article 24 of th, ~ Permanent Statute, it is for the rtason 1 havt. already stated, namely~ that article Il clearly supersedes this provision in accordancc with the terms of :the Instrument. 1 can state without reservation, moreover, that all of these agreements were concluded with,the best interl"..sts of Trieste in mind and with the object of promoting its economic reCovery and wellbeing. In the first plac~, the Yugoslav Government has mentioned an agreement dated 9 March 1948 which concerns the supply of lira «.urrency to the Free Territory. It states that, by virtue of this agreement, "the monetary frontier has been wiped .out"• This charge is wlthout foundation Bince no such monetary frontier has ever existed. The free circulation of Italian lire within the F.ree Territory and be~ween the Free Territory and Italy has never been impeded, and article Il of Annex VII in effect provides for the continuation of this situation pencli.ag the establishment of an independent currency regime. The Yugoslav Government cites article 4 of the agreement of 9 March 1948, the agreement we are discussing, to the effect that the Trieste branch of the Bank ~f Italy will administer the Treasury of the zone adrninistered by the United States and the United Kingdom. In'the context of the Yugoslav argument, this statement might appear to some to imply that the Italian Governmènt, through the Trieste branch of the Bank of Italy, was to exercise contrrA, or at least to have influence over the bl~dgetary and fiscal policy of the Free Territory. However, when one looks at the text of the agreement, <lne finds that article 4 of this agreement of 9 Ma~ch merely provides as follows: , 1 , "Th.e amount of notes thus supplied will be entered by the Trieste branch of the Bank of Italy in a special account in the name 'of the Command of the zone. "The operation of the Treasury cash account , of the zone will be entrusted to the Tricstf' branch of the Bank of Italy which will provicJ." special accoun" .g showing the incorne and expenditure in ,respect of, ~e Administration of the zone" [S/781J. . As' is seen from this provision, the Trieste brandi of the Bank of Italy exercises no function . The Yugoslav Govemment charges that, ,as . a result, "the Free Territory is" - 1 am quoting - "subjected to measures of the Italian Gov,;, emment, by which it increases or decreases the circula.tion of notes in accordance with its own estimates and in the exclusive interest of Italy, without an] possibility for the Free Territory of Trieste to protect itsrights in any way whatsoever" [8/927]. " ' The currency circulating in the United States- United KiRgdomzone of Trieste is not affected sqlely, or even largely, by the operation of 'the 9 March currency agreement, to which the Yugoslav Govern:rnent attributes such' consequences. This is oilly the first of three agreements signed on 9 March between the Allied Military Conunand and the Italian Government which, together, provide for the implementation of article 11 of Annex VII ofthe Treaty.This, and, the second.agreement,concern the supply of lira currency to the Allied Military Comrnand. In fact, the greater part of the needs· of the Free Territory for lira currency are to be met under the secon<J agr ,.~",ent. The amount of lira currency wlùch will be put into circulation in Trieste is not a matter for unilateral Italian determination. The 9 March agreements explicitly provicle that this decision will. be made through consultation between the Allied Military Govèrnment and the Italian Government. In view of that arrangement, it is difficult ta see any basis for the charge that it represents "in a monetary regard, the submission and incorporation of part of the Free Tenitory of Trieste into Italy" [8/927]. The Yugoslav Government stat~ that in consequence the second currency agreement, name1y, the agreement on finance of 9 March 1948, "the Italian Government •.• will he granted complete control of its finances • • • ", that is, the finances of Trieste. . No substantiation of tlùs charge can be found when one examines the ten of the agreement referred to. The agreement provides, in substance, that Italy will meet the lira requirements of the Allied Military Command and that the requirements of the zone will be determined in consultation between Trieste and the Italian Govemm.ent. The Allied Military Command therefore has every opportunity to defend, in such discussions, the interests of the zone with respect to its economic recovery and the' weIlbeing of its inhabitants. Moreover, article 3 of tlùs agreement provides that if the Italian Goveri1ment and the Command of the zone do not reach agreement on the amount of the funds to be advanced, the latter reserves the right to refer the question to the Governments of the United Kingdom and the United States. The Yugoslav Government's statement aIso appears to imply that the Italian Government has control over the internal financial and budget~ operations within the United States-United . Kingdom zone. 1 have al.ready stated that no such arrangement is provided for in any agreements nor is it contemplated. • .ments, Th~ Yugoslav Government further chl:L",es that the Allied Military Command has gone far beyond its mandate in imposing on the future Government of the Free Territory of Trieste a contractual obligation, the final amountofwlùch i~ .not determined at the present tirne and wlù~h Will eventually. depend only on an· agreement between the United States-United Kingdom part of the Free Territory of Trieste and the Italian Government.' . , iP~vit.~b,!~~es~~W;~ an o~ligationbeing i~curred, ~èl' ~t )8, cl~arly ImpOSSlble to dctermme now ~~ '#pg',~()~p.t. The parties to ~e Treaty, in a~~~ t!> ~cle Il) must ne~ess~y have con- ~emJ?~a~eq.tiiat such an obligation would be mèurrea. Naturally, the amount of currency advanced depends only on agreement between the Unitedl;'States-United Kingdomzone of the Free Tetrltory and the Italian Government. What other authority is in a position to judge the reqJlîrements of the zone? The final amount of the obligation will, of course, only be determined by negotiation between the Italian Government and the Govemment which will ultimately administer the Free Terrltory of Trieste. This is specified in article 5 of the agreement under consideration. .. 1 believe that my comments on the!e two agreements of 9 March have made it clear that rather than impedÛlg or injuring the eCQnomic development of the Free Terrltory, these agreements are in fact making a substantial contribution to that development. The Italian Govermnent, at considerable burden to itself, is currently supplying a sizable portion of the financial requirements for the revival of industrial and commercial activity and the healthy economic functioning .of the United States-United Kingdom zone. Naturally, in view of the Italian contribution" close ànd continual consultation is maintained between Italy and the AlIied Command conc~g the magnitude of the Trieste require- 'ments and the use of thè funds wlüch Italy is contributing. .' The Yugoslav Government has referred aIso to the third agreement dated ,9 ,March 1948, concerning provision by Italy of foreign exchange, and to the series of working arrangements concluded in final form on 26\ June, which the Yugoslav Govermnent says were published in the Italian Bolletino set.timanale dated 6 May. These agreement& implement the three agreements of 9 March. The Yugoslav Government charges that through these arrangements the Allied MilltaryCommand has hlUlded over to the It3.Iian Govermnent control of the mœt ïmportagt foreign ·relations of the United States-United Kingdom zone and that it is accomplishing the destruction of theindependence of the zone and its inclusion in Italy. In the first place, 1 turn again to article Il of Annex VII as the ebvious basis of the third agreement of 9 March. Italy is required thereby to'supply the'foreign exchange neeas of the FTee Territory under conditions no less favourable than thoseapplied in Italy. That is the language of article"Il. That the Italian foreign 'exchange regulationsmust be extended to the United States-United Kingdom zone of Trieste is aIso clear if the foreign exchange positionis to be A simple analysis of the problem of aUocating foreign exchange to importers within Italy and within Trieste would indièate why this is 156~ Until the Govemor has set up a Trieste curren:t>9 an independent foreign exchange control syst~" an independent banking system and an :'~dè~ pendent customs control system, the only l pràcticaI solution is to continue the applicâtîoh'bf the Italian trade agreements to Trieste."Wb;tJi~ charge that this is an exclusive arrangCIhent With ItaIy, the answer is that of course it ~is"It·~:so because that is ex~ctly what was contempl~te4 by the Peace Treaty for the period prec~r;fulg.the, time when the Govemor could set, up;'hjs O'WD; independent system. What we hav~;dQne:m,qllJ1 zone is mereIy to carry out the progran,une c(;m"; templated by the Trieste Commission\ôf J;:fiqiûry and by the Council of Foreign M"liùStèrS;' '; ;~. " l';,' .\i ~d 1U ~ i', ! ; • t pbur que' p,roÏ're des'IClial1 .. :,':,; ,h-,;~'\ ,~r ~':"t:~~: The Trieste report says, in;the: ~t; pf!J'lgr,~~ of the section entitled "Fore~i~~~g~'~: "R~ recommended that the Govemmentofthe I!';rec; Territory of Trieste shoul,~~~tâ~~" ,~: lSpon, as possible after the ina:ugwati,on.;pf,)pe,F,!=:~ Territory, an autonomou~.~Qr~gI.l exc1l.~gc;~9J;l'ë .trol system. Pending W~ \~~~q~~ep~;.pf;t~, system the present reW,.~~()~~ho.qlq'11em~ .m Eorce." . ." ... ',' ,C' . , l' "i1'} \;'~1: ~f~.t ~ mande In paragraph 7 of;tbiSsaIh'è·Qctloi1!it iài'ë~6ni~' inended that, "pending the regulation o.f its)dwn.) ::~:t s~~e!r~;~J~bW~4lr:~à ~'.~~ '.~: The present systêi4.~:j]ûG1i ..~~~~h,;~~g~\~ f th 1, t!.!1':·)l'L.~··I'>!. ,1.,1", .~.I..lFt.t~ ..' ..L,.".~, JL'.~.. a course, e çw.an, s~l.em. '. . "" 1 <.;~.hill,:~:'Jl J.i3.\l:".?'J ;·.~',~:~.r!ldq :,.,:). '" :]0 The Yugos1av!~GQvéltrm!len.tj\mflther.:tim61wheni i~ considereduthelmpOlli: of the l'rl~')~Q~';: sion of Inquiryv maàe. nQ:)êQmInmtS fonhthese: secrlons. It.J:is.lilooo'Wartlh}f:that'iat:itliè·begilinihg} of its papeniit stated!ithat ~heré,\n()) commcl1tsl were made,rib~agteed-wi~,the!(€ontltiSionS:lt)flth'é! report. :).îJ:n J.q::1fn~HJ!>iï":~~)J.!:i) r,!lU?<l!HI('p,i :,aJ\)!ll ThereteIition of Trieste within the lta.li':lli.; custo~" ;~Y§1.\~Iti.);w~,: Ji'~§o~~dtdi$ r.Q.Ppr9prl~te fo~ t..~..~.I.~t~~,.p. e.,rio .. tt.ÀYi.[il!h~QQUIl!.€U 9irF,~~gn.! MJmSt~~~:P.bt1;J,else<;:tmd.J;pmia;grap,h.\epfI~etr :del'll c~w;Q.;?m; MO$!lqWlÏ9u<;~~2.2.nApli1 :)HM:).lJ5~61t$l~J)t 'Mll~)l,jÜ!e}ir~1"~~lliitb.e:\ ~epjilrt~bf,)thè"faQm.~; ~o~gf:)lp.!Ïl.J:iw;f.oti;r.JiÏ~c;.~d'JtëQammendecP th " l _ ...:1' .' . • •• . ,at,lli')2-:iu~! Ul:~Y!\IJJ~ ~~Wf!k~to~ r~e'l~imttGl"~} The repeated Yugoslav charges of suhjugation to 'Italy have no more validity here than e1se.. where. 1 trust that the members of the Security Council will realize that the arrangements which are complained of in no way prejudice the future or tie the hands of any successor Government. The 9 March agreements entail an exclusive association with ltaly only ,in sa far as this is rc:;quired for the full implementation of article Il of the Instrument for, the Provisional Regime, or for the observance of the principle of article 2 of that Instrument which states that the Gover.. nOT, and presumahly the Allied Command before him, should be guided by the needs of the popu.. lation and itswell·being. As for the working arrarigements adopted on 26 June, these set' fortb certain administrative procedures in the fields of foreign exchange and trade which must logically be put into effect during this interim period. Finally, let me only mention in passing the ridiculous Yugoslav allegation that) by concluding a postal agreement with Italy in which the United States-United Kingdom ~one establishes uniform postal rates with Italy, the Allied Military Command has. p1aced its zone under .Italian sovereignty. By what' stretch of the imagination can such an agreement be said to entail the10ss of sovereignty? However, in case members of the Security Council would like to examine this lengthy postal agreement, copies are being forwarded by air mail from Trieste and will he submitted to the Secwity Council when they arrive. ' . ,The above analysis, point by point, of the Yugcslav charges shows how utterly baseless tht}y are. These charges have been levelled against the United States and the United Kingdomin this CoÛncil. However, the Yugoslav charge that . the United States and the United Kingdom have conspir.ed to impose on the Security Council the fait adllomjJli of the incorporation,of the United States-United Kingd<,lmzone into Italy rests upon the ftimsiest,of foundations; and we lIatly reject this charge. . • 1 have tak~ a great deal of the Council's time and perh'apshave gone into greaterdd:ail than is warrantedbythe utter baselessness of the YugosJav Govermnent's Chargesi 1have done so .in ordêr that. the meriîbers of the Secuiity , Counci1who examine this matter in a. judicial spirit need not depend .on mere assertions, but maY see for themselvesthat the Government of i: have spoken so far aboùt the past administration of the United States-United Kingdom zone. 1 have attempted to ~plain to the Council a few of the very many legal and administrative difficulties which beset the Commander of the combined United Kingdom and United States forces in the zone. Despite all difficulties, 1 say again; my Government is proud of the accomplishments of the Allied Military Government in its efforts to care for the welfare of the population and to keep alive the fragile economic life of Trieste. There have been more than technical administrative difficulties; there have been grave financiaI diffièu1ties; and the' burden which has thus far been borne by the United States, United Kingdom and Italian Govemments has been very considerable and ~annot·be borne indefinitely. A SI ltisfactory solution of the Trieste problem cannot be postponed much ronger. During the discussion of the Italian Peace Treaty in the Counci1 of Foreign Ministers, the United States Govemment insisted that the entire area nowconstituting the Free Territory of Trieste, with its overwhelming Italian popula- . tion, must remain an Italian. city. 'However, . after many weeks and months of discussion of this problem, itbecame apparent that it would not be possible to secure the adoption of such a solution. For the sake of unanimity and in the interest of .the re-establishment of peace with Italy, thé United States therefore agreed to the creation of a'Free Territory of Trieste, despite the fact that the Territory was practicâlly foredbomed to politicaI and economic instability. Agreem.ent was given reluctantly and the settlement Wa8 accepted by the Uriited States Govemment in the olear understanding that the successful implementation of the provisions for the creation of a truly independent Free Terri~ tory was wholly dependent upon the full and faithful co-operation ofall of the· Powers concerned, and most particularly of ItaIy and . Yugoslavia. The I~alian Govemment hasfaithfully fulfilled its. obligations and' has a1ready contributed~ at measurable sacrifice to·its· own •economy, to the m.aintenan.ce of the economy of tht: United States- United Kingdom zone. The Yugoslav. Govern- As a first step in the direction of achieving the necessary revision of the Treaty, the.United States, United Kingdom and French Govem-' ments have invited the USSR GovelïllÙent, the fourth membèr of the Council of Foreign Ministers which drafted the Treaty of Peace with Italy, as well as tl1e Italian Government, the Government which. would regain sovereignty over the Tenitory,'to agree to negotiate a'protocol to effect the necessary rèvision. The Italian Government agreed immediately to the proposai. In concert withthe Governments of the United Kingdom, France and the USSR, it is hoped that it will. soon be possible to establish a procedure to, make fur.ther prog!"ess in implementation .of the 20 March proposaI. The United States believes that this is the appropriate, procedure, within the spirit andintent of the Charter, for hrÏJ;1ging about a change in' an unsatisfactory treaty. It is the procedure of peacefulnegotiation. 'The United States does not accept or act upon the theOI'Y which seems to inspire some, other Governments, namely, that if it does not Iike ~ treaty it may disregard it and violate it. The United States, while'urginga . change' in the Treaty, meanwhile regards it as . biniling. Foras long as the United States Government shares in the responsibility fOf.thè"administration of the FreeTerritory of Trieste, 1 can • assure the Security Council, without' quali:ficationof any kind, that my Government will continue to adhere to all its obligations under the existing Treatyand that it will give its complete co-0.peratÎdh to the Council in the fulfilment ,ofthe Council's'respoilsibilitiesfor the assurance of the integrit}';, and independence. of the Terri~ tory, the protection of the human rights of the

The meeting will adjourn until 3.30 p.m. The meeting rose at 1.30 p.m. THREE HUNDRED AND fORTY-SIXTH MEETING (Union Argentine, Fr2l1ce, d'Ukraine, soviétiques, rique. Held at Lake Success, New York, on ThursdaY3 12 August 1948, at 2.30 p.m. . President: Mr. J. MAUK (Union of Soviet Socialist Republics) .. Present: The representatives of the following countries: Argentina, Belgium, Canada, China, Colambia, France, Syria, Ukrainian Soviet Socialist· Republic, Union of Soviet Socialist Republics, United Kingdom, Unittd States of America. The' agenda was that of the 345th meeting (S/Agenda 345/Rev.l). ,l'S. Continuation of the discussion on the Trieste question 195. , At the invitation of the Presid.mt, Mr. Vilfan, the representative of Yugoslavia, took his plac at the Security Council table. Sir Alexander CADOGAN (United Kingdom): In his speech at the fimt meeting [334th meeting] at which the Securlty CounciI dealt with this , subject; the representative of Yugoslavia based his charges against my Government and the Govemment of the United States on artic1e 21 of the Peace Treaty with Italy and on certain articles of Annex VI of that Treaty, which contains' the Permanent Statute for the Free Territory of Trieste. il . 1 should like to begin by reminding ,the Secur- ity CouncM. of the conditions in ,which the. provi- sions in that Treaty re1ating ta the Free Territory become appJ... :"oble. There can be no doubt that article 21 of the Peace Treaty is a~ present in force. Its third paragraph reads as follows: "On the termination of Italian sovereignty, the Free Territory of Trieste shall be governed in accordance with an instrument. for a provi- sional regime drafted by the Council of Foreign Ministers and approved by the Security Council. This Instrument shall remainin-:force until such date as the SecUrity Council shall fix for the coming into force of the Permanent Statute which shall have been approved by it. The Free Terri- tory shaUhenceforth be governed by the pro- visions of suchPermanent Statute." présenta:tit table . (traduit sécurité slavie contre le 'sations de l'Annexe Hermanent toire condition~ lement 'provisoire, " No date for 'the entry. into force of the Per- manentStatute has .yet been fixed by the Security Council, and the'Permam:nt Statute is therefore in force at present only in so far as it is applicable