Australia presented case for amendment to third recital of
preamble including
(a) Reference to principles of justice and equity as basis of
treaty and
(b) Reference to fundamental rights on protection minorities.

On 27th August. First two portions of the Australian amendment to
first recital of the preamble viz. insertion of the words-
'conforming to the principles of justice' after the words-'treaty
of peace which . . .' were adopted.

The third part of the Australian amendments relating to human
rights was reserved for consideration after the amendments to the
articles affected has been considered.

Consideration was then given to articles of the treaty. There was
no comment on article 1, which was passed. On article 2, the
President explained that this article was common to the Roumanian
and Hungarian treaties, and that it was proposed to hold a joint
meeting of the two Commissions to hear the Hungarian proposals.

The Australian representative stated that in this case he would
defer his proposals regarding examination by a Sub-Commission
until the Hungarian case had been heard.

[C.] Political and Territorial Commi[ssion] for Finland
Nothing further since report of last meeting.

D. Political and Territorial Commission for Hungary
A communication was presented to this Commission from the
Hungarian Government, but this was not accepted as amendment or
discussed as no member was prepared to endorse it.

The Commission then considered the Australian amendment to the
preamble. It discussed whether the Commission should proceed
direct with this amendment or await decision of the international
Secretariat. The Australian delegate informed the Commission that
the Secretariat had been asked to refer such amendments to the
General Commission which would consider them and make
recommendations to various Commissions. This was strongly opposed
by the Soviet delegation which referred to Article 1 paragraph 2
of the rules of procedure and by Ukraine and Yugoslavia. The
adjournment was moved by South Africa before any decision was
reached.

[E.] Political and Territorial Commi[ssion] for Bulgaria
Jebb, United Kingdom, was elected Rapporteur. It was decided that
the Bulgarian[s] should state the views of their Government in
writing to the Commission. There was a discussion whether Greece
and Yugoslavia should be called to the Commission to orally state
their views on Bulgarian treaty.

Paragraphs 1, 2 and 3 of the preamble were adopted.

Military Commission. Discussions to date have been largely on
procedure in the Commission and [not] as yet on specific treaty
clauses.

[F.] Economic Commission for the Balkans and Finland
Australian amendments on Roumanian reparations were discussed at
length. We would have preferred to open on Italy but incidence of
Commission meetings forced the above position. Any request of ours
for deferment would have been rejected. Walker outlined the
underlying reasons for our amendments and the principles on which
we based them. In particular he stressed:

(a) Lack of factual information on which to base reparations.

(b) That while agreeing with the justice of reparations it was
nevertheless necessary for payment to be assessed on some
measurement of economic capacity.

(c) That assessment and control of reparations was a continuing
matter which requires a continuing authority.

Molotov spoke for fifty minutes in very strong opposition of our
proposals. His general line was
(a) Failure to understand why a so distant country was taking the
initiative in this matter which concerns mainly Russia and
Roumania.

(b) That Russia had suffered very heavy losses directly inflicted
by Roumanian forces and was entitled to directly collect
reparations.

(c) That the proposal for payment in foreign exchange would throw
Roumania into the pound/dollar net (he studiously avoided
mentioning the provision in our draft for 'other currencies').

(d) That the interests of lasting and durable peace could not be
served by the Australian amendment which would only defer
settlement of reparations and provide an avenue for ex-enemy
countries to avoid their reparations responsibilities.

(e) That the peace terms follow the armistice terms which had been
confirmed by the C.F.V. [4] and should not be changed.

Ten members spoke out of fourteen on Commission. Of these
U.S.S.R., Yugoslavia, Czechoslovakia, Ukraine, Byelo Russia,
United States of America, France and United Kingdom were directly
opposed to the Australian amendments although the last three
expressed concern that U.S.S.R. had thought fit to attack
Australia's rights and motives in bringing amendments forward.

We had only qualified support on the general principles from
Greece and Canada.

It was obvious that if a vote were taken we would receive no
support although there may have been one or two abstentions.

So as not to weaken our position in relation to other treaties
which have been fully reserved we thought it necessary to withdraw
amendment to article 22 of the Roumanian treaty. Our action on
this was well received by our friends on the Commission, and we
expect it to help on the Italian Commi[ssion] where the balance of
representation is more favourable.

[G.] Economic Commission for Italy
At the afternoon meeting on the 27th Walker outlined principles of
Australian amendments and our reasons for advancing them.

Yugoslavia and Russia (Molotov) replied on much the same lines as
their speeches on Roumanian discussion.

[AA:A1067, E46/38/14]

1 The file copy was numbered in error 'PCC22'.

2 Dispatched 23 August. It reported on elections to offices and
progress in the commissions.

3 A sign here indicates 'as received'.

4 'C.F.V.' presumably should read 'C.F.M.' (Council of Foreign
Ministers).