affecting Italy in regard to the Zone. The Italian Political Adviser will have a status similar to that of the United Kingdom and United States Political Advisers.

6. A Senior Director of Administration will be proposed by the Italian Government and will be appointed by the Zone Commander. The Senior Director of Administration will be responsible to the Zone Commander and under the latter's direction will administer, by means of two directorates, the functions of civil government indicated in the following sub-paragraphs. He will have under his administration:

(a) a Directorate of Interior consisting of the following branches: Local Government (Zone Presidency and Communes), Department of Labour, Department of Social Assistance, Public Health Office, Education Office, Census and Survey Office, Fire Service.

(b) a Directorate of Finance and Economics consisting of the following branches: Department of Commerce, Department of Production, Department of Finance (including Customs and Finance Guards), Department of Transportation, Department of Public Works and Utilities (with the exception of construction and housing for the United Kingdom and United States troops), Office of Agriculture and Fisheries, Loans Section.

7. Italians in a number adequate to ensure efficient administration of the directorates, departments and offices mentioned in paragraph 6 above will be proposed by the Italian Government and will in the same manner be appointed by the Zone Commander to staff those directorates, departments and offices. They shall be responsible to the Zone Commander through the Senior Director of Administration. Persons appointed in accordance with the provisions of this paragraph and of paragraph 6 above may be replaced by the Zone Commander, who shall ask the Italian Government to propose their successors. The Italian Government retains the right to recall persons proposed by it, on due notification to the Zone Commander. Employees who have been recruited locally and who are now exercising civil functions in the Military Government will be retained to the maximum practicable extent; any dismissal shall be effected with the prior approval of the Zone Commander.

8. While it is intended initially to retain the present organisation of the directorates administered by the Senior Director of Administration, he may recommend modifications thereof to the Zone Commander and effect them with the latter's approval.

9. The three Governments have noted the intimate connexions that exist between the economy of the Zone and the Italian economy as a whole and the essential contribution that is made to the well-being of the Zone by the Italian Government. The three Governments therefore reaffirm that all the existing Economic and Financial Agreements between them concerning Zone A, and the understandings reached 415900-57- -31

pursuant thereto, remain in full force and effect. Security controls over international trade shall continue to be administered by United Kingdom and United States officers appointed by and responsible to the Zone Commander.

10. The Governments of the United Kingdom and the United States will instruct the Zone Commander concerning the application of the present understandings and the necessary readjustments to be made in the present organisation of the Military Government, in order to carry out the provisions of this Memorandum of Understanding as soon as practicable with a view to substantial completion by the 15th July, 1952.

5. STATEMENT RELEASED TO THE PRESS BY THE GOVERNMENTS OF THE UNITED STATES AND THE UNITED KINGDOM, OCTOBER 8, 1953 2

The Governments of the U.S. and U.K. have viewed with great concern the recent deterioration in the relations between Italy and Yugoslavia which has resulted from the dispute over the future of the Free Territory of Trieste.

3

Since the conclusion of the Second World War, the two Governments have jointly exercised the administration of Zone A of the Territory under the terms of the Italian Peace Treaty. Similarly, the Yugoslav Government has continued to be responsible for the administration of Zone B. These responsibilities were to be purely temporary and it was never envisaged that they should become permanent. For reasons that are well known, it proved impossible to reach agreement with the other signatories of the Peace Treaty for setting up the permanent regime for the Free Territory provided for in the Treaty.

The Governments of the U.S. and U.K., who were thus faced with a situation not contemplated in the Treaty, subsequently employed their good offices on frequent occasions in the hope of promoting a settlement by conciliation between Italy and Yugoslavia. Unfortunately it was not possible to find a solution acceptable to both sides. Moreover the recent proposals put forward by Italy and Yugoslavia have been reciprocally rejected.

In these circumstances, the two Governments see no alternative but to bring the present unsatisfactory situation to an end. They are no longer prepared to maintain responsibility for the adminis

1 See TIAS 1845 (62 Stat., pt. 3, p. 3026), TIAS 1978 (63 Stat., pt. 3, p. 2709), TIAS 2035 (64 Stat., pt. 3, p. B107), TIAS 2261 (2 UST, pt. 1, p. 1156), and TIAS 2620 (3 UST, pt. 4, p. 4657).

2 Department of State Bulletin, Oct. 19, 1953, p. 529.

3 TIAS 1648; 61 Stat., pt. 2, p. 1245.

See the agreement of June 9, 1945, regarding the provisional administration of Venezia Giulia; A Decade of American Foreign Policy, pp. 478-479.

tration of Zone A. They have therefore decided to terminate the Allied Military Government, to withdraw their troops, and having in mind the predominantly Italian character of Zone A to relinquish the administration of that Zone to the Italian Government. The two Governments expect that the measures being taken will lead to a final peaceful solution.

It is the firm belief of the two Governments that this step will contribute to stabilization of a situation which has disturbed ItaloYugoslav relations during recent years. They trust that it will provide the basis for friendly and fruitful cooperation between Italy and Yugoslavia, which is as important to the security of Western Europe as it is to the interest of the two countries concerned.

The withdrawal of troops and the simultaneous transfer of administrative authority will take place at the earliest practicable date, which will be announced in due course.

6. MEMORANDUM OF UNDERSTANDING BETWEEN THE GOVERNMENTS OF THE UNITED STATES, ITALY, THE UNITED KINGDOM, AND YUGOSLAVIA, OCTOBER 5, 1954 1

1. Owing to the fact that it has proved impossible to put into effect the provisions of the Italian Peace Treaty relating to the Free Territory of Trieste, the Governments of the United Kingdom, the United States and Yugoslavia have maintained since the end of the war military occupation and government in Zones A and B of the Territory. When the Treaty was signed, it was never intended that these responsibilities should be other than temporary and the Governments of Italy, the United Kingdom, the United States and Yugoslavia, as the countries principally concerned, have recently consulted together in order to consider how best to bring the present unsatisfactory situation to an end. As a result they have agreed upon the following practical arrangements.

2. As soon as this Memorandum of Understanding has been initialled and the boundary adjustments provided by it have been carried out, the Governments of the United Kingdom, the United States and Yugoslavia will terminate military government in Zones A and B of the Territory. The Governments of the United Kingdom and the United States will withdraw their military forces from the area north of the new boundary and will relinquish the administration of that area to the Italian Government. The Italian and Yugoslav Governments will forthwith extend their civil administration over the area for which they will have responsibility.

3. The boundary adjustments referred to in paragraph 2 will be carried out in accordance with the map at Annex I.3 A preliminary Department of State Bulletin, Oct. 18, 1954, pp. 556-558.

See articles 4, 5, 21, and 22 and annexes VII-X of the Treaty of Peace with Italy; TIAS 1648 (61 Stat., pt. 2. p. 1245).

Not printed. The map reproduced here (p. 420) was especially prepared for the Department of State Bulletin.

1

demarcation will be carried out by representatives of Allied Military Government and Yugoslav Military Government as soon as this Memorandum of Understanding has been initialled and in any event within three weeks from the date of initialling. The Italian and Yugoslav Governments will immediately appoint a Boundary Commission to effect a more precise demarcation of the boundary in accordance with the map at Annex I.

4. The Italian and Yugoslav Governments agree to enforce the Special Statute contained in Annex II.'

5. The Italian Government undertakes to maintain the Free Port at Trieste in general accordance with the provisions of Articles 1-20 of Annex VIII of the Italian Peace Treaty.

6. The Italian and Yugoslav Governments agree that they will not undertake any legal or administrative action to prosecute or discriminate against the person or property of any resident of the areas coming under their civil administration in accordance with this Memorandum of Understanding for past political activities in connexion with the solution of the problem of the Free Territory of Trieste.

7. The Italian and Yugoslav Governments agree to enter into negotiations within a period of two months from the date of initialling of this Memorandum of Understanding with a view to concluding promptly an agreement regulating local border traffic, including facilities for the movement of the residents of border areas by land and by sea over the boundary for normal commercial and other activities and for transport and communications. This agreement shall cover Trieste and the area bordering it. Pending the conclusion of such agreement, the competent authorities will take, each within their respective competence, appropriate measures in order to facilitate local border traffic.

8. For a period of one year from the date of initialling of this Memorandum of Understanding persons formerly resident ("pertinenti"-"zavičajni") in the areas coming under the civil administration either of Italy or of Yugoslavia shall be free to return immediately thereto. Any persons so returning, as also any such who have already returned, shall enjoy the same rights as the other residents of these areas. Their properties and assets shall be at their disposal, in accordance with existing law, unless disposed of by them in the meantime. For a period of two years from the date of initialling of this Memorandum of Understanding, persons formerly resident in either of these areas and who do not intend returning thereto, and persons presently resident in either area who decide within one year from the date of initialling of this Memorandum of Understanding to give up such residence, shall be permitted to remove their movable property and transfer their funds. No export or import duties or any other tax will be imposed in connexion with the moving of such property. Persons wherever resident who decide to sell their movable and immovable property within two years

1 Not printed. See Department of State Bulletin, Oct. 18, 1954, pp. 558-561.

from the date of initialling of this Memorandum of Understanding will have the sums realised from the sale of such property deposited in special accounts with the National Banks of Italy or Yugoslavia. Any balance between these two accounts will be liquidated by the two Governments at the end of the two year period. Without prejudice to the immediate implementation of the provisions of this paragraph the Italian and Yugoslav Governments undertake to conclude a detailed agreement within six months of the date of initialling of this Memorandum of Understanding.

9. This Memorandum of Understanding will be communicated to the Security Council of the United Nations.1

Settlement With Japan

7. TREATY OF PEACE, SEPTEMBER 8, 1951 2

Whereas the Allied Powers and Japan are resolved that henceforth their relations shall be those of nations which, as sovereign equals, cooperate in friendly association to promote their common welfare and to maintain international peace and security, and are therefore desirous of concluding a Treaty of Peace which will settle questions still outstanding as a result of the existence of a state of war between them;

Whereas Japan for its part declares its intention to apply for membership in the United Nations and in all circumstances to conform to the principles of the Charter of the United Nations; to strive to realize the objectives of the Universal Declaration of Human Rights; to seek to create within Japan conditions of stability and well-being as defined in Articles 55 and 56 of the Charter of the United Nations and already initiated by post-surrender Japanese legislation; and in public and private trade and commerce to conform to internationally accepted fair practices;

Whereas the Allied Powers welcome the intentions of Japan set out in the foregoing paragraph;

The Allied Powers and Japan have therefore determined to conclude the present Treaty of Peace, and have accordingly appointed the

1 Transmitted to the President of the Security Council on Oct. 5, and circulated as U. N. doc. S/3301.

TIAS 2490; 3 UST, pt. 3, p. 3169.

Ratification advised by the Senate, Mar. 20, 1952, subject to a declaration (see infra); ratified by the President, Apr. 15, 1952; entered into force, Apr. 28, 1952.