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On December 11 the commission submitted plebiscite proposals which it urged the two Governments to accept in their entirety. In order to provide any necessary explanations thereof, the commission dispatched one member, Dr. Alfredo Lozano (Colombia) to the subcontinent. Following conversations with him in the course of which certain interpretations and clarifications were provided, India and Pakistan on December 23 and 25 respectively signified their acceptance of the proposals.

These proposals provide for the holding of a plebiscite to be conducted by a plebiscite administrator nominated by the Secretary-General in agreement with the commission. The administrator is, however, to be formally appointed by the Government of Jammu and Kashmir and is to derive from that State the powers he considers necessary for organizing and conducting the plebiscite and for insuring its fairness and impartiality. Provision is made, following implementation of parts I and II of the commission's resolution of August 13, 1948, for consultation to determine the final disposal of all armed forces within the State. All civil and military authorities in the State and principal political elements therein are to be required to cooperate with the administrator in the preparation and holding of the plebiscite. All citizens of the State who have left on account of the disturbances are to be invited and are to be free to exercise all their rights as citizens. Persons who since August 15, 1947, have entered the State for other than lawful purposes are to be required to leave the State. A detailed series of civil and political rights is guaranteed.

These proposals were formalized by the commission in a resolution adopted January 5, 1949. Meanwhile, the Governments of India and Pakistan, believing that “with acceptance of these proposals there remained no reason for continuation of hostilities”, arranged for a cease-fire in Jammu and Kashmir to come into effect at one minute before midnight on January 1, 1949, precisely one year after the presentation of the Indian complaint to the Security Council.

In the light of these agreements the commission decided to return immediately to the subcontinent to carry out its responsibilities with reference to the cease-fire and truce agreements and the plebiscite principles. A military observer, Lt. Gen. Maurice Delvoie, of Belgium, arrived on the subcontinent January 2, 1949. It was planned that he would be joined shortly by military observers to assist in supervision of the observation of the cease-fire and truce arrangements. It was also anticipated that an outstanding person would be nominated as plebiscite administrator and that he would formally undertake his duties as soon as the cease-fire and truce arrangements had been car

ried out.

The area

TRIESTE QUESTION In January 1947 the Security Council approved the terms of the Italian peace treaty providing for the establishment of a Free Territory of Trieste and accepted certain responsibilities in that connection, particularly that of assuring the independence and integrity of the Free Territory. The coming into force of the Italian treaty, on September 15, 1947, made this responsibility an active one. of the Free Territory has remained divided into two separate zones, one under the administration of the American-British military command (the city and port of Trieste and a small rural area), and the other under the Yugoslav military command (a predominantly rural area to the south of the city). Article 1 of annex VII of the peace treaty provides for the continuation of such separate administration of the two zones pending the assumption of office by a Governor.

The British and American Governments have furnished the Security Council during the past year with regular quarterly reports on the administration of their zone, in which British General T. S. Airey is commander. The Yugoslav Government recently sent the Security Council a report on the military administration of their zone over the past year. This was done after repeated references were made in the Council last summer to the absence of such reports from the Yugoslav Government.

The protracted division of the area has been due to the inability of the Security Council to agree on the appointment of a Governor, without whom it would be impossible to progress toward unification of the two zones and place the Permanent Statute for the Free Territory into effect. Periodic discussions in the Security Council in 1947 had failed to produce agreement on a candidate for Governor. In December of that year, the Council asked the Governments of Italy and Yugoslavia to consult with each other in an effort to agree on a candidate they might jointly propose. The Italo-Yugoslav talks produced no agreement, and in January 1948 the permanent members of the Council were asked to consult on the problem. With the Soviet Union differing from the views of the four other permanent members, the deadlock was passed back to the Security Council which decided, in March 1948, to postpone further discussion.

Convinced that conditions in the Free Territory of Trieste had reached the point at which the treaty settlement for Trieste had become unworkable, the United States, the United Kingdom, and France, on March 20, 1948, proposed that the Soviet Union and Italy join them in agreement on an additional protocol to the Italian peace treaty which would provide for the return of the Free Territory to Italy. The

three powers pointed out that Security Council discussions of a Governor had shown that agreement was impossible. They referred specifically to evidence that the Yugoslav zone had been “completely transformed in character” and had been virtually incorporated into Yugoslavia so that the intended independent and democratic status of the Territory was compromised. In view of such conditions the three Governments asserted that the existing settlement for Trieste “cannot guarantee the preservation of the basic rights and interests of the people of the Free Territory”.

The Italian Government expressed agreement with the proposal. The Soviet Government, replying in April to two communications from the United States on the subject, indicated a generally unfavorable attitude toward the proposed procedure for revising a part of the Italian treaty settlement. However, the Soviet Government has neither accepted nor rejected the substance of the proposal.

On June 1, 1948, a further note was sent to the Soviet Embassy in Washington, reiterating the American Government's belief that a suitable procedure should quickly be found to bring about the return of the Free Territory to Italy. Similar notes were also sent by the British and French Governments. The notes again requested the views of the Soviet Government on the appropriate procedure to be followed. This last approach has also remained unanswered.

It continues to be the view of the United States, British, and French Governments that the solution of the Trieste problem envisaged in the peace treaty has become unworkable and that under the circumstances the return of the entire area of the Free Territory to Italy would provide the only just and practicable solution. The United States, British, and French Governments have subsequently reiterated their continued support of such a solution as first proposed in our joint statement of March 20, 1948.

In the spring and summer of 1948 the British-American military administration, on behalf of their zone of the Free Territory, concluded several financial accords with the Italian Government for the regulation of the use of the Italian lira as legal tender in that zone and for the supply of lire and foreign exchange by Italy, as well as on other trade and financial matters. This was in implementation of article 11, annex VII, of the Italian peace treaty, which calls for such arrangements between Italy and the provisional authorities of the Free Territory "pending the establishment of a separate currency regime for the Free Territory”. The agreements did not prejudice the freedom of action of any future government of the Free Territory.

Yugoslavia on July 28, 1948, seized upon those financial accords, which had been duly published, to charge before the Security Council that there had been a violation of the peace treaty by the Allied military administration. The latter was accused of seeking to incorporate Trieste into Italy by economic means and of thus jeopardizing the Territory's independence. The Security Council debated the matter between August 10 and 19, 1948. During the course of the debate, frequent references were made to the noticeable absence at that time of any reports to the Council on the Yugoslav administration of their zone.

Throughout the debate the Yugoslav spokesman was supported by the Representatives of the Soviet Union and the Ukraine. Both the American and British Representatives made ample statements to the Council on the conformity with the terms of the treaty of the financial agreements in question. At the conclusion of the debate two draft resolutions were placed before the Council. One, formulated by Yugoslavia and sponsored by the Ukraine, called for nullification by the Council of the financial agreements as contrary to the peace treaty. A second, proposed by the Ukraine, sought to transfer the Council's attention to the separate question of the appointment of a Governor and embodied a declaration by the Council that this matter should be urgently settled. The Yugoslav motion failed with 9 of the Council members simply abstaining, while the Soviet Union and the Ukraine voted affirmatively. The second proposal also failed when 6 members abstained and 4 voted affirmatively.

Considerable aid has gone from the United States in the effort to promote the economic recovery of the United States United Kingdom zone of Trieste, whose normal rate of economic activity has been disrupted not only by the war but by the political and economic aftermath of the war in that part of Europe which the port is equipped to serve. This problem has been heightened by the economic difficulties inherent in the existence as an independent territory of such a small area virtually devoid of natural resources. Through September 1948 the zone received relief supplies from the United States designed to provide food for the population and to prevent economic retrogression.

On October 14, 1948, the Anglo-American zone of the Free Territory was admitted to the Organization for European Economic Co-operation. On October 15 an economic-cooperation agreement was signed in Trieste between the authorities of the United States-United Kingdom zone and of the United States Government. These two steps opened up expanded possibilities of assisting in the restoration of a healthy economic life for Trieste within the larger framework of broad European recovery. An Economic Cooperation Administration mission

is now established in Trieste to supervise the provision of United States aid for the recovery program.

On October 24, Yugoslavia submitted a new complaint to the Security Council against the Anglo-American administration of their zone of Trieste. The Yugoslavs took exception to the United States, United Kingdom military government's agreement for the zone's participation in the European Recovery Program, to the military government's conclusion of certain financial arrangements for the zone, and to other administrative measures of the military government.

As of the end of 1948, the Security Council had not scheduled any meetings for formal consideration of this matter.

HYDERABAD

On August 15, 1947, the suzerainty of the British Crown over the various Indian States was terminated. Hyderabad, one of the most important of the States, did not accede to either of the two new dominions of India or Pakistan. Hyderabad is located in the center of the Dominion of India, and a large majority of the population is Hindu, although the Nizam is a Moslem and his Government was composed principally of Moslems. On November 29, 1947, the Nizam entered into a one-year “stand-still agreement” with India which placed the conduct of Hyderabad's external relations in the hands of the Government of India. However, the relations between the Government of India and the Nizam became strained and efforts to reach agreement on the basis of permanent accession to India proved fruitless.

The problem of relations between the two Governments was placed before the Security Council through a complaint by the Nizam of Hyderabad dated August 21, 1948, in which it was alleged that ac by the Government of India involving intimidation, economic blockade, and frontier violations threatened the existence of Hyderabad and constituted a grave dispute the continuance of which was likely to endanger the maintenance of international peace and security.

The matter was discussed in the Security Council on September 16 with representatives of India and Hyderabad present. Although some doubt was expressed by certain members as to whether Hyderabad was a "state" within the meaning of that article of the Charter which permits a state to bring a complaint to the attention of the Security Council, the Council decided, with the United States Representative voting in favor, to place the matter on its agenda for discussion without prejudicing the merits of the case.

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