PRINCIPAL RUMANIAN PROBLEMS
 
                      Summary
 
     The long-range interest of the United States in 
the maintenance of peace and stability in eastern Europe 
may be involved in the issues now arising in connection 
with the control of Rumania during the armistice period 
and with the eventual peace settlement.  The fundamental
problem is the degree to which the United States will 
acquiesce in the exercise by the Soviet Union of a domi-
nant or exclusive influence in Rumania. The British 
seem to fear that present Soviet policies threaten Ru-
mania's existence as an independent state and may block
the British plans to restore their pre-war political and 
economic position in Rumania. Prominent Rumanians have 
made direct appeals to American representatives in Bu-
charest for an indication of the policy of the United 
States on the matter of possible Soviet domination of 
Rumanian.
 
       Under the armistice agreement, to which all three 
principal Allied Governments were parties, the Allied 
Control Commission operates under the general direction 
of the Soviet High Command. The Soviet authorities have 
taken a number of unilateral decisions, such as those in-
volving the property of American-owned petroleum com-
panies, on matters which the Department believes should
have been made the subject of consultation and agreement 
among the three Allied Governments.
 
     It would be desirable to secure the agreement of 
the British and Soviet Governments to the following prin-
ciples:
 
          1.   Respect for the Rumanian people's right to in-
dependence and to the choice of' their own government;
 
          2.   An Allied economic policy toward Rumania, under 
the armistice and the peace settlement, which will recon-
cile the legitimate claims of Allied nations to repara-
tion with the general interest in promoting the rapid 
economic recovery of Europe;
 
          3.   The desirability of finding a solution of the 
Hungarian-Rumanian frontier dispute which will give some 
satisfaction to Hungary's legitimate claims and promote 
peaceful relations between the two states.