Reference Dominions Office telegrams D.1688, 1689, 1690 and 1691.
 Soviet proposals for peace treaties with Finland, Bulgaria, Hungary and Roumania. 
1. Our interest in these countries is mainly the general one of seeing created conditions which will enable the establishment of settled governments broadly representative of popular opinion hitherto suppressed under Fascist regimes and capable of substantially raising the living standards and general economic condition of impoverished peasants and working people.
2. Economic reconstruction aimed at raising living standards will bring expanding opportunities of international trade with the Balkans and Finland and we would agree with any proposals in the peace treaties likely to promote such conditions.
3. The main territorial change appears to be the transfer of Transylvania to Roumania. We think this a just settlement provided it is accompanied by voluntary exchange of minority populations and guarantees for minority rights. A good deal of the criticism of the 1919 settlement was based on agitation by Chauvinist elements in Hungary.
4. The proposal in the final paragraph of each of Soviet drafts that Allied Powers will support candidature of each of the countries for membership in United Nations is paralleled by similar proposal in United Kingdom draft heads for political sections of Treaty with Italy. (Part 1(i) in telegram D.1226 of 14th July, 1945 ). In as much as the four countries concerned broke with Hitler, rendered active support to the United Nations cause and have recently fulfilled Armistice obligations by arrests of war criminals and purges of Fascist influences, it seems appropriate that they should be supported in any candidature, for membership in the United Nations. If adoption of the attribute of being 'democratic' is to be made the test of sponsorship for prospective membership of the United Nations (see Dominions Office telegram D.1466  paragraph 2) there would be serious anomalies in respect of existing members. It would be difficult for example to establish that the existing regimes in Argentine or Ethiopia or Greece are in any sense democratic.
5. The immediate problem appears to be less the actual content of the peace treaties for these countries but when, and under what conditions, they will be concluded (see Dominions Office telegram D.1466 of 16th August and No. 378 to Australia of 16th September  concerning New Zealand's comments). We do not think that differing interpretations of the character of the internal regime in Bulgaria, Roumania and Hungary should stand in the way of early conclusion of peace treaties. The following considerations occur to us:-
(a) All these countries have languished under Fascist rule for many years and the practice of Western parliamentary democracy is foreign to them. In eliminating the political, economic and social roots of Fascism one must expect far-reaching economic and social changes in the interests of the hitherto oppressed majority. These changes may be initiated through political forms and processes foreign to those of Western parliamentary practice but it should not be assumed that the mere existence of national party 'blocs' necessarily involves unrepresentative government. In any case the estimate of the degree of popular consent and support enjoyed by the existing Balkan governments is essentially a matter for their respective peoples to decide.
(b) Ending of the armistice regimes as a result of the conclusion of peace treaties will enable restoration of normal diplomatic representation and facilities for protection of legitimate foreign interests in the Balkans as proposed earlier in Dominions Office telegram D.944 of 30th May. 
(c) Prolongation of the attitude expressed in Dominions Office telegram 1466 and in recent moves by Western Powers in Bulgaria and Russia will only increase suspicion and possible friction between Russia and the Western democracies without yielding likely positive gains.