Treaty of Capua (1939)
The Treaty of Capua was a peace treaty signed on 3 March 1939 between the new Socialist government of Echia and the Socialist Republic of Varkana, that ended Echia's participation in the Great Adonian War and established a non-aggression pact between the two countries. The treaty was signed in Capua, after two months of negotiations. The treaty was forced on the Echian population following the armistice and subsequent establishment of the Second Republic of Echia. According to the treaty, Echia defaulted on all of its commitments to the Coastal Powers.
Occupation of Echia
The Varkans made sure that a loyal and stable government dominated by Communists was installed in the country before transferring authority from the occupational force to the Echian authorities. In elections held in November 1937, the Social Democratic Party won 53 percent of the vote. The Echian Communist Party, under the leadership of Marino Caracciolo and Francesco Palumbo, received support from only 21 percent of the population. The Varkan commander in Echia, Marshal Valiko Jugheli, refused to allow the Social Democrats to form a government. Instead, Jugheli established a coalition government with the Communists holding some of the key posts. Later, Palumbo boasted that he had dealt with his partners in the government one by one, "cutting them off like slices of salami." The gradual takeover by the Communists was completed on 28 February 1939, three days before the Treaty was signed.
During the Varkan occupation, a forced labor policy affected all prisoners of wars captured in Echia and Varkana. It consisted of the requisition and transfer of almost two million Echian workers (POWs and civilians) to Varkana against their will, for the Varkan war effort, which lasted until 1939. In addition to work camps for factories, agriculture, and railroads, forced labor was used for military facilities as well. Additionally, all arms factories and the Echian military industry were requisitioned and used at full capacity for the Varkan war effort, at no cost for Varkana. Workers in Echia were paid wages by the Echian government. A similar situation arose in all Echian ports on the Imerian Sea, while all Echian military bases were requisitioned by Varkans. The Echian military was grounded and completely disarmed until 1939.
The economic consequences of the Varkan occupation were severe. Echia lost all its major trading partners the moment it was occupied. Varkana became the main trading partner, but could not make up for the lost import and export business. While production capacity largely remained intact, the Varkan authorities confiscated a very large part of the output (mainly raw materials). This left Echia with only 62% of its production being freely available. Varkana's occupation of arms factories concentrated Echia's military industry into production for the Varkan military, with no economic returns for Echians. The occupation of all ports also slowed down trade, as all merchandise was heavily inspected by the Varkan military to ensure Echia was complying with the Armistice terms.
Additionally, Varkana and the rump state of Echia started to establish a decentralized socialist economy on the Varkan model during the occupation. Varkana's involvement in the internal affairs of Echia lasted until the peace treaty was signed in 1939.
Return of laborers
The first wave of systematic returns occurred in March–September 1939, interrupted until May 1940. The last to come back, about 1,500 people, were returned only after 1943. Echian sources estimate that around 1,700,000 laborers returned in total, giving an estimate of about 300,000 perished in transit or in captivity.
The peace talks were negotiated by Medea Tevzadze, the Varkan Ambassador to Echia before the war, who had accompanied General Valerian Maglakelidze as a diplomat and President Gotua's representative. Tevzadze negotiated with a special commission representing the new socialist government led by ??, ??, and ?? of Echia.
In addition to the terms of the armistice, the treaty formally forced Echia to cease all military commitment and alliances with the Coastal Powers, military trade with nations at war with Varkana and a 10-year non-aggression pact with provisions that included: consultation, arbitration if either party disagreed, neutrality if either went to war against a third power, and no membership of a group "which is directly or indirectly aimed at the other". There was also a protocol to the treaty which stipulated Echia was to grant Varkana, for trade and navigation, a most-favored nation clause. It also set a framework for the withdrawal of Varkan troops from the country. Surprisingly, no war reparations were suggested or mentioned by Varkana during the negotiations.
On Echia and Varkana
On other regions
The Coastal Powers, especially Volisan Prime Minister Who, were unhappy with this extension of communist power, and the Kandari Caliphate feared Varkana would fight them alongside Aetolia. The Allies and especially Breisland were disappointed with the treaty as it allowed Varkana to put all its forces into its Kastrunetian campaign.