Proposal by the U.S. Delegation
[Babelsberg, July 17, 1945]
Top secret
Policy Toward Italy
The objectives of the three governments with regard to Italy are directed towards her early political independence and economic recovery, and the right of the Italian people ultimately to choose their own form of government.
Italy’s present status as co-belligerent and unconditionally surrendered enemy is anomalous, and hampers every effort both by the Allies and by Italy herself, to improve Italy’s economic and political situation. This anomaly can be finally solved only through the negotiation of a definitive peace treaty which would at best require some months. The preparation of such a treaty should be one of the first tasks of the suggested council of foreign ministers.
Meanwhile, however, improvement in the Italian internal situation would be greatly facilitated by some immediate interim arrangement whereby the Italian Government would have some tangible recognition of Italy’s contribution toward the defeat of Germany.
It is therefore recommended that the short terms of surrender and the numerous obsolete clauses of the long terms of surrender be terminated, and replaced by certain undertakings on the part of the Italian Government to meet the requirements of the existing situation.
These undertakings should provide:
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That the Italian Government will refrain from any hostile action against any of the United Nations pending the conclusion of the treaty of peace.
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That the Italian Government will maintain no military, naval or air forces or equipment, except as authorized by the Allies, and will comply with all instructions on the subject of such forces and equipment.
Under this interim arrangement, control of Italy should be retained only so far as is necessary:
- a. To cover Allied military requirements, so long as Allied forces remain in Italy or operate therefrom.
- b. To safeguard the equitable settlement of territorial disputes.
Proposal by the U.S. Delegation
[Babelsberg, July 17, 1945]
German Reparations
Agreed Principles
The Allied Commission on Reparations has agreed on seven basic principles (text attached).
Principle for Decision
The Commission has failed to reach agreement on the underscored last clause of an eighth principle:
After payment of reparations, enough resources must be left to enable the German people to subsist without external assistance. In working out the economic balance of Germany, the necessary means must be provided for payment of imports approved by the governments concerned before reparation deliveries are made from current production or from stocks of goods.”
The United States Government fully concurs in these principles and must insist that such necessary imports as are approved by our governments shall constitute a first charge against exports from Germany of current production and stocks of goods. To do otherwise, will lead either to a repetition of our mistakes at the end of the last war, or leave us unable to bring about the desired industrial disarmament of Germany.
Definitions and Allocation of Reparations
The United States proposes immediate agreement on definitions of restitution, war booty, and reparations (text attached). The Commission has agreed on a formula for allocation of reparations between the USSR, U.K. and U.S. and a procedure for settling the division of reparations among other countries (texts attached).
The United States Government feels that the definitions of restitution, war booty, and reparations are so interrelated with the formulae for allocation of reparations that agreement must be reached on all of these matters simultaneously.
[Attachment 1]
Agreed Principles of Reparations
I. Removals of property for reparations shall be primarily such as to assist in bringing to an end the war-making power of Germany by eliminating that part of Germany’s industrial capacity which constitutes war potential.
II. Reparations shall be such as will speed recovery and reconstruction in countries devastated at German hands.
III. For the purposes of making a reparations plan, Germany will be treated as a single economic unit.
IV. Any plan of reparations shall be avoided which necessitates external financial assistance either to enable reparations deliveries to be made or to facilitate economic reconstruction required for reparation purposes, or which might, in the opinion of the Governments concerned, prejudice the successful execution of the task entrusted to the Armies of Occupation.
V. To a maximum extent reparations shall be taken from existing national wealth of Germany. While for convenience claims may be stated in money, it is necessary to bear in mind that in contrast to reparations after World War I which were assessed and exacted in money, this time reparations will be assessed and exacted in kind in the form of things, such as plants, machines, equipment, stocks, foreign investments, etc.
VI. In order to avoid building up German industrial capacity and disturbing the long term stability of the economies of the United Nations, long run payment of reparations in the form of manufactured products shall be restricted to a minimum.
VII. In justice to those countries occupied by the enemy, reparations shall be calculated upon the basis that the average living standards in Germany during the reparation period shall not exceed the average of the standards of living of European countries. European countries means all European countries excluding U.K. and USSR.
[Attachment 2]
Proposed Definitions
The United States proposes that:
1.) Restitution shall be confined to identifiable artistic, religious and cultural objects existing at the date of the invasion of the territories from which such objects have been removed, insofar as such objects can be recovered and irrespective of the form of dispossession by which they came into enemy hands. While any nation entitled to reparation may be allowed a prior claim for the return of certain other particular types of identifiable property removed by the enemy, the value of such property, if returned, shall be entered on the reparation account of such nation.
2.) War booty shall be limited to finished equipment and supplies produced for and belonging to the German armed forces exclusive of any facilities used to produce such equipment or supplies.
3.) Except for property transferred as restitution, war booty or exports to pay for approved imports, all property in the territory within the boundaries of the German Reich as it existed on December 31, 1937 shall be subject to reparations.
[Attachment 3]
Agreed in the Allied Commission on Reparations
In accordance with the principles established at the Crimean Conference, namely, that the countries entitled to the greatest share of reparations are those which have borne the main burden of the war, have suffered the heaviest losses and have organized victory over the enemy, the Allied Commission on Reparations agrees that the total sum of reparations (including both what is received on account of removals from the national wealth of Germany and what is received from annual deliveries after capitulation) will be distributed as follows:
|
Of the total |
USSR |
56% |
UK |
22% |
USA |
22% |
TOTAL |
100% |
To meet the validated claims for reparations on the part of the other nations, as determined by mutual agreement of the three powers, each of the three powers will give up from their share in the ratio that each share bears to the total.
[Attachment 4]
Agreed in the Allied Commission on Reparations
Procedure for settling the division of reparations between countries other than the U.K., USA, and USSR
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The Allied Commission on Reparations will send a communication as soon as possible through the Governments of the U.K., USA, and USSR inviting all the United Nations that have taken a direct part in the war with Germany to submit within one month to the Allied Commission on Reparations through their Diplomatic Representatives in Moscow, or otherwise, statements showing data for establishing their reparations claims against Germany and the value of German pre-war assets in their territory. The nature of the data to be submitted will be determined subsequently.
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On receipt of the data the Allied Commission on Reparations will decide as a basis of discussion on a provisional list of countries entitled to receive reparations and also on the percentage to be allotted to each of them.
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The Allied Commission on Reparations will in such form as is found to be convenient enter into negotiations with the United Nations whose claims to reparations are considered to be well founded with the object of securing their agreement to the percentage of reparations which has been provisionally suggested by the Allied Commission on Reparations.
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If the said negotiations with the United Nations whose claims to reparations have been recognized are successful the Allied Commission on Reparations through the member Governments will send to these nations a further communication inviting them to take part in a special conference for the conclusion of a general agreement on reparations between the interested nations.
If however the preliminary negotiations prove not sufficiently successful to make it possible to call a conference of this kind the Allied Commission on Reparations will consider afresh in the light of the factual material in its possession the question of the further steps required.
- A Communication will be sent to the United Nations whose claims to reparations have not been approved informing them of the decision of the Allied Commission on Reparations with an indication of the reasons for that decision.
Proposal by the U.S. Delegation
[Babelsberg, July 17, 1945]
Top secret
Subject: DRAFT PROPOSAL FOR THE ESTABLISHMENT OF A COUNCIL OF FOREIGN MINISTERS
One of the most urgent problems in the field of foreign relations facing us today is the establishment of some procedure and machinery for the development of peace negotiations and territorial settlements without which the existing confusion, political and economic stagnation will continue to the serious detriment of Europe and the world.
The experience at Versailles following the last war does not encourage the belief that a full formal peace conference without preliminary preparation on the part of the leading powers is the best procedure. Such a conference without such preparation would be slow and unwieldy, its session would be conducted in a heated atmosphere of rival claims and counterclaims and ratification of the resulting documents might be long delayed. I therefore propose as the best formula to meet the situation the establishment of a Council composed of the foreign ministers of Great Britain, the Union of Soviet Socialist Republics, China, France and the United States, namely, the countries which compose the permanent members of the Security Council of the United Nations organization. It is my thought that this Council should meet as soon after our meeting as preparations therefor can be completed. I should like to present therefore a draft proposal along these lines which I have drawn up for your consideration.
[Attachment]
Draft Proposal for the Establishment of a Council of Foreign Ministers
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There shall be established a Council composed of the Foreign Ministers of Great Britain, the Union of Soviet Socialist Republics, China, France, and the United States.
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The Council shall meet at ___________ and its first meeting shall be held on ____________. Each of the Foreign Ministers shall be accompanied by a high-ranking deputy duly authorized and capable of carrying on the work of the Council in the absence of his Foreign Minister. He will likewise be accompanied by a small staff of technical advisers suited to the problems concerned and to the organization of a joint secretariat.
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As its immediate important task, the Council would be authorized to draw up, with a view to their submission to the United Nations, treaties of peace with Italy, Rumania, Bulgaria, and Hungary and to propose settlements of territorial questions outstanding on the termination of the war in Europe. The Council shall be utilized for the preparation of a peace settlement for Germany to be accepted by the Government of Germany when a government adequate for the purpose is established.
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Whenever the Council is considering a question of direct interest to a State not represented thereon, such State should be invited to send representatives to participate in the discussion and study of that question. It is not intended, however, to fix hard and fast rules but rather to permit the Council to adapt its procedure to the particular problem under consideration. In some cases it might desire to hold its own preliminary discussions prior to the participation of other interested States. In other cases the Council might desire to convoke a formal conference of the States chiefly interested in seeking a solution of the particular problem. It is so authorized.
Proposal by the U.S. Delegation
[Babelsberg, July 17, 1945]
Top secret
Implementation of the Yalta Declaration on Liberated Europe
In the Yalta Declaration on liberated Europe signed February 11, 1945, the three governments assumed certain obligations in regard to the liberated peoples of Europe and the peoples of the former Axis satellite states. Since the Yalta Conference, the obligations assumed under this declaration have not been carried out. In the opinion of the United States Government the continued failure to implement these obligations would be regarded throughout the world as evidence of lack of unity between the three great powers, and would undermine confidence in the sincerity of their declared aims.
The United States Government proposes, therefore, that the following steps to carry out the obligations of this Declaration be agreed upon at this meeting:
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The three Allied Governments should agree on necessity of the immediate reorganization of the present governments in Rumania and Bulgaria, in conformity with Clause (c) of the third paragraph of the Yalta Declaration on liberated Europe.
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That there be immediate consultation to work out any procedures which may be necessary for the reorganization of these governments to include representatives of all significant democratic elements. Diplomatic recognition shall be accorded and peace treaties concluded with those countries as soon as such reorganization has taken place.
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That in conformity with the obligations contained in Clause (d) of the third paragraph of the Declaration on liberated Europe, the three governments consider how best to assist any interim governments in the holding of free and unfettered elections. Such assistance is immediately required in the case of Greece, and will in due course undoubtedly be required in Rumania and Bulgaria, and possibly other countries.