Meeting of the Economic Subcommittee, 10:30 a.m.
| Present | ||
|---|---|---|
| United States | United Kingdom | Soviet Union |
| Mr. Clayton | Sir Walter Monckton | Mr. Maisky |
| Mr. Pauley | Sir David Waley | Mr. Sobolev |
| Mr. Murphy |
Memorandum by the Political Adviser in Germany
[Babelsberg,] July 20, 1945
The following is an exposition of ideas submitted by Messrs. Maisky and Sobelev:
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The main task of the Control Council is the elimination of the German war potential.
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For purpose of [blank] war potential in the future, the general policy which will be carried out uniformly in all zones of occupation will be in preventing recovery of those parts of the economy which are the basis of the heavy industry and at the same time giving Germany a free hand in agriculture and in light industry.
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Guiding ideas for the Control Council and for the German administration: (1) Reparation obligation according to plan which will be established, and (2) Meeting needs of occupying armies. (Russians try to establish that “first” general principle governing the Control Council will be reparations).
(MAISKY) It would be undesirable politically to say that imports have priority over reparations. Everybody would say that reparations come first and imports after because we have suffered so much – capitalists want to have profits from foreign trade and don’t care about reparations for those who suffered. Also when Germans know about it they will try to prove that without very considerable imports they can’t live and can’t export. Same as after last war and there is no reason to believe they won’t repeat same joke again as after last war.
German economy after this war will be a very strictly regulated economy, otherwise she couldn’t pay reparations etc. This regulated economy should provide the necessary means. It should be quite feasible to guarantee reparations and necessary imports. On (?) of principle we have a conviction that if there is a conflict between reparations and imports, then imports must give way. Political repercussions.
MONCKTON says political objectives are met by
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Imports approved by Government’s consent[.]
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Pauley said we are not going to consider that this will be a charge against once for all deliveries (capital assets, etc.).
CLAYTON – American people will not again, as they did after last war, finance Germany. That was President Roosevelt’s position. Germany has very little in way of natural resources except coal, potash, and some poor quality iron ore.
MAISKY suggests also that question of economic regime in Germany and machinery which will regulate this economy – proposes that in postwar period economic life of Germany should be regulated by comprehensive program on annual basis by Control Council and reparations authorities which we should have soon --(?) by Control Council and German authorities. Naturally supervisory power lies – with Control Council to approve and German authorities to execute.
This program should include (1) production, (2) distribution of goods, including unified system of rationing taking into account local conditions, and (3) program of exports and imports, (4) currency, (5) railroad communications and water transport. These are main items.
MAISKY also pointed out that pre-war Germany lived on a very high scale as compared with other European countries. Now he said we must visualize quite another Germany whose level will be that of “Middle” Europe which is very much lower. Therefore imports will be much lower and we will be able to use German iron ore and not Swedish.
CLAYTON said he was thinking of principle of minimum standards of living only and Reparations. Bankers will not finance.
MAISKY said question is theoretical.
WALEY – This is not a school debating society. This is practical.
CLAYTON suggests that we report this as one principle on which we cannot agree.
No – Approval of new paragraph 12.
No – Approval of new paragraph 13.
U.S. Delegation Working Paper
[Babelsberg,] July 20, 1945
Proposed Text
- A primary purpose of occupation is to obtain reparation for the damage and injury caused Allied countries by German aggression. To accomplish this purpose some importation of raw materials and other items will be necessary. The Control Council shall formulate as soon as possible a program of minimum required imports for Germany as a whole. Such a program shall include provision for equitable inter-zonal distribution of supplies available within Germany, so as to minimize the net deficit for, and imports into, Germany as a whole. With full recognition of the principle that the cost of imports must be met from the proceeds of exports from current production or stocks responsibility for the procurement and financing of approved imports for Germany as a whole shall be shared on a basis to be negotiated in the Control Council. Reimbursement for any initial net outlays made in connection with the provision of supplies for Germany shall be a first charge against the German economy.
U.S. Delegation Working Paper
[Babelsberg,] July 20, 1945
Proposed Text
- One of the primary purposes of occupation is to obtain reparation for the damage and injury caused Allied countries by German aggression. To accomplish this purpose some importation of raw materials and other items will be necessary. The Control Council shall formulate as soon as possible a program of minimum required imports for Germany as a whole. Such a program shall include provision for equitable inter-zonal distribution of supplies available within Germany, so as to minimize the net deficit for, and imports into, Germany as a whole. Responsibility for the procurement and financing of approved imports for Germany as a whole shall be shared on a basis to be negotiated in the Control Council. Reimbursement for all net advances made for approved imports into Germany shall be a first charge against the proceeds of any exports from Germany of current production and stocks of goods.
U.S. Delegation Working Paper
[Undated]
Memorandum
With reference to the “Proposed Agreement on the Political and Economic Principles To Govern the Treatment of Germany in the Initial Control Period, Text as Submitted to the Foreign Secretaries by Economic Sub-Committee,” the following recommendations are made:
Economic Principles
Paragraph 13: Proposed alternative substitute for first sentence:
During the period of occupation, Germany shall be treated as a single economic unit and the Allied Control Council shall have authority to issue directives to insure the consistent application of this principle in all zones of occupation.
During the period of occupation, Germany shall be treated as a single economic unit except in those instances as the Allied Control Council shall otherwise determine.
Paragraph 13: There shall be added a further sub-section upon which common policies shall be established in Germany during the period of occupation, as follows:
(g) finance, transportation, and communications.
Paragraph 14(d) on page 3, should either be stricken or amended to read as follows:
Except with the approval of the Control Council or except where determined by the Government concerned to be required for the payments of necessary imports, no grant or credit to Germany or Germans by any foreign persons or Governments shall be permitted.
740.00119 (Potsdam)/7-3145
Report of the Economic Sub-Committee to the Foreign Secretaries
[Babelsberg, July 20, 1945]
Top secret
We have considered the proposals in a memorandum by the United States Delegation on the Economic Principles to govern the treatment of Germany in the initial control period, together with the Annex dealing with reparations.
We have unanimously agreed to recommend the adoption of the Economic Principles set out in the attached clauses for incorporation in the proposed Agreement.
On one matter, which relates both to the Economic Principles and to Reparations, we have to report that agreement has not been reached.
The U.K. and U.S. representatives consider that it is essential that such necessary imports into Germany as are approved by the Governments controlling Germany shall constitute a first charge against exports from Germany whether of capital equipment or current production and stocks of goods. They therefore recommend the adoption of the text attached hereto as Annex II for incorporation in the Agreement on Economic Principles. The Soviet Representatives do not accept this principle and express the view that reparation deliveries should have priority and that imports into Germany, should, if necessary, be confined to the amount that can be paid for by exports from Germany after reparation schedules have been met.
The U.K. and U.S. representatives point out that the provisions of paragraph 18 (to the effect that it shall be the general principle, that in the absence of special reasons to the contrary, each of the zones of occupation, including the Greater Berlin area, will draw its supplies, so far as practicable, from the areas in Germany on which it had drawn before the war) apply to the territory of Germany as it existed on December 31, 1937 whether or not any part of such territory is administered by or ceded to another State.
The Soviet representatives think that any decision on this point at the present time is premature, pending a decision by the Conference on the future boundaries of Germany.
The U.K. and U.S. representatives point out that there are two matters in addition to those mentioned in paragraph 13 on which a common policy is essential in the treatment of Germany as a single economic unit:
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Uniform method of treatment of the German civilian population;
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Subject to normal regulations, free circulation of nationals of U.K., U.S., USSR and France in all zones by land and air.
The Soviet representatives take the position that these two points, while having economic significance, have a wider political application, and that they should therefore not be considered by the Economic Sub-Committee.
The Allied Commission on Reparations has agreed on seven basic principles. The Sub-Committee recommend that these principles (Annex 1) should be accepted.
The Allied Commission on Reparations 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.
As stated above, the Sub-Committee have been unable to reach agreement on this point.
. . . . . . . . . . . . . .
[Attachment]
Proposed Agreement on the Political and Economic Principles to Govern the Treatment of Germany in the Initial Control Period
Text as Submitted to the Foreign Secretaries by Economic Subcommittee
Economic Principles
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In order to eliminate Germany’s war potential, the production of arms, ammunition and implements of war as well as all types of aircraft and sea-going ships shall be prohibited and prevented. Production of metals, chemicals, machinery and other items that are directly necessary to a war economy shall be rigidly controlled and restricted to Germany’s approved post-war peacetime needs to meet the objectives stated in Paragraph 14. Productive capacity not needed for permitted production shall be destroyed, or shall be removed in accordance with the reparations plan recommended by the Allied Commission on Reparations and approved by the Governments concerned.
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At the earliest practicable date, the German economy shall be decentralized for the purpose of eliminating the present excessive concentration of economic power as exemplified in particular by cartels, syndicates, trusts and other monopolistic arrangements. Notwithstanding this, however, and for the purpose of achieving the objectives set forth herein, certain forms of central administrative machinery, particularly in the fields of Finance, Transportation and Communications, shall be maintained or restored.
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In organizing the German economy, primary emphasis shall be given to the development of agriculture and peaceful domestic industries.
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During the period of occupation Germany shall be treated as a single economic unit. To this end common policies shall be established in regard to:
(a) mining and industrial production and allocation;
(b) agriculture, forestry and fishing;
(c) wages, prices and rationing;
(d) import and export programs for Germany as a whole;
(e) currency, central taxation and customs;
(f) reparation and removal of industrial war potential.
In applying these policies account shall be taken, where appropriate, of varying local conditions. -
Allied controls shall be imposed upon the German economy but only to the extent necessary:
(a) to carry out programs of industrial disarmament and demilitarization, of reparations, and of approved exports and imports.(b) to assure the production and maintenance of goods and services required to meet the needs of the occupying forces and displaced persons in Germany and essential to maintain in Germany average living standards not exceeding the average of the standards of living of European countries. (European countries means all European countries excluding U.K. and USSR).
(c) to ensure in the manner determined by the Control Council the equitable distribution of essential commodities between the several zones so as to produce a balanced economy throughout Germany and reduce the need for imports.
(d) to control German industry and all economic and financial international transactions, including exports and imports, with the aim of preventing Germany from developing a war potential and of achieving the other objectives named herein. For the same purpose no grant of credit to Germany or Germans by any foreign persons or Governments shall be permitted except with the approval of the Control Council.
(e) to control all German public or private scientific bodies, research and experimental institutions, laboratories, et cetera connected with economic activities.
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In the imposition and maintenance of economic controls established by the Control Council, German administrative machinery shall be created and the German authorities shall be required to the fullest extent practicable to proclaim and assume administration of such controls. Thus it should be brought home to the German people that the responsibility for the administration of such controls and any breakdown in these controls will rest with themselves. Any German controls which may run counter to the objectives of occupation will be prohibited.
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The principles and conditions governing the exaction of reparations from Germany are set forth in Annex I to this agreement.
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Measures shall be promptly taken:
(a) to effect essential repair of transport;
(b) to enlarge coal production;
(c) to maximize agriculture output; and
(d) to effect emergency repair of housing and essential utilities. -
In securing the objective mentioned in paragraph 14(c) it shall be the general principle that, in the absence of special reasons to the contrary, each of the zones of occupation, including the Greater Berlin Area, will draw its supplies so far as practicable from the areas in Germany on which it had drawn before the war.
[Annex I]
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.
[Annex II]
- The Control Council shall formulate as soon as possible a program of minimum required imports for Germany as a whole. Such a program shall include provision for equitable inter-zonal distribution of supplies available within Germany, so as to minimize the net deficit for, and imports into, Germany as a whole. Responsibility for the procurement and financing of approved imports for Germany as a whole shall be shared on a basis to be negotiated in the Control Council. Reimbursement for all net advanced [advances?] made for approved imports into Germany shall be a first charge against the proceeds of both exports of capital equipment and of current production and stocks of goods from Germany.
Byrnes-Gromyko conversation, morning
| Present | ||
|---|---|---|
| United States | Soviet Union | |
| Secretary Byrnes | Mr. Gromyko |
Third meeting of the Foreign Ministers, 11:30 a.m.
| Present | ||
|---|---|---|
| United States | United Kingdom | Soviet Union |
| Secretary Byrnes | Foreign Secretary Eden | Foreign Commissar Molotov |
| Mr. Dunn | Sir Alexander Cadogan | Mr. Vyshinsky |
| Mr. Harriman | Sir William Strang | Mr. Gromyko |
| Mr. Cohen | Sir Archibald Clark Kerr | Mr. Gusev |
| Mr. Page | Mr. Novikov |
Department of State Minutes
Potsdam, July 20, 1945, 11:30 a.m.
Top secret
The meeting of Foreign Ministers began at 11:30 on Friday, July 20, 1945. Mr. Molotov was in the Chair.
MR. MOLOTOV stated that the first question on the agenda was the German economic paper, which unfortunately was not yet ready. The question must therefore go over until tomorrow. He inquired concerning the status of the Polish paper, which was the second question on the agenda.
MR. VYSHINSKI stated that the committee had met yesterday and today but had not yet been able to produce a report. He hoped for results by tonight.
MR. MOLOTOV passed the subject over until tomorrow.
Council of Foreign Ministers
MR. MOLOTOV stated that the third question on the agenda was that of the peace settlement or the establishment of the Council of Foreign Ministers.
MR. BYRNES had suggested that a subcommittee be appointed to draft on this matter. He asked whether the subcommittee’s report was ready.
MR. MOLOTOV stated that no subcommittee had been appointed.
MR. BYRNES pointed out that the paper had been referred back to the drafting committee established to consider it.
MR. MOLOTOV asked whether there is a general drafting committee to cover all questions.
MR. BYRNES replied that a special committee had been appointed to draft the document on the Council of Foreign Ministers. The committee is working, and Mr. Byrnes wished to know whether they had completed their report.
MR. MOLOTOV asked who was acting on behalf of the American delegation.
MR. BYRNES stated that Mr. Dunn and Mr. Cohen had been appointed.
MR. COHEN stated that because of the fact that Sobolev was busy the committee had not been able to meet until this morning and its work was not yet finished.
MR. BYRNES remarked that nothing could be done until the committee had reported. Mr. Byrnes then suggested that the document on the implementation of the Yalta declaration on liberated areas1 be placed on the agenda for the meeting of the Heads of States this afternoon.
MR. MOLOTOV replied that this question would come up next and that the Russian delegation also wanted to reach agreement on the Council of Foreign Ministers.
MR. BYRNES stated that the American delegation is extremely anxious to reach agreement on the Council of Foreign Ministers and that he was willing to ask his appointees to leave the table to begin work immediately.
MR. MOLOTOV replied that the Soviet member of the drafting committee is now in an economic meeting.
MR. BYRNES inquired whether it was possible to substitute someone else for him since the economic meetings had been going on for a long time and might continue.
MR. MOLOTOV then suggested that the matter be settled by the Foreign Ministers without reference to the subcommittee.
MR. BYRNES stated it was his understanding that there were two or three separate proposals being considered by the subcommittee.
MR. MOLOTOV then said that it was better to leave the matter to the subcommittee and not discuss it in the present meeting.
MR. EDEN suggested that the matter go over until tomorrow.
MR. BYRNES then asked if agreement could be reached that the proposal under consideration by the subcommittee should be submitted to the Heads of State this afternoon. He remarked that the Foreign Ministers could, if necessary, meet a few minutes before the regular meeting to discuss it.
MR. BYRNES went on to suggest that if Mr. Eden preferred a short recess could be taken to discuss the matter.
MR. MOLOTOV then pointed out that the document was not available.
MR. BYRNES thereupon renewed his request for consideration at 4 p.m.
MR. MOLOTOV suggested 3:45 p.m., and this was agreed to.
Discussion of Agenda
MR. MOLOTOV suggested that the day’s agenda be concerned with (1) the Yalta declaration; (2) the western frontiers of Poland; (3) trusteeship questions; and (4) the fixing of an agenda for the Big Three.
MR. BYRNES asked whether this agenda was for the present meeting or for the afternoon meeting.
MR. MOLOTOV stated that the last point on today’s agenda is the Big Three agenda. He asked whether the agenda suggested was acceptable and stated that the Soviet delegation had certain draft proposals to circulate.
MR. EDEN remarked that neither the trusteeship question nor the Polish boundaries had been referred to the present meeting by the Heads of State.
MR. BYRNES suggested that the paper on the implementation of the Yalta declaration be placed on the Big Three agenda, and added that he had no objection to consideration of the western frontiers of Poland.
MR. MOLOTOV stated that the meeting was not discussing at this time the agenda for the afternoon meeting but for the present meeting.
MR. EDEN insisted that the Foreign Ministers’ agenda should be based on matters referred to them by the Big Three.
MR. MOLOTOV replied that this was not necessarily so. If the Foreign Ministers didn’t want to discuss a matter, it went to the Big Three, but he wanted to discuss the matters he had mentioned.
MR. BYRNES replied that the Big Three had assigned certain questions to the Foreign Ministers and that these questions should be discussed first. He asked what questions had been so assigned.
MR. MOLOTOV mentioned the German economic question, the Polish question, and the implementation of the Yalta declaration. He asked what other matters had been assigned to them.
MR. BYRNES stated that the declaration on liberated Europe had been passed over on the request of the Generalissimo since he had wanted to circulate a paper.
MR. MOLOTOV stated that the Soviet delegation had the paper now and asked whether the Soviet draft could be considered. After consideration by the Foreign Ministers the question will pass to the Big Three.
MR. BYRNES remarked that it would be helpful to circulate the paper and consider it in the present meeting.
MR. MOLOTOV stated that he wished to make it clear that the agenda mentioned by him was for this meeting.
MR. EDEN again remarked that he was unable to understand the consideration of questions not referred to the Foreign Ministers by the Chiefs of State.
MR. MOLOTOV then suggested that the meeting dispose of all questions referred to them.
MR. EDEN replied that these questions did not include either Poland or trusteeship.
MR. MOLOTOV stated that the Yalta declaration had not been discussed yesterday because no draft was available. He would now circulate drafts, after which it could be discussed.
MR. EDEN agreed but asked why other items referred to them were not used.
MR. MOLOTOV asked about specific items.
MR. EDEN cited the questions of Spain and Rumanian oil.
MR. MOLOTOV asked whether Spain would be considered.
MR. BYRNES replied that the question had been referred to the Foreign Ministers. He went on to state that on July 17 the President had proposed that the three Heads of State support the admission of Italy to international organizations. Mr. Byrnes now proposed the appointment of a subcommittee to draft a declaration on this matter. Mr. Byrnes went on to propose that instructions to the committee should include a statement that the three powers would not support the entrance of Spain into international organizations so long as Spain remained under the control of the present regime there.
MR. MOLOTOV asked whether he correctly understood that Mr. Byrnes was suggesting the appointment of a subcommittee on Italy and Spain.
MR. BYRNES replied that this subcommittee should be appointed only to carry out the President’s suggestion of the 17th, in addition to the inclusion of a mention of Spain.
MR. MOLOTOV agreed to both.
MR. EDEN asked what committee was contemplated.
MR. BYRNES replied, a drafting committee composed of persons who are not too busy.
MR. EDEN pointed out that this was not entirely a drafting matter but was primarily political.
MR. MOLOTOV agreed that the subcommittee could not work without the delegates.
MR. BYRNES suggested that a subcommittee could prepare a document for discussion by the Big Three.
MR. EDEN stated his belief that the Foreign Ministers must agree on principles on which the committee could work.
MR. MOLOTOV agreed that the matter could be put on the agenda.
MR. EDEN asked whether it would come up in the present meeting.
MR. BYRNES stated that if Mr. Eden wanted to discuss it now he agreed.
MR. MOLOTOV then reraised the matter of the agenda, which he recapitulated as
- Italy.
- Liberated Europe.
- Rumania.
Other items could be added if these are not enough.
MR. BYRNES asked for a consideration of the Big Three agenda.
MR. MOLOTOV said that the first question is Italy.
MR. BYRNES pointed out that the American position on Italy had been set forth in the President’s paper of July 17.
MR. EDEN stated his general agreement with the American position. He thought it was a good idea to favor the admission of certain states and clearly to state that we do not favor the admission of Spain into international organizations. He asked whether more could not be done. Specifically he recommended the admission into international organizations of all neutral governments but Spain, since this would make the reference to Spain more pointed.
MR. BYRNES agreed. His suggestion had been for the admission of Italy and the declaration regarding the non-admission of Spain. He agreed to the British suggestion that other neutral governments be added.
MR. MOLOTOV inquired what governments Mr. Eden had in mind and asked whether this was a secret.
MR. EDEN mentioned Sweden, Portugal, and Switzerland.
MR. BYRNES stated his assumption that this was only to strengthen stated disapproval of Spain.
MR. EDEN pointed out that the situation in Portugal was not the same as that in Spain.
MR. BYRNES believed that this would strengthen the statement and would be in line with the Generalissimo’s position.
MR. EDEN suggested that we say that we favor the entrance of all neutral states except Spain.
MR. MOLOTOV then asked whether Italy would be liable for the payment of reparations.
MR. BYRNES asked what they would pay with.
MR. EDEN agreed but stated that in principle Italy would be liable.
MR. MOLOTOV stated his understanding that Italy had signed an instrument of unconditional surrender.
MR. EDEN remarked that any declaration on the admission of Italy into international organizations should contain the phrase “on conclusion of peace.”
MR. MOLOTOV insisted that somebody must consider the question of Italian reparations.
MR. EDEN pointed out that this question would be dealt with in the peace settlement. Italy’s admission into international organizations would be conditional upon the fulfillment of her engagements. However, he frankly felt that Italy would be unable to pay.
MR. BYRNES pointed out that the United States Government has already advanced $200,000,000 to Italy and would probably have to advance $400,000,000 or $500,000,000 more. Therefore reparations do not seem to the United States to be an immediate problem.
MR. MOLOTOV asked whether it would be just to have small Finland paying large reparations and large Italy paying none. He asked how this would be understood by the world.
MR. EDEN asked what connection the question of reparations had with admission into international organizations. Reparations would be settled in the peace treaty and should have no effect on entrance into international organizations.
MR. MOLOTOV pointed out that United Nations do not pay reparations.
MR. BYRNES remarked that when the peace treaty was concluded it might be possible to work out some plan for Italy in future years to arrange some form of payment. However, in the best spirit he felt that he must say that the United States does not intend to make advances to any country in order that reparations may be paid by them.
MR. MOLOTOV stated that he had not suggested this.
MR. BYRNES replied that he knew that but wanted to make the situation perfectly clear.
MR. MOLOTOV suggested that the subcommittee to be appointed might consider the question of the advisability of reparations from Italy.
MR. BYRNES stated that the American position was that reparations should be decided at an early peace settlement. The United States wanted the peace settlement done and out of the way. He went on to state that the President’s specific proposal in the last paragraph did not contemplate the question of reparations. He read the section of the proposal in question.
MR. MOLOTOV stated that he had no objection to the appointment of a subcommittee but that reparations should be discussed.
MR. BYRNES felt that it was unnecessary for the subcommittee to consider this point: it must be considered by the Big Three. The Foreign Ministers could make recommendations but the subcommittee could not help us decide on revision of the short-term surrender document. The only purpose of the committee suggested is to draft a statement on the admission of Italy into international organizations and our objection to Spain becoming a member thereof.
MR. MOLOTOV then suggested that when the Foreign Ministers reported to the Big Three on the establishment of this subcommittee it be suggested that the question of reparations be referred to this or another subcommittee.
MR. BYRNES stated that he would not object to the reference of the reparations question to the subcommittee charged with the consideration of reparations matters.
MR. MOLOTOV agreed and then referred to the fact that Mr. Eden had mentioned states other than Italy. He asked for the inclusion of states which were enemy states but are now cobelligerents.
MR. EDEN stated that this could be considered and MR. BYRNES agreed.
MR. EDEN then pointed out that from the British point of view it was essential that the conclusion of the peace treaty precede admission into international organizations.
MR. MOLOTOV agreed.
MR. EDEN remarked that the contrast between neutral states and Spain was greater than between other states and Spain.
MR. BYRNES suggested that the reparations subcommittee might also consider the question of Austrian reparations.
MR. MOLOTOV and MR. EDEN agreed.
MR. MOLOTOV asked that members of the committee to draft on admissions into international organizations be named.
MR. BYRNES named Mr. Matthews and Mr. Cannon.
MR. EDEN named Mr. Hoyer Millar and Mr. Dean.
MR. MOLOTOV named Mr. Maisky.
MR. BYRNES then restated his understanding that reparations questions go to the present reparations committee.
Yalta Declaration on Liberated Europe
MR. MOLOTOV then raised the question of the Yalta declaration on liberated Europe and circulated the Soviet draft.
MR. EDEN, with some warmth, stated that he would like to say at once that the description of Greece given in the Soviet proposal is a complete travesty of fact. The Soviet Government had no representatives in Greece, although they were free to go there. The press of the whole world was free to go to Greece and see for themselves and tell the world without censorship what was going on. Unfortunately this was not possible in either Rumania or Bulgaria. The Greeks proposed regular elections open to all parties. The present Greek Government had invited international observers to regulate these elections. Unfortunately the situation in Rumania and Bulgaria was not the same.
MR. MOLOTOV stated that there were missions in Rumania and Bulgaria, including British representatives.
MR. EDEN replied that these representatives had few facilities to see anything and still less to get anything done. In addition, the press was not permitted freely to operate in these countries.
MR. MOLOTOV remarked that the number of British representatives in Rumania and Bulgaria was greater than the number of Soviet representatives. It was true that there were no British troops, but there were many political representatives. It was his understanding that the British Government had enough people there to keep it informed. In addition, Mr. Eden knew that the Soviet representatives had recently made proposals for greater cooperation.
MR. EDEN replied that he now hoped that the situation would improve.
MR. MOLOTOV asked what suggestions there were.
MR. BYRNES stated that so far as the United States was concerned it had hoped that the spirit of the Yalta declaration would be carried into effect. However, the governments in the countries concerned have restricted the movement of our representatives and the press has been denied admission. This had become a source of great irritation among our people. They believe that the Yalta agreement contemplated early elections. Mr. Byrnes considered that the determination of policy in these countries should not be the sole burden of one of the three powers but should be shared by all of them, and he felt that steps should be taken to see that the governments in question should not discriminate against either the Soviet, British, or American Governments. In view of the attitude of the governments concerned, we could not recognize them at this time. At Yalta we agreed in the declaration on liberated Europe, among other things, to form interim governments broadly representative of all democratic elements of the people and pledged to the earliest possible establishment of a government through free elections. If such elections were held, the United States would gladly recognize any governments resulting therefrom. It cannot do so now. As long as the governments in question deny to American representatives and press an opportunity to observe and report on conditions, recognition will be difficult.
MR. MOLOTOV stated that there were no excesses in Bulgaria or Rumania comparable to those taking place in Greece. He cited the American and British press as authority for this statement. He went on to say that there was no trouble in Bulgaria or Rumania. He admitted restrictions on British and American representatives during the war but stated that things will be different now. The Soviet representatives in the countries in question have therefore already made suggestions in Hungary, Bulgaria, and Rumania to the American and British representatives regarding the future operation of the control councils. He was willing to discuss the matter at this meeting. He pointed out that no elections had been held in Italy despite the fact that Italy had been out of the war for some time. Nevertheless, the United States has diplomatic representatives there. It was therefore difficult to understand why the United States should not recognize Bulgaria and Rumania, which gave greater assistance to the war effort than Italy. In any event, the Soviet Government can no longer delay diplomatic recognition of these countries. He suggested the consideration of a draft either in the present meeting or in a subcommittee.
MR. BYRNES pointed out that our press was able to get an account of conditions in Greece but was unable to do so in Bulgaria and Rumania. Many misunderstandings might disappear if the press was permitted to operate in these countries.
MR. MOLOTOV stated that there was no objection to this.
MR. BYRNES replied that he was sure that the Soviet Union did not object but the governments of these countries do. In Greece the United States is impressed by the fact that the Greeks invite us to supervise their elections. He had just this morning addressed to Mr. Molotov a letter inviting Russia to participate in the supervision of these elections.
MR. MOLOTOV stated that there was no doubt of free elections in Rumania and Bulgaria, which would be held as soon as candidates could be nominated.
MR. BYRNES asked whether the British Empire had been consulted regarding elections in Rumania and Bulgaria.
MR. EDEN replied that it had not.
MR. MOLOTOV confirmed this statement.
MR. EDEN pointed out the difference between Greece, where all parties would participate in the elections, and Bulgaria, where the vote would be only for or against a set list. This did not meet the British idea of democracy. The press of the world could send anything out of Greece, and this included the TASS representative. On the other hand, British press representatives could send nothing out of Rumania or Bulgaria without extremely heavy censorship.
MR. MOLOTOV said that censorship had been hard during the war but would be better now.
MR. BYRNES recalled that at Yalta we, and particularly President Roosevelt, had wanted to see Poland and other governments bordering Russia friendly to the Soviet Union. The United States has no interest in the Governments of Rumania and Bulgaria except that they be representative of the people and permit our representatives and press to observe conditions freely.
MR. MOLOTOV suggested that methods be discussed.
MR. BYRNES pointed out that if elections are held without asking for supervision by the Big Three, and governments were established which were distrusted generally by the people of our country, it will affect our relations. If the Big Three will see to it that free elections are held, the United States would recognize any government formed. We are interested in having governments friendly toward Russia.
MR. MOLOTOV stated that there was no reason to fear delay or that elections would not be free. However, the situation in Greece was different. The situation was dangerous. Mr. Molotov cited warlike speeches made in Greece against neighboring countries.
MR. EDEN interjected that he was aware that the Yugoslav press and radio were accusing Greece of aggressive intentions. The same charges were contained in the document presented this morning by the Soviet delegation.
MR. MOLOTOV insisted that there is no connection between the Soviet document and the Yugoslav Government.
MR. EDEN replied that he had only said that the language was the same. He pointed out that the Prime Minister yesterday had given figures proving that it was ludicrous to talk about an aggressive Greece. This was quite apart from the presence of British troops in Greece. He could only suppose that our Soviet Allies do not accept British assurances regarding the number of Greek troops. Greece has neither the intention nor the means to be aggressive.
MR. MOLOTOV remarked that Mr. Eden’s logic was correct, but the facts were that warlike speeches were being made.
MR. EDEN replied that he was well aware of the storm of abuse coming over the Moscow and Yugoslav radios regarding Greece, but could only say that these stories were not correct.
MR. MOLOTOV stated the facts had been obtained from the American and British press.
MR. EDEN at this point stated his hope that the Soviet paper would be withdrawn. It was an unhappy paper regarding an Ally.
MR. MOLOTOV replied that he was asking for consideration and for the facts.
MR. EDEN said that it was easy for the Soviet Government to go and look at the facts.
MR. MOLOTOV suggested that an end should be put to the reign of terror in Greece and that the Government should be reorganized.
MR. EDEN reiterated that there was no terror.
MR. MOLOTOV again remarked that he had read about it in the British press.
MR. BYRNES stated that it was unwise to base actions of this sort on press accounts. He was impressed by the fact that we could send representatives to Greece freely and to evaluate information received regarding conditions in that country. Since we are unable to do the same in Rumania and Bulgaria, all sorts of rumors are flying about which affect relations so long as we cannot check them.
MR. MOLOTOV asked that the American and British Governments say what they want and promised that they could have it.
MR. BYRNES replied that Mr. Molotov should see that we could send representatives where they wished to go and also permit the press to come in in order that information might flow freely.
MR. MOLOTOV insisted that American representatives now have the right and the press also, except for essential military censorship.
MR. BYRNES remarked that the difficulty is that the Soviet Foreign Minister is not there. Our representatives say that they are not permitted privileges. When they report that they are denied such privileges, we must accept their report.
MR. MOLOTOV again referred to the suggested improvement in operations made by the Soviet representatives in Rumania, Bulgaria, and Hungary.
MR. EDEN remarked that there was no reference to the press in these suggestions.
MR. BYRNES welcomed the statement that we should consult and decide. The difficulty had arisen out of the fact that we haven’t been consulted. He felt that the recent proposals constituted a step forward even though they did not cover the press.
MR. MOLOTOV stated that there was no doubt about the situation of the press. It would be the same as in Italy.
MR. EDEN said “or in Greece.”
MR. BYRNES stated that if we can accomplish that with certainty, we would be making great progress.
MR. MOLOTOV stressed the necessity for a common understanding. The government in Greece must be more representative and not warlike.
MR. EDEN remarked that the Greeks were only warlike in the imagination of their neighbors. He stated that only this morning he had suggested Soviet participation in the supervision of elections.
MR. BYRNES added that our information is that the Greek Government wishes us to supervise elections.
MR. EDEN pointed out that we would like the same procedure in other countries. He stated that he did not know what more the Greek Government could do than they were doing.
MR. MOLOTOV referred to the Varkiza agreement, which he termed excellent, but added that it was not being carried out and people were complaining.
MR. EDEN stated that he wished to report on the Soviet document to the Prime Minister, since it contained grave charges against the British Government.
MR. MOLOTOV denied this and stated that the charges were against the Greek Government.
MR. EDEN replied that Mr. Molotov knew very well that the British have troops in Greece. It was necessary to take the gravest exception to this Soviet document.
MR. BYRNES stated that the American Government is not anxious to supervise elections in any country. It regrets the necessity for so doing. But because we are satisfied that it is necessary in order to improve conditions, we would be willing to participate in the supervision of elections in Italy, Greece, Rumania, Bulgaria, and Hungary. The world knows we meant what we said at Yalta. Settlement of this matter would remove a source of irritation between us.
MR. EDEN suggested that each delegation draft its own requirements about what we want in each country.
MR. MOLOTOV, referring to the Soviet document, said that the Soviet suggestions are ready.
MR. EDEN replied that the Soviet suggestions stated that everything was all right in Rumania and Bulgaria and all wrong in Greece.
MR. BYRNES suggested that instead of finding fault with each other an agreement be drafted providing for the supervision of free elections in Italy, Rumania, Bulgaria, Greece, and Hungary, in addition to provision for freedom of the press.
MR. EDEN remarked that this was exactly what he had meant.
MR. MOLOTOV stated that the Soviet delegation had set forth its position in its document. He saw no reason to supervise elections in Rumania and Bulgaria. The press was now more free. However, he was willing to consider written suggestions. He suggested that drafts be prepared and hoped that they might be finished today.
Agenda for Meeting of Heads of State
The following agenda was set for the meeting of Heads of State on July 20:
-
Council of Foreign Ministers.
-
Italy (on this point MR. BYRNES made it clear that the document to be discussed was the President’s paper circulated on July 17 and not the question of admission to international organizations, or reparations, which had been referred to appropriate subcommittees).
-
Austria.
-
The western borders of Poland (Soviet paper and maps circulated).
-
Trusteeship (paper circulated).
Approved Proposal for the Establishment of a Council of Foreign Ministers
[Babelsberg, July 20, 1945]
-
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.
-
The Council shall meet at London 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.
-
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.
For the discharge of each of these tasks the Council will be composed of the members representing those States which were signatory to the terms of surrender imposed upon the enemy State concerned. For the purposes of the peace settlement for Italy, France shall be regarded as a signatory to the terms of surrender for Italy.
Other members should be invited to participate when matters directly concerning them are under discussion.
-
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.
740.00119 (Potsdam)/7-2045
Proposal by the Soviet Delegation
July 20, 1945
[Translation — Extracts]
The Yalta Declaration ‘On Liberated Europe’
In connection with the note of the USA delegation regarding the Yalta declaration on liberated Europe the Soviet Government deem it necessary to declare that they cannot agree to the statements regarding Rumania and Bulgaria expounded in the above-mentioned note.
The Soviet Government feel obliged to draw the attention of the USA Government to the fact that in Rumania and Bulgaria as well as in Finland and Hungary since the signature of the instruments of surrender by the Governments of these states, due order exists and legal power in acting, which has authority and is trusted by the population of these states. The governments of these states faithfully carry out the obligations assumed by them under their respective instrument of surrender. Rumania and Bulgaria gave the United Nations serious assistance by their armed forces in the struggle against German troops having put out against our common enemy 10-12 divisions each. Under these circumstances the Soviet Government see no reasons for interfering in the domestic affairs of Rumania or Bulgaria.
. . . . . . . . . . . . . .
In accordance with the aforesaid the Soviet Government consider necessary:
- to restore in the nearest days diplomatic relations with Rumania, Bulgaria, Finland and Hungary as further delay in this respect could not be justified;
. . . . . . . . . . . . . .
The Soviet Government express their assurance that the above-mentioned measures will find the support of the Governments of Great Britain and the United States of America and will be carried out.
740.00119 (Potsdam)/7-2045
Proposal by the Soviet Delegation
July 20, 1945
[Translation — Extracts]
The Yalta Declaration ‘On Liberated Europe’
. . . . . . . . . . . . . .
But there is one country – Greece – in which no due order still exists, where law is not respected, where terrorism rages directed against democratic elements which have borne the principal burden of the fight against German invaders for the liberation of Greece. Moreover, the present Greek Government is breaking the peace with their neighbors and threatening Albania and Bulgaria with military action. All these circumstances create the necessity of taking urgent measures to eliminate such a situation in Greece.
In accordance with the aforesaid the Soviet Government consider necessary:
. . . . . . . . . . . . . .
- to recommend to the Regent of Greece to take immediate measures towards the establishment of a democratic government in the spirit of the agreement reached at Varkiza, February 12, 1945, between the representatives of the then existing government of Greece and the representatives of Greek democracy.
The Soviet Government express their assurance that the above-mentioned measures will find the support of the Governments of Great Britain and the United States of America and will be carried out.
740.00119 (Potsdam)/7-2045
Proposal by the Soviet Delegation
[Translation]
Top secret
On the Question of Western Frontier of Poland
We have considered the question of western frontier of Poland and have, taking in consideration ethnographical and historic conditions recognized it necessary and equitable, pending the final settlement of territorial questions at the Peace Congress, the western frontier of Poland to fix along the line marked on the attached map viz: west of Swinemünde to the river Oder leaving Stettin on the Polish side, further up the river Oder to the estuary of the river West Neisse to the Czechoslovakian frontier.
501.BE/72045
Proposal by the Soviet Delegation
July 20, 1945
[Translation]
Top secret
On Trust Territories
In connection with the fact that the Charter of the United Nations Organization provides for bringing into effect the trusteeship system, the Conference deems necessary to lay down in conformity with the Charter measures for settlement, in the nearest future, of the question of the trust territories. By this are understood categories of territories defined in decision of the Crimean Conference and in the above mentioned Charter of the International Security Organization.
For the purpose of elaborating practical measures in order to bring into effect provisions on trusteeship system provided in the Charter the Conference deems necessary to authorize the Council of Foreign Ministers to consider in detail this question and work out practical proposals. In considering the question of preparing such proposals on category of territories which are detached from enemy states, the Council of Foreign Ministers shall be guided by the necessity of solution in the nearest future of the problem relating to the terms of trusteeship on the former colonial possessions of Italy in Africa and in the Mediterranean having in view herewith the possibility of establishing the trusteeship system exercised by individual states or by USSR, USA, and Great Britain jointly on the above-mentioned former colonial possessions of Italy.
The Council of Foreign Ministers shall also work out practical measures for reaching agreements on trusteeship system provided by the Charter of the United Nations including proposals on the further regime of territories now held under mandate of the League of Nations.
740.00119 (Potsdam)/7-2045
Proposal by the U.S. Delegation
July 20, 1945
Top secret
Declaration on Italy and Spain
In the statement on the policy toward Italy introduced by the President on July 17 we propose that there be included a statement to the effect that the Three Heads of Government will support the entry of Italy into the United Nations Organization.
The Three Heads of Government further declare that they will not support the entry of Spain into the United Nations Organization, so long as Spain is under the control of the present regime in that country.
868.00/7-1745
The Soviet Foreign Commissar to the Secretary of State
Berlin Conference, July 20, 1945
[Translation]
Dear Mr. Byrnes: In connection with your letter of July 19, containing a proposal regarding the establishment of Allied Control in connection with the national elections in Greece, I wish to state that on July 20 at the meeting of the three Ministers of Foreign Affairs, I put forward the point of view of the Soviet Government regarding the situation in Greece. Consequently you are now advised of the negative attitude of the Soviet Government toward the practice of control by foreign governments over national elections, and also (you are advised) that the Soviet Government has its proposals in relation to the state of affairs in Greece which, I hope, will be further examined by us.
Sincerely yours,
V. MOLOTOV
740.00119 Potsdam/7-2045
U.S. Delegation Memorandum
Potsdam, July 20, 1945, 11:30 a.m.
Summary of Meeting of Foreign Ministers Friday Morning, July 20
I. Agenda of meeting of heads of governments
It was agreed that the following subjects would be recommended to the Heads of Governments this afternoon:
-
Procedure for Peace Settlements
The Foreign Ministers are meeting 15 minutes before the meeting of Heads of Governments with a view to reaching agreement on the redraft of paragraph 3 of the proposal for the establishment of the Council of Foreign Ministers which was approved July 18. If they reach agreement the redraft will be presented to the Heads of Government at this meeting. -
Policy Toward Italy
It is recommended that the basis of discussion be the U.S. paper presented to the Conference by the President on July 17. -
Situation in Austria, Particularly in Vienna
The Prime Minister will make an oral statement on this subject. The question involved is the ratification by the three Governments of the agreements already approved by the European Advisory Commission on control machinery3 and zones of occupation for Austria and Vienna. -
The Western Boundary of Poland
A Russian paper on this subject, together with a map, has been prepared for discussion. -
Trusteeship
A Russian paper on this subject has been presented for discussion.
II. Economic policy for Germany
The Foreign Ministers were unable to act on this question as the subcommittee has not yet reported.
III. Polish question – liquidation of the London government and implementation of the Yalta Agreement
The Foreign Ministers were also unable to act on this question as the subcommittee has not yet reported.
IV. Statement on entry of Italy and Spain into the United Nations
The U.S. presented a draft statement under which the three Governments would support the entry of Italy into the United Nations Organization but would not support the entry of Spain as long as the present regime continues. This paper was referred to a subcommittee. It was also understood that reference might be made in the statement to other neutral countries and to other ex-enemies which fought on the side of the Allies.
V. Italian and Austrian reparations
The Soviet delegation having raised the question of Italian reparations, the question of reparations from Italy as well as from Austria was referred to the subcommittee now dealing with German reparations.
VI. Implementation of the Yalta Declaration on liberated areas
The Soviets presented the redraft to that presented by the U.S. After prolonged and inconclusive discussion, it was agreed that the three delegations would each prepare concrete statements of the action they believed should be taken in Rumania, Bulgaria, Hungary, and Greece and that these statements would be considered at a later meeting.
740.00119 Potsdam/7-2045
Rapporteur’s Report
Potsdam, July 20, 1945, 11:30 a.m.
[Translation]
Agenda of the meeting of Three Foreign Ministers included the following questions:
1. Economic principles related to Germany
It was stated that Commission authorized to prepare this question has not completed its work and therefore the question was not factually discussed. Resolved: to ask the Commission to complete its work not later than July 21st.
2. Polish question
Announcement was made that Commission dealing with this question has not yet completed its work as result of which the question was not factually discussed. It is resolved to ask the Commission to complete its work not later than July 21.
3. On peace settlement
In view of the fact that Commission authorized to prepare the draft on this question was not able to do it, members of the Commission being engaged in other Commissions, [it] was resolved: Foreign Ministers meet to-day at 15-45 in order to prepare the question for submission to the meeting of the Heads of Three Governments. At this meeting of the three Foreign Ministers was adopted the amendment to the paragraph 3 and in the result of it this paragraph reads as follows:
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, Hungary and Finland 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.
For the discharge of each of these tasks the Council will be comprised of the members representing those States which were signatory to the terms of surrender imposed upon the enemy State concerned. For the purposes of the peace settlement for Italy, France shall be regarded as a signatory to the terms of surrender for Italy.
Other members should be invited to participate when matters of interest to them are under discussion.
Other matters may from time to time be referred to the Council by agreement between the States members thereof.
4. On Yalta Declaration on liberated Europe
People’s Commissar for Foreign Affairs V. M. Molotov handed to Minister for Foreign Affairs of Great Britain A. Eden and Secretary of State of USA J. Byrnes the Soviet draft proposals on this question. In connection with the submitted draft the question of the situation in Roumania and Bulgaria on one hand and in Greece on the other were discussed. As a result of the discussion, it was found out that Foreign Ministers vary in their estimation of the situation in these countries. In particular M[ess]rs. J. Byrnes and A. Eden stated that in Rumania and Bulgaria there are limitation[s] for the press. V. M. Molotov pointed out that there were certain inevitable limitations for press under wartime conditions. Of course at present time in view of termination of war the possibilities for work of the press representative] may be extended. This point raises no doubt. Secretary of State of USA Byrnes proposed that three Powers conclude an agreement on arranging for an observation by three Powers on procedure of elections in Italy, Greece, Roumania, Bulgaria, [and] Hungary and on provisions for the free access of press representatives of USA, USSR and Great Britain and for their unrestricted travels and possibility to freely send information. Mr. Eden seconded this proposal. People’s Commissar for Foreign Affairs V. M. Molotov stated he sees no necessity to send special observers to Roumania and Bulgaria. As far as Greece is concerned the Soviet Government position was stated in the submitted document. Mr. Molotov stated that in case Foreign Ministers of Great Britain and USA submit written proposals on this question they can be discussed at the meeting of Three Ministers.
5. On Italy
Secretary of State J. Byrnes submitted the draft decision of the Heads of Three Governments to the effect that they will support joining by Italy the Organization of the United Nations, but that they will not support the Spanish joining the Organization of the United Nations until [while] Spain remains under the control of the present regime in that country. Mr. Eden Foreign Minister of Great Britain stated that he supported this proposal and if any declaration on this question is worked out he would consider it expedient to mention in it that the Three Powers would also support the admittance to the membership of the United Nations of some neutral states, for example Sweden, Switzerland and Portugal. V. M. Molotov put a question whether this proposal could cover such countries, which were enemy states and now become cobelligerent states in the fight against Germany. Mr. A. Eden stated that this question could be discussed, but that he personally felt that such States could be admitted to the membership of the United Nations only after signing of the peace treaties with them. To study this question a subcommission of Matthews and Kennan [Cannon] of USA, Hoyer Millar and R. [P.] Dean of Great Britain and Maisky and Goussev of USSR was set up.
In connection with this it was agreed to ask the Commission dealing with reparations to consider the question of the reparations from Italy and Austria.
6. On Western Polish frontier
V. M. Molotov handed to Foreign Ministers [of the] USA and Great Britain the Soviet Government’s proposal on delimitation of the Western frontiers of Poland with the appropriate map. It was decided to submit the question to the meeting of the Three Heads of Governments July 20, 1945.
7. On trusteeship territories
V. M. Molotov handed to Foreign Ministers of the USA and Great Britain the Soviet Government’s proposals about trusteeship territories. It was decided to put the question on the agenda of the Three Heads of Governments July 20, 1945.
8. On agenda of the meeting of the Three Heads of Governments
Agreed to recommend to the Three Heads of Governments the following agenda:
- The peace settlement.
- Of the USA President’s memorandum of July 17 on the policy toward Italy.
- The situation in Austria and particularly in Vienna (The Prime Minister’s of the Great Britain information).
- The Western Polish frontier.
- The Trusteeship territories.
800.014/6-2045
The Soviet Ambassador to the Secretary of State
[Babelsberg,] July 20, 1945
[Translation]
Secret
Dear Mr. Secretary: I am sending you herewith in accordance with your request expressed at the time of our conversation this morning, a copy of my letter and the letter of former Secretary of State Stettinius on the question of territorial trusteeships. We exchanged these letters while at San Francisco at the time of the United Nations Conference.
A. GROMYKO
[Enclosure 1 — Translation]
The Soviet Ambassador to the Former Secretary of State
Secret
On the 9th of June in the study of the American document on trusteeship, I informed the member of the American Delegation, Mr. Stassen, of the desire of my Government to acquire under trusteeship some territory in conformity with point 3, section b, of the said document. Mr. Stassen replied that he had to consult his Government on this question. The same day Mr. Stassen informed the member of the Soviet Delegation, Mr. Novikov, that the American Government was prepared to support the Soviet Government in the turning over to it of trusteeship territories. At the same time you, Mr. Secretary, in a conversation with me on June 9th confirmed your agreement to satisfying the desire expressed above of the Soviet Government.
In accordance with our agreement my Government has directed me to define more clearly the question of trusteeship territories for the USSR. I hope that you will agree to discuss this question before the termination of the present conference.
[Enclosure 2]
The Former Secretary of State to the Soviet Ambassador
[San Francisco,] June 23, 1945
My Dear Mr. Ambassador: I have your letter of June 20 in which you refer to the conversation which took place between Commander Stassen and yourself on June 9 concerning the attitude held by the Soviet Government with reference to territorial trusteeship and your desire that our two Governments should be in accord on this matter.
Commander Stassen promptly conveyed to me your point of view, stating that your Government would like to be assured of the favorable attitude of the United States if the Soviet Government, at some future time, proposed a territory for trusteeship. He added that you indicated that you had no specific territory in mind but that you hoped that the two Governments could agree in principle upon this question.
Commander Stassen also reported that he was certain that your Government understood that, in accordance with the Yalta agreement, no specific territories were to be discussed at San Francisco and that the method by which a trusteeship would arise would be by the state which had the jurisdiction over a territory making a proposal to the appropriate body of the Organization.
I told Commander Stassen that I thought your point of view was eminently reasonable and that we would be happy to support in principle the Soviet proposal as to the eligibility of your Government as a potential administering authority.
Your letter of June 20 carries the point raised to a further stage beyond the principle agreed upon in the conversation. In accordance with the Yalta agreement no specific territories were to be discussed at the San Francisco Conference but I shall, of course, be glad to know your views on this subject, even though the matter falls outside the scope of the Conference. It might be more convenient, however, to both of us, to take this matter up after our return to Washington.
With kind regards [etc.]
[E. R. STETTINIUS]
Byrnes-Churchill luncheon meeting, early afternoon
Churchill’s quarters, 23 Ringstrasse, Babelsberg
| Present | ||
|---|---|---|
| United States | United Kingdom | |
| Secretary Byrnes | Prime Minister Churchill | |
| Lord Cherwell |
800.515/7-2045
The Assistant Secretary of War to the Assistant Secretary of State
Washington [Babelsberg], 20 July 1945
Memorandum for Mr. Clayton
Subject: GERMAN INTERIM FINANCING
I have looked at your memorandum from the Secretary to the President on the War Department’s responsibility for German interim financing. I have no difficulty with the paper as far as it goes, but I think it is incomplete. The following points should be clearly understood, and I would think the gist of them should be incorporated in any memorandum to the President:
-
The War Department under present arrangements will be able to finance all food imports into Germany for whatever zone through October loadings.
-
Testimony before Congress indicated that funds made available for the War Department would not be used for maintenance of zones other than the United States, except for a brief turnover period not extending beyond the current calendar year.
-
With respect to any period of time or any zone, the funds which the War Department has received from the Congress for the present fiscal year are restricted to the prevention of disease and starvation.
-
If the President approves Secretary Byrnes’ memorandum, it is necessary that the President send a letter of instructions to the Secretary of War, specifying the extent to which he desires the War Department to finance supplies under the disease and unrest formula outside of the United States zone, and in addition the extent of general economic assistance that he desires the War Department to finance with respect to all zones, including the United States zone. Unless some standard is specified, we would not be able to determine the amount of appropriations we should go to Congress to obtain. In effect, we should have a letter similar to that which President Roosevelt sent to the War Department in November 1943.
-
It is suggested that the part of the paper entitled “German Import Program” would be strengthened as a negotiating agent for our representatives in the Control Council, if there were added the following: “Recognizing the principle that proceeds from the sale of exports from Germany as a whole must be used to finance essential imports” at the beginning of the sentence which now starts “Procurement and financing responsibility …”
I am returning the memorandum which you gave me.
JOHN J MCCLOY
Meeting of the Combined Chiefs of Staff, 2:30 p.m.
CCS 197th Meeting
| Present | ||
|---|---|---|
| United States | United Kingdom | |
| General of the Army Marshall | Field Marshal Brooke | |
| Fleet Admiral King | Marshal of the Royal Air Force Portal | |
| General of the Army Arnold | Admiral of the Fleet Cunningham | |
| General Somervell | Field Marshal Wilson | |
| Lieutenant General Hull | General Ismay | |
| Vice Admiral Cooke | Lieutenant-General Macready | |
| Major General Norstad | Major-General Laycock | |
| Rear Admiral Flanigan | Major-General Hollis | |
| Secretariat | ||
| Brigadier General McFarland | Brigadier Cornwall-Jones | |
| Captain Moore | Lieutenant-Colonel Haddon |
CCS Minutes
Potsdam, July 19, 1945
Top secret
Approval of the Minutes of the CCS 196th Meeting, 19 July 1945
The Combined Chiefs of Staff:
a. Approved the conclusions of the CCS 196th Meeting subject to the amendment of the conclusions under item 4 to read as follows:
a. Operational Information and Intelligence
That the United States and British Chiefs of Staff will pass to the Russians such operational information and intelligence regarding the theatres in which they are respectively responsible as either may wish and without bargaining.b. Information and Intelligence Other than Operational
The United States and British Chiefs of Staff will consult together before passing to the Russians any information and intelligence other than operational. Neither party will pass to the Russians information or intelligence derived wholly or in part from the other party’s sources without their consent.
b. Approved the detailed report of the meeting, subject to any later minor amendments.
Directive to the Supreme Allied Commander, Southeast Asia (CCS 892/1)
The Combined Chiefs of Staff had before them a draft directive to the Supreme Allied Commander, Southeast Asia, proposed by the British Chiefs of Staff.
The United States Chiefs of Staff proposed a few amendments to the text of the directive.
GENERAL MARSHALL said that the United States Chiefs of Staff were prepared to accept the directive on the understanding that the British Chiefs of Staff would be responsible for obtaining the approval of the Australian, New Zealand and Dutch Governments to the proposed reallocation of areas and command set-up in Southwest Pacific and Southeast Asia, since these governments had been party to the original arrangements.
The Combined Chiefs of Staff:
a. Approved the directive to the Supreme Allied Commander, Southeast Asia, in CCS 892/1 as amended during the discussion. (Subsequently circulated as CCS 892/2)
b. Took note that the British Chiefs of Staff would take steps to obtain the agreement of the Australian, New Zealand, and Dutch Governments to the proposed reallocation of areas and command set-up in Southwest Pacific and Southeast Asia.
Disposal of Enemy War Matériel in Germany and Austria (CCS 706/11 and 706/14)
The Combined Chiefs of Staff: Approved Appendices “A” and “B” to CCS 706/11, as amended in CCS 706/14. (Subsequently dispatched to SACMed as [message number] Fan 603)
Land-Leathers conversation, 3 p.m.
51 Ringstrasse, Babelsberg
| Present | ||
|---|---|---|
| United States | United Kingdom | |
| Vice Admiral Land | Lord Leathers | |
| Major General Gross | Major-General Holmes | |
| Mr. Morse | Brigadier Greaves | |
| Mr. Bissell | Mr. Weston | |
| Mr. Nicholson | ||
| Mr. Picknett |
The following subjects were discussed: allocation of shipping for civilian and military passengers; extension of the time during which the United States should have the use of the Queen Elizabeth and the Queen Mary; the conversion of 100 vessels by the United Kingdom; the allocation of captured German passenger vessels for United States use in the movement of troops; the use and possible conversion of the Gripsholm and the Drottningholm; American and British trooplift programs; the possible admission of Italy to the United Maritime Authority and the Mediterranean Shipping Board; possible British payment of charter hire for Italian vessels; the distribution of captured German vessels and their use during the war against Japan; and problems relating to the striking Polish crews on British-operated Polish vessels.
860c.85/7-2045: Telegram
The Acting Secretary of State to the Assistant Secretary of State
[Washington,] July 20 [1945]
Secret
73
For attention Clayton.
WSA have brought to our attention problem arising out of Polish seamen’s strike regarding which they are communicating to Admiral Land at Potsdam. Crews of merchant vessels controlled by London Polish authorities and chartered or allocated to British Ministry of War Transport struck last week in protest against recognition of Warsaw-Polish Government. Ships affected include five small American-owned coasting steamers transferred to Polish flag by regular procedure under Lend-Lease and operating in British coasting service. So far as known strike has not extended to the single Liberty ship similarly transferred to Polish operation and now loading on West Coast South America.
WSA state idleness of five Lend-Lease vessels on which crews have struck can not be justified for such a cause and only practical method to deal with the situation is to withdraw the ships under charter option requiring thirty days notice or more promptly on some other basis. However, they wish to avoid any action which might prove prejudicial in present Polish situation or which might prejudice atmosphere or otherwise prove embarrassing in connection with Potsdam conference.
Our view is that political character of strike voids essential purpose of allocation these ships to Polish operation, which was to provide crews for them. This seamen’s strike, however justified from viewpoint of the seamen themselves, constitutes interference with shipping and foreign policy operations of this Government and therefore cannot be tolerated; moreover, strike indicates prospect of continuing trouble with these seamen if existing arrangements continue. Therefore we believe ships should be withdrawn from Polish allocation by promptest legitimate procedure unless such action at this time would in any way embarrass proceedings of Potsdam conference. It is believed British would provide substitute crews if the vessels are allocated to them in view of importance to them of coasting services. If new Polish Government subsequently wishes to take over and operate American-owned ships under similar charter arrangements, this question can be discussed on the basis of then existing circumstances. Of course transfer of these ships to British or other allocation would likely make it more difficult to find other ships for later allocation to new Polish Government.
Possibility has been suggested that withdrawal of these ships from Polish operation might provide new Polish authorities with excuse for withdrawing from UMA and that Polish withdrawal might be followed by others. Since however withdrawal of these ships would reduce tonnage under Polish flag and in no way improve Polish ability to provide shipping space for Polish import requirements, disadvantage to Poland of withdrawal from UMA would not be lessened by transferring these struck ships to other operation. In light of information available to us therefore we do not believe possible repercussions UMA should be considered a significant factor as against greater objection to any course of catering to seamen who have struck for political reasons. We understand strike also affects about twenty Polish-owned ships chartered to British Ministry of War Transport but that presents problem for British to solve independently of action taken toward our ships allocated to Polish operation.
We presume this question will be subject of direct discussion with Admiral Land Potsdam, but would appreciate your instructions or comment.
[GREW]
860c.85/7-2045: Telegram
The Acting War Shipping Administrator to the Assistant to the War Shipping Administrator
[Washington,] July 20 [1945]
Secret
74
To Admiral Land for Morse from Conway. SD 4486.
In view of the Polish crew strike, Helmbold and I believe we should immediately withdraw N3’s and re-allocate. State Department also of this opinion but believe with us that no action should be taken pending clearance from you since it may embarrass your current negotiations or UMA questions. Liberty crew so far has not joined strike. At meeting in Shipping Division Office State Department Polish desk advised it would be an advantage to take action now on vessels as this would be a propitious time to take a necessary if unpleasant step. However Saugstad fully advising Clayton on situation. I have signed the following letter and dispatched it to the State Department today:
The State Department has been informed of the arrangements under which the War Shipping Administration has allocated six U.S. owned ships to the Polish Government on a “Bareboat out, time charter back” basis. Since the date on which the ships were delivered there has been a change in the recognized Polish Government.
Although we understand that the Polish Government now recognized is apparently the legal successor to the prior government, it has occurred to us that there may be reasons why it would not be desirable to continue the “Bareboat out, time charter back” arrangements with the new government. A strike on the part of the crews of five of the six ships involved has brought this point to an immediate head which will require action on our part. We are informed by a cable from London today that the crews have struck in protest against the recognition of the Warsaw-Polish Government.
From an operating point of view, we cannot justify the idleness of these ships for such a cause; and the only practical method by which we could deal with the present situation is to withdraw the ships from their present allocation either by taking advantage of our charter option to cancel the present arrangements on thirty days notice or otherwise. Since this might be interpreted as an uncordial act towards a newly formed friendly government we would appreciate your advices before taking any further action.
In the event that the ship delay problem is settled before we have been able to take any action along the above lines, it would appear to us, from an operating point of view, that the present arrangements could be continued and the ships thus kept moving without interruption until such time as a definite policy be established. We believe this possible even though, because of the many uncertainties involved, we have felt it necessary for the present to stop payment of charter hire to protect our interest.
The present arrangement was concluded with the then duly authorized Polish authorities, and we have worked with their duly appointed agency, the Gdynia-America Line, which is ninety-eight percent owned by the Polish Government. Pending official word from Warsaw, we feel there is some basis for continuance of the present arrangements. Because of the many factors involved and because of the maturing obligation to pay charter hire, we would also like your advice on this point.
In view of the operating problem involved, your immediate advice is urgently requested.
We have received following cable from Devlin: “Wsa 3714-W 2084 reference our Wsa 3590-W 2038 on five Polish coasters. Situation unchanged as regards Kowel[,] Kolno and Kielce. Kutno crew remains with exception of master and vessel continues in Liverpool-Belfast trade. Krosno anchored Southend with crew and cargo on board[;] crew will leave when vessel ties up at berth. London berthing situation tight account labour and British hesitate to berth vessel as she will be immobilized immediately she ties up. Prospects of settlement extremely uncertain. Unless otherwise advised by you we will take no action as problem apparently one of high level foreign relations.” To which we have replied as follows: “Your present method for handling situation approved. Settlement of dispute not desirable until we are prepared to act under necessary diplomatic clearances. Necessary that we be kept fully advised of any possibility that situation may be changed. We are handling with State Department here and with Morse in Potsdam.”
Informal meeting of the Foreign Ministers, 3:45 p.m.
No minutes have been found.
Fourth plenary meeting, 4 p.m.
| Present | ||
|---|---|---|
| United States | United Kingdom | Soviet Union |
| President Truman | Prime Minister Churchill | Generalissimo Stalin |
| Secretary Byrnes | Foreign Secretary Eden | Foreign Commissar Molotov |
| Fleet Admiral Leahy | Mr. Attlee | Mr. Vyshinsky |
| Mr. Dunn | Sir Alexander Cadogan | Mr. Maisky |
| Mr. Clayton | Sir William Strang | Mr. Gromyko |
| Mr. Davies | Mr. Gusev | |
| Mr. Harriman | Mr. Sobolev | |
| Mr. Pauley | ||
| Mr. Murphy | ||
| Mr. Matthews | ||
| Mr. Bohlen | ||
| Mr. Cohen | ||
| Mr. Thompson |
U.S. Delegation Working Paper
Potsdam, July 20, 1945, 4 p.m.
Agenda for Meeting of Heads of Three Governments
- Council of Ministers.
- Italy in the United Nations, including reference to Spain.
- Vienna – Austria (paper to be presented by Mr. Churchill).
- Western frontiers of Poland (paper presented by USSR this morning).
- Trusteeship (paper presented by USSR this morning).
- Turkey (paper to be presented by Mr. Churchill).