America at war! (1941–) – Part 5

7256

Nachtkriegsprogramm der USA

…

7257

U.S. State Department (July 23, 1945)

Meeting of the Joint Chiefs of Staff, 9:30 a.m.

JCS 201st Meeting

Present
Fleet Admiral Leahy Brigadier General Jamison
General of the Army Marshall Brigadier General Lincoln
Fleet Admiral King Brigadier General Esposito
General of the Army Arnold Captain McDill
General Somervell Captain Stroop
Lieutenant General Hull Captain Oster
Vice Admiral Cooke Colonel Peck
Rear Admiral Flanigan Colonel Dean
Rear Admiral Gardner Colonel Donnelly
Major General Gross Colonel Stone
Major General Norstad Colonel Cary
Brigadier General Cabell Colonel Cary
Secretariat
Brigadier General McFarland Captain Moore

JCS Minutes

Potsdam, July 23, 1945, 9:30 a.m.
[Extracts]
Top secret

. . . . . . .

Command in Indo-China (CCS 890/3)

ADMIRAL KING read a memorandum relating to the approach by the United States and British Governments to Generalissimo Chiang Kai-shek in regard to the reallocation of the southern part of Indo-China to the Southeast Asia area.

GENERAL MARSHALL proposed the amendment of the statement in paragraph 3 of CCS 890/3 which the British had recommended for inclusion in the final report to the President and the Prime Minister.

The Joint Chiefs of Staff: Approved the amendment to paragraph 3 of CCS 890/3 proposed by General Marshall and directed that it be presented to the Combined Chiefs of Staff.

Provision of Personnel Shipping for the Requirements of Allied Governments (CCS 897)

The Joint Chiefs of Staff: Agreed to recommend that the Combined Chiefs of Staff approve the recommendation of the Combined Military Transportation Committee in paragraph 5b of CCS 897 subject to the amendment of Enclosure “A” as follows:

a. Substitute in paragraph 3c “when satisfactory arrangements in regard to the movement of civilians cannot be” in lieu of “as regards the movement of civilians for which provision is not.”

b. In paragraph 5 delete the words “statement of.”

***Report to the President and Prime Minister (CCS 900)

The Joint Chiefs of Staff considered CCS 900 and amended it in several particulars.

ADMIRAL KING stated that he considered that the United States Chiefs of Staff should insist on the inclusion under Section III of the numbered paragraphs now omitted from the final report to the President and Prime Minister, since the report should be complete and since the substitutes for these paragraphs dealing with rehabilitation did not come under the purview of the Combined Chiefs of Staff.

The Joint Chiefs of Staff:
a. Agreed to recommend approval by the Combined Chiefs of Staff of the final report to the President and Prime Minister in the Enclosure to CCS 900 as amended during the discussion.

b. Agreed to recommend the inclusion under Section III of CCS 900 of appropriate paragraphs as set forth by the United States Chiefs of Staff in the Enclosure to CCS 877/5.

. . . . . . . . . . . . . .

Policy in Regard to Lend-Lease Assignments

GENERAL MARSHALL asked Admiral Leahy if he had discussed with the President the question of Lend-Lease assignments to the United Nations.

ADMIRAL LEAHY said that he had discussed the question with the President and was trying to get him to change the basic directive on Lend-Lease to permit General Eisenhower to continue his present course of action. He believed that the President would approve the delivery of maintenance supplies to occupational forces in Europe but that he would not approve the delivery of arms and ammunition.

GENERAL SOMERVELL said that he had proposed three policies which might be approved by the President, as follows:

  1. The support of that portion of the forces of such nations as in the opinion of the Joint Chiefs of Staff will be profitably employed against Japan in furtherance of our agreed strategy or for such other purposes connected with the war against Japan as may be approved by the Joint Chiefs of Staff.

  2. Supply of maintenance items for United States equipment now in possession of Allied Armies of occupation.

  3. Such exceptional military programs as the Joint Chiefs of Staff consider necessary for the successful prosecution of the war.

GENERAL SOMERVELL said that if the President would approve these three policies as a substitute for the policy he had announced on 5 July 1945, the Chief of Staff of the Army could then issue specific directives for assignment of Lend-Lease to the countries concerned which would accord with the three policies established by the President. He said we are receiving demands from the British for maintenance supplies and that some means of providing them is necessary. He felt that some decision must be reached promptly in regard to the delivery of maintenance supplies in order that the production problem might be controlled.

ADMIRAL LEAHY said that he recognized that this problem must be settled and that perhaps some basis for barter with the British might be found. Possibly the supply of United States material against reimbursement as provided for in Section 3c of the Lend-Lease Act would be the solution.

7258

Memorandum by the British Chiefs of Staff

[Babelsberg,] 22 July 1945
Top secret
CCS 890/3

Command in Indo-China

  1. We agree that as a first step in reorganising command in Indo-China, there is advantage in dividing the country into two, leaving the northern portion in China Theatre and allotting the southern portion to Southeast Asia Command. This organisation of command should be subject to review in the light of the development of operations in that area.

  2. We have examined the run of communications in Indo-China and suggest that the most satisfactory dividing line would be latitude 16° N.

  3. We, therefore, recommend that the Combined Chiefs of Staff should include in their final report to the Prime Minister and President, a statement on the following lines:

    We consider it important that there shall be unity of control of major operations in the Indo-China-Siam area when they develop and of previous subversive and para-military operations. As the first step in securing this unity of control, we are agreed that the best arrangement would be to include that portion of Indo-China lying south of latitude 16° North in Southeast Asia Command. This arrangement would continue General Wedemeyer’s control of that part of Indo-China which covers the flank of projected Chinese operations in China, and would enable Admiral Mountbatten to prepare the ground in the southern half of Indo-China where any initial operations by him would develop.

    We recommend that the President and the Prime Minister should approach the Generalissimo to secure his agreement to this arrangement.

7259

Byrnes-Molotov meeting, 10:30 a.m.

Present
United States Soviet Union
Secretary Byrnes Foreign Commissar Molotov
Mr. Bohlen Mr. Pavlov

Bohlen Minutes

Potsdam, July 23, 1945, 9:30 a.m.
Top secret

THE SECRETARY said he had asked to see Mr. Molotov because he was deeply concerned at the development of the question of reparation from Germany. He said that as Mr. Molotov knew the United States Government had always favored and still favored the adoption of a friendly overall policy for the Three Powers which would treat Germany as an economic whole. He said, however, after listening to the discussions here and hearing the report of the Reparations Committee he did not see how certain of the positions taken by the Soviet Government could be reconciled by [with?] the adoption of an overall reparation plan. For example, the question of the transfer now to Polish administration of a large part of 1937 Germany would expose the British and Americans in their zones to serious dangers in connection with an overall reparation plan. Another factor which worked against the overall plan was the definition put in by Mr. Maisky of “war bounty [booty?]”. The Secretary said he wished to make it very plain that the United States did not intend to pay out money to finance imports to Germany and thus repeat the experience after the last war when in fact United States funds had been used to pay reparations to others.

MR. MOLOTOV said he fully understood that point of view and he wished to say that Mr. Maisky had not fully made clear the position of the Soviet Government on the definition of “war bounty [booty?].”

THE SECRETARY continued that he was also very much afraid that the attempt to resolve these conditions in practice would lead to endless quarrels and disagreements between the three countries at a time when unity between them was essential.

MR. MOLOTOV said he thought that these difficulties could be reconciled here at the Conference and that he intended to put forward at the morning meeting of the Foreign Ministers concrete proposals which he hoped would be carefully studied by the British and American Delegations.

THE SECRETARY said that under the circumstances he wondered whether it would not be better to give consideration to the possibility of each country taking reparations from its own zone. For example, according to their estimates, about 50% of the existing wealth of Germany was in the Soviet zone and that, therefore, the Soviet Union could receive its share of reparations from its own zone. He added that if they wished to obtain certain equipment or materials from the British or American zones they could do so in exchange for food or coal needed to feed and warm the German population in the west. He added that Marshal Stalin had indicated some such proposal when he had said yesterday that if the British wished to obtain coal from Silesia they could do so by exchanging other goods with the Poles. He added that his suggestion for zonal as against overall treatment applied only to reparations but that in other matters, such as currency, transport, etc. Germany would be treated as an economic whole.

MR. MOLOTOV said he knew that the Marshal strongly favored an overall plan for reparations and he said that they would be quite prepared to consider reducing their reparation claims.

As it was then time for the meeting, it was agreed that if agreeable with Mr. Eden the three Foreign Secretaries would meet informally this afternoon in order to discuss the matter further.

In conclusion, THE SECRETARY repeated that the United States could not agree to anything which would require them to finance the feeding of Germans in their zone so that the latter could work on behalf of reparations for other countries.

7260

Byrnes-Eden conversation

Present
United States United Kingdom
Secretary Byrnes Foreign Secretary Eden

Byrnes expressed the views of the United States on the subject of reparations from Germany to Molotov and had subsequently informed Eden of this talk.

7261

Byrnes-Churchill conversation, morning

Present
United States United Kingdom
Secretary Byrnes Prime Minister Churchill

Churchill: “Mr. Byrnes told me this morning that he had cabled to T. V. Soong advising him not to give way on any point to the Russians, but to return to Moscow and keep on negotiating pending further developments.

“It is quite clear that the United States do not at the present time desire Russian participation in the war against Japan.”

7262 
740.00119 Potsdam/8-745: Telegram

The President to the Ambassador in China

[Babelsberg,] 23 July 1945
Top secret

Number 310, personal and top secret, from the President for Ambassador Hurley.

Please deliver the following message to Generalissimo Chiang Kai-shek:

I refer to your message of 19 [20] July quoting your telegram to Generalissimo Stalin.

I asked that you carry out the Yalta agreement but I had not asked that you make any concession in excess of that agreement. If you and Generalissimo Stalin differ as to the correct interpretation of the Yalta agreement, I hope you will arrange for Soong to return to Moscow and continue your efforts to reach complete understanding. TRUMAN

TRUMAN

7263

Sixth 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 Archibald Clark Kerr Mr. Gromyko
Mr. Clayton Sir Alexander Cadogan Mr. Gusev
Mr. Harriman Sir William Strang Mr. Maisky
Mr. Murphy Mr. Ward Mr. Sobolev
Mr. Pauley Mr. Novikov
Mr. Matthews
Mr. Cohen
Mr. Russell

Department of State Minutes

Potsdam, July 23, 1945, 11:30 a.m.
Top secret

The sixth session of Foreign Ministers opened at 11:30 a.m. on July 23, 1945. MR. MOLOTOV was in the Chair.

MR. MOLOTOV first announced that he wished to state the questions which were up for discussion. They were:

  1. Reparations from Germany and Italy;
  2. Economic Principles Regarding Germany;
  3. The Report of the Subcommittee on the Council of Foreign Ministers;
  4. Trusteeships;
  5. The Directive to the Allied Commanders-in-Chief in Germany;
  6. Paper on Cooperation in Solving urgent European Economic Problems;
  7. Perhaps Iran.

MR. EDEN pointed out that Iran was on the Big Three agenda.

MR. MOLOTOV agreed and suggested that it be passed over.

MR. MOLOTOV then suggested Tangier, and MR. EDEN agreed.

MR. MOLOTOV then suggested the proposed text of the invitations to China and France and added that the morning agenda would conclude with the preparation of an agenda for the Big Three. He asked whether there were any other questions. If so, they should be stated. He remarked that several questions now before subcommittees were not yet ready for discussion. These included the questions of Italy and Spain and several others.

Reparations

MR. MOLOTOV then brought up the matter of reparations and circulated a paper containing the principal suggestions of the Soviet delegation on this matter. The first paper was entitled “Plan for Reparations from Germany.” He then mentioned the draft considered by the Commission regarding advance deliveries from Germany and submitted a Soviet draft. He stated that there were other reparations questions which could not be raised now. There was need for time to study them and consideration could be postponed until tomorrow.

MR. BYRNES agreed that it was best to postpone consideration since documents had been received only now and time would be needed to study them.

MR. EDEN remarked that he was certainly not now prepared to comment on the Soviet proposals.

MR. MOLOTOV accepted this position but asked whether informal conversations could not be held on the matter in the present meeting.

MR. EDEN asked that the Economic Subcommittee work at the drafts.

MR. MOLOTOV agreed.

MR. BYRNES agreed that the papers should not be considered during the present meeting.

MR. EDEN then asked about Molotov’s reference to informal conversations.

MR. MOLOTOV stated that the question of reparations is linked with other economic questions, such as war booty, and it would be a good idea to have informal exchanges of view. However, he is ready to accept any proposal.

MR. BYRNES then asked for postponement until tomorrow and that there should be no informal conversations.

MR. MOLOTOV agreed.

MR. MOLOTOV then stated that the second question concerned economic principles, which was not finished yesterday. He stated his readiness to withdraw his amendment to paragraph 13 and hoped that his colleagues could agree on 18.

MR. BYRNES replied that it was the American position that paragraph 18 should remain in the document.

MR. EDEN agreed and pointed out that paragraph 18 is linked with paragraph 5 of the report of the Committee.

MR. MOLOTOV then made a statement regarding the paragraph mentioned by Mr. Eden. He maintained that the subcommittee report was not accurate. The present Conference should not discuss how to deal with German territory. He knew that the idea is to supply Germany as far as possible from territories where supplies were drawn before the war. However, heavy damage in some areas has radically changed the situation. He did not believe that it was possible for the Conference to know where conditions have changed and to what degree. This matter should be referred to the Council. It was the affair of our representatives and should be referred to them. They can deal with the questions specifically. He mentioned the opposing views of Stalin and Churchill on this matter and therefore concluded that nothing could be accepted as being generally binding. He wished to decide these matters by means of our representatives in Germany who if they did not agree could refer questions to their governments. If they attempted to write a paper applicable to Germany as it was before the war, the Soviet Union could not agree. He suggested that the question in paragraph 18 should not be decided either way at this meeting. There should be no binding decision taken at this time. It should be decided in accordance with future developments in Germany.

MR. EDEN doubted that it would help much to pass the question on to the Control Council. There were already differences of opinion in the Council on temporary problems on how to fuel Berlin. A temporary arrangement had been reached on this matter in order to tide it over this Conference.5 A common solution must now be found in order to meet the situation adequately.

MR. MOLOTOV insisted that if he did accept this suggestion, it would make no practical difference since all disagreements would remain. He pointed out that there are no figures on how much coal, food and other materials are available or are necessary. This must be decided by the Control Council when data is available. The Control Council at that time will be able to reach a common agreement or will refer the matter to their governments. If this article is accepted there would still be no practical solution. The question would still go back to the governments. He suggested that if agreement could not be reached, the matter be referred to the Big Three.

MR. EDEN admitted the truth of Mr. Molotov’s contention to the effect that agreement on this principle would not solve the practical problems of coal and food. On the other hand, this principle would constitute a good basis upon which the Control Council could make decisions; otherwise, there would be no basis to guide them.

MR. MOLOTOV replied that the Soviet Union could not accept now because of differences in conception of the German problem. He suggested that the question be studied in a business-like fashion for several weeks or for several days.

MR. BYRNES inquired whether Mr. Molotov would object to a statement of general principles to the effect that in the absence of a specific reason, supplies would as far as possible be drawn from the same areas as before the war. He pointed out that the statement actually says “so far as practicable.” Such a statement would be a guide to assist the Control Council in their determinations of such questions. If we simply referred the matter to them Mr. Byrnes feared that they would be unable to decide and would only send the question back to their governments.

MR. MOLOTOV replied that he could not agree now because he had no data. Time was needed. When the study had been made the matter might be reconsidered. He suggested reference to the Big Three, and all agreed.

MR. MOLOTOV then raised the question of the relative priority of exports and reparations. He asked for consideration of the Soviet draft which he distributed and inquired whether his suggestion was clear.

MR. BYRNES replied that the American position is clear. It is the position of the United States that there will be no reparations until imports in the American zone are paid for. There can be no discussion of this matter. We do not intend, as we did after the last war, to provide the money for the payment of reparations.

MR. MOLOTOV gave an example of the sense of his suggestion. He supposed the possibility that 2 million tons of coal would be produced, and the total requirements for internal use, export and reparations would amount to 2,200,000 tons. In this case he suggested that exports and reparations be reduced 10 percent to make up the difference. It would mean that both exports and reparations would be little less and that over a period of a year’s time the situation might be balanced. If during the whole year there was still a shortage of 10 percent, all three factors, including internal consumption, would be reduced 10 percent.

MR. MOLOTOV considered this to be a simple and fair solution. He stated that if production were increased over the figure set the reparations amount would not change. This would mean a surplus either for internal use or for export as the Control Council should decide. He asked whether this was not a fair arrangement.

MR. EDEN stated that it seemed to him that either imports should be a first charge or reparations should be a first charge or that as now suggested they should have an equal status. He considered it certain that if exports were not sufficient to cover imports someone must make deliveries without payment therefor.

MR. MOLOTOV replied that imports could be reduced.

MR. EDEN pointed out that the Soviet Union had agreed to a minimum import program which must be fulfilled and which cannot be cut to meet reparations.

MR. MOLOTOV thought that shortages in coal exports might be compensated by increased exports of other commodities.

MR. BYRNES remarked that he had stated his position. Imports must be a first charge and not a dollar will be paid on reparations until imports are paid for.

MR. MOLOTOV then made another suggestion. Such German exports as had been agreed to by the Control Council should have a first priority. On other exports reparations would have first priority. All exports approved by the Control Council would be carried out in the first instance.7 He suggested that if the Foreign Ministers were unable to agree, that the matter be referred to the Big Three.

MR. EDEN asked for permission to clarify the situation. He pointed out that the Control Council has agreed to a minimum export program. If this program is cut in any way it can only be done at the expense of someone, say the miners who are producing coal. In order to avoid such a situation someone must bring in supplies without payment. Therefore, imports must be a first charge.

MR. MOLOTOV stated that this was not quite clear to him and asked Mr. Eden to repeat the statement.

MR. EDEN did so.

MR. BYRNES stated that if we lessened food supplies we lessened production.

MR. MOLOTOV suggested the possibility of cutting internal consumption.

MR. BYRNES stated that we have started with a program of minimum import needs and it was therefore impossible to reduce internal consumption in order to provide for reparations.

MR. MOLOTOV pointed out that he had made the suggestion that where the Control Council had approved imports they would be a first charge although they might possibly affect reparations.

MR. EDEN stated that everything must be approved by the Control Council.

MR. MOLOTOV gave another example of his meaning. Say the Control Council had decided on the export of 500,000 tons of coal at a time when it was planned to produce 2,000,000 tons. Suppose the British then wanted to export 700,000 tons. His suggestion would mean that the 500,000 tons would be a first charge and the supplementary 200,000 tons would be subject to reparations needs. To summarize, the exports approved by the Control Council for the payment of imports is to be a first charge. In other cases reparations have priority. In the example cited the 500,000 ton exports would have priority but the 200,000 additional would be subject to a reparations priority. However, if the Control Council agreed that the 200,000 tons should be exported in order to pay for imports then they would also have priority over reparations. He again suggested reference of the matter to the Big Three.

Council of Foreign Ministers

MR. MOLOTOV stated that there was a final draft on the establishment of the Council of Foreign Ministers. He had no comment and after asking for comment asked that the draft be considered as approved.

Trusteeship

MR. MOLOTOV then raised the subject of trusteeship and asked for comments on the Soviet draft. He pointed out that the Soviet draft deals in the first place with the Italian colonies and suggested that a definite determination be made of the future status of these colonies. If they are to be separated from Italy, a joint trusteeship under the United States, United Kingdom and the Soviet Union should be established.

MR. EDEN pointed out there were two problems in regard to the Italian colonies. The first problem is whether Italy lost the war or not. The British have said that Italy has no right to get her colonies back but have not gone beyond that point. The British believe that this question should be considered in connection with the settlement of a peace treaty by the Council of Foreign Ministers. When our minds are made up whether colonies go back to Italy or not, then it is probable that the United Nations organization would decide on the form of trusteeship, if any.

MR. BYRNES pointed out that the American position had been stated by the President yesterday afternoon. At the President’s suggestion it was tentatively agreed that the conclusion of the peace treaty with Italy would be the first business of the Council of Foreign Ministers. As a result the Foreign Ministers and their governments must determine the disposition of the colonies and the Trieste boundaries and any other decisions in regard to Italian territory. Mr. Byrnes did not see how the Conference could decide what territories should be taken from Italy and what trusteeships should be established. It is true that the Charter provided that there can be an agreement as to trusteeships. The colonies referred to by the Soviet Union are now in the custody of the United Kingdom. If there was an agreement between them the matter could be considered here; but there is no agreement and there can be no disposition until peace is concluded. Mr. Byrnes did not see how the conference could decide this question.

MR. MOLOTOV stated that he would like to make a statement. Eden had publicly stated in Parliament several times the British position. Therefore their position can be clearly seen; but it has not been disclosed to the Allies, The colonies are now in the custody of the British Army. Under these conditions there was ground to believe that the British might wish to express an opinion. If they do not wish to do so now perhaps they will later. The trusteeship question had been raised in San Francisco and even in Moscow by the United States. Mr. Molotov had no doubt that the American Government has considered this question. He hoped that the United States Government would give an expression of its views to the Allies. The Soviet Government will express their views. If the matter is not to be discussed now, he would agree. That is why the Soviet Government had suggested discussion in the Council of Foreign Ministers. The matter will be referred to the first meeting in London.

MR. BYRNES stated that the United States had presented both at Dumbarton Oaks and at San Francisco its general views on trusteeships. However, it did not state its views on specific colonies. The Council of Foreign Ministers at its first meeting would pass on this and must necessarily make a decision regarding the disposal of the colonies. If it was determined that the colonies or some of them were to be taken from Italy, it was proper and necessary to decide the question of administration.

MR. EDEN added that the British Government has not yet decided whether some or all of the colonies should be taken from Italy. He agreed that this should be discussed in the Council of Foreign Ministers in the London meeting at the time they drew up the peace treaty with Italy. Until then it was not worthwhile to talk about trusteeships. However, he thought that the new world organization should decide this question.

MR. BYRNES asked whether it was agreed that this question would not be disposed of here.

MR. MOLOTOV then suggested that the Soviet memorandum be referred to the Council of Foreign Ministers for consideration at its first meeting in London.

MR. EDEN remarked there was no point in referring the Soviet memorandum since the first task of the Council will be the preparation of peace terms for Italy and the matter would come up automatically.

MR. MOLOTOV stated that he of course fully agreed. However, the question of the western frontiers of Poland was a question to be considered by the Council of Foreign Ministers in their preparation of peace treaties. Despite this the matter is being dealt with now. In any event, Mr. Molotov asked that note be taken of the fact that the matter would be raised in the first meeting of the Council.

MR. BYRNES stated that this is fully understood.

Directive to Allied Commanders-in-Chief in Germany

MR. MOLOTOV stated that the next subject up for discussion was the proposed directive to Allied Commanders-in-Chief in Germany.

MR. BYRNES stated that this paper was proposed because in the opinion of the American representative on the Control Council it was desirable to have such a directive issued giving instructions to the Commanders in each zone to carry out whatever agreement was reached at this Conference. Therefore, he suggested that the matter be referred to a committee in order that the Soviet and British Delegations could make any suggestions they desired regarding the proposal. The directive would simply give the Commanders instructions from their Heads of State and each Commander would have the same instructions.

MR. EDEN stated that he was a little puzzled regarding the need for this directive. He pointed out that they had had before them principles on [of?] agreement in the handling of Germany. The political principles had been approved. They were based on an American draft which he considered to be extremely well set up. He had assumed that these principles would go to the British Commanders in order to guide them. He thought that this would be enough. The proposed discussion [directive?] covers to some extent similar grounds. Some things are left out and some added. Some very good things had been left out.

MR. BYRNES stated that his purpose is to have the matter referred to a committee in order that past and future agreements of the Conference could be put into a directive from the Heads of States to the Commanders. We should transmit to each Commander everything decided at this Conference. This should be done before the Conference ends.

MR. MOLOTOV believed that there was some point in Mr. Eden’s remarks. The proposed directive repeats what has been said in the document on political principles plus some economic. He asked whether it was advisable to have two wordings on the same points a ad stated that he did not know how to solve this difficulty. If the purpose is to give additional direction, the Soviet Government might consider; but decisions have already been taken on political directives and are to be taken on economic matters. These would be sent to the Commanders and the advantage of the directive is not clear.

MR. BYRNES agreed that the language should be the same. His only idea was to make certain that the Commanders would know what had been decided at this Conference. He suggested the appointment of a committee to incorporate the language previously approved plus any that may be approved in the future, into a directive. Either we can do this or let the Commanders read about it in the press or perhaps they could be sent a copy of the communiqué. Army people generally want written directives and General Eisenhower has asked for this.

MR. EDEN thought General Eisenhower might not have known that we had adopted a set of political principles based on the draft submitted by the United States. Mr. Eden agreed entirely that the directives given to the Commanders must be written and the British had intended to send their Commander all agreed principles. Mr. Eden suggested that before agreements were communicated to the Commanders, France should be consulted in order that the directive should be uniform in all four zones.

MR. BYRNES agreed to this proposal and restated his desire for some machinery to send to the Commanders whatever was decided at the Conference.

MR. EDEN asked whether consideration would be given to bringing France in line.

MR. MOLOTOV agreed and inquired about the composition of the subcommittee.

MR. BYRNES named Mr. Murphy and Mr. Riddleberger.

MR. EDEN named Mr. [Sir William] Strang and Mr. Harrison.

MR. MOLOTOV named Mr. Gusev and Mr. Sobolev.

Cooperation in Solving Urgent European Economic Problems

MR. MOLOTOV stated that the next question concerned cooperation in solving urgent European economic problems. He thought it advisable to establish a subcommittee to consider this matter.

MR. BYRNES agreed that this was the best thing to do.

MR. MOLOTOV named Mr. Arutunian and Mr. Goroshenko.

MR. EDEN named Mr. Brand and Mr. Phillips [Coulson].

MR. BYRNES suggested that the matter be referred to the Economic Committee [Subcommittee].

MR. MOLOTOV replied that this committee was not suitable.

MR. BYRNES then named Mr. Clayton and Mr. Pauley.

Iran

MR. MOLOTOV then raised the question of Iran.

MR. EDEN stated that this would be considered at another time.

Tangier

MR. MOLOTOV then brought up the question of Tangier.

MR. EDEN stated that there was to be a preliminary discussion of this matter in Paris soon and that we would welcome Soviet participation in the discussion. He stated that he was in entire agreement with the principles contained in paragraph 1 of the Soviet draft to the effect that the Zone should remain international and that steps should be taken to put an end to Spanish occupation. It was to consider how best this could be done that the suggestion was made that the meeting should be convened in Paris. Mr. Eden stated the hope that all governments signatory to the Act of Algeciras would meet before final decisions were taken. He did not feel that the four powers could ignore the interests of the small powers. He hoped that a full conference could meet before long. He did not think that it was right for the Conference to consider the subject since there was to be a meeting soon and the French have considerable interest in the matter. The position of Spain would of course have to be considered in the Paris meeting.

MR. MOLOTOV asked what was suggested.

MR. EDEN replied that he suggested an early Paris meeting between the representatives of the three powers here and the French.

MR. MOLOTOV suggested the adoption of paragraph 1 and agreement that the four powers would meet.

MR. EDEN replied that he must say that he had told the French that the British would not join in a settlement of the Tangier situation without the French.

MR. BYRNES asked whether it was agreed that the four powers should work out an agreement. He stated his assumption that Mr. Eden would prefer no publicity in the press.

MR. EDEN wondered whether such a paradise was possible.

MR. BYRNES then asked whether the Soviet Union wanted an announcement.

MR. EDEN stated that it would be unwise to make an announcement that we are going to the French capital in order to decide the Tangier question. Also, there were the other signatories of the Act to be considered. It is enough that we here agree to have conversations.

MR. MOLOTOV stated that the Soviet Union would not insist on an announcement. He suggested agreement among the Foreign Ministers without publicity that we accept paragraph 1 of the Soviet paper and that we will meet in Paris.

This was agreed to.

Invitations to China and France

MR. MOLOTOV brought up the subject of the proposed invitations to China and France. He suggested that after the words “members of Council” there should be added the words “by agreement between them.” After looking at Mr. Byrnes’ draft he agreed that it was all right without this change.

Agenda for Big Three

MR. MOLOTOV then asked for consideration of an agenda for the Big Three.

MR. BYRNES intervened to suggest that a time should be set for sending the invitations to China and France. He remarked that if they were sent now they might become known to the press. He suggested sending the invitations the day before the issuance of the communiqué and the end of the Conference.

MR. EDEN thought that there should be a little more notice than one day in order to give a chance for an answer to be received. He suggested 48-hour notice.

This was agreed to.

Agenda for Big Three

MR. MOLOTOV again asked for the formulation of an agenda for the afternoon Big Three meeting. He stated that there would be:

  1. Turkey
  2. Koenigsberg
  3. Syria and the Levant
  4. Persia

MR. MOLOTOV mentioned the question of reparations from Germany and Italy, but it was agreed that this should not go on the agenda but should be discussed in the next day’s meeting of the Foreign Ministers.

MR. MOLOTOV also raised the question of economic principles but this was put over until the next day.

MR. BYRNES then brought up the fact that the question of the admission of Italy into international organizations and the exclusion of Spain from them had been referred to a committee, which had not yet reported. He understood that part of the paper had been agreed to and suggested that the committee report back if it was unable to agree. There had been a suggestion that there would be two separate papers and then a proposal that they be combined into one paper. At the present time they were incorporated in one paper. He thought that this matter might be disposed of.

MR. MOLOTOV asked what suggestions Mr. Byrnes had.

MR. BYRNES replied that he suggested that the matter be acted on now and disposed of. He understood that there was no difficulty about the matter except whether there should be two papers or one. He was willing to take either.

MR. EDEN suggested the drafting committee have one more try and that otherwise the matter would be considered tomorrow.

MR. MOLOTOV stated that it was not entirely a question of whether there should be one or two documents.

MR. BYRNES then asked for a report from the subcommittee either for or against the paper tomorrow.

MR. EDEN then circulated a note by the Prime Minister on the Greek situation.

The meeting then adjourned.

7264 
740.00119 Potsdam/7-2345

U.S. Delegation Memorandum

Potsdam, July 23, 1945, 11:30 a.m.

Summary of Meeting of Foreign Ministers Monday Morning, July 23, 1945

1. Reparations by Germany, Austria and Italy
Discussion of this question was postponed in order to enable the Economic Subcommittee to study two new papers on the subject presented by the Soviet Delegation.

2. German Economic Questions
The Soviet [Delegation] objected to paragraph 18 of the proposed agreement on economic principles, stating that each occupation zone should so far as practicable draw its supplies from the areas in Germany from which it had drawn before the war. It was agreed that this question should be referred to the Heads of Governments.

The Soviet Delegation presented a draft of a new paragraph 19 dealing with comparative priority between reparations and exports from Germany in payment of imports. Since no agreement could be reached on this question it was also referred to the Heads of Governments.

3. Council of Foreign Ministers
The revised text on this subject was given final approval.

4. Trusteeship
It was agreed that the disposition of the Italian colonies would be discussed by the Council of Foreign Ministers in connection with the negotiation of the peace settlement with Italy.

5. Directive to Military Commanders in Germany
A subcommittee was named to prepare directives to the respective military commanders in Germany embodying the decisions of this conference and to make recommendations as to the manner of consulting the French in regard thereto.

6. Cooperation in Solving Immediate European Economic Problems
A subcommittee was named to deal with this problem.

7. Iran
It was agreed that this question should be discussed by the Heads of Governments.

8. Tangier
The Foreign Ministers agreed to the first paragraph of the Soviet paper on this subject stating that Tangier should remain international. It was also agreed that the three Governments would participate with France in preliminary discussions of this question to be held in Paris in the very near future and that the other matters raised in [the] Soviet paper would be discussed at that time.

9. Telegram to the Chinese and French Governments concerning the Council of Foreign Ministers
The draft telegram on this subject was approved without change. It was agreed that these telegrams should be dispatched 48 hours before the issuance of the communiqué at the conclusion of this Conference.

10. Agenda for this afternoon’s meeting of the Heads of Governments
It was agreed to recommend to the Heads of Governments that the following subjects should constitute their agenda this afternoon.

  1. Turkey. A Soviet paper on the Black Sea Straits was circulated yesterday.
  2. The Transfer to the Soviet Union of the Koenigsberg area in East Prussia. A Soviet paper on this subject was circulated yesterday.
  3. Syria and Lebanon.
  4. Iran. British paper on this subject has been circulated.
7265 
740.00119 Potsdam/7-2345

Rapporteur’s Report

Potsdam, July 23, 1945, 11:30 a.m.
[Translation]

Agenda of the meeting of the three Ministers was as following:

1. Reparations from Germany, Austria and Italy
V. M. Molotov handed to Secretary of State Byrnes and Minister for Foreign Affairs Eden the draft proposals of the Soviet Delegation on reparations from Germany and on advance deliveries from Germany in [on] account of reparations.

It was decided to charge the Economic Commission [Subcommittee] with preliminary examination of the both drafts and to discuss them at the next meeting of the three Ministers.

2. Economic principles in regard to Germany
Paragraphs 13 and 18 were discussed same [as well] as paragraph 19. proposed by the Soviet Delegation. V. M. Molotov said he withdrew the proposed by him amendment to paragraph 13 and proposed to exclude paragraph 18, questions related to this paragraph to be examined by the Allied organs in Germany with subsequent solution in the Control Council; in case no agreement is reached in the Control Council the questions are to be agreed upon by the Governments. On this point there was no agreement reached and it was decided to submit the question of paragraph 18 to the meeting of the Heads of Three Governments to be decided upon.

V. M. Molotov submitted to Mr. Eden and Mr. Byrnes the draft of new paragraph 19 proposed by the Soviet Delegation. Mr. Byrnes stated this draft cannot be accepted by the United States Delegation. V. M. Molotov proposed an alternate draft of paragraph 19 according to which the approved by the Control Council export from Germany to cover the import is realized prior to all other deliveries. In all other cases priority is given to reparations. The agreement was not reached and it was decided to submit this question to the meeting of the Heads of Three Governments to be decided upon.

3. On the Council of Foreign Ministers
Presented by the Drafting Committee draft was approved without amendments.

4. On trust territories
The draft of the Soviet Delegation was discussed. Mr. Eden stated that first of all should be solved the question of whether the Italian colonies should be detached from Italy and if so, which ones specifically. This question should be solved simultaneously with the drafting of the peace agreement with Italy. The question of who should be given the trusteeship over all former Italian colonies to be detached from Italy, must be solved by the International Organization of United Nations. Mr. Byrnes proposed to postpone the decision on this question until the signing of the peace agreement with Italy, when all territorial problems concerning Italy would be solved.

V. M. Molotov proposed to refer the Soviet Memorandum to the first meeting of the Council of the Foreign Ministers that will take place in London next September. Mr. Eden said that he thought that there was no necessity to refer the Soviet Memorandum to the Council of the Foreign Ministers because in working out the Peace Treaty with Italy question of the Italian colonies will be automatically brought up.

V. M. Molotov asked to take into account that the questions Soviet Memorandum is dealing with will be put by the Soviet Government before the September meeting of the Council of the Foreign Ministers in London.

5. On directives to Allied Commanders-in-Chief in Germany (proposal of the US delegation)
It was decided to inform all Commanders in Chief of the Allied occupational forces in Germany of all concerning them decisions of the Conference upon securing confirmation of the Provisional Government of the French Republic on these decisions.

For this objective [it] was decided to organize a Committee composed of:
United States Murphy and Riddleberger,
Great Britain Strang and Harrison,
Soviet Union Goussev and Sobolev.

6. On cooperation in solving immediate European economic problems
For preliminary examination of the memorandum submitted by the United States Delegation to organize a Committee composed of:
United States Clayton and Pauley
Great Britain Brand and Coulson
Soviet Union Arutiunian and Geraschenko.

7. On Tangier
The Soviet draft was discussed.

Resolved:

  1. To approve the first paragraph of the Soviet Delegation’s draft which reads as the following:

    International Zone of Tangier.
    Having considered the question of the zone of Tangier we agreed that this zone which includes the town of Tangier and the area adjoined to it shall owing to it[s] special strategic importance remain international.

  2. It was decided to discuss in immediate future the whole question on [of?] Tangier at the meeting in Paris of the representatives of the Four Governments – USSR, USA, Great Britain, and France.

8. Approval of the text of address to Governments of China and France
Text of address proposed by the Committee is approved without amendments.

It is decided to send the address forty-eight hours before communiqué on the results of the Conference is published.

9. On agenda of the meeting of the Heads of the Three Governments
It was agreed to recommend to the Heads of the Three Governments the following agenda:

  1. On Turkey;
  2. On Koenigsberg region;
  3. On Syria and Lebanon;
  4. On Iran[.]
7266

Proposal by the Soviet Delegation

[Babelsberg, July 23, 1945]
[Translation?]

Article 19 of ‘Economic Principles’

  1. 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 for imports approved by the Control Council. In case the means are insufficient to pay simultaneously on reparations account and for approved imports all kinds of deliveries (internal consumption, exports, reparations) have to be proportionally reduced.
740.00119 (Potsdam)/7-3145

Proposal by the Soviet Delegation

[Babelsberg, July 23, 1945]
[Translation?]

Article 19 of ‘Economic Principles’

  1. 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 to pay for imports (in so far as they are approved by the Control Council). The exports to pay [for] such imports will have priority over Reparations and internal consumption.
740.00119 (Potsdam)/7-3145

Proposal by the Soviet Delegation

[Translation?]
Top secret
[Undated]

Plan of Reparations from Germany

  1. The total sum of Reparations 20 billion dollars which is accepted for consideration has to be covered approximately 50% by the way of once for all removals from the national wealth of Germany within two years after the capitulation and approximately 50% by the way of the annual deliveries in kind within 10 years after the capitulation.

  2. The once for all removals from the national wealth of Germany are to be exacted from the following branches of her economic life:

Billion dollars
1. War and chemical industries (aircraft production, tank production, naval shipbuilding, arms and ammunition production, production of powder and explosives, synthetic rubber and fuel, artificial fibre, cellulose, Koke-Chemie) 2,0-2,2
2. Iron and steel, non-ferrous metals, engineering (including electrical industry), coal, power stations 2,3- 2,7
3. Building industry, textiles, food industry, printing, transport (including water transport), communications (radio, telephone, telegraph), equipment of ports, warehouses, etc. 1,8- 2,0
4. Foreign investments and claims of Germany 1,1- 1,4
5. Shares of German enterprises (railways, ports, canals, etc.), foreign currency, precious metals 1,9- 2,3
6. Miscellaneous 0,9- 1,2
10,0- 11,8

For the purpose of removals German property situated on the territory of Germany in 1937 frontiers as well as German property abroad.

  1. To fix the following approximate list of goods with which the postwar Germany has to pay her annual deliveries in kind:
Coal, brickets Sugar
Chemicals (drugs, dyes, potassium etc.) Cattle, agricultural products Ceramics
Machinery, tools Medical instruments
Cement, building materials Optical apparatus
Timber, paper River shipbuilding

  1. To fix the total sum of annual deliveries in kind [at] 1 billion dollars per annum or 10 billion dollars in 10 years. To ask Allied Commission on Reparations to make more detailed calculations concerning these deliveries.

  2. The basis of calculations are prices of 1938 plus 15% on equipment and 10% on raw materials and finished goods.

  3. The rate of exchange: 1 dollar equals 3.5 marks.

740.00119 Potsdam/6-1945

Proposal by the Soviet Delegation

[Translation?]
Secret
[Undated]

On Advance Deliveries from Germany

  1. Pending the establishment of a permanent allied reparation agency, advance deliveries (removals) should be based upon the urgency of need of suffered Nations [nations which have suffered?] for rehabilitation purposes and should be made as advance deliveries with subsequent accounting of these deliveries as reparations or restitution, or for purchase account of the recipient nations.

  2. With respect to advance deliveries of capital goods to all United Nations, the following procedure should be adopted:

    a. Immediate establishment of a sub-commission of the Allied Commission on Reparations to be situated in Berlin, and to be composed of representatives of the nations participating in the Allied Commission on Reparations. This sub-commission should keep in constant consultation with the Control Council and should keep the Control Council informed of all its activities.

    b. The Allied Commission on Reparations will transmit to its sub-commission a list of industries from which advance deliveries of equipment will be allowed.

    c. Advance deliveries (removals) of capital equipment from those industries up to an agreed percentage of the movable assets, expressed in physical terms, may be made upon the approval or recommendation of the sub-commission. Shipping documents covering such advance deliveries (removals) shall include notification to the receiving country that in the final accounting such deliveries (removals) may be deemed by the Allied Commission on Reparations to be on account of reparations or restitution.

    d. Each of the occupying powers may remove or permit to be removed from its zone of occupation plant and equipment from any industries in such list, subject to the following conditions:

    1. With respect to any removal by an occupying power for its own account, the respective zone commander shall notify the sub-commission of the contemplated removal, giving the sub-commission2 an opportunity to enter such removal in the plan of advance deliveries.

    2. With respect to any removal from the zone of one occupying power for the account of another United Nation (whether or not such United Nation be an occupying power) such removal shall only be permitted upon the approval or recommendation of the sub-commission.

  3. With respect to advance deliveries to all United Nations of raw materials out of current production or inventories, such deliveries may be made upon the approval or recommendation of the sub-commission on the basis of the need of the claimants after due regard to the supplies available and the requirements of the occupation forces. Shipping documents covering such advance deliveries shall include notification to the receiving country that in the final accounting such deliveries may be deemed by the Allied Commission on Reparations to be on (1) export account to be paid for in acceptable currencies, (2) reparation, or (3) restitution.

  4. Adequate and uniform accounting controls shall be instituted with respect to all deliveries effected under the above proposed plan.

  5. Claimant nations should be notified of the establishment of the foregoing procedures for effecting urgently needed advance deliveries.

  6. It shall be mutually agreed that each of the occupying powers shall submit, within six months of the date hereof, a statement of all property removed from Germany after the termination of war with Germany.

7267 
881.00/7-2345: Telegram

The Secretary of State to the Acting Secretary of State

[Babelsberg,] July 23, 1945
Secret
Victory 230

To Acting Secretary of State, Washington.

Information American Embassy, Paris, to American Legation, Tangier.

British are telegraphing to London today suggesting that the French and British Embassies in Moscow invite the Soviet Government to send representatives to Paris for the discussions regarding Tangier. They hope that the discussions may begin by August 6. We are in accord with this action.

7268

Text Considered by the Subcommittee on Admission to the United Nations

[Undated]

The three Governments consider that the time has come to terminate the present anomalous position of Italy. Italy was the first of the Axis Powers to break with Germany, to whose defeat she has made a material contribution, and has now joined with the Allies in the struggle against Japan. Italy has freed herself from the Fascist regime and is making good progress towards the re-establishment of a democratic government and institutions. She gives promise of becoming a firm supporter of a policy of peace and resistance to aggression.

The three Governments have therefore resolved that very early steps should be taken to conclude a peace treaty with Italy and have included the preparation of this among the immediate important tasks to be undertaken by the new Council of Foreign Ministers. The conclusion of such a peace treaty will make it possible for the three Governments to fulfill their desire to support an application from Italy for membership of the United Nations Organization.

As regards the admission of other States, Article IV of the Charter of the United Nations declares that:

  1. membership in the United Nations is open to all other peace-loving States who accept the obligations contained in the present Charter and, in the judgment of the organization, are able and willing to carry out these obligations;

  2. the admission of any such State to membership in the United Nations will be effected by a decision of the General Assembly upon the recommendation of the Security Council.

The three Governments so far as they are concerned will support applications for membership from those States which have remained neutral during the war and which fulfill the qualifications set out above.

The three Governments feel bound however to make it clear that they for their part would not favor any application for membership put forward by the present Spanish Government, which, having been founded on the support of the Axis Powers, does not, in view of its origins, its nature, its record and its close association with the aggressor States, possess the qualifications necessary to justify such membership.

7269 
868.00/7-2245

Memorandum by Prime Minister Churchill

Potsdam, 22nd July, 1945
P (TERMINAL) 25
Secret

Greece

In view of the reference to Greece in the Soviet Memorandum, I circulate the following two papers to the Conference. The first is the report of Field Marshal Alexander. The second is the report on the visit of the British Trades Union Delegation to Greece, which was headed by Sir Walter Citrine and composed of leading Trades Unionists. This I believe gives a true picture of the rights and wrongs of the Greek position.

I am puzzled at the reference on paragraph 4, Sub-section 2 of the Soviet Memorandum to “the representatives of Greek democracy.” According to the information I have, the EAM-ELAS elements in Greece in no way represent Greek democracy or the vast majority of Greeks. Their conduct in Athens during their attempt to seize and dominate the city have made a gulf between them and the Greek people which will last for many years. The report of the Trades Union Delegation should be read in this connection.

W[INSTON] S. C[HURCHILL]

7270

Meeting of the Combined Chiefs of Staff, 11:30 a.m.

CCS 199th Meeting

Present
United States United Kingdom
Fleet Admiral Leahy Field Marshal Brooke
General of the Army Marshall Marshal of the Royal Air Force Portal
Fleet Admiral King Admiral of the Fleet Cunningham
General of the Army Arnold Field Marshal Wilson
General Somervell General Ismay
Lieutenant General Hull Lieutenant-General Macready
Vice Admiral Cooke Major-General Laycock
Major General Norstad Major-General Holmes
Rear Admiral Flanigan Major-General Hollis
Captain McDill
Secretariat
Brigadier General McFarland Brigadier Cornwall-Jones
Captain Moore

CCS Minutes

Potsdam, July 21, 1945
Top secret

Approval of the Minutes of the 198th Meeting of the Combined Chiefs of Staff, 21 July 1945

The Combined Chiefs of Staff: Approved the conclusions of the 198th Meeting and approved the detailed report, subject to any later minor amendments.

Employment of Captured Enemy Ocean-Going Passenger Shipping and British Troopship Employment in U.S. Trans-Atlantic Programs in the First Half of 1946 (CCS 679/6, 679/7, 679/8, and 679/9)

SIR ALAN BROOKE said that the British Chiefs of Staff had considered CCS 679/9 and regretted that the amendments proposed by the United States Chiefs of Staff were not acceptable to the British Chiefs of Staff. It appeared to be the view of the United States Chiefs of Staff that if the seven captured German ships were moved to the Pacific they would be unable to make more than one trip before the 31st of December, 1945. If then, as a result of the review of the combined requirements and combined resources for the first half of 1946, it was decided that these seven captured ships should no longer be allocated to the United States, their initial assignment to the Pacific in 1945 would prove uneconomical. He said he appreciated the point of view of the United States Chiefs of Staff.

SIR ALAN BROOKE pointed out, however, that the very fact that these ships had been moved to the Pacific would be a strong argument for retaining them there. This argument would be weighed with all the other arguments when it came to the combined review which the British Chiefs of Staff had proposed in paragraph 6 of CCS 679/8. To exclude these ships from the review at this stage seemed to the British Chiefs of Staff to be wrong.

ADMIRAL KING proposed that the Combined Chiefs of Staff accept CCS 679/8, provided that the combined study on the lines suggested by the British Chiefs of Staff be undertaken as a firm commitment to be completed by mid-September.

The Combined Chiefs of Staff:
a. Agreed to allocate the total lift of the seven ships listed in CCS 679/6 for United States employment up to 31 December 1945.

b. Took note that the United States Chiefs of Staff would allocate to the United Kingdom a lift of 16,000 during the remainder of 1945 for the movement of Canadians.

c. Directed the Combined Military Transportation Committee, in collaboration with the Combined Shipping Adjustment Board, to submit by 15 September 1945 a report, on the lines of CCS 679/1, of the combined requirements and combined resources (including captured enemy trooplift) for the first half of 1946, the study to cover the recommendation in paragraph 7 of CCS 679/7 and the employment during the first half of 1946 of the seven ships listed in CCS 679/6.

Provision of Personnel Ships for the Requirements of Allied Governments (CCS 897)

The Combined Chiefs of Staff: Approved the memorandum in Enclosure “A” to CCS 897, subject to amendments agreed in discussion, and directed that it be dispatched to the Combined Shipping Adjustment Board.

Command in French Indo-China (CCS 890/3)

The Combined Chiefs of Staff: Approved the recommendation in paragraph 3 of CCS 890/3, and directed that the statement contained in that paragraph, as amended in discussion, be included in their final report to the President and Prime Minister.

Report to the President and Prime Minister (CCS 900)

The Combined Chiefs of Staff: Approved CCS 900, as amended in discussion.

Control of Allied Naval Units Other Than U.S. at Present Under Command of Seventh U.S. Fleet

The Combined Chiefs of Staff: Took note that upon the dissolution of the U.S. Seventh Fleet pursuant to the reallocation of areas and change in command in the Southwest Pacific, as proposed in CCS 890/1, it was the intention of the Commander in Chief of the United States Fleet to release to British control those Allied naval units other than U.S. at present incorporated in the U.S. Seventh Fleet.

7271

Memorandum by the U.S. Chiefs of Staff

[Babelsberg,] 23 July 1945
Top secret
CCS 679/9

Employment of Captured Enemy Ocean-Going Passenger Shipping and British Troopship Employment in U.S. Trans-Atlantic Programs in the First Half of 1946

The United States Chiefs of Staff agree with the provisions of CCS 679/8 except for the date of 31 December 1945 given in paragraph 5 as terminating the use by the United States of the six of the seven captured German ships destined for the Pacific.

After moving these ships great distances to the Pacific we shall be fortunate to obtain one trip from them before the 31 December date. By then our deployment will not have ended and the main operation will yet have to be undertaken. It would be uneconomical to remove this shipping from the Pacific after just one run. When ships may be withdrawn from the Pacific, less adaptable shipping such as the converted Victory ships should be first transferred back to the Atlantic. The lift of these ships of course will be included in the proposed review of personnel shipping to be completed by mid-September.

Accordingly, the United States Chiefs of Staff recommend that paragraphs 5 and 6 of CCS 679/8 be modified as indicated in the Enclosure.

[Enclosure]

Top secret

  1. In view of the serious position of United States movement to the Pacific, the British Chiefs of Staff are prepared to agree that the Combined Chiefs of Staff should allocate the total lift of the seven ships listed in CCS 679/6 for to the United States employment up to 31st December 1945 for employment as follows: the Europa until 31 December 1945; and the Caribia, Patria, Vulcania, Potsdam, Pretoria and Milwaukee until 30 June 1946. In return, they ask that the United States Chiefs of Staff allocate to them a lift of 16,000 during the rest of 1945 for movement of the Canadians, many of whom have been absent from their homes for a very long time. The Canadian Government are pressing us very strongly in this matter.

  2. The British Chiefs of Staff further suggest that a combined study on the lines of CCS 679/1 of the combined requirements and combined resources (including captured enemy trooplift) for the first half of 1946 should be completed by mid-September if possible. The study would cover the recommendation in CCS 679/7 and also the employment during the first half of 1946 of the seven ships to which reference is made in CCS 679/6 subject to the provisions of paragraph 5 above.

7272 
740.00119 Control (Austria)/7-2345: Telegram

The Political Adviser for Austrian Affairs to the Acting Secretary of State

Verona, July 23, 1945 — 2 p.m.
Secret
126

July 21 Koniev sent letter to United States, British, and French commanders stating he had been instructed facilitate occupation of various sectors Vienna by our forces. Gruenther, Winterton and Cherrière invited to Vienna meeting 1 p.m., July 24, to settle problems discussed at July 16 conference re taking over and they have accepted. US reconnaissance party moving to Vienna July 22 and July 24.

Soviet began evacuating Styria July 22 but were not quite ready to move into Upper Austria north of Danube. Soviet Genl who went to Linz for preliminary arrangements was reported as most cooperative.

ERHARDT

7273

Morse-Weston conversation, 2:30 p.m.

Present
United States United Kingdom
Mr. Morse Mr. Weston
Mr. Bissell Mr. Nicholson

The principal subject covered was the discussion of Swedish requisitioning of shipping which was expected to take place at a forthcoming meeting of the United Maritime Authority.

7274

Informal meeting of the Foreign Ministers, 4 p.m.

Present
United States United Kingdom Soviet Union
Secretary Byrnes Foreign Secretary Eden Foreign Commissar Molotov
Mr. Clayton Sir David Waley Mr. Maisky
Mr. Pauley Mr. Harrison Mr. Golunsky
Mr. Bohlen Mr. Coulson Mr. Potrubach
Major Theakstone

Department of State Minutes

Potsdam, July 23, 1945, 4 p.m.
Top secret

THE SECRETARY said that he had expressed the views of the United States on the subject of reparations from Germany to Mr. Molotov this morning and had subsequently informed Mr. Eden of this talk. He said it would not, therefore, be necessary for him to repeat all that he had said but he merely wished to state that in our view it was difficult to reconcile certain positions of the Soviet Government with the principle of an overall plan of reparation. He said that since Mr. Maisky was here he would like to have confirmation or clarification of the Soviet definition of “war booty.” As it had been reported to him by the American representative on the Separations Committee it covered all supplies and equipment, including plants and other materials.

MR. MOLOTOV then handed in what he said was the true definition from the Soviet point of view of “war booty.” (Annex 1)

THE SECRETARY then said he would like to ask Mr. Molotov a question not in any attitude of hostility but with the simple desire of ascertaining the facts in the situation, and that was, whether it was true that the Soviet authorities had taken large quantities of equipment and materials out of their zone. He said that they had even heard that household equipment, such as plumbing, silver, furniture, etc. had also been removed.

MR. MOLOTOV replied that “Yes, this was the case,” that a certain quantity of property had been removed. He said that if this was what was worrying the Secretary that they agree to deduct from their reparation plans a suitable figure to cover removals already made. He said in this connection it should be borne in mind that the Soviet Union had suffered direct losses of many billions of dollars. He offered to knock off 300 million for miscellaneous removals.

THE SECRETARY said that every country had suffered in this war, that the United States had spent 400 billion dollars so far in the war and its national debt had risen to 250 billion dollars, but we were not talking about that and he felt it was idle to discuss it on that basis.

MR. MOLOTOV said that they would be prepared to reduce their claims from 10 billion to 9 billion in order to cover removals already made and thus dispose of the question.

THE SECRETARY said that according to our estimates approximately 50% of the present wealth of Germany lay in the Soviet zone.

MR. MOLOTOV said that that was not their figure.

THE SECRETARY then said that our figures did not agree and it would be difficult to establish agreed figures on this subject.

There was some discussion between Mr. Maisky and Ambassador Pauley as to the figures of German resources in the Soviet zone.

MR. MOLOTOV then remarked that having agreed to give Poland compensation in the west he could not believe that at Yalta any of us had had in our minds to strip the territory of everything in reparations before turning it over to the Poles. He felt that such a step would be impossible. He added, however, that it was possible to consider the equipment and materials in the area as Poland’s share of reparations.

MR. EDEN then remarked that since this territory was to go to Poland only at the time of the peace treaty, until that time it should be considered part of Germany for the purposes of economics.

MR. MOLOTOV said that he had meant that the treatment of the part to go to Poland must of necessity be considered differently; he did not mean that it should be entirely excluded from consideration.

MR. EDEN said that a part of the question was that during the period of occupation we had a problem of feeding and retaining approximately the same number of Germans, but under the Soviet suggestions on conditions which would cut off the source or a large part of the source from which this same population formerly drew its sustenance.

THE SECRETARY then remarked that even if the Soviet plan was put at 9 billion, thus making the total 18 billion, it was still a mystery to him where any such amount of reparations was to come from.

MR. MOLOTOV remarked that this had been the figure accepted as the basis for discussion at Yalta.

THE SECRETARY replied that since then our armies have invaded Germany and have destroyed literally billions of dollars worth of property and that this would inevitably alter the situation. He added that we were faced with a terrible problem with regard to feeding the German population in our zone, that we had 800,000 more people in our zone [sector] in Berlin than had lived there before and approximately 4 million more in our zone as a whole. He said that counting fifty cents per day per person it would cost the United States in the first year some billion and a half dollars to maintain this excess population. They would, of course, work but they would work for the production of reparations for others and that was what we could not agree to. He said under the suggestion he had made this morning, that if each country should take reparations from its own zone, it would be possible to exchange goods between the zones. In this manner the Soviet Union would get its share from its own zone and the United States and Great Britain from theirs and would be able to take care of the needs of France, Belgium, Holland, etc. He repeated that according to our figures, approximately 50% of German resources were in the Soviet zone, 30% in the British and 20% in the American and French zones combined.

MR. MOLOTOV then inquired what about the Ruhr; that the Soviet Union desired in the form of reparations certain industrial equipment and machines from the Ruhr. He said they would be prepared to reduce their reparation figure even to 8½ or 8 billion, but they must insist on a fixed amount, say two billion, from the Ruhr. He said they could agree to no plan which did not contain such a provision.

MR. EDEN remarked that they were thinking of the immediate problem which faced them this winter, which was either to have wholesale starvation in their zone or to pay for the necessary imports, since it was apparent from the discussion that the Soviets were unwilling to turn over food and coal from the zone which they wished to give to Poland.

MR. MOLOTOV said this was a question that could be discussed.

THE SECRETARY remarked that he was worried that quarrels would develop between the Soviet, British and American Governments over these matters since there would obviously be a disposition on the part of the Soviet authorities to question the need for imports which would reduce the amount available for reparations from the western zones.

MR. MOLOTOV in conclusion repeated his willingness to reduce their figure but repeated Soviet insistence on a fixed quantity of reparations from the Ruhr. He reiterated his belief that agreement could be reached. He inquired as to what was to be the future status of the Ruhr, whether it was to be internationalized or not.

Both MR. EDEN and THE SECRETARY said that this was another subject of great political importance, but that they were thinking now of the immediate situation confronting the United States and Great Britain in their tasks of occupying Germany.

7275

Land-Leathers conversation, 4:30 p.m.

Present
United States United Kingdom
Vice Admiral Land Lord Leathers
Mr. Morse

The following subjects were discussed: the use of British vessels in the Pacific for CORONET; United States agreement not to request the conversion of 18 British cargo vessels to troopships, subject to the allocation of the Milwaukee to the United States; the allocation of captured German passenger vessels to the United States; the question whether the Milwaukee should be converted in the United States or the United Kingdom and whether this vessel should be manned by American or British crews; the inability of the United Kingdom to supply France with coal during the coming winter and the allocation of American shipping for this purpose; United States support of British coal requirements for bunkering, either on a lend-lease or a pay basis; possible British payment of charter hire for Italian vessels; possible Italian membership in the United Maritime Authority; shipping aspects of a possible revision of the Italian armistice terms and of a peace treaty for Italy; disposition of captured German vessels, the use of the Soviet share in the war against Japan, and the possibility that the Soviet Union might wish to man these vessels; possible Soviet membership in the United Maritime Authority; the relationship of the new Polish Provisional Government of National Unity to the United Maritime Authority; British consent to United States participation in the work of the Capcraft commission in the light of needs of the United States Navy for sea-going tugs for use in CORONET; the mechanism in London to be used for the division of captured German vessels as between the United States and the United Kingdom; and a draft British paper on shipping programs intended for submission to the August meeting of the Council of the United Nations Relief and Rehabilitation Administration.