America at war! (1941–) – Part 5

[NormanStewart]

Austria

MR. BYRNES stated that the next question concerned Austria. The Soviet representative maintained that the Protocol should record the agreement of the three governments that the authority of the Provisional Government should be extended to all zones. The U.S. and British Governments were prepared to state that this question would be examined after the entry of their forces into Vienna.

MR. MOLOTOV stated that he had no objection to this. However, the last paragraph concerning Koniev had no bearing on the subject.

MR. BYRNES and Mr. Bevin agreed that it should go out.

MR. BYRNES then stated that so far as he knew, the differences of the Protocol Committee had been settled. He suggested that the Conference agree to direct the Protocol Committee to include only important decisions of the Conference. The Protocol should certainly be limited to decisions. Any attempt to insert proposals would lead to difficulties and the insertion of other proposals.

MR. MOLOTOV agreed.

MR. BYRNES stated that the Protocol Committee could then be asked to return to its work.

MR. BEVIN agreed and asked whether the decision regarding Rumania should be put in.

MR. BYRNES stated that only a factual statement should be inserted.

Revised Allied Control Commission Procedure in Rumania, Bulgaria and Hungary

MR. BYRNES stated that the U.S. delegation had yesterday asked for consideration today of a paper regarding revised Allied Control Commission Procedure for Rumania, Bulgaria and Hungary. He had the impression that there is no serious difficulty here and would like to dispose of the matter, if possible.

MR. MOLOTOV stated that he could accept this proposal but that the second sentence was not exact. He suggested the deletion of the second sentence.

MR. BYRNES suggested that this sentence be read. Mr. Byrnes noted that our representatives in these countries had been saying that there had not been regular and frequent meetings of the Control Commission and that no information had been advanced before the issuance of directives.

MR. MOLOTOV stated that the Soviet proposals contained these points.

MR. BYRNES pointed out that the difficulty is that Mr. Molotov was asking to have deleted the assurance that is really important to our representatives there. Nothing would hearten them more than to know that there would be a change and that there would be frequent meetings. He was sure that the Soviet delegation would agree that this was the right thing. He asked to have the second sentence remain.

MR. MOLOTOV insisted that it was all in the Soviet proposal in detail and in accurate form. He pointed out that we had agreed to accept the Soviet proposal as a basis for discussion.

MR. BYRNES remarked that if it was really meant that we intend to do what is in this sentence, he could not see why it was objected to.

MR. MOLOTOV stated that if it was thought necessary to keep the second sentence, it should be drafted more accurately. He had no objection. However, he thought that since the Soviet proposal had been accepted as a basis for discussion, the second sentence was not necessary.

MR. BYRNES asked what proposal.

MR. MOLOTOV went on to state that regular meetings were all right but not too frequent. He suggested the deletion of the word “frequent.”

MR. BYRNES asked why they should not have frequent meetings.

MR. MOLOTOV stated that he was not opposed to frequent meetings but that the words might mean they would have to meet every day. The Soviet proposals had contained specific language regarding frequency.

MR. BYRNES suggested regular meetings weekly and added that we do not want regular to mean three times a year.

MR. MOLOTOV then suggested regular meetings two or three times a month.

MR. BYRNES replied that this was better than two or three times a year. He pointed out that in the proposed directive for Rumania it was drafted that there should be meetings every 10 days.

MR. MOLOTOV stated that they would perhaps be more frequent.

MR. BYRNES suggested that it should be stated that they would meet at least once in 10 days.

MR. MOLOTOV reiterated that perhaps the meetings would be even more frequent. He added that it was not a question for decision at Berlin.

MR. BYRNES replied that we had not been able to fix this matter otherwise.

MR. MOLOTOV pointed out that the Soviet delegation had made a written proposal which had been accepted.

MR. BYRNES stated that it had not been accepted as to details.

MR. MOLOTOV admitted that it had been accepted as a basis for discussion.

MR. BYRNES agreed and stated that he would now accept Mr. Molotov’s provision for meetings at least once in ten days.

MR. MOLOTOV said all right and inquired about the language concerning the importance of facilities for American and British representatives. It was not clear what was implied. The Soviet draft had contained specific proposals. Were these accepted or not.

MR. BYRNES asked for a moment to read.

MR. BEVIN asked whether Mr. Molotov referred to the document relating to Rumania as his specific proposal.

MR. MOLOTOV stated that the proposals concerned Rumania, Bulgaria and Hungary. He pointed out that the Conference had settled the question of the meeting at least once in ten days or oftener, if required.

MR. BYRNES pointed out that his wording “at least” would permit meetings every day, if necessary. He submitted that the language in the U.S. draft regarding the importance of facilities is the wisest suggestion. The Soviet proposal concerned two question[s]. Mr. Byrnes considered that it would be better to have general language. If the British have a copy of the Soviet proposal and will accept the language contained in their paper dated July 12 referring to Hungary, he considered the language in 3, 4 and 5 to be entirely satisfactory. It could apply to all countries and might do good and remove the source of irritation.

MR. BEVIN stated that he would accept the draft on Hungary as applicable to all countries.

MR. BYRNES stated that he would so instruct the drafting committee.

MR. MOLOTOV asked that Mr. Bevin’s proposal to extend the Hungarian proposal to Bulgaria and Rumania be accepted.

MR. BYRNES suggested reference to a drafting committee.

MR. MOLOTOV asked why it should go to a drafting committee.

MR. BYRNES replied that this would be done only to insert 3, 4 and 5 in the paper instead of the language Mr. Molotov wished to have deleted.

MR. BYRNES named Mr. Russell and Mr. Cannon.

MR. BEVIN suggested reference to the Protocol Committee.

MR. MOLOTOV thought that it should be a special committee. He named Mr. Novikov and Mr.———.

MR. BEVIN named Mr. [Hoyer] Millar.

MR. BYRNES then stated that the sentence to which Mr. Molotov had objected would be eliminated and the three paragraphs proposed by him would be inserted instead.

Freedom of the Press

MR. BYRNES pointed out in the papers concerning Poland and Rumania and Bulgaria reference had been made to freedom of the press. On the paper regarding Admission to United Nations Organization and on the Polish paper where the words “freedom of the press” were used, he had been informed that radio was not necessarily governed. He therefore suggested the addition of the words “and radio.”

MR. MOLOTOV pointed out that the press and radio were not the same thing.

MR. BYRNES agreed although in some places they were construed to mean the same thing and in others not. He assumed that Mr. Molotov would not desire to discriminate against radio.

MR. MOLOTOV pointed out that in some cases radio was run by the government unlike the press. The American rules hardly apply in these cases. He hardly thought it was possible to find a common rule.

MR. BYRNES stated that the only result of the present wording is to give representatives of the Allied press full freedom to report to the world. He was sure that the Soviet Delegation would not feel that representatives of Allied radio should not be permitted to report. There was no essential difference between a newspaperman reporting to his paper and a radioman reporting over the radio.

MR. MOLOTOV suggested that they conform to the decision already adopted.

MR. BEVIN asked whether it was meant that correspondents and radio representatives would be allowed to repeat [report?] on the same basis.

MR. BYRNES replied that the insertion after the word “press” of the word “radio” would mean this. If this word were not included, newspapermen would be all right but radiomen would not.

MR. BEVIN asked whether Mr. Molotov objected to radiomen being able to report.

MR. MOLOTOV stated that the Soviet Delegation would not be able to deal with this question at this moment since different things were involved. He suggested that the question not be raised at all at this time. There should be neither permission nor prohibition.

MR. BYRNES remarked that every morning at eight he listened to a correspondent reporting the news from Moscow.

MR. MOLOTOV rejoined that the Soviet Government would not permit a Hearst correspondent to talk over its radio. It all depended on the situation.

MR. BEVIN stated that he did not want Mr. Molotov to put British socialized institutions like the BBC at a disadvantage as compared to private press.

MR. MOLOTOV doubted that the Conference had time to examine this question.

MR. BYRNES suggested that it be passed and that the Big Three be advised.

Chinese Acceptance of Invitation to Join Council of Foreign Ministers

MR. BYRNES announced that he had just received word that the Chinese Government has accepted with pleasure the invitation sent to them to join the Council of Foreign Ministers.

German Fleet

MR. BYRNES stated that according to the naval subcommittee the unresolved questions on this subject are__________

MR. MOLOTOV interrupted to ask for a ten-minute adjournment.

MR. BYRNES agreed.

MR. BYRNES after the adjournment again raised the question of the German fleet and merchant marine. He stated that the first unresolved question is that of distribution. The British Delegation had asked that the French share in the distribution of certain ships.

MR. MOLOTOV pointed out that it had already been decided by the Big Three that the fleet would be divided equally among the three powers.

MR. BYRNES asked for British comment.

MR. BEVIN asked whether they were now dealing purely with the fleet since he had reservations regarding merchant vessels. After receiving an affirmative answer, he agreed to the one-third division.

MR. BYRNES then passed to the question of the merchant marine.

MR. BEVIN interrupted to mention the question of submarines. There were some differences here. The question is how many submarines should be saved and how many should be destroyed and how should they be divided. Churchill had laid down the British position on this subject to the effect that only token submarines should remain. The British were very sensitive on this point. The British and American Delegations had agreed that thirty submarines should be saved and the rest destroyed.

MR. MOLOTOV remarked that the Soviet Union would like to save more.

MR. BEVIN replied that he knew this. However, if the Russians asked for a big submarine fleet after what the British had suffered, no statesman would survive. Mr. Molotov must go along with him on this. It was a tender point with the British Navy. U-boat warfare had cost the lives of 30,000 British seamen carrying supplies. The main thing, therefore, is that submarines be saved for experimental purposes only. The number suggested by the American and British Delegations would be adequate for this purpose. He hoped that the Soviet Delegation would agree.

MR. MOLOTOV after asking whether any addition could be made agreed to saving thirty submarines.

MR. BEVIN thanked him.

MR. BYRNES then reverted to the subject of the merchant marine.

MR. BEVIN stated that the British were anxious to see a reasonable amount of shipping left to care for the German economy. He was willing to have the Allied Control Commission examine the problem very carefully in order to determine the number and type of ships suitable for Baltic and other uses. When the Control Commission had determined the amount of tonnage and type, there would be a balance left. He would then agree to a division provided that the Soviet Delegation out of their one-third would take care of Poland proportionately as the British and Americans would take care of others.

MR. MOLOTOV proposed that the British-American Delegation draft be accepted. This does not mention specific countries.

MR. BYRNES remarked that Holland may make claims, and Norway also. As he understood Mr. Bevin he had agreed that after the German economy had been taken care of there would be a division, provided that the Soviet Union took care of Poland and we of the others.

MR. MOLOTOV again referred to the necessity for determining the ships necessary for the German economy.

MR. BYRNES stated his understanding that the British Foreign Minister had covered this point and had said that thereafter there would be a one-third division but that the Soviet Union would take care of Poland and we would provide for the reasonable claims of others.

MR. BEVIN interjected to state that he wished to limit distribution of the British and American portions to Norway, France, the Dutch and possibly Belgium.

MR. BYRNES inquired about Greece.

MR. BEVIN agreed that Greece should be included.

MR. MOLOTOV suggested that the question be decided in accordance with the agreement by the American and British Delegations, namely that subparagraph (d) states that part of the German [merchant] fleet shall be held for the German economy.

MR. BEVIN pointed out now that this had been accepted.

MR. MOLOTOV went on to state that the rest of the merchant fleet should be divided into three parts.

MR. BYRNES stated that this was correct and in accord with the committee report but the British Delegation wished to make clear which countries should not look to the Soviet Union for part of their share.

MR. MOLOTOV stated that he understood but added that it had been provided in the [text on?] reparations that the Soviet Union will meet Polish claims and the other Allies other claims.

MR. BEVIN stated that this must be clarified. This concerns the distribution of booty, not reparations. He wished to know who has a claim to booty. The British lost 48 percent of their merchant fleet, the USA 15 percent, Norway 10½ percent, France 7 percent, the Dutch 5½ percent. He interrupted himself at this point to state that he had been quoting wrongly and that the figures mentioned by him applied to the percentage of total loss. After recapitulating he stated that the USSR had suffered one percent of the losses and that he had no figures for the Poles.

MR. MOLOTOV asked where he had gotten the Soviet figure, which was not correct.

MR. BEVIN replied that he had a figure of 240,000 tons lost. His position is that in the distribution of booty he could not admit legal claims on the British in accordance with the Churchill statement but will give a fair interpretation to what Churchill had stated in this connection. Therefore he was willing, together with the U.S. to meet the claims of the other Allies, but he asked for a definite understanding that Poland should out of this booty have their proportionate share out of the Soviet one-third. He undertook with American approval to deal with the Norwegians, the French, the Dutch and the Greeks.

MR. MOLOTOV inquired about the Yugoslavs.

MR. BEVIN said “No. Why?”

MR. MOLOTOV stated that he thought their opinion should be sought. Otherwise, they would be offended.

MR. BEVIN replied that he would leave the Yugoslavs to the Soviet Union out of their generosity.

MR. MOLOTOV asked why.

MR. BEVIN stated that he did not think that Great Britain after their tremendous losses should satisfy the claims of every other Ally. This is asking too much.

MR. MOLOTOV inquired about the United States position.

MR. BYRNES stated that in consideration of this question heretofore it had been recognized that ships, even merchant marine, was war booty in British possession, Churchill had agreed at this table to a division subject to the condition that ships under the Combined Maritime Authority would be used in the war against Japan. He wondered whether it was wise to enumerate the countries whose claims are to be considered. He thought that it might induce them to file claims. He thought some South American countries had lost ships and would like to file claims. If agreement was reached that the Soviet Government would out of its one-third care for the Polish claim and in addition look after Yugoslavia, it would make it easy.

MR. MOLOTOV stated that the question is whether there would be any ships left after their use by Russian allies against Japan.

MR. BYRNES replied that there would be [an] ample number of ships left if the Soviet Union looked after Poland only.

MR. MOLOTOV again asked if there would be any left after the Far Eastern war.

MR. BYRNES replied that no one could say but he believed that we were not losing many merchant ships at this time. He again repeated his belief that to enumerate ships would be to invite others to make claims. He wondered whether it was necessary.

MR. BEVIN stated that he only mentioned it as an example.

MR. BYRNES restated his understanding that the ships were in the possession of the British and when division had been made other claims would be determined. We did not want to commit ourselves. It would be for British and American Governments to decide whether Yugoslavia would be allowed any ships.

MR. BEVIN stated that if the Soviet Union would agree that Poland would receive the same percentage of losses as America and Great Britain gave the other Allies, then he would undertake with the United States to take care of Yugoslavia. He wanted to get this point settled.

MR. MOLOTOV reserved his views on this matter.

MR. BEVIN referred to the proposed public announcement regarding ships and submarines.

MR. MOLOTOV replied that there is a draft announcement for publication, which seems to be proper.

MR. BYRNES suggested that this question be submitted to the Big Three unless Mr. Molotov wished to let us know his view later.

MR. MOLOTOV thought it should be submitted to the Big Three.

MR. BEVIN asked what was to be submitted.

MR. MOLOTOV stated the proposal regarding the fleet and merchant marine.

MR. BYRNES pointed out that certain items had been agreed upon and that if they were not referred it would save time.

MR. MOLOTOV agreed that what had been agreed upon was all right, but he reserved his views on other sections. He referred to the last subparagraph of the British proposal.

MR. BEVIN stated that this had been withdrawn.

MR. MOLOTOV then referred to the agenda for the Big Three.

MR. BYRNES replied that the Big Three agenda had been made up as we went along.

External Assets of Germany

MR. BYRNES stated that a report had been received from the Economic Subcommittee regarding external German assets.

MR. MOLOTOV stated that this question must go to the Big Three.

MR. BYRNES said that it would be placed on the agenda.

Article 19 – Economic Principles

MR. BYRNES reported that the Economic Subcommittee had failed to agree on Article 19 of Economic Principles.

MR. BEVIN asked whether agreement could be reached now.

MR. MOLOTOV suggested adjournment until three.

MR. BYRNES pointed out that the Big Three would meet at three – the meeting adjourned.

[NormanStewart]

740.00119 Potsdam/8-145

Rapporteur’s Report

Potsdam, August 1, 1945, 11:25 a.m.

German reparations

It was agreed that the heads of Government should be asked to consider the draft on this subject prepared by the subcommittee.

German economic principles

It was agreed that the report of the Economic Subcommittee on this subject should be presented to the Heads of Government.

War crimes

It was agreed that the Heads of Government should be asked to decide the one outstanding issue in this connection, that is, whether certain prominent war criminals should be referred to by name in the decision of the Conference.

Use of Allied property for satellite reparations or ‘war trophies’

A subcommittee was named to consider the U.S. paper on this subject which was circulated on July 25th. The American Secretary of State withdrew the U.S. paper circulated at the same time on “Removals from Germany of Properties of United Nations or Neutral Nationals.”

German external assets

The U.S. paper on this subject is still before the Economic Subcommittee, which will report to the Heads of Government.

Oil for Western Europe

The U.S. proposal on this subject is also before the Economic Subcommittee which will report to the Heads of Government.

Allied oil equipment in Rumania

The Foreign Ministers agreed that there should be two bilateral commissions, one British-Soviet and one U.S.-Soviet, to meet August 10 in Rumania to examine the documents and the facts in connection with this question. It was agreed that these commissions would be accorded all necessary facilities to perform their task in Rumania.

Fascist activities in U.S. and British zones in Germany and Austria

The U.S. and British representatives stated that their Governments are investigating the situation reported in the Soviet paper on this subject and that they will inform the Soviets of the results of these investigations and will at that time discuss what further steps should be taken.

Repatriation of Soviet citizens

The British representatives stated that they are looking into the situation reported in the Soviet paper circulated already on this subject and that they would deal with it as soon as they returned to London. The Soviet representatives circulated a new paper on the subject and laid great stress on the importance which they attached thereto. The U.S. and British representatives stated that they would deal with the matter as promptly as possible.

Disputed questions before the Protocol Committee

The American Secretary of State presented four questions on which the Protocol Subcommittee had been unable to reach agreement: (1) Trusteeship Territories; (2) Black Sea Straits; (3) the Koenigsberg Area; and (4) Austria. The Foreign Ministers were able to agree upon texts on all of these questions. They also agreed that only important decisions of the Conference should be included in the Protocol. They approved a suggestion that the decision reached this morning creating bilateral commissions to deal with the question of Allied oil equipment in Rumania should be mentioned in the Protocol.

Revised procedure for Allied Control Commissions in Rumania, Bulgaria and Hungary

The U.S. draft on this subject was accepted with the exception of the second sentence. It was agreed that for this sentence there should be substituted the third, fourth and fifth paragraphs of the Soviet paper on the Control Commission in Hungary. A drafting committee was named to prepare the final document for presentation to the Heads of Government.

Facilities for radio representatives in Poland, Hungary, Rumania, Bulgaria and Finland

The American Secretary of State proposed that in the papers already approved by the Conference on the Polish question and on admission to the United Nations, where certain facilities were stipulated for representatives of the allied press, the words “and radio” be added in order that these same facilities might be available to representatives of the Allied radio. The Foreign Ministers were not able to reach agreement on this question and it was decided so to advise the Heads of Government who might then determine whether or not they wished to discuss the question.

Disposition of German fleet and merchant marine

The report of the subcommittee on this subject was considered by the Foreign Ministers. It was agreed that 30 German submarines should not be destroyed. Other points in dispute were not settled and it was agreed that they should be brought before the Heads of Government this afternoon.

[NormanStewart]

Report by the Drafting Committee on Reparations from Germany

[Babelsberg, August 1, 1945]

No agreement was reached by the Committee on a protocol on German reparations. The U.S. and U.K. representatives considered that, in return for the percentages of capital equipment allocated to the Soviet Union under the terms of paragraph 4 of the attached draft, the USSR had agreed to refrain from asserting a claim to German external assets, gold captured in Germany or securities of German corporations in the Western Zones. Therefore, the U.S. and U.K. representatives maintained that German external assets should be included in paragraph 3, as a source of reparation to countries other than the USSR. Lacking this, the percentages in paragraph 4 would be unacceptable to the U.S. and U.K. representatives.

The Soviet representative considered that no agreed decision had yet been taken regarding relinquishment by the USSR of a claim to external assets, gold and securities. Therefore the Soviet representatives did not accept the addition of German external assets in paragraph 3 and recommended that the matter should be referred to the Heads of Government.

The attached draft would be acceptable to the U.S. and U.K. representatives upon condition that the Soviet representatives confirm the above understanding regarding external assets, gold and securities. The Soviet representative stated that he could not agree with the way this question had been raised.

[Attachment]

German Reparation

1. Reparation claims of USSR shall be met by removals from the zone of Germany occupied by the USSR.

2. The USSR undertakes to settle the reparation claims of Poland from its own share of reparations.

3. The reparations claims of the United States, the United Kingdom and other countries entitled to reparations shall be met from the Western Zones and from German external assets[.]

4. In addition to the reparations to be taken by the USSR from its own zone of occupation, the USSR shall receive additionally from the Western Zones:

   (a) 15 percent of such usable and complete industrial capital equipment, in the first place from the metallurgical, chemical and machine manufacturing industries as is unnecessary for the German peace economy and should be removed from the Western Zones of Germany, in exchange for an equivalent value of food, coal, potash, zinc, timber, clay products, petroleum products, and such other commodities as may be agreed upon.

   (b) 10 percent of such industrial capital equipment as is unnecessary for the German peace economy and should be removed from the Western Zones, to be transferred to the Soviet Government on reparations account without payment or exchange of any kind in return.

   Removals of equipment as provided in (a) and (b) above shall be made simultaneously.

5. The amount of equipment to be removed from the Western Zones on account of reparations must be determined within six months from now at the latest.

6. Removals of industrial capital equipment shall begin as soon as possible and shall be completed within two years from the determination specified in paragraph 5. The delivery of products covered by 4 (a) above shall begin as soon as possible and shall be made by the USSR in agreed installments within five years of the date hereof. The determination of the amount and character of the industrial capital equipment unnecessary for the German peace economy and therefore available for reparation shall be made by the Control Council under policies fixed by the Allied Commission on Reparations, with the participation of France, subject to the final approval of the Zone Commander in the Zone from which the equipment is to be removed.

7. Prior to the fixing of the total amount of equipment subject to removal, advance deliveries shall be made in respect to such equipment as will be determined to be eligible for delivery in accordance with the procedure set forth in the last sentence of paragraph 6.

[NormanStewart]

740.00119 (Potsdam)/7-3145

The U.S. Representatives on the Economic Subcommittee to the Secretary of State

[Babelsberg,] August 1 [1945] — 1:00 p.m.
[Extract]

There is attached the Third Report of the Economic Subcommittee to the Foreign Ministers.

With respect to the question of German external assets, the U.S. and U.K. recommended the inclusion in the Economic Principles of the following:

18. Appropriate steps shall be taken by the Control Council to exercise control and the power of disposition over German owned external assets not already under the control of United Nations which have taken part in the war against Germany.

We also recommended that appropriate reference to this matter be made in the communiqué.

The Soviet representatives, while stating that they had very little interest in the matter, reserved their position pending a study of the entire problem.

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

[Attachment — Extract]

Third Report of the Economic Subcommittee to the Foreign Ministers

The Economic Subcommittee considered the questions of a statement regarding German external assets and an Article 19 of the Economic Principles relating to payment for imports into Germany.

With respect to the question of German external assets, no decision was reached. The Soviet representatives, after a general explanation of the problem had been made, requested fuller information and reserved their position pending the furnishing of such information.

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

---

740.00119 (Potsdam)/7-3145

The U.S. Representatives on the Economic Subcommittee to the Secretary of State

[Babelsberg,] August 1 [1945] — 1:00 p.m.

There is attached the Third Report of the Economic Subcommittee to the Foreign Ministers.

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

With respect to Article 19, the discussion indicated that the U.S., U.K. and USSR representatives were all in fact in agreement on two paragraphs:

Payment of reparations should leave sufficient resources to enable the German people to subsist without external assistance.

Payment for imports into Germany approved by the Control Council shall be a first charge against the proceeds of exports out of current production and out of stocks of goods.

We felt that we could not agree to report favorably these two paragraphs alone without insisting that the following be recorded in the protocol: “The above clause will not apply to the equipment and products referred to in paragraphs 4 (a) and 4 (b) of the Reparations Agreement.”

The British representatives indicated that they would concur. When the Soviet representatives refused to agree to a report that would have included a statement of the position of the U.S. representatives in this matter, it became necessary to fail to agree on any part of the subject.

It had been the understanding of the U.K. and U.S. representatives that in the event Article 19 as indicated above had been agreed upon, it would still have been necessary for you and/or the President to indicate that the general Control Council agreement proclaimed June 5 would be operative, that is, if the Control Council failed to agree, each zone commander would still be free to import into his own zone such supplies as his government considered essential, for the payment of which he might assess a first charge on exports from his own zone.

[Attachment — Extracts]

Third Report of the Economic Subcommittee to the Foreign Ministers

The Economic Subcommittee considered the questions of a statement regarding German external assets and an Article 19 of the Economic Principles relating to payment for imports into Germany.

The Subcommittee also failed to reach agreement in the matter of an Article 19 of the Economic Principles.

---

740.00119 (Potsdam)/7-3145

Report by the Economic Subcommittee

[Babelsberg, August 1, 1945]
[Extract]

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

The Soviet representatives reported that they were not yet in a position further to discuss the matter of oil supplies from the East.

[NormanStewart]

Harriman-Mikołajczyk conversation, 12:30 p.m.

	Present
United States		Poland
Mr. Harriman		Deputy Prime Minister Mikołajczyk

[NormanStewart]

Twelfth plenary meeting, 4 p.m.

	Present
United States	United Kingdom	Soviet Union
President Truman	Prime Minister Attlee	Generalissimo Stalin
Secretary Byrnes	Foreign Secretary Bevin	Foreign Commissar Molotov
Mr. Davies	Sir Alexander Cadogan	Mr. Vyshinsky
Mr. Bohlen	Major Birse	Mr. Golunsky
Mr. Cohen		Mr. Maisky
Mr. Thompson

U.S. Delegation Working Paper

Potsdam, August 1, 1945, 4 p.m.

Suggested Agenda – Meeting of Heads of Governments August 1, 1945

1. German Reparations
The subcommittee will present its report on this subject.

2. German Economic Principles
The Economic Subcommittee has presented the report on this subject, as well as on two immediately following points.

3. German External Assets

4. Oil Supplies for Western Europe

5. Use of Allied Property for Satellite Reparations or ‘War Trophies’
A subcommittee was appointed by the Foreign Ministers this morning to consider this subject.

6. War Crimes
The question of whether or not certain prominent war criminals be designated by name remains unsettled.

7. Procedures of the Allied Control Commissions in Rumania, Bulgaria and Hungary
The Foreign Ministers reached substantial agreement on this subject this morning and a subcommittee was named to prepare a final draft.

8. Disposition of the German Fleet and Merchant Marine
The subcommittee on this subject reported to the Foreign Ministers this afternoon.

9. Facilities for Representatives of the Allied Radio
The U.S. Secretary of State proposed to the Foreign Ministers this afternoon that reference be made in the papers on “the Polish Question” and “Admission to the United Nations” to representatives of the Allied radio as well as to representatives of the Allied press. No decision could be reached by the Foreign Ministers and it was agreed that the Heads of Governments should be so advised.

[NormanStewart]

Thompson Minutes

Potsdam, August 1, 1945, 4 p.m.
Top secret

MR. BYRNES said they had taken up many questions in the Foreign Ministers meeting. He thought it would be helpful to take them up one at a time.

German Separations

MR. BYRNES read the report of the drafting committee on the protocol of [on?] German reparations. He said the question was whether the Big Three had yesterday reached agreement on reparations when the Soviet delegate had said that he would not press the Soviet claim to 30 percent of the German gold, foreign assets, and shares.

MR. STALIN inquired what was meant by the expression “western zones” in the document.

THE PRESIDENT said it meant the zones occupied by France, Great Britain, and the United States.

MR. STALIN suggested that they might reach agreement along the following lines. The Russians would not claim the gold which their Allies had found in Germany. With regard to shares and foreign investments, perhaps the demarcation line between the Soviet and western zones of occupation should be taken as the dividing line and everything west of that line would go to the Allies and everything east of that line to the Russians.

THE PRESIDENT inquired if he meant a line running from the Baltic to the Adriatic.

STALIN replied in the affirmative and said that with respect to foreign investments, all investments in Europe west of this line would go to the Allies and all investments in Eastern Europe to the Russians. He said that for example German investments in Rumania and Hungary would fall to the Russians.

MR. BEVIN asked if German investments in other countries would be theirs.

MR. STALIN replied that they would and mentioned France, Belgium, and America as examples.

MR. BEVIN said he agreed and asked if Greece would belong to Britain.

MR. STALIN said the only questions related to Austria and Yugoslavia. Austria was divided into three zones. Yugoslavia was partly in the Russian zone. What should they do with investments there.

MR. BEVIN suggested that they be given to them.

MR. STALIN asked if he wanted Austria too.

MR. BEVIN replied that he did not.

MR. STALIN suggested that the Allies take Yugoslavia and Austria would be divided into zones.

MR. BYRNES asked what Stalin had to say with respect to the shares of German corporations that had been included in Stalin’s proposal yesterday but later withdrawn.

MR. STALIN said that the shares of enterprises located in the American zone would belong to the Americans.

MR. BYRNES said that he understood from this that the Russians would make no claim to shares of enterprises located in the American zones.

MR. STALIN replied that he would not.

MR. BYRNES pointed out that yesterday Stalin had asked for 30 percent of German foreign assets. What percent did he now ask of these assets.

MR. STALIN said he did not know but it would be very small as most of them were west of the demarcation line.

MR. BEVIN said he understood that yesterday the Soviet Government had renounced all claim to foreign assets.

MR. STALIN replied that they were speaking of the western zone of Europe and not the eastern zone. They had yesterday asked for 30 percent of the foreign assets in the west. This had been withdrawn but the Allies should also renounce those in the east.

MR. BEVIN said he understood the Russians had renounced all claim to German foreign assets yesterday.

MR. STALIN said not those in Rumania, Bulgaria, Finland, and Hungary.

MR. BYRNES asked in the case of a Berlin corporation which owned assets located in the American zone or in the United States or in South America, if the Russians claimed a share of the property elsewhere even though [because?] the headquarters were located in the Soviet zone.

MR. STALIN replied that if the enterprises were west of the line the Russians would have no claim on them.

MR. BYRNES said that then if the enterprises themselves were in the United States or elsewhere the Russians would not claim them.

MR. STALIN replied that he would not and added that those in Norway, Switzerland, Spain and other countries in the west would all fall to the Allies.

MR. BEVIN pointed out that this was rather going back on the agreement reached yesterday and asked if Stalin would renounce all claims to German foreign assets outside the zone of Russian occupation.

MR. BYRNES asked what would happen to the previous Soviet claim on gold.

MR. STALIN replied that the Russians would have no claim whatsoever.

MR. BYRNES said he thought it was important to have a meeting of minds. Mr. Bevin’s question was whether the Russian claim was limited to the zone occupied by the Russian Army. To that he understood Mr. Stalin to say “yes”. If that were so he was prepared to agree.

MR. STALIN replied in the affirmative.

MR. BYRNES said that only a few minutes before a claim had been made to assets outside of Germany and to avoid disputes in the future it would be well to have an understanding now. As he understood it the Russians would make no claim to foreign assets unless they were in the zone occupied by the Soviet Army.

MR. STALIN said he considered Finland to be in this zone. Yugoslavia was not but the eastern part of Austria was in their zone.

MR. BEVIN said he assumed it was clear that assets owned by British and Americans in those areas would not be touched.

MR. STALIN replied of course they would not and said that they had not been at war with Great Britain.

MR. BEVIN pointed out that these assets might have been taken over by the Germans.

MR. STALIN replied that in such cases it would be necessary to decide the matter on the merits of each case.

THE PRESIDENT pointed out that doubtless Yugoslavia and Czechoslovakia and other countries would claim assets in their territory.

MR. STALIN replied that Yugoslavia and Czechoslovakia were in the Allied zone for this purpose.

THE PRESIDENT said that he agreed with the Soviet proposal.

MR. BEVIN said he also agreed.

MR. STALIN said he thought the decision should be put in the Protocol but not published.

MR. BYRNES agreed that it should be put in the Protocol to avoid misunderstanding.

THE PRESIDENT said he thought it should be published.

MR. STALIN said he would agree.

MR. BYRNES referred to the statement in the third paragraph of the report drafted by the committee referring to the situation of the claims from other countries to German external assets. He assumed there would be no objection to that language in view of the agreement just reached.

MR. STALIN suggested the language, “and respective German assets abroad”. He added that it could be defined in the Protocol.

MR. BYRNES suggested that they decide that the language to carry out the agreement just reached be added to the report and that the matter be referred back to the sub-committee.

This was agreed to.

Invitation to France to Become a Member of the Reparations Commission

MR. ATTLEE proposed that the French Government be invited by the three Governments to become a member of the Reparations Commission today.

MR. STALIN suggested that they also invite Poland as Poland had suffered very much.

MR. ATTLEE said he understood it had been agreed that France be invited.

MR. STALIN asked why they should not invite Poland.

THE PRESIDENT said that they had agreed yesterday that the Soviet Government could take care of Poland with respect to reparations and that the Allies could take care of the others. Why mix other hands in the pie?

MR. ATTLEE pointed out that France had a zone of occupation in Germany.

MR. STALIN asked if Attlee was anxious to have France participate.

MR. ATTLEE replied in the affirmative.

MR. STALIN then said he would agree.

Delivery of Food, Coal, and Fuel to Berlin

MR. ATTLEE read the paper which he had submitted on this question which stated that an agreement had been reached on the delivery of 40,000 tons of food per month and 24,000 [2,400] tons of coal per day by the Soviets for the British and American zones in Berlin for thirty days running from July 15. He proposed that the Control Commission should be instructed to draw up a program of food, coal, and fuel to be imported during the next six months into the greater Berlin area. The amount furnished by the Soviet Government could be considered as an advanced delivery under paragraph 4 of the Reparations Agreement.

MR. STALIN pointed out that this was a new question upon which he did not know the opinion of the Control Council. He did not think it possible to have a high standard of living for Germany in the near future. They should ask the Control Commission for the facts and for plans for the future.

MR. ATTLEE replied that it was not a question of a high standard of living. He pointed out that deliveries of capital goods from the Ruhr were to begin now and the supply of necessary food should also begin now. The quantity could be determined by the Control Commission.

MR. STALIN said that in principle of course there should be an agreement but it was impossible to discuss figures here. The military people on the Control Commission could arrange such matters better.

MR. ATTLEE replied that this was what he was asking.

MR. STALIN said he did not know how this matter stood now and added that he could not take a decision now and pull figures out of the air.

MR. ATTLEE said he did not ask for figures.

MR. STALIN replied that he had mentioned figures in his memorandum. Where had they come from?

MR. ATTLEE said that these figures had been agreed upon.

MR. STALIN replied that he did not know about it.

MR. BEVIN pointed out that a temporary agreement was already in [Page 571]existence. The British asked that they decide in principle that when the Control Commission drew up the figure, the Soviet Government would supply the goods. He asked who was going to supply Berlin when the month covered by the present agreement was up.

MR. STALIN said that they should refer the question to the Control Commission.

MR. ATTLEE said that he understood that the Russians wanted supplies of capital goods to come forward from the Ruhr regularly. They were proposing the same thing from the Russian side.

MR. STALIN said he understood. He would like to have the opinion of the Control Commission in order to have something on which to base his decision. He pointed out that there was no similarity between the agreements to supply capital equipment and food since they were to be completed within different periods of time.

MR. ATTLEE replied that the Russians were asking for advance deliveries before the value of the equipment had been set.

MR. STALIN replied that they could refuse to make those advance deliveries.

MR. BEVIN said that they did not wish to do that. They wished to accommodate each other.

MR. STALIN asked what he could do if he was not ready to decide the matter.

MR. BEVIN said then they would postpone it.

Austrian Reparations

MR. ATTLEE said he understood that the Generalissimo had said that Austria would not be called on for reparations, and that this matter was not quite clear. He asked if this were a firm decision.

MR. STALIN replied that it was and that it could be put in the Protocol.

Economic Principles for Germany

MR. BYRNES made a proposal for the inclusion in the document on economic principles for Germany of paragraph 18.

MR. STALIN inquired if this were an amendment or a new proposal.

MR. BYRNES said that a paper had been circulated some days ago and that the sub-committee had reported, recommending the inclusion of this paragraph.

MR. MOLOTOV said that perhaps this amendment would be needed as they had decided on the language with respect to reparations. If they thought it was affected by the decision just taken, they would have to refer it back to the committee. It related to the control of the property of German citizens abroad.

MR. STALIN said he had read the language and could accept it.

This was agreed to.

MR. BYRNES said that the Soviet Government had yesterday asked for time to consider paragraph 19.

MR. MOLOTOV asked if the British draft of paragraph 19 could be accepted and said they had no objection to this draft.

MR. BYRNES said he understood that the British representatives had agreed with the United States representatives that if paragraph 19 was adopted, the words proposed by the American representatives should be added. This was necessary because of the agreement on reparations reached yesterday.

MR. STALIN said he agreed.

MR. ATTLEE also agreed.

MR. BEVIN said that this disposed of the paper on economic principles. Mr. Bevin informed [was to inform?] the French that this was agreed to.

War Crimes

MR. BYRNES said that the question was whether certain war criminals should be referred to by name in the decision of the Conference. The British and American Foreign Ministers thought that this should be left to the prosecutor.

MR. STALIN said that names were necessary. If they were going to try certain German industrialists they should say so. The Soviets had included the name of Krupp for this reason. If they would rather name another German industrialist, he had no objection.

THE PRESIDENT said he did not like any of them and thought that by naming some of them the others might think they would escape.

MR. STALIN pointed out that they mentioned them only as examples. Public opinion was interested in this matter. They wondered why Hess was well fed and cared for.

MR. ATTLEE said they need not worry about that.

MR. STALIN said what was important was the opinion of the people in the occupied countries.

MR. BEVIN said that if they were in any doubt about Hess, he could give an undertaking that Hess would be handed over and he added that they would also send along a bill for his keep.

MR. STALIN said he wanted advanced [advance?] delivery.

MR. ATTLEE replied that he had already received advanced delivery on some of them. He had Goebbels.

MR. STALIN said he personally needed no undertaking. There was a question of public opinion that had to be satisfied.

THE PRESIDENT said that as Mr. Stalin knew the United States had appointed one of its most able jurists to the Commission set up to deal with this question. Justice Jackson advised him that it would be a handicap to him if persons were named before the commission was ready to bring them to trial, which he expected would be within thirty days. All of these people would be named in the indictment and the Marshal need not worry for they would be tried and punished.

MR. STALIN suggested that they might not mention so many. Perhaps three.

MR. ATTLEE suggested Hitler.

MR. STALIN said they did not have Hitler at their disposition but he had no objection to naming him.

MR. STALIN then suggested that perhaps they could say that within one month the first list of war criminals would be published.

This was agreed to.

Use of Allied Property for Satellite Reparations or War Trophies

THE PRESIDENT said a paper on this had been handed to the Soviet Delegation yesterday.

MR. MOLOTOV said he had had no recess from the meetings in which to study it. His first impression had been favorable. Perhaps they could consider it at the evening meeting.

Oil for Western Europe

MR. BYRNES said that this question was now before the Economic Sub-Committee.

Allied Oil Equipment in Rumania

MR. BYRNES said that the Foreign Ministers had agreed that there should be two bilateral commissions, one British-Soviet and one United States-Soviet, to meet within ten days in Rumania to examine the documents and facts in connection with this question.

It was agreed that these commissions would be accorded all necessary facilities to perform their task in Rumania.

The decision of the Foreign Ministers was approved.

Fascist Activities in the U.S. and British Zones in Germany and Austria

MR. BYRNES said that the United States and British representatives in Germany and Austria were investigating the situation reported in the Soviet paper on this subject and that they would inform the Soviets of the results of these investigations and would at that time discuss what further steps should be taken.

Repatriation of Soviet Citizens

The British representatives stated that they are looking into the situation reported in the Soviet paper circulated already on this subject and that they would deal with it as soon as they returned to London. The Soviet representatives circulated a new paper on the subject and laid great stress on the importance which they attached thereto. The U.S. and British representatives stated that they would deal with the matter as promptly as possible.

Disputed Questions Before the Protocol Committee

The American Secretary of State presented four questions on which the Protocol Subcommittee had been unable to reach agreement: (1) Trusteeship Territories; (2) Black Sea Straits; (3) the Koenigsberg Area; and (4) Austria. The Foreign Ministers were able to agree upon texts on all of these questions. They also agreed that only important decisions of the Conference should be included in the Protocol. They approved a suggestion that the decision reached this morning creating bilateral commissions to deal with the question of Allied oil equipment in Rumania should be mentioned in the Protocol.

Revised Procedure for Allied Control Commissions in Rumania, Bulgaria and Hungary

The United States draft on this subject was accepted with the exception of the second sentence. It was agreed that for this sentence there should be substituted the third, fourth and fifth paragraphs of the Soviet paper on the Control Commission in Hungary. A drafting committee was named to prepare the final document for presentation to the Heads of Government.

MR. BYRNES said the committee had reported that the document should read as set forth in the paper which he was now circulating. The committee’s report was accepted.

The Polish Question

THE PRESIDENT at this stage said he wished to report that the President of the Polish Provisional Government and members of the Polish Delegation had called on him this morning and he had informed them of the action which the Conference had taken with respect to Poland. The Poles had agreed to say nothing about it until the report of the Conference was made public. They had asked him to transmit the thanks of the Polish Government to all three Governments at the Conference.

MR. BEVIN said he wished to announce with reference to the matter he had raised yesterday that he had arrived at an agreement with the Poles for a reciprocal air service from London to Warsaw. He added that he was very pleased about this.

MR. BYRNES said that the United States representative had suggested to the Foreign Ministers meeting that in the documents on Poland [and on admission to the United Nations] the words “and radio” should be added wherever the press was mentioned.

MR. STALIN said he did not think this advisable.

MR. ATTLEE agreed that it would not be advisable.

THE PRESIDENT said that the United States had a different system from the other two governments. Radio was controlled in Great Britain by the government. Ours was set up on the same basis as the newspapers. Pressure was being brought on him for radio representation. He pointed out that American radiomen would have nothing to do with radio in the country concerned. They would merely act as correspondents for the radio in the United States.

MR. STALIN suggested that they arrive at an agreement with the respective governments.

MR. BEVIN asked if Mr. Stalin would have any objection to an agreement between the governments.

MR. STALIN replied that he would not.

THE PRESIDENT asked if he would object to the United States’ arranging for the same treatment to be accorded to the press and to the radio.

MR. STALIN said he would not object, but that it should not be mentioned here. This was agreed to.

Disposition of the German Fleet and Merchant Marine

MR. MOLOTOV said that the Soviet Delegation withdrew its objection to the question of Poland receiving her share of ships from the Soviet share.

MR. BYRNES said that then there was agreement on this report. If the experts were agreed, one paragraph of the report would be published in the joint statement.

MR. BEVIN suggested that the following language be used with respect to the Polish and other shares:

The United Kingdom, and the United States will provide out of their shares of the surrendered German merchant ships appropriate amounts for other Allied states whose merchant marines have suffered heavy losses in the common cause against Germany, except that the Soviet Union shall provide out of its share for Poland.

This was agreed to.

MR. ATTLEE suggested that a message be sent to Mr. Churchill and to Mr. Eden thanking them for the parts they had played in the Conference.

This was agreed.

At this point the meeting recessed to await reports of the committees. The meeting was resumed twenty minutes later.

MR. BYRNES inquired if Mr. Molotov had had time to read the document on the use of Allied property as reparations.

MR. MOLOTOV said he had not, but would try to do so before the evening meeting.

MR. ATTLEE suggested that the paper needed some examination. Its provisions were not fully equitable. MR. ATTLEE pointed out that when Allied property was removed from a satellite state, he thought the country which took it should either pay for it or credit it as reparations.

MR. BYRNES inquired if Mr. Attlee proposed doing nothing about this question.

MR. ATTLEE replied that something should be done, but the language should be improved. He also thought that paragraph three with respect to “valuta” needed discussion. He did not see why valuta should be treated any different from other exports with respect to reparations.

MR. STALIN said he thought the American draft was nearer to the correct solution of this problem than Mr. Attlee’s [suggestion?]. He suggested that it be postponed to the evening session.

Inland Waterways

MR. BYRNES said that this question which had been submitted by the President had been discussed and it had been decided to refer it to the Council of Foreign Ministers. The Protocol and Communiqué Committees could not agree to state this fact.

THE PRESIDENT said all he wanted was a factual statement that it had been referred to the Council of Foreign Ministers.

MR. ATTLEE said he agreed.

MR. STALIN said there was already enough in the protocol.

THE PRESIDENT pointed out that the action was taken by the Conference and he had agreed to the inclusion of a great many things in the communiqué. He was only pressing this one thing.

MR. STALIN said it had not been discussed at the Conference.

THE PRESIDENT said he had discussed it at length on three [two?] different days and a committee had had it under consideration for ten days.

MR. STALIN said the question was not mentioned in a list of questions submitted before the Conference and the Russians were not in a position to discuss it. They should not be in a hurry to dispose of the matter.

THE PRESIDENT said that he did not ask that it be disposed of, but merely that it be referred to the Council of Foreign Ministers and that this be stated.

MR. STALIN pointed out that there was nothing in the communiqué in regard to the Black Sea Straits. The question of inland waterways was raised in connection with the question of the Black Sea Straits. Why should they give preference to this.

THE PRESIDENT pointed out that the question of the Black Sea Straits would be mentioned.

MR. STALIN did not think it should be mentioned.

THE PRESIDENT at first said he agreed, but then continued that he did not see why matters decided at the Conference should not be in the communiqué and in the protocol.

MR. STALIN said because it would make them too long.

THE PRESIDENT said that be was trying to prevent a situation in which it could be charged that secret agreements were concluded at the Conference.

MR. STALIN said that the answer was that there were no secret agreements.

MR. BYRNES said he wished to submit that they had agreed to refer this document to the Council of Foreign Ministers. As long as they had taken that action, could they not agree to state it. If it were not in the communiqué they would not want to make a statement in the United States about it.

MR. STALIN said that at Tehran and at previous conferences there were two kinds of decisions. One kind was included in the protocol and these were greater than those published in the communiqué. This did not mean that they were secret. It meant that there was no need to publish them. Policy decisions were put in the protocol. Decisions of a formal nature, not affecting the substance of the question, should not be mentioned in the communiqué but only in the protocol. This did not mean that decisions [not] in the communiqué were secret.

THE PRESIDENT said he had no objection if this applied to all questions, but he wanted to be free to mention this matter of inland waterways in any statement he might have to make before the Senate.

MR. STALIN said of course he had this right.

Meeting adjourned.

[NormanStewart]

Cohen Notes

Potsdam, August 1, 1945, 4 p.m.

TRUMAN: I ask for the reading of the Committee’s report on reparations.

BYRNES: At the meeting of the Foreign section [Secretaries] this morning, many questions were considered which might be taken up here one by one.

First is reparations. The Committee reported no agreement on text for the protocol. The United States and British representatives consider that in return for the capital equipment allocated the Soviets, the Soviets have agreed to refrain from asserting claim to gold, industrial shares and foreign assets. Therefore, they maintain that German external assets should be included as a source of reparations for countries other than Russia and Poland. They took the view that unless this was done the percentages would be unacceptable. The Soviet representatives consider that the Soviets had not relinquished claim to German external assets. The American and British representatives agreed to the balance of the report with the reservation that the Soviets must relinquish their claim to foreign assets.

STALIN: The question which must be made clear is, what is meant by the western zones. The Soviets agree not to claim anything from the western zones.

TRUMAN: The zones occupied by America, Britain and France are the western zones.

STALIN: We don’t claim gold. As to shares in foreign investments everything west of the military demarcation line is relinquished by us. Everything east of the line should go to us.

TRUMAN: That implies [applies] only to German investments east of the line.

STALIN: For example, German investments in Rumania and Bulgaria.

ATTLEE: I agree.

BEVIN: Greece belongs to the British.

STALIN: Austria is divided into parts – how shall we deal with those.

BEVIN: You better give it to us.

STALIN: You want all of Austria? You can have part of Austria and Yugoslavia.

BYRNES: What is the status of the investments in Germany?

STALIN: The shares of enterprises in our zone are at our disposal and those in your zone at yours.

BYRNES: Suppose Berlin companies own assets in our sphere, those assets should go to us.

STALIN: If property is in your zone it would be yours whether it is in United States, Norway, Sweden or Honduras.

BEVIN: This is going back on what we agreed yesterday. Would you, Marshal, renounce all claims outside zones occupied by the Russian Army.

STALIN: We only ask for the property from Finland east as far as Austria.

BEVIN: It is clear that assets owned by Americans and British in these zones would not be affected.

STALIN: We are not at war with Great Britain.

TRUMAN: We are supposed to settle with Yugoslavia and Czechoslovakia in regard to their reparations claim. These countries will, of course, claim German assets within their jurisdiction.

STALIN: Yugoslavia, Czechoslovakia and western Austria are in your zone.

TRUMAN: We agree.

STALIN: Should the agreement go into the protocol? Need it be published in the communiqué?

BYRNES: We think it should go into the protocol and also [be] published in the communiqué. The committee reports should make it clear that other countries are to be satisfied from western zones and from external assets.

STALIN: From the respective external assets.

BYRNES: The committee should be asked to add appropriate language to cover this.

STALIN: Does Secretary Byrnes object to the words “respective assets” in paragraph 3?

BYRNES: Appropriate assets might do better, but I suggest that the committee fix up the language.

STALIN: All right.

BEVIN: The French Government should be invited to become a member of the Reparation Committee.2

STALIN: Why should we not invite Poland?

TRUMAN: I don’t see the reason for bringing in others.

STALIN: If the British insist on France we will not object.

ATTLEE: We have an agreement regarding the feeding and fueling of Berlin for the next 30 days. I suggest that we instruct the Control Commission to provide a program to provide uniform subsistence standards for the next six months. This is a practical matter which requires immediate action.

STALIN: That is a new question. It has not been studied. I do not think it will be possible in the near future to have a high standard of life in Germany. We must first ask the Control Council how they will provide for Berlin needs. We can not come to any decision now.

ATTLEE: I am not asking for figures, I am asking for the Control Commission to draw up a program. We understood that you wanted capital goods from the Ruhr. We want the flow of goods from the other way also.

STALIN: I want the report of the Control Council first.

ATTLEE: But you are asking for advance deliveries.

STALIN: What can I do if I am not ready to take a decision.

BEVIN: We will postpone it.

ATTLEE: There is one other point. The Generalissimo said that Austria should not be called upon for reparation. Is this a firm decision for the protocol?

STALIN: Yes, you can put it in the protocol.

BYRNES: With regard to German external assets, the United States and Britain recommend that steps be taken to control German external assets in nations not part of the United Nations which have taken active part in the war against Germany. This paper was circulated a few days ago.

STALIN: I learned of this only after we agreed on reparations.

BYRNES: The committee failed to agree on paragraph 19 of the economic principles and on the problem of oil supplies to western Europe.

MOLOTOV: We will accept the British draft on paragraph 19.

BYRNES: I believe it was understood that if Article [paragraph] 19 proposed by the British is accepted there should be added a clause at the end indicating that it is not to apply to stipulated deliveries to the Russians from the western zones.

The next subject discussed by the Foreign section [Secretaries] was war criminals. Should the prominent prisoners be referred [to] by names. British and American representatives believe that the naming of defendants should be left to the prosecutors. Soviets accepted the British draft as to language, but wished to add some names.

STALIN: Names are necessary and are very important to give proper orientation. The people should know that we are going to try some industrialists, that is why we mentioned Krupp.

TRUMAN: I don’t like any of it. If you name some, others will think they have escaped.

STALIN: People wonder about Hess living comfortably in England.

ATTLEE: You need not worry about that.

STALIN: I want advance delivery. We should satisfy public opinion.

TRUMAN: We have appointed a judge of our highest court, an able lawyer to work on these problems for us. He is very strongly opposed to giving names in advance. But the Marshal need have no doubt as to our attitude with regard to the prosecution of these men.

STALIN: We will be satisfied with three names.

ATTLEE: Our lawyers take the same view that the Americans do.

STALIN: Our lawyers differ, perhaps you will mention that the first ten principal defendants to be tried will be named within thirty days.

It was so agreed.

BYRNES: On the subject of inland waterways, the Soviet delegation wanted more time.

STALIN: We are ready. We are favorably inclined and we will discuss it tonight.

BYRNES: The economic principles for Germany and the problem of oil for western Europe were being considered by our respective committees, to which they had been referred, with regard to the Soviet proposal that action had been taken by the British and Americans in their zones to stop Fascist activity being carried on in Germany and Austria against the Soviets. The British and Americans agreed to make an investigation and to act if the results of their investigation so warrant it. The Soviet Foreign Minister also brought up the matter of the repatriation of Soviet Citizens. The British promised to investigate this problem as it primarily related to their zone. The Foreign section [Secretaries] also considered four disputes referred to them by the Protocol Committee and settle [settled these?] disputes. They instructed the Protocol Committee that only important decisions should go into the protocol. It was agreed that Rumanian oil investigation procedure should be included in the protocol. The Foreign section [Secretaries] agreed on a paper concerning a revision of the Control Commission’s procedures in Bulgaria, Rumania and Hungary. The Committee’s draft was agreed to with an amendment substituting for one sentence in the Committee’s report. The new agreement for improved procedures for the Control Commission in Hungary. That is, it was agreed that the Hungarian agreement should be basis for the improved machinery in all three countries.

TRUMAN: Is the report of the Foreign section [Secretaries] on this point satisfactory?

ATTLEE: Yes.

STALIN: No objection.

TRUMAN: The President of the National Council of Poland and three delegates called on me this morning and I informed them of our decision of the provisional frontier of western Poland. They asked me to convey the thanks of the Polish Government to all three governments.

BEVIN: I am also happy to announce that the London-Warsaw air communication has been satisfactorily arranged.

BYRNES: The next question considered by the Foreign section [Secretaries] was the question whether we should add in two of our papers where we referred to representatives of Allied President [press], the words “and radio.”

STALIN: I don’t think it would be advisable to mention radio.

ATTLEE: I also think it would not be advisable.

TRUMAN: Our radio is not government owned or controlled. It is set up on the same basis as newspapers. I don’t think there should be any discrimination.

STALIN: I don’t think it is advisable to go into the matter of radio.

TRUMAN: The radio reporters report only to the United States.

STALIN: It is not advisable for us to go into this.

BEVIN: You would have no objection to arrangements between the governments?

STALIN: No.

BYRNES: The next question discussed by the Foreign section [Secretaries] was the distribution of the German merchant marine.

The Committee report was agreed to.

It was also agreed that a joint statement should be published later by the three governments.

BEVIN: I have drafted a clause relating to Poland’s participation in the distribution.

It was accepted.

BYRNES: That disposes of the questions considered by the Foreign section [Secretaries], There are some matters still in the hands of the Committee.

TRUMAN: I suggest a short adjournment of ten minutes.

ATTLEE: Before we should adjourn, I should like to suggest that the conference send a message to Mr. Churchill and Mr. Eden thanking them for their part in its deliberation.

It was so agreed, and Mr. Attlee was asked to draft the messages.

A short adjournment was taken.

BYRNES: May I ask if Mr. Molotov has had a chance to read our paper on Allied property in the satellite states?

MOLOTOV: I can do it only in the evening. If that is not possible, we must dispose of it through diplomatic channel.

BYRNES: I hope that Mr. Molotov may have a chance to read the document before this evening. We will have to have an evening session in any event and I hope very much that we can agree to this paper here.

MOLOTOV: I see no difficulty in substance, but the wording of the paper must be exact.

BYRNES: We will try to make the wording exact by night.

MOLOTOV: I will try.

ATTLEE: I am not satisfied with the paper as it is drafted. It is not equitable.

BYRNES: In what respect is it inequitable?

ATTLEE: When property is removed as booty according to the document the satellite must make compensation.

BYRNES: The paper says the United States looks to the occupying power. Where it is not returned, the United States must demand compensation from the satellite. We also have a question on the point of foreign exchange. There is no more reason for foreign exchange here than there is in the case of reparations or any other support [export?]. The foreign exchange requirement ties up the satellite too tightly.

BYRNES: That is why the paper was circulated on July 26 so that these objections could be raised and considered.

MOLOTOV: I figure that the Americans are nearer the problems than Mr. Attlee. We will discuss it further this evening.

TRUMAN: Shall we consider the communiqué.

ATTLEE: Let us have the Protocol and the Communiqué Committees get to work and we will convene as soon as they have finished – say at 9:00 o’clock.

TRUMAN: I should like a mention in the communiqué of the matter of inland waterways which I brought up.

STALIN: We did not discuss it. It was not mentioned in the lists of subjects to be covered by the conference. We should not be in a hurry[.]

TRUMAN: We discussed it several times.

STALIN: Why should we give preference to the discussion of the waterways over the discussion of the Straits.

TRUMAN: The Straits are in the protocol and in the communiqué.

STALIN: Have we finished. Truman: I don’t think so.

STALIN: I suggest both be mentioned in the protocol but not in the communiqué. Truman: All right.

BEVIN: I should like to ask if [that] the French be associated with our decision on war crimes.

TRUMAN: I don’t see why if things are acted on here they should not be mentioned in the protocol and in the communiqué.

BYRNES: We only wish to say that the matter should be referred to the Council of Foreign Ministers.

STALIN: If we go back to the practice of our previous conferences we find that there are two kinds of decisions, one kind for the protocol and another for the communiqué. The communiqué was much shorter. The other agreements were not secret. There was simply no need for their publication in the communiqué.

TRUMAN: That is all right if I make mention of the decision on inland waterways on [in?] my own report?

STALIN: Of course, you have this right.

Adjournment taken at 2:30 [5:50?] p.m.

[NormanStewart]

Meeting of the Communiqué Subcommittee

	Present
United States	United Kingdom	Soviet Union
Mr. Brown		Mr. Golunsky

Brown’s diary entry: “The Foreign Ministers met at 11:00 and sat almost continuously until the Big Three meeting at 3:00 p.m. The Big Three met and a number of points were agreed on.

“I was busy working on communiqué. We had an agreement except on introduction, Tangier, Rumanian oil equipment removal and military talks. Discussion on this latter item interesting. In first draft, I had confined military talks to affairs in Europe. Golunski wanted limitation stricken to appear military talks included Japanese war. Today he wanted to go back to original draft, eliminating [reinstating?] limitations. We decided to pass to Big Three.”

[NormanStewart]

The Special Assistant to the Secretary of State to the President and the Secretary of State

Memorandum

[Potsdam, August 1, 1945]

Subject: COMMUNIQUÉ

Attached is revised draft of communiqué: The Committee is in agreement on this draft with the following exceptions:

1. Introduction: (I) We and the British prefer the introduction in the attached draft. The Russians have submitted a substitute which is attached.

   The differences are these:
   (a) The Russian draft breaks the introduction by listing all the names of the delegations, about 30 in all. Many of these ore military names and there is only one line in the communiqué about military talk. Our draft lists the Big Three and Foreign Ministers in the lead and the other names at the end of the communiqué.

   (b) Our communiqué gives more details as to the numbers and times of meetings held by the Big Three.
   Neither we or the British feel strongly about the matter but thought we would let the Big Three decide.

2. On page 1 of Germany, III, last line of first paragraph the Russians wish to delete words “loudly applauded.” This is a British phrase which we accepted.

3. On orderly transfers of German populations, XIII, Russians wish to delete word “orderly” in title. Dunn and British feel this word should be retained since one of the two principal provisions of the agreement is that the transfers shall be orderly.

4. The British do not want to include Tangier (XVI) and Russians do not want to include Rumanian oil equipment (XIV). We prefer to include both.

5. Military Talks (XV). This chapter caused much discussion. Neither Russians nor British like Leahy text. We agreed to a single sentence stating Chiefs of Staffs of the three Governments conferred “on military matters of common interest.”

All agreed on that yesterday.

The British agreed to go along with separate joint statement on Japanese War if we desired.

Today the Russians wanted to go back to sentence saying meetings were held by joint Chiefs of Staff “on military matters of common interest affecting Europe.”

We decided to pass this one up to the Big Three.

The following items are in the protocol but no mention is made of them in the communiqué:

1. Ruhr
2. Black Sea Straits
3. International inland waterways
4. European Inland Transport Conference
5. Directive to military commanders in Allied Control Council
6. Allied property in Southeastern Europe.

In connection with the discussion this afternoon on the inland waterways proposal, I would also like to call your attention to the fact that in Trusteeships (XI) and in the second part of Iran (XV) direct mention is made of the fact that the matters are being referred to the [Council of] Foreign Ministers.

W[ALTER] B[ROWN]

[Attachment]

[Soviet Draft of the Communiqué]

I. [Introduction – alternative a]

Draft proposed by the Soviet Union of Section I of the Report on the Tripartite Conference at Berlin

A Conference of the leaders of the three Allied Powers, the President of the United States of America, H. S. Truman, the President of the Council of Peoples Commissars, J. V. Stalin, the Prime Minister of the United Kingdom, Winston S. Churchill, and, from July 28 onwards, the Prime Minister of the United Kingdom, Clement R. Attlee, took place in Berlin from July 17 until August 1, 1945, with the participation of the Foreign Secretaries, military and other advisers.

The President of the United States of America was invited by his two colleagues to be the Chairman of the Conference.

Besides the heads of the three Governments, the following took part in the Conference:

• For the Soviet Union: [blank]
• For the United Kingdom: [blank]
• For the United States: [blank]

During the course of the Conference there were daily meetings of the Foreign Ministers. Committees appointed by the Foreign Ministers for preliminary consideration of the questions before the Conference also met daily.

The meetings of the Conference were held at the Cecilien Hof near Potsdam. The Conference ended on August 1, 1945.

Important decisions and agreements were reached and they are announced in this report. Views were exchanged on a number of other questions that deeply concern the three Governments and consideration of these matters will be continued by the Council of Foreign Ministers established by the Conference.

This Conference strengthened the ties among the three Governments and extended the scope of their collaboration and understanding.

President Truman, Generalissimo Stalin and Prime Minister Attlee leave this Conference with renewed confidence that their governments and peoples, together with the other United Nations, will ensure the creation of a just and enduring peace.

I. [Introduction – alternative b]

[Draft proposed by the U.S. and British Delegations]

On July 17, 1945, the President of the United States of America, Harry S. Truman, the Chairman of the Council of People’s Commissars of the Union of Soviet Socialist Republics, Generalissimo J. V. Stalin, and the Prime Minister of Great Britain, Winston S. Churchill, together with Mr. Clement R. Attlee, met in the Tripartite Conference of Berlin. They were accompanied by the foreign secretaries of the three Governments, Mr. James F. Byrnes, Mr. V. M. Molotov, and Mr. Anthony Eden, the Chiefs of Staff, and other advisers.

There were nine meetings between July 17 and July 25. The Conference was then interrupted for two days while the results of the British general election were being declared.

On July 28 Mr. Attlee returned to the Conference as Prime Minister, accompanied by the new Secretary of State for Foreign Affairs, Mr. Ernest Bevin. There were four additional meetings. During the course of the Conference there were daily meetings of the Foreign Ministers. Committees appointed by the Foreign Ministers for preliminary consideration of the questions before the Conference also met daily.
The meetings of the Conference were held at the Cecilien Hof near Potsdam. The Conference ended on August 1, 1945.

Important decisions and agreements were reached and they are announced in this report. Views were exchanged on a number of other questions that deeply concern the three Governments and consideration of these matters will be continued by the Council of Foreign Ministers established by the Conference.

This Conference strengthened the ties among the three governments and extended the scope of their collaboration and understanding.

President Truman, Generalissimo Stalin and Prime Minister Attlee leave this Conference with renewed confidence that their governments and peoples, together with the other United Nations, will ensure the creation of a just and enduring peace.

I. [Introduction – alternative c]

[Redraft by the British Delegation]
On July 17, 1945, the President of the United States of America, Harry S. Truman, the Chairman of the Council of People’s Commissars of the Union of Soviet Socialist Republics, Generalissimo J. V. Stalin, and the Prime Minister of Great Britain, Winston S. Churchill, together with Mr. Clement R. Attlee, met in the Tripartite Conference of Berlin. They were accompanied by the foreign secretaries of the three Governments, Mr. James F. Byrnes, Mr. V. M. Molotov, and Mr. Anthony Eden, the Chiefs of Staff, and other advisers.

There were nine meetings between July 17 and July 25. The Conference was then interrupted for two days while the results of the British general election were being declared.

On July 28 Mr. Attlee returned to the Conference as Prime Minister, accompanied by the new Secretary of State for Foreign Affairs, Mr. Ernest Bevin. Four days of further discussion then took place. During the course of the Conference there were regular meetings of the Heads of the Three Governments accompanied by the foreign secretaries, and separate8 meetings of the Foreign Secretaries alone. Committees appointed by the Foreign Secretaries for preliminary consideration of questions before the Conference also met daily.
The meetings of the Conference were held at the Cecilienhof near Potsdam. The Conference ended on August 1, 1945.

Important decisions and agreements were reached. Views were exchanged on a number of other questions [that deeply concern the three Governments] and consideration of these matters will be continued by the Council of Foreign Ministers established by the Conference.

President Truman, Generalissimo Stalin and Prime Minister Attlee leave this Conference, which has strengthened the ties between the three governments and extended the scope of their collaboration and understanding, with renewed confidence that their governments and peoples, together with the other United Nations, will ensure the creation of a just and enduring peace.

II. Establishment of a Council of Foreign Ministers

The Conference reached an agreement for the establishment of a Council of Foreign Ministers representing the five principal Powers to continue the necessary preparatory work for the peace settlements and to take up other matters which from time to time may be referred to the Council by agreement of the governments participating in the Council.

The text of the agreement for the establishment of the Council of Foreign Ministers is as follows:

1. There shall be established a Council composed of the Foreign Ministers of the United Kingdom, the Union of Soviet Socialist Republics, China, France and the United States.

2. (i) The Council shall normally meet in London, which shall be the permanent seat of the joint Secretariat which the Council will form. Each of the Foreign Ministers will be accompanied by a high-ranking Deputy, duly authorized to carry on the work of the Council in the absence of his Foreign Minister, and by a small staff of technical advisers.

   (ii) The first meeting of the Council shall be held in London not later than September 1st 1945. Meetings may be held by common agreement in other capitals as may be agreed from time to time.

3. (i) As its immediate important task, the Council shall be authorised to draw up, with a view to their submission to the United Nations, treaties of peace with Italy, Roumania, Bulgaria, Hungary and Finland, and to propose settlements of territorial questions outstanding on the termination of the war in Europe. The Council shall be utilised 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.

   (ii) 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 will be invited to participate when matters directly concerning them are under discussion.

   (iii) Other matters may from time to time be referred to the Council by agreement between the Member Governments.

4. (i) 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.

   (ii) The Council may adapt its procedure to the particular problem under consideration. In some cases it may hold its own preliminary discussions prior to the participation of other interested States. In other cases, the Council may convoke a formal conference of the State[s] chiefly interested in seeking a solution of the particular problem.

In accordance with the decision of the Conference the three Governments have each addressed an identical invitation to the Governments of China and France to adopt this text and to join in establishing the Council.
The establishment of the Council of Foreign Ministers for the specific purposes named in the text will be without prejudice to the agreement of the Crimea Conference that there should be periodic consultation among the Foreign Secretaries of the United States, the Union of Soviet Socialist Republics and the United Kingdom.

The Conference also considered the position of the European Advisory Commission in the light of the agreement to establish the Council of Foreign Ministers. It was noted with satisfaction that the Commission had ably discharged its principal tasks by the recommendations that it had furnished for the terms of Germany’s unconditional surrender[,] for the zones of occupation in Germany and Austria, and for the inter-Allied control machinery in those countries. It was felt that further work of a detailed character for the coordination of Allied policy for the control of Germany and Austria would in future fall within the competence of the Allied Control Council at Berlin and the Allied Commission at Vienna. Accordingly, it was agreed to recommend that the European Advisory Commission be dissolved.

III. Germany

The Allied armies are in occupation of the whole of Germany and the German people have begun to atone for the terrible crimes committed under the leadership of those whom, in the hour of their success, they (loudly applauded and) blindly obeyed.

Agreement has been reached at this Conference on the political and economic principles of a coordinated Allied policy toward defeated Germany during the period of Allied control.

The purpose of this agreement is to carry out the Crimea declaration on Germany. German militarism and Nazism will be extirpated and the Allies will take in agreement together, now and in the future, the other measures necessary to assure that Germany never again will threaten her neighbors or the peace of the world.

It is not the intention of the Allies to destroy or enslave the German people. It is the intention of the Allies that the German people be given the opportunity to prepare for the eventual reconstruction of their life on a democratic and peaceful basis. If their own efforts are steadily directed to this end, it will be possible for them in due course to take their place among the free and peaceful peoples of the world.

The text of the agreement is as follows:

The Political and Economic Principles to Govern the Treatment of Germany in the Initial Control Period

A. Political Principles

1. In accordance with the Agreement on Control Machinery in Germany, supreme authority in Germany is exercised on instructions from the respective Governments, by the Commanders-in-Chief of the armed forces of the United States of America, the United Kingdom, the Union of Soviet Socialist Republics, and the French Republic, each in his own zone of occupation, and also jointly, in matters affecting Germany as a whole, in their capacity as members of the Control Council.

2. So far as is practicable, there shall be uniformity of treatment of the German population throughout Germany.

3. The purposes of the occupation of Germany by which the Control Council shall be guided are:

   (i) The complete disarmament and demilitarization of Germany and the elimination or control of all German industry that could be used for military production. To these ends:

   • (a) All German land, naval and air forces, the SS, SA, SD and Gestapo, with all their organizations, staffs and institutions, including the General Staff, the Officers’ Corps, Reserve Corps, military schools, war veterans’ organizations and all other military and quasi-military organizations, together with all clubs and associations which serve to keep alive the military tradition in Germany, shall be completely and finally abolished in such manner as permanently to prevent the revival or reorganization of German militarism and Nazism;

   • (b) All arms, ammunition and implements of war and all specialized facilities for their production shall be held at the disposal of the Allies or destroyed. The maintenance and production of all aircraft and all arms, ammunition and implements of war shall be prevented.

   (ii) To convince the German people that they have suffered a total military defeat and that they cannot escape responsibility for what they have brought upon themselves, since their own ruthless warfare and the fanatical Nazi resistance have destroyed German economy and made chaos and suffering inevitable.

   (iii) To destroy the National Socialist Party and its affiliated and supervised organizations, to dissolve all Nazi institutions, to ensure that they are not revived in any form, and to prevent all Nazi and militarist activity or propaganda.

   (iv) To prepare for the eventual reconstruction of German political life on a democratic basis and for eventual peaceful cooperation in international life by Germany.

4. All Nazi laws which provided the basis of the Hitler regime or established discrimination on grounds of race, creed, or political opinion shall be abolished. No such discriminations, whether legal, administrative or otherwise, shall be tolerated.

5. War criminals and those who have participated in planning or carrying out Nazi enterprises involving or resulting in atrocities or war crimes shall be arrested and brought to judgment. Nazi leaders, influential Nazi supporters and high officials of Nazi organizations and institutions and any other persons dangerous to the occupation or its objectives shall be arrested and interned.

6. All members of the Nazi Party who have been more than nominal participants in its activities and all other persons hostile to Allied purposes shall be removed from public and semi-public office, and from positions of responsibility in important private undertakings. Such persons shall be replaced by persons who, by their political and moral qualities, are deemed capable of assisting in developing genuine democratic institutions in Germany.

7. German education shall be so controlled as completely to eliminate Nazi and militarist doctrines and to make possible the successful development of democratic ideas.

8. The judicial system will be reorganized in accordance with the principles of democracy, of justice under law, and of equal rights for all citizens without distinction of race, nationality or religion.

9. The administration of affairs in Germany should be directed towards the decentralization of the political structure and the development of local responsibility. To this end:

   (i) local self-government shall be restored throughout Germany on democratic principles and in particular through elective councils as rapidly as is consistent with military security and the purposes of military occupation;

   (ii) all democratic political parties with rights of assembly and of public discussion shall be allowed and encouraged throughout Germany;

   (iii) representative and elective principles shall be introduced into regional, provincial and state (Land) administration as rapidly as may be justified by the successful application of these principles in local self-government;

   (iv) for the time being no central German government shall be established. Notwithstanding this, however, certain essential central German administrative departments, headed by State Secretaries, shall be established, particularly in the fields of finance, transport, communications, foreign trade and industry. Such departments will act under the direction of the Control Council.

10. Subject to the necessity for maintaining military security, freedom of speech, press and religion shall be permitted, and religious institutions shall be respected. Subject likewise to the maintenance of military security, the formation of free trade unions shall be permitted.

B. Economic Principles

11. 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 removed in accordance with the reparations plan recommended by the Allied Commission on Reparations and approved by the Governments concerned or if not removed shall be destroyed.

12. 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.

13. In organizing the German economy, primary emphasis shall be given to the development of agriculture and peaceful domestic industries.

14. 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 and banking, central taxation and customs;
    (f) reparation and removal of industrial war potential;
    (g) transportation and communications.

    In applying these policies account shall be taken, where appropriate, of varying local conditions.

15. 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.

    (e) to control all German public or private scientific bodies, research and experimental institutions, laboratories, cetera, connected with economic activities.

16. 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.

17. 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.

18. Appropriate steps shall be taken by the Control Council to exercise control and the power of disposition over German owned external assets not already under the control of United Nations which have taken part in the war against Germany.

19. Payment of Reparations should leave enough resources 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 approved by the Control Council in Germany. The proceeds of exports from current production and stocks shall be available in the first place for payment for such imports.

    The above clause will not apply to the equipment and products referred to in paragraphs 4 (a) and 4 (b) of the Reparations Agreement.

[NormanStewart]

IV. Reparations from Germany

In accordance with the Crimea decision that Germany be compelled to compensate to the greatest possible extent for the loss and suffering that she has caused to the United Nations and for which the German people cannot escape responsibility, the following agreement on reparations was reached:

1. Reparation claims of USSR shall be met by removals from the zone of Germany occupied by the USSR.

2. The USSR undertakes to settle the reparation claims of Poland from its own share of reparations.

3. The reparations claims of the United States, the United Kingdom and other countries entitled to reparations shall be met from the Western Zones and from appropriate German external assets.

4. In addition to the reparations to be taken by the USSR from its own zone of occupation, the USSR shall receive additionally from the Western Zones:

   (a) 15 percent of such usable and complete industrial capital equipment, in the first place from the metallurgical, chemical and machine manufacturing industries as is unnecessary for the German peace economy and should be removed from the Western Zones of Germany, in exchange for an equivalent value of food, coal, potash, zinc, timber, clay products, petroleum products, and such other commodities as may be agreed upon.

   (b) 10 percent of such industrial capital equipment as is unnecessary for the German peace economy and should be removed from the Western Zones, to be transferred to the Soviet Government on reparations account without payment or exchange of any kind in return.

   Removals of equipment as provided in (a) and (b) above shall be made simultaneously.

5. The amount of equipment to be removed from the Western Zones on account of reparations must be determined within six months from now at the latest.

6. Removals of industrial capital equipment shall begin as soon as possible and shall be completed within two years from the determination specified in paragraph 5. The delivery of products covered by 4 (a) above shall begin as soon as possible and shall be made by the USSR in agreed installments within five years of the date hereof. The determination of the amount and character of the industrial capital equipment unnecessary for the German peace economy and therefore available for reparation shall be made by the Control Council under policies fixed by the Allied Commission on Reparations, with the participation of France, subject to the final approval of the Zone Commander in the Zone from which the equipment is to be removed.

7. Prior to the fixing of the total amount of equipment subject to removal, advance deliveries shall be made in respect to such equipment as will be determined to be eligible for delivery in accordance with the procedure set forth in the last sentence of paragraph 6.

8. The Soviet Government renounces all claims to shares of German enterprises which are located in the Western Zones of Germany as well as to German foreign assets in all countries except those specified in paragraph 9 below.

9. The Governments of the U.K. and USA renounce their claims to shares of German enterprises which are located in the Eastern Zone of occupation in Germany, as well as to German foreign assets in Bulgaria, Finland, Hungary, Rumania and Eastern Austria.

10. The Soviet Government makes no claims to gold captured by the Allied troops in Germany.

V. Disposition of the German Navy and merchant ships

The Conference agreed in principle upon arrangements for the use and disposal of the surrendered German Fleet and merchant ships. It was decided that the Three Governments would appoint experts to work out together detailed plans to give effect to the agreed principles. A further joint statement will be published simultaneously by the Three Governments in due course.

VI. City of Koenigsberg and the adjacent area

The Conference examined a proposal by the Soviet Government that pending the final determination of territorial questions at the peace settlement, the section of the western frontier of the Union of Soviet Socialist Republics which is adjacent to the Baltic Sea should pass from a point on the eastern shore of the Bay of Danzig to the east, north of Braunsberg-Goldep, to the meeting point of the frontiers of Lithuania, the Polish Republic and East Prussia.

The Conference has agreed in principle to the proposal of the Soviet Government concerning the ultimate transfer to the Soviet Union of the City of Koenigsberg and the area adjacent to it as described above subject to expert examination of the actual frontier.

The President of the United States and the British Prime Minister have declared that they will support the proposal of the Conference at the forthcoming peace settlement.

VII. War criminals

The Three Governments have taken note of the discussions which have been proceeding in recent weeks in London between British, United States, Soviet and French representatives with a view to reaching agreement on the methods of trial of those major war criminals whose crimes under the Moscow Declaration of October, 1943 have no particular geographical localisation. The Three Governments reaffirm their intention to bring those criminals to swift and sure justice. They hope that the negotiations in London will result in speedy agreement being reached for this purpose, and they regard it as a matter of great importance that the trial of those major criminals should begin at the earliest possible date. The first list of defendants will be published before September 1.

VIII. Austria

The Conference examined a proposal by the Soviet Government on the extension of the authority of the Austrian Provisional Government to all of Austria.

The three Governments agreed that they were prepared to examine this question after the entry of the British and American forces into the city of Vienna.

It was agreed that reparations should not be exacted from Austria.

IX. Poland

The Conference considered questions relating to the Polish Provisional Government and the western boundary of Poland.

The following statement on the Polish Provisional Government was approved:

We have taken note with pleasure of the agreement reached among representative Poles from Poland and abroad which has made possible the formation, in accordance with the decisions reached at the Crimea Conference, of a Polish Provisional Government of National Unity recognized by the Three Powers. The establishment by the British and United States Governments of diplomatic relations with the Polish Provisional Government has resulted in the withdrawal of their recognition from the former Polish Government in London, which no longer exists.

The British and United States Governments have taken measures to protect the interest of the Polish Provisional Government as the recognized government of the Polish State in the property belonging to the Polish State located in their territory and under their control, whatever the form of this property may be. They have further taken measures to prevent alienation to third parties of such property. All proper facilities will be given to the Polish Provisional Government for the exercise of the ordinary legal remedies for the recovery of any property belonging to the Polish State which may have been wrongfully alienated.

The three Powers are anxious to assist the Polish Provisional Government in facilitating the return to Poland as soon as practicable of all Poles abroad who wish to go, including members of the Polish Armed Forces and the Merchant Marine. They expect that those Poles who return home shall be accorded personal and property rights on the same basis as all Polish citizens.

The three Powers note that the Polish Provisional Government in accordance with the Crimea Conference has agreed to the holding of free and unfettered elections as soon as possible on the basis of universal suffrage and secret ballot in which all democratic and anti-Nazi parties shall have the right to take part and to put forward candidates, and that representatives of the Allied press shall enjoy full freedom to report to the world upon developments in Poland before and during the elections.

The following agreement was reached on the western boundary of Poland:

In conformity with the agreement on Poland reached at the Crimea Conference the three Heads of Government have sought the opinion of the Polish Provisional Government of National Unity in regard to the accession of territory in the north and west which Poland should receive. The President of the National Council of Poland and members of the Polish Provisional Government of National Unity have been received at the Conference and have fully presented their views. The three Heads of Government reaffirm their opinion that the final delimitation of the western frontier of Poland should await the peace settlement.

The three Heads of Government agree that, pending the final determination of Poland’s western frontier, the former German territories east of a line running from the Baltic Sea through Swinemunde, and thence along the Oder River to the confluence of the western Neisse River and along the western Neisse to the Czechoslovak frontier, including that portion of East Prussia not placed under the administration of the Union of Soviet Socialist Republics in accordance with the understanding reached at this conference and including the area of the former free city of Danzig, shall be under the administration of the Polish State and for such purposes should not be considered as part of the Soviet zone of occupation in Germany.

X. Conclusion of peace treaties and admission to the United Nations

In view of the victorious end of the war in Europe and the necessity of establishing as soon as possible the conditions of lasting peace, the Conference agreed upon the following statement of common policy:

The Three Governments consider it desirable that the present anomalous position of Italy, Bulgaria, Finland, Hungary and Rumania should be terminated by the conclusion of Peace Treaties, so that as soon as possible thereafter relations between them and the ex-enemy States can, where necessary, be reestablished on a normal footing. They trust that the other interested Allied Governments will share these views.

For their part the Three Governments have included the preparation of a Peace Treaty with Italy as the first among the immediate important tasks to be undertaken by the new Council of Foreign Ministers. 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 reestablishment of a democratic government and institutions. The conclusion of such a Peace Treaty with a recognized and democratic Italian Government will make it possible for the Three Governments to fulfil their desire to support an application from Italy for membership of the United Nations.

The Three Governments have also charged the Council of Foriegn Ministers with the task of preparing Peace Treaties for Bulgaria, Finland, Hungary and Rumania. The conclusion of Peace Treaties with recognized democratic Governments in these States will also enable the three Governments to support applications from them for membership of the United Nations. The three Governments agree to examine each separately in the near future, in the light of the conditions then prevailing, the establishment of diplomatic relations with Finland, Rumania, Bulgaria, and Hungary to the extent possible prior to the conclusion of peace treaties with those countries.

The three Governments have no doubt that in view of the changed conditions resulting from the termination of the war in Europe, representatives of the Allied press will enjoy full freedom to report to the world upon developments in Rumania, Bulgaria, Hungary and Finland.

As regards the admission of other states into the United Nations Organization, Article 4 of the Charter of the United Nations declared 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 these states which have remained neutral during the war and which fulfil 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 with 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.

XI. Trusteeship territories

The Conference examined a proposal by the Soviet Government concerning trusteeship territories as defined in the decision of the Crimea Conference and in the Charter of the United Nations Organization.
After an exchange of views on this question it was decided that the disposition of any former Italian territories was one to be decided in connection with the preparation of a peace treaty with Italy and that the question of Italian territory would be considered by the September Council of Ministers of Foreign Affairs.

XII. Revised Allied Control Commission procedure in Rumania, Bulgaria, and Hungary

The Three Governments have taken note that the Soviet Representatives on the Allied Control Commissions in Rumania, Bulgaria and Hungary, have communicated to their United Kingdom and United States colleagues proposals for improving the work of the Control Commission, now that hostilities in Europe have ceased.

The Three Governments agree that the revision of the procedures of the Allied Control Commissions in these countries will now be undertaken, taking into account the interests and responsibilities of the Three Governments which together presented the terms of armistice to the respective countries, and accepting as a basis, in respect of all three countries, the Soviet Government’s proposals for Hungary.

XIII. (Orderly) Transfers of German populations

The Conference reached the following agreement on the removal of Germans from Poland, Czechoslovakia and Hungary:

The Three Governments, having considered the question in all its aspects, recognize that the transfer of German populations, or elements thereof, remaining in Poland, Czechoslovakia and Hungary, will have to be undertaken. They agree that any transfers that take place should be effected in an orderly and humane manner.

Since the influx of a large number of Germans into Germany would increase the burden already resting on the occupying authorities, they consider that the Allied Control Council in Germany should in the first instance examine the problem with special regard to the question of the equitable distribution of these Germans among the several zones of occupation. They are accordingly instructing their respective representatives on the Control Council to report to their Governments as soon as possible the extent to which such persons have already entered Germany from Poland, Czechoslovakia and Hungary, and to submit an estimate of the time and rate at which further transfers could be carried out, having regard to the present situation in Germany.

The Czechoslovak Government, the Polish Provisional Government and the Control Council in Hungary are at the same time being informed of the above, and are being requested meanwhile to suspend further expulsions pending the examination by the Governments concerned of the report from their representatives on the Control Council.

XIV. Bilateral commissions to investigate the removal of oil equipment from Rumania

The Conference agreed to set up two bilateral commissions of experts, one to be composed of United Kingdom and Soviet Members, and one to be composed of United States and Soviet members, to investigate the facts and examine the documents, as a basis for the settlement of questions arising from the removal of oil equipment from Rumania. It was further agreed that these experts shall begin their work within ten days, on the spot.

XV. Iran

The Conference has decided that Allied troops should be withdrawn immediately from Tehran, and that further stages of the withdrawal of troops from Iran should be considered at the meeting of the Council of Foreign Ministers to be held in London in September 1945.

XVI. The International Zone of Tangier

A proposal by the Soviet Government was examined and the following decisions were reached.
Having examined the question of the Zone of Tangier, the three Governments have agreed that this Zone, which includes the city of Tangier and the area adjacent to it, in view of its special strategic importance shall remain international.

The question of Tangier will be discussed in the near future at a meeting in Paris of representatives of the Governments of the Union of Soviet Socialist Republics, the United States of America, the United Kingdom, and France.

XVII. Military talks

During the Conference there were meetings between the chiefs of Staff of the three Governments on military matters of common interest (affecting Europe).

XVIII. List of delegations

For the United States
• The President
• The Secretary of State, James F. Byrnes
• Fleet Admiral William D. Leahy, USN, Chief of Statt to the President
• Joseph E. Davies, Special Ambassador
• Edwin Pauley, Special Ambassador
• W. Averell Harriman[,] Ambassador to the USSR
• General of the Army, George C. Marshall, Chief of Staff, United States Army
• Fleet Admiral, Ernest J. King, USN, Chief of Naval Operations and Commander in Chief, U.S. Fleet
• General of the Army, H. H. Arnold, U.S. Army Air Forces
• Lieutenant General Brehon B. Somervell, Commanding General, Army Service Forces
• Vice Admiral Emory S. Land, War Shipping Administrator
• William L. Clayton[,] Assistant Secretary of State
• James C. Dunn[,] Assistant Secretary of State
• Ben Cohen, Special Assistant to the Secretary of State
• H. Freeman Matthews, Director of European Affairs, State Department
• Charles E. Bohlen[,] Assistant to the Secretary,
• (together with political, military and technical advisers).

[NormanStewart]

The Pittsburgh Press (August 1, 1945)

800 B-29s RIP JAPAN
6,000 tons rained on five cities

Biggest Superfort attack yet spreads ruin through Honshu

…

[NormanStewart]

Truman wins concessions at Potsdam

Final conference of Big Three underway
By Merriman Smith, United Press staff writer

…

[NormanStewart]

Petain tried to save people but harmed France, Leahy quoted

Admiral’s letter to marshal read at trial; says Vichy leader voiced hope for Nazi defeat

…

[NormanStewart]

Laval in Paris to face trial

Vichy chief handed over by U.S. Army

…

[NormanStewart]

Quit ‘lying’ about father, Elliott asks

Young Roosevelt takes full blame

…

[NormanStewart]

Legless soldier’s wife ‘stolen’

War veteran faces ‘most painful hurt’

…

[NormanStewart]

They’ll hang –
Germans stunned as Yanks doom 7

Sentenced to die for murder of 6 Americans

…

[NormanStewart]

Japs put American captives in strategic target areas

U.S. protests; enemy action won’t save them from methodical air attacks

…

[NormanStewart]

Progress made in travel crisis

Army to release railroad men

…