Potsdam Conference (TERMINAL)

152

L’Aube (July 19, 1945)

Quinze hommes autour d‘une table ronde gardent le secret de leurs entretiens

…et 180 journalistes estiment s’être déplacés pour rien

…

153

U.S. State Department (July 19, 1945)

871.6363/7-1945: Telegram

The Chargé in the Soviet Union to the Acting Secretary of State

Moscow, July 19, 1945 — midnight
Secret
2634

Letter went forward to Foreign Office in conformity with Department’s 1621, July 16, warning that exclusive Soviet Rumanian trade pact and monopolistic agreements on oil would cause serious concern in United States Government and might compel United States Government to reconsider present favorable oil policy toward USSR. (To Department, repeated Bucharest 94, London 372). Harriman has been informed.

KENNAN

154

Meeting of the Joint Chiefs of Staff, 10 a.m.

JCS 198th Meeting

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

JCS Minutes

Potsdam, July 19, 1945, 10 a.m.
[Extract]
Top secret

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

Information for the Russians Concerning the Japanese War (CCS 884, 884/1 and 884/2)

GENERAL HULL said that it was the desire of the British that information be given to the Russians on a combined basis. This had not been the policy of the Joint Chiefs of Staff. The Combined Intelligence Committee had prepared an intelligence report on the Japanese situation which had been presented to the Combined Chiefs of Staff and the Joint Intelligence Committee had prepared a report which might be given to the Russians. He said that he did not believe that the British would agree to giving the Russians the Combined Intelligence Committee report, but he thought the Joint Chiefs of Staff would be willing to give the report of the Joint Intelligence Committee to the Russians.

GENERAL MARSHALL said that he thought the British were more concerned in regard to intelligence that might be given the Russians on special projects than in regard to operational intelligence.

GENERAL DEANE said that he believed that the British had two motives in presenting their views: first, to share in the operational running of the war, and second, to exchange information with the Russians on a quid pro quo basis.

He said that he believed that we should give the Russians operational intelligence without reference to the British. He agreed to a certain extent in the exchange of intelligence with the Russians on a quid pro quo basis, but it had been the policy of the Military Mission to Moscow to go further than that and to provide the Russians with information they needed to win the war. He felt that Russian security was entirely adequate and that they would not disclose information furnished them. It was his view that the only relations that the British would have with the Russians in connection with the war in the Far East was in the exchange of intelligence, whereas our interest was operational and much greater than that of the British.

ADMIRAL KING said that he had noted that the British paper on the subject (CCS 884/2) was written before yesterday’s meeting of the Combined Chiefs of Staff and he felt that their motive at that time was to take an equal part with the Joint Chiefs of Staff in the operational strategy of the war against Japan. He thought there should be a delimitation between operational intelligence and general intelligence; that we should give the Russians directly such operational intelligence as we considered necessary and that general intelligence should be furnished the Russians on a common basis which would mean a continuation of the present arrangement.

The Joint Chiefs of Staff: Agreed to discuss this subject with the British Chiefs of Staff.

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

155

Second meeting of the Foreign Ministers, 11 a.m.

Present
United States United Kingdom Soviet Union
Secretary Byrnes Foreign Secretary Eden Foreign Commissar Molotov
Mr. Dunn Sir Alexander Cadogan Mr. Vyshinsky
Mr. Harriman Sir William Strang Mr. Gromyko
Mr. Cohen Sir Archibald Clark Kerr Mr. Gusev
Mr. Page Mr. Novikov
Mr. Thompson

Thompson Minutes

Potsdam, July 19, 1945, 11 a.m.
Top secret

MR. EDEN in the Chair stated his understanding that the Agenda for today included:

  1. German political questions, on which there was a revised draft;
  2. Poland; and
  3. German Economic Problems.

MR. EDEN stated that before consideration of the agenda, he understood that Mr. Byrnes had a point to make on the paper concerning the Council of Foreign Ministers.

MR. MOLOTOV at this point asked whether he could add to the agenda.

Reconsideration of Paper on Council of Foreign Ministers

MR. BYRNES stated that he wished to move reconsideration of the language of the paper on the Council of Foreign Ministers. He referred to the members charged with duties under section 3 and specifically to the language restricting membership to governments signatory to the terms of surrender. He pointed out that some governments were at war but were not signatory to the armistice terms and asked that the drafting committee on this subject be instructed to reconcile points of view on this phase of the matter.

MR. MOLOTOV inquired whether paragraph 3 was referred to and stated that it was not quite clear to him what question was involved.

MR. BYRNES pointed out that France, for example, was at war with Italy but was not signatory to the armistice terms and asked whether she would be permitted to participate in discussions regarding Italy.

MR. MOLOTOV replied that he believed that she would.

MR. BYRNES stated that under the present language of this paper he did not believe that a state in such a situation could participate.

MR. MOLOTOV asked whether the change would provide only for Italy.

MR. BYRNES replied that if Russia, for example, were at war with a country but was not a signatory to the armistice terms, Russia should not be excluded.

MR. MOLOTOV then asked specifically whether France should take part in the formulation of the peace treaty with Rumania.

MR. BYRNES stated his belief that if France were not at war with any country she would be present during any discussions but would not necessarily participate in the decisions.

MR. MOLOTOV then moved that Mr. Byrnes’ motion be accepted.

MR. EDEN stated general agreement and asked Mr. Molotov what subjects he wished to add to the agenda.

German Fleet and Merchant Marine

MR. MOLOTOV stated that he had a draft on the German fleet and merchant marine which he wished his colleagues to study. He stated that the draft would be ready in 10-15 minutes.

Consideration of the Agenda

MR. EDEN then brought the meeting back to the agenda and stated that the drafting committee on German political questions had a revised draft ready for presentation. He asked Mr. [Sir William] Strang to present it.

MR. STRANG explained in some detail various changes made by the drafting committee in the text of this paper. (See Attachment 1)

In paragraph 1 [2] (i) the word “demilitarization” was added after the word “disarmament” in order to bring this section in line with the declaration issued in Berlin on June 5. Subparagraph (a) immediately after subparagraph (i) was altered to accord with EAC recommendations. Subparagraph (b) was altered by the deletion of the word “seize” and the substitution of the phrase “held at the disposal of the Allies”, since most seizures had already been made.

MR. MOLOTOV then thanked the drafting committee for its work, and was followed by MR. EDEN and MR. BYRNES.

MR. BYRNES moved that the text be approved and this was agreed to.

Poland

MR. EDEN stated that the next item on the agenda was Poland. He added that the Prime Minister during the meeting on July 18 had promised to produce the text of a possible proposal.

MR. EDEN stated gratitude to the Generalissimo for his understanding of British difficulties even though their purposes were the same.

The British Delegation had produced the text of a draft proposal and had attempted a Russian translation, which was only in manuscript form. This proposal was delivered to the delegates and there was an interim period for consideration of it during which MR. MOLOTOV distributed copies of the Russian proposal.

After a brief period MR. EDEN again called the meeting to order.

MR. MOLOTOV stated that the Russian Delegation had no objection to the first paragraph of the proposal. There was, however, some question about paragraph 2. The title [paragraph?] began “The British and U.S. Governments express their willingness.” This was not considered urgent enough and some expression of the need for immediacy was needed.

MR. EDEN stated that he wished to say that a telegram had come giving information on this subject. The British have done more than the Prime Minister was able to indicate during the July 18 session of the Heads of Governments. The British Government had taken under control the whole machinery of the former Polish Government, which was being liquidated rapidly. A Treasury committee has assumed full control of all Polish finances. All Polish ministries have been closed and diplomatic privileges have been withdrawn. All properties except the Polish Embassy have been taken by the British Government and all work not connected with the liquidation of the former Polish Government has been stopped. All recruiting for Polish armed forces has been stopped and the War Office is now supervising the activities of the Polish General Staff. Polish ships are under charter to the United Kingdom, which desires to discuss this question with the Warsaw government. Much has been done and is being done.

MR. MOLOTOV then pointed out that since there is no representative of Poland here, it is impossible for the Soviet Delegation to speak for them. The principal question is to prevent the London Government from transferring assets and properties to private persons.

MR. EDEN stated that he was able to give absolute assurances on this point.

MR. MOLOTOV then pointed out that the law governing these matters was recent and that many transfers might have taken place in the past.

MR. EDEN replied that British action had been taken from the moment that recognition was accorded to the Warsaw government. The British Government is now awaiting the arrival of a representative of the Polish Provisional Government in London in order that immediate discussions can begin.

MR. MOLOTOV again raised the question of immediacy.

MR. EDEN replied that discussions could not be begun with persons who are absent.

MR. MOLOTOV then stated that he only wanted a statement stressing immediacy.

MR. EDEN expressed the belief that such statement could be made and MR. BYRNES agreed.

MR. BYRNES then mentioned the fact that an attempt had been made to transfer the Polish Embassy property in Washington but that this had been stopped and the Embassy had been vacated and was now at the disposal of the Warsaw Government.

MR. MOLOTOV then raised the matter of stocks, assets, and property and asked whether the sentence from the Russian proposal forbidding such transfers could be used.

MR. EDEN replied that he would consider a phrase noting that steps had been taken.

MR. MOLOTOV then questioned practice in other countries, specifically mentioning Norway.

MR. EDEN then agreed that a drafting committee might be appointed in order to try to find words which would meet Mr. Molotov’s wishes and asked whether there were any other points in the draft to which the Soviet Delegation took exception.

MR. MOLOTOV inquired concerning the debts of the London Polish Government and asked for an indication of the totals.

MR. BYRNES replied that he was unable to give a definite answer on this point and pointed out that the statement in paragraph 2 concerning discussions which would take place on these matters apparently met Mr. Molotov’s point.

MR. EDEN noted that the draft paper only suggests that discussions embrace this question and does not ask the Polish Provisional Government to accept a liability in advance.

MR. BYRNES suggested that the matter be referred to a committee to reconcile differences in language, and MR. MOLOTOV agreed.

MR. EDEN felt that the meeting should hear more about remaining points first.

MR. MOLOTOV then stated that the last words in paragraph 3 regarding the assurance of a livelihood carried an implication which no country could guarantee.

MR. EDEN suggested the words “personal freedom and security.”

MR. MOLOTOV suggested the inclusion of the words “without discrimination.”

MR. MOLOTOV then asked whether the Crimea text could not be used in the last paragraph and suggested that this point and other differences be left to the drafting committee.

MR. BYRNES and MR. EDEN agreed.

MR. BYRNES appointed Mr. Harriman and Mr. Bohlen to serve on the drafting committee.

MR. EDEN appointed Ambassador Clark Kerr and Mr. Allen.

MR. MOLOTOV appointed Mr. Vyshinski and Mr. Golunski.

MR. EDEN asked whether it was possible that a draft would be ready for the meeting this afternoon.

MR. MOLOTOV stated that he would prefer to have the question discussed on July 20 since the matter should not be hurried.

MR. BYRNES then suggested that an effort be made to get a draft today, but if this was not possible it be held over until tomorrow.

MR. MOLOTOV agreed.

German Economic Problems

MR. EDEN stated that the next item on the agenda was the consideration of German economic problems but that he understood that the drafting committee had no report ready since it had not been possible to meet yesterday. Therefore, neither this meeting nor the meeting of the Heads of States could consider this question today.

MR. EDEN then suggested consideration of an agenda for the meeting of the Heads of States.

MR. MOLOTOV asked that other matters be discussed first. These included the disposition of the German fleet and merchant marine, and Spain. A Russian proposal on Spain was distributed at this point. (See attachment 2).

MR. EDEN inquired concerning the disposition of these two matters.

MR. BYRNES stated that he saw no reason why these two subjects should not be put on the agenda for discussion today by the Heads of States.

MR. EDEN stated that it was impossible for him to discuss the German fleet without consultation with naval authorities, who were not now present.

MR. BYRNES reiterated his belief that both questions should be discussed by the Heads of States. He also suggested that the President’s paper on the implementation of the Yalta agreement come up for consideration this afternoon.

MR. EDEN remarked that the President’s paper dealt only with the Balkans and asked for permission to add two items on the British agenda. These are: one paper on Yugoslavia and one on Rumania.

MR. BYRNES agreed that these questions should be added and if not reached on the agenda today should go over until tomorrow.

MR. MOLOTOV stated that he had no objection.

Agenda for Meeting of Heads of States

MR. EDEN then recapitulated the items agreed upon for discussion by the Heads of States on the afternoon of July 19. These were:

  1. Agreed text on political control of Germany;
  2. Poland;
  3. The German fleet and merchant marine;
  4. Spain;
  5. Implementation of the Yalta Declaration;
  6. Yugoslavia;
  7. Rumania.

MR. MOLOTOV asked whether there were any drafts available on items 6 and 7.

MR. EDEN promised them by this afternoon.

MR. EDEN, after asking whether there was anything else to come before the meeting, then declared the meeting adjourned.

156 
740.00119 (Potsdam)/7-1945

The First Secretary of Embassy in Portugal to the Assistant Secretary of State

Berlin Conference, July 19, 1945

Memorandum

Subject: WORK SHEET ON QUESTION OF IMPLEMENTATION OF THE YALTA DECLARATION ON LIBERATED EUROPE

  1. It is important to keep in mind the distinction between the Yalta formula and the armistice control in the satellite states. In our view Yalta should not be invoked to change the armistice administration, which was set up by specific negotiation and which, much as it needs improvement, should be negotiated ad hoc. This distinction is important at the moment, because the Soviet Government may well try to sidestep the issue of implementing Yalta by referring to their new move to give better treatment to the United States and United Kingdom delegations in the armistice commissions.

    The British proposal for discussing the Rumanian petroleum question at this afternoon’s session suggests that they may expect the Yalta formula to help out in ameliorating United Kingdom and United States positions under the armistice regimes. We consider that the petroleum problem may indeed require negotiation above the level of the ACC, but that it is not germane to the Yalta Declaration.

  2. The British paper on Yalta (their No. 8) favors concluding peace treaties as the first step toward the creation of conditions for the emergence of democratic government. We think that only after some change in the composition of the government in Rumania and Bulgaria should we proceed to normalizing relations. We need not make our demands so rigid as to shut off the means of dealing with an imperfect regime, if we can work out a substantial broadening of the base as a beginning.

  3. The “consultation” proposed in point 2 of our paper might be by our Ambassadors at Moscow, or our political representatives at Bucharest and Sofia, but preferably not by the Control Commissions, for the reasons mentioned above.

  4. The British are proposing adding Yugoslavia to this topic. The Soviet Government would probably object to making a joint “statement” at the conclusion of the conference. Much of the desired effect could be achieved by a joint “message” (not made public) on the basis of which we could exert pressure at Belgrade at appropriate times.

C. W. CANNON

157 
740.00119 Potsdam/7-1945

Proposal by the Soviet Delegation

July 19, 1945
[Translation]

The German Navy and Merchant Marine

  1. One third of the total German navy including the ships which at the beginning of unconditional surrender of Germany were under construction or in repair shall be handed over to the Soviet Union.

  2. One third of reserve armaments, ammunition and supplies of the German navy in accordance with the classes of ships shall be handed over to the Soviet Union.

  3. One third of the German merchant marine shall be handed over to the Soviet Union.

  4. The transfer and receipt of the ships of the German navy and merchant marine shall begin August 1 and shall be completed by November 1, 1945.

  5. There shall be established an expert commission the strength of which shall be determined by the Naval Commands of the three Allied countries to transfer and take the ships of the German navy and merchant marine located in the ports and bases of the Allied Commands as well as in the ports and bases in Germany and other countries.

Proposal by the Soviet Delegation

July 19, 1945
[Translation]

Spain

The Soviet Government present for consideration by the Conference the following suggestion.

In view of the fact:

  1. that the regime of Franco originated not as a result of the development of the internal forces in Spain but as a result of the intervention by the principal axis-countries – Hitler Germany and fascist Italy which imposed upon the Spanish people the fascist regime of Franco;

  2. that the regime of Franco constitutes a grave danger to the freedom-loving nations in Europe and South America;

  3. that in the face of brutal terror instituted by Franco the Spanish people have repeatedly expressed themselves against the regime of Franco and in favour of the restoration of democratic government in Spain,

The Conference deems it necessary to recommend to the United Nations:

  1. to break off all relations with the Government of Franco;

  2. to render support to the democratic forces in Spain and to enable the Spanish people to establish such a regime as will respond to their will.

740.00119 Potsdam/7-2045

Proposal by the Soviet Delegation

[Translation]
[Undated]

Amendments of the Soviet Delegation to the British Draft Declaration on the Polish Question

It Is Suggested:

  1. that the text of paragraph 2 of the above-mentioned document be replaced by a new text (see enclosure 1).

  2. that the text of the last sentence of paragraph 3 be replaced by a new text (see enclosure 2).

  3. that the last two sentences of paragraph 4 be omitted.

[Enclosure 1 — Translation]

Declaration on the Polish Question

In place of the text of paragraph 2 of the British draft the following text is proposed:

The British and United States Governments have already taken measures to prevent the alienation to third parties of property of all kinds belonging to the Polish State located on their territory and under their control, whatever the form of this property may be, wherever and at whosoever’s disposal it may be, and without regard to whether it was transferred to someone earlier and exactly when. They are ready to take immediate measures for the transfer of this property, as well as vessels of the Polish Merchant Marine, to the disposal of the Polish Provisional Government as soon as possible. To this end they are prepared to discuss with properly accredited representatives of the Polish Provisional Government the manner and time of such transfer.

[Enclosure 2 — Translation]

Declaration on the Polish Question

In place of the text of the last sentence of paragraph 3 the following text is proposed:

They expect that those Poles who return home shall be accorded personal and property rights on the same basis as all Polish citizens and in accordance with the existing laws of Poland.

At the same time the British Government shall take measures that in the territory of Great Britain, and in territories under British control, Poles wishing to return to Poland shall not be arrested.

740.00119 Potsdam/7-2045

Proposal by the Soviet Delegation

[Translation]
[Undated]

The British and United States Governments have already taken measures to prevent the alienation to third parties of property of all kinds belonging to the Polish State located on their territory and under their control, whatever the form of this property may be. They are ready to take immediate measures for the transfer of this property, as well as vessels of the Polish Merchant Marine, to the disposal of the Polish Provisional Government as soon as possible. To this end they are prepared to discuss with properly accredited representatives of the Polish Provisional Government the manner and time of such transfer.

All facilities will be given to the Polish Government of National Unity for the return to it, in accordance with the laws of the USA and Great Britain, of any property which may have been wrongfully alienated.

158

Report by the Subcommittee on German Political Questions

[Babelsberg, July 19, 1945]

Proposed Agreement on the Political and Economic Principles To Govern the Treatment of Germany in the Initial Control Period

Political Principles

  1. In accordance with the Agreement on Control Machinery in Germany, supreme authority in Germany is exercised, on instructions from their 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. 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 militaristic 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.

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

  4. 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.

  5. 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.

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

  7. 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.

  8. 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.

  9. 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.

159 
023.1/9-1454

Proposal by the British Delegation

[Babelsberg, July 19, 1945]

[Draft of a Statement on Poland]

  1. 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 recognised 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.

  2. The British and United States Governments express their willingness to discuss with properly accredited representatives of the Polish Provisional Government the orderly transfer to it of Polish State property, including the Polish Embassies in London and Washington, in regard to which measures of conservation have been taken by the two Governments. They assume that such discussions would embrace also the questions of the acknowledgement by the Polish Provisional Government of liability for the credits advanced to the late Polish Government and other outstanding debts, and the relation of such advances to any assets of the Polish State available abroad.

  3. 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 Merchant Marine. It is their desire that as many of these Poles as possible should return home, and they consider that the Polish Provisional Government could itself greatly assist in this regard by giving specific undertakings that those Poles who return will do so with full assurance of their personal security, freedom and livelihood.

  4. The Three Powers note that the Polish Provisional Government is pledged 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. It is the confident hope of the Three Powers that the elections will be so organised as to enable all sections of Polish opinion to express their views freely, and thus play their full part in the restoration of the country’s political life. The Three Powers will further expect that representatives of the Allied Press shall enjoy full freedom to report to the world upon developments in Poland before and during the elections.

740.00119 Potsdam/7-1945

Proposal by the British Delegation

July 19, 1945

Yugoslavia

At the Crimea Conference on February 10th the Heads of the three Governments discussed the Yugoslav question and agreed to recommend to Marshal Tito and Dr. Šubašić that the agreement between them be put into effect and a new government formed on the basis of the agreement.

  1. The three Governments have thus endorsed the Tito-Šubašić Agreement, with its guarantees of the basic principles of democratic liberties, in particular personal freedom, freedom from fear, freedom of religion and conscience, freedom of speech, press meetings and associations, and the right of property and private initiative, and with the promise of a democratic election within three months of the Yugoslav liberation.

  2. Doubtless owing to war conditions, the principles set out in the Tito-Šubašić Agreement have not been fully carried out. In view of the declaration issued at Yalta, it is desirable that, at the close of the present meeting, the three Heads of Governments should issue a statement recalling the fact that they had given recognition to the Yugoslav Government on the basis of the Yalta Agreement and the Tito-Šubašić Agreement, which they expect to be fully carried out in the near future.

740.00119 Potsdam/7-1945

Proposal by the British Delegation

TERMINAL, 19th July, 1945
Secret
P (TERMINAL) 10

The Removal as Booty of Allied Industrial Equipment Especially in Roumania

  1. Large sums of British capital are invested in companies producing oil in Roumania. In October, 1944, the Soviet authorities in Roumania removed large quantities of equipment from these British companies and from other Allied-owned companies, on the grounds that it was war booty.

  2. The resulting damage to British interests was very considerable. Furthermore, the action taken has reduced the total output of Roumanian oil wells by one million tons a year, at a time of grave oil shortage. As a result, Roumania’s capacity to pay reparations and the revenue earning capacity of British and other Allied capital was diminished.

  3. In January, 1945, the Soviet Government agreed to discontinue removals of equipment. But the equipment already removed was not returned, nor did the Soviet Government agree to regard it as deliveries on account of reparations.

  4. Further oil equipment was removed from a British-controlled company in April.

  5. His Majesty’s Government ask that the equipment which has been removed from these British companies shall be returned as soon as possible. Furthermore, they ask that no further action damaging to these British companies shall be taken by the Soviet authorities, and that the consent of the British representative on the Allied Control Commission in Roumania shall be sought before any action in their regard is undertaken.

160

U.S. Delegation Memorandum

Potsdam, July 19, 1945, 11 a.m.

I. Agenda of Meeting of Heads of Governments
It was agreed that the following subjects should be recommended to the Heads of Governments for discussion this afternoon:

  1. Authority of the Control Council for Germany in Political Questions.
    The redraft of the U.S. proposal on this subject drawn up by the subcommittee named yesterday was approved by the Foreign Ministers and is ready for discussion by the Heads of Governments.

  2. Polish Question.
    A British paper on this subject was referred to a subcommittee for drafting changes. If the subcommittee is able to report by four o’clock, this question will be ready for discussion by the Heads of Governments this afternoon; otherwise, it will be held over until tomorrow.

  3. Disposition of German Fleet and Merchant Ships.
    A Russian paper on this subject has been presented for discussion.

  4. Spain.
    A Russian paper proposing a policy to be adopted by the three Governments toward the Franco regime has been presented for discussion.

  5. Implementation of the Yalta Declaration on Liberated Europe and Satellite States.
    The paper on this subject presented by the President at the opening meeting of the Conference is recommended for discussion.

  6. Yugoslavia.
    The British will raise the question of the implementation of the Yalta declaration on Yugoslavia and hope to have a paper ready on this subject.

  7. British and U.S. Oil Interests in Rumania.
    The British will raise this question and hope to have a paper ready for presentation.

II. Council of Foreign Ministers
The Foreign Ministers agreed that the document establishing a Council of Foreign Ministers, which was approved by the Heads of Governments yesterday, should be reconsidered and paragraph 3 thereof should be revised in such a way as to permit any member of the Council at war with a given state to participate in the peace settlement concerning that state, even if it was not a signatory of the armistice terms concluded with that state. It was understood that if a member of the Council was not at war with a given state, it might participate in the discussions of the peace settlement concerning that state but would not participate in the decisions connected with that peace settlement.

161 
740.00119 Potsdam/7-1945

Rapporteur’s Report

Potsdam, July 19, 1945, 11 a.m.

Plenary Meeting, 19th July 1945

  1. The United States Secretary of State informed the meeting that the United States Government desired to propose an amendment to the redraft, adopted by the Foreign Secretaries meeting on July 18th, of paragraph 3 of the United States draft proposal for the establishment of a Council of Foreign Ministers. The meeting agreed to refer this point to a drafting committee.

  2. Germany. Political questions.
    The Foreign Secretaries have given further consideration to the political section of the proposed agreement on the Political and Economic Principles to govern the treatment of Germany in the initial control period circulated by the United States Delegation. Preliminary consideration was given to this draft by the Heads of Governments at their meeting yesterday and the Foreign Secretaries were asked to submit a report on this draft at the present meeting.

    The Foreign Secretaries now submit a revised draft (Flag A) of the political section of the proposed agreement, which is already in the hands of Delegations.

    In addition to clarifying the draftmanship of the text, the Foreign Secretaries have supplemented it in a few places with new material. They now recommend it for acceptance by the Heads of Governments.

    When the economic section has been discussed and agreed upon, it will be for consideration whether the whole agreement should be made public.

  3. Poland.
    The United Kingdom Delegation put forward a redraft of the draft “Statement of the Heads of the Three Governments on the Polish Question” put forward by Marshal Stalin at the Plenary Meeting on July 18th.

    The meeting agreed to refer this redraft to a drafting committee.

Agenda for the Plenary Meeting
The meeting agreed to submit the following points for discussion at the Plenary Meeting this afternoon:

(a) Germany: political questions.

(b) Poland.
This item to be on the agenda if the report of the drafting committee is ready in time.

(c) The German Navy and Merchant Marine.
A memorandum by the Russian Delegation has been circulated.

(d) Spain.
A memorandum by the Russian Delegation has been circulated.

(e) The Yalta Declaration on Liberated Europe.
A memorandum of July 17th on this subject by the United States delegation has been circulated.

(f) Yugoslavia.
The British Delegation proposed discussion of the situation in Yugoslavia and the fulfilment of the Tito-Šubašić Agreement and undertook to submit a paper on the subject.

(g) Rumania.
The British Delegation proposed discussion of the question of the removal as booty of Allied industrial equipment, especially in Rumania, and undertook to submit a paper on the subject.

162

First meeting of the Economic Subcommittee, 11 a.m.

Present
United States United Kingdom Soviet Union
Mr. Clayton Mr. Turner Mr. Maisky
Mr. Murphy

Memorandum by the Political Adviser in Germany

Potsdam, July 19, 1945

Subject: SUBCOMMITTEE OF EXPERTS ON ECONOMICS

This committee agreed to proceed informally. The scope of its discussion was limited to a statement of principles and it is expected to report back items on which the members do not agree.

MR. MAISKY led off by inquiring what was meant by decentralization. MR. CLAYTON explained that this related to the breaking up of trust cartels and monopolies, while MR. TURNER stated that it meant the elimination of a tight central control of industry and commerce. The following definition of decentralization was agreed upon: “The German economy shall be decentralized for the purpose of eliminating the present excessive concentration of economic power as exemplified by cartels, syndicates, trusts, and other monopolistic arrangements.”

  • Item No. 10. MR. MAISKY said he had no quarrel with this principle.

  • Item No. 11(a). MR. MAISKY inquired what is meant by relief of liberated areas.

  • Item No. 11(b). MR. TURNER inquired whether we were talking about the Germany included in the 1937 frontiers. At this point MR. MAISKY made no comment.

    With respect to the minimum subsistence standard in Germany, a formula was suggested under which it would be essential to maintain in Germany the average standards of living which would not exceed the average living standards in the European countries (European countries excluding the U.K. and USSR).

  • Item No. 11(c). MR. TURNER pointed out that the desire to produce a balanced economy throughout Germany and reduce the need for imports. MR. MAISKY said we will consider this point.

  • Item No. 11(d). No grant of credit shall be permitted except with the approval of the Control Council.

  • Item No. 12. The principles (and proposals) – this was added language by Pauley, here agreed.

  • New Item No. 12(a). This was submitted for consideration.

  • Item No. 13. To the effect that Germany was to be treated as an economic unit. Agreed.

  • Item No. 13(1). MR. TURNER submitted a re-draft.

163

Texts Considered by the Economic Subcommittee

[Babelsberg, July 19, 1945]

  1. The German economy shall be decentralized for the purpose of eliminating the present, excessive concentration of economic power as exemplified by cartels, syndicates, trusts and other monopolistic arrangements. Notwithstanding this, however, and for the purpose of achieving the objectives set forth herein, central administration of certain forms of governmental machinery, including in particular Finance, Transportation and Communications, shall be restored or maintained.

  2. In the imposition and maintenance of economic controls authorized by the Control Council, German administrative machinery shall be established 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 run counter to the objectives of occupation will be abolished.

  3. Allied controls shall be imposed upon the German economy but only as may be 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 the equitable distribution of essential commodities between the several zones so as to produce a balanced economy throughout Germany and reduce the need for imports.

    (d) to control German industry and all economic and financial international transactions, including exports and imports, with the aim of preventing Germany from developing a war potential and of achieving the other objectives named herein. For the same purpose no grant of credit to Germany or Germans by any foreign persons or Government shall be permitted except with the approval of the Control Council.

  4. The production of arms, ammunition and implements of war, including all types of aircraft and ocean-going ships, shall be prohibited and prevented. Production of metals, chemicals and machinery shall be rigidly controlled and restricted to minimum, peacetime needs. Production of selected key items within these industrial fields shall be wholly eliminated. Productive capacity not needed for permitted production shall be removed or destroyed.

  5. The principles and conditions governing the exaction of reparations from Germany are set forth in Annex I to this agreement.

  6. Measures shall be promptly taken:
    (a) to effect essential repair of transport;
    (b) to enlarge coal production;
    (c) to maximize agricultural output; and
    (d) to effect emergency repair of housing and essential utilities.

164

Approved Proposal for the Establishment of a Council of Foreign Ministers

[Babelsberg, July 20, 1945]

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

  2. The Council shall meet at London and its first meeting shall be held on ________. Each of the Foreign Ministers shall be accompanied by a high-ranking deputy duly authorized and capable of carrying on the work of the Council in the absence of his Foreign Minister. He will likewise be accompanied by a small staff of technical advisers suited to the problems concerned and to the organization of a joint secretariat.

  3. As its immediate important task, the Council would be authorized to draw up, with a view to their submission to the United Nations, treaties of peace with Italy, Rumania, Bulgaria, and Hungary and to propose settlements of territorial questions outstanding on the termination of the war in Europe. The Council shall be utilized for the preparation of a peace settlement for Germany to be accepted by the Government of Germany when a government adequate for the purpose is established.

    For the discharge of each of these tasks the Council will be composed of the members representing those States which were signatory to the terms of surrender imposed upon the enemy State concerned. For the purposes of the peace settlement for Italy, France shall be regarded as a signatory to the terms of surrender for Italy.

    Other members should be invited to participate when matters directly concerning them are under discussion.

  4. Whenever the Council is considering a question of direct interest to a State not represented thereon, such State should be invited to send representatives to participate in the discussion and study of that question. It is not intended, however, to fix hard and fast rules but rather to permit the Council to adapt its procedure to the particular problem under consideration. In some cases it might desire to hold its own preliminary discussions prior to the participation of other interested States. In other cases the Council might desire to convoke a formal conference of the States chiefly interested in seeking a solution of the particular problem. It is so authorized.

165

Stimson-Cherwell conversation, noon

Present
United States United Kingdom
Mr. Stimson Lord Cherwell
Mr. Bundy

Stimson’s diary entry: “At twelve o’clock Lord Cherwell called, and he and Bundy and I sat out under the trees and talked over S-l. He was very reasonable on the subject of notification to the Russians, feeling about as doubtful as we. He reported Churchill as being much pleased with our luncheon together last Monday and much cheered by the talk.”

166

Stimson-Alexander conversation, early afternoon

Present
United States United Kingdom
Mr. Stimson Field Marshal Alexander
Mr. McCloy Field Marshal Wilson

Stimson’s diary entry:

“After lunch at two o’clock Field Marshal Alexander and Field Marshal Sir Henry Wilson came in. The main subject of their call was the appointment of Colonel James H. Douglas to be the American member of the Italian Control Commission. There had been delay and some complications about it and Alexander reported that there had been news reports which had been embarrassing to the present incumbent, Admiral Stone. He thereupon proposed a solution by suggesting that Douglas come out on a visit of inspection preparatory to assuming the duties of the office, and invited him to stay with him. Then he would take office later in September. This was agreed to and the telegrams were drawn up and sent. I talked over with Alexander his campaigns in Italy and complimented him on their success which seemed to please him. It is the first time I had met him personally, he having been absent when I visited both Africa and Italy. We talked over the episodes of Tito and de Gaulle in their incursions into Italy.”

167

Memorandum by the Secretary of War

[Babelsberg, July 19, 1945]
Top secret

Reflections on the Basic Problems Which Confront Us

  1. With each International Conference that passes and, in fact, with each month that passes between conferences, it becomes clearer that the great basic problem of the future is the stability of the relations of the Western democracies with Russia.

  2. With each such time that passes it also becomes clear that that problem arises out of the fundamental differences between a nation of free thought, free speech, free elections, in fact, a really free people with a nation which is not basically free but which is systematically controlled from above by Secret Police and in which free speech is not permitted.

  3. It also becomes clear that no permanently safe international relations can be established between two such fundamentally different national systems. With the best of efforts we cannot understand each other. Furthermore, in an autocratically controlled system, policy cannot be permanent. It is tied up with the life of one man. Even if a measure of mental accord is established with one head the resulting agreement is liable to be succeeded by an entirely different policy coming from a different successor.

  4. Daily we find our best efforts for coordination and sympathetic understanding with Russia thwarted by the suspicion which basically and necessarily must exist in any controlled organization of men.

  5. Thus every effort we make at permanent organization of such a world composed of two such radically different systems is subject to frustration by misunderstandings arising out of mutual suspicion.

  6. The great problem ahead is how to deal with this basic difference which exists as a flaw in our desired accord. I believe we must not accept the present situation as permanent for the result will then almost inevitably be a new war and the destruction of our civilization.

    I believe we should direct our thoughts constantly to the time and method of attacking the basic difficulty and the means we may have in hand to produce results. That something can be accomplished is not an idle dream. Stalin has shown an indication of his appreciation of our system of freedom by his proposal of a free constitution to be established among the Soviets. To read this Constitution would lead one to believe that Russia had in mind the establishing of free speech, free assembly, free press and the other essential elements of our Bill of Rights and would not have forever resting upon every citizen the stifling hand of autocracy. He has thus given us an opening.

    The questions are:
    a. When can we take any steps without doing more harm than good?
    b. By what means can we proceed?

    1. By private diplomatic discussion of the reasons for our distrust.
    2. By encouraging open public discussions.
    3. By setting conditions for any concessions which Russia may ask in respect to:
      (a) Territorial concessions
      (b) Loans
      (c) Bases
      (d) Any other concessions.

    How far these conditions can extend is a serious problem. At the start it may be possible to effect only some amelioration of the local results of Russia’s Secret Police State.

  7. The foregoing has a vital bearing upon the control of the vast and revolutionary discovery of X which is now confronting us. Upon the successful control of that energy depends the future successful development or destruction of the modern civilized world. The Committee appointed by the War Department which has been considering that control has pointed this out in no uncertain terms and has called for an international organization for that purpose. After careful reflection I am of the belief that no world organization containing as one of its dominant members a nation whose people are not possessed of free speech but whose governmental action is controlled by the autocratic machinery of a secret political police, cannot [can] give effective control of this new agency with its devastating possibilities.

    I therefore believe that before we share our new discovery with Russia we should consider carefully whether we can do so safely under any system of control until Russia puts into effective action the proposed constitution which I have mentioned. If this is a necessary condition, we must go slowly in any disclosures or agreeing to any Russian participation whatsoever and constantly explore the question how our head-start in X and the Russian desire to participate can be used to bring us nearer to the removal of the basic difficulties which I have emphasized.

168

The Assistant Secretary of War to the War Department

Babelsberg, 19 July [19]45
secret
urgent

Victory 98

To AG War for Chanler, Civil Affairs Division for Colonel James H. Douglas from McCloy.

Prospective appointment of Col James H. Douglas is subject.

Have discussed Douglas’ appointment with Alexander. We have agreed with him that the announcement quoted below will be made simultaneously from London and Washington at a time to be set as soon as Douglas cables me that the announcement is agreeable to him. Announcement follows:

It was announced that Colonel James H. Douglas, former Assistant Secretary of the US Treasury, would leave shortly to study economic conditions in Italy, preparatory to his eventual assumption of the position of Chief Commissioner of the Allied Commission in Italy when steps are taken to alter the military character of the commission.

Colonel Douglas will resign his commission which he now holds in the Army before assuming such a position and in the meantime will be given an opportunity to make himself familiar with conditions in Italy. The present Chief Commissioner of the council is Rear Admiral Ellery Stone who has occupied the position during the military phase and has performed most valuable services during the critical stages of the Italian recovery during and following the conduct of the military campaign in Italy. Admiral Stone will continue as the Chief Commissioner until the completion of the military phase.

Alexander would propose that Douglas proceed shortly (probably not until close of Terminal conference so that Alexander will be there to receive him) to Italy as his guest but without taking office as Chief Commissioner at this time to become familiar with the situation on the spot and then to return to Washington and make report.

About 1st September or thereabouts Douglas would then return to Italy and take office relieving Admiral Stone at that time. I believe that this arrangement is desirable and hope Douglas will approve of it promptly.

Alexander is much pleased by Douglas’ appointment but anxious to make this arrangement in order to conform to his plans for placing commission on civilian status. Every precaution should be taken to avoid any further announcements until authorized from here.

169

Meeting of the Combined Chiefs of Staff, 2:30 p.m.

CCS 196th Meeting

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

CCS Minutes

Potsdam, July 18, 1945
Top secret

Approval of the Minutes of the CCS 195th Meeting, 18 July 1945*

The Combined Chiefs of Staff:
a. Approved the conclusions of the CCS 195th Meeting subject to the following amendments:

  1. Change item 4a. to read: “Agreed in principle that that part of the present Southwest Pacific Area lying south of the boundary proposed in paragraph 2 of CCS 852/1, should pass from United States to British command as soon as possible.”

  2. Change item 5e. to read as follows: “In the event the USSR enters the war against Japan, the strategy to be pursued should be discussed between the parties concerned.”

b. Approved the detailed report of the meeting subject to later minor amendments.

Participation of Two French Colonial Infantry Divisions in Far Eastern Operations (CCS 895, 895/1, and 895/2)

The Combined Chiefs of Staff: Approved the reply to the Chief of the French Military Mission in the United States in the Enclosure to CCS 895/2.

Combined Chiefs of Staff Machinery After the War With Japan (CCS 891 and 891/1)

SIR ALAN BROOKE said that the British Chiefs of Staff had considered the memorandum by the United States Chiefs of Staff in CCS 891/1. The British Chiefs of Staff were prepared to discuss the matter or to take note of the views of the United States Chiefs of Staff as the latter desired.

GENERAL MARSHALL said that the United States Chiefs of Staff were not in a position to discuss at this date the post-war relationship between the respective military staffs.

ADMIRAL KING said that the second paragraph of CCS 891/1 was meant to refer to the procedure envisaged in the changed conclusion under 5e. of the minutes of the Combined Chiefs of Staff 195th Meeting.

The Combined Chiefs of Staff: Took note of CCS 891 and 891/1.

Information for the Russians Concerning the Japanese War (CCS 884, 884/1, and 884/2)

SIR ALAN BROOKE said that the British Chiefs of Staff felt that it was desirable that the policy adopted in imparting information concerning the Japanese war to the Russians should be coordinated with the policy of the United States Chiefs of Staff.

GENERAL MARSHALL said that the United States Chiefs of Staff had considered the matter raised in the memorandum by the British Chiefs of Staff and had come to the following conclusion:

a. The United States Chiefs of Staff desired to retain freedom of action regarding the passing of purely operational information and intelligence to the Russians.

b. On matters of information and intelligence which were not purely operational, the United States Chiefs of Staff would agree not to pass such information to the Russians without consulting the British Chiefs of Staff.

c. As regards information and intelligence from purely British sources, this would not be passed without permission of the British Chiefs of Staff.

SIR CHARLES PORTAL said that there was considerable technical information which had been developed by joint effort, and he asked whether this information would be handled the same as operational information.

ADMIRAL KING said that information on technical equipment was not included in purely operational information. Operational information or intelligence included information on such matters as weather and the composition and disposition of enemy forces. The technical information referred to by Sir Charles Portal would not, therefore, be handled under a. above.

GENERAL MARSHALL said that it was the policy of the United States Chiefs of Staff to pass purely operational information and intelligence freely to the Russians and not to withhold it for bargaining purposes. If such information contributed to the efficiency of the Russian armies or aided in the prosecution of the war the United States Chiefs felt that it should be given to the Russians regardless of whether or not the Russians reciprocated.

SIR ALAN BROOKE said that this policy would be agreeable to the British Chiefs of Staff as they felt that it would be better for the British and United States Chiefs of Staff to pursue the same policy in this matter since both countries have military missions in Moscow.

The Combined Chiefs of Staff: Agreed:

  • Operational Information and Intelligence
    That the U.S. and British Chiefs of Staff will pass to the Russians such operational information and intelligence regarding the theatres in which they are respectively responsible as either may wish and without bargaining.

  • Information and Intelligence Other than Operational
    The United States and British Chiefs of Staff will consult together before passing to the Russians any information and intelligence other than operational. Neither party will pass to the Russians information or intelligence derived wholly or in part from the other party’s sources without their consent.

Planning Date for the End of Organized Resistance by Japan (CCS 880/8)

The Combined Chiefs of Staff: Agreed that for the purpose of planning production and the allocation of manpower, the planning date for the end of organized resistance by Japan be 15 November 1946; that this date be adjusted periodically to conform to the course of the war.

Appointment of Colonel Douglas to Allied Commission in Italy

FIELD MARSHAL WILSON reported that he had attended that afternoon a meeting between the U.S. Secretary of War, the U.S. Assistant Secretary of War, and Field Marshal Alexander at which the appointment of Colonel Douglas as Chief Commissioner to the Allied Commission in Italy had been discussed.

It was proposed at that meeting that Colonel Douglas should visit Italy for a month or so to examine the situation on the spot. He could then take over the appointment from Admiral Stone in September, when all Italian territory, excluding Venezia Giulia, would have been handed back to the Italian Government and a change in the status of the Control Commission to more of a civilian basis would take place.

This proposal had been accepted by the United States and British representatives present at the meeting, and subject to approval by Colonel Douglas which was being requested from Washington, it was decided to adopt the above suggestions provided the Department of State and the Foreign Office agreed.

The Combined Chiefs of Staff: Took note of Field Marshal Wilson’s statement.

170

Memorandum by the U.S. Chiefs of Staff

[Babelsberg,] 19 July 1945
Top secret
CCS 895/2

Participation of Two French Colonial Infantry Divisions in Far Eastern Operations

The United States Chiefs of Staff have considered the comments of the British Chiefs of Staff in CCS 895/1 as to the employment of the two French divisions and recommend that the enclosed memorandum be forwarded by the Combined Chiefs of Staff to the Chief of the French Military Mission to the United States in lieu of Enclosure “B” to CCS 895.

[Enclosure]

Top secret
Draft

Memorandum for the Chief of the French Military Mission in the United States

The Combined Chiefs of Staff accept in principle your offer of a French corps of two infantry divisions to serve in the Pacific war on the understanding that:

a. Whether the corps will serve under U.S. or British command and the area in which it will operate will be determined later.

b. Final acceptance of the corps will involve an agreement with the government concerned on basic matters including command, combat efficiency, replacements, and logistical support.

c. Maximum use will be made of equipment provided under the North African and Metropolitan Rearmament Program.

d. The time of movement will be in accordance with the priority of the operations in which it is to be used. Pressing shipping and other requirements for operations in the Pacific make certain that the corps cannot be moved from France for at least several months. Whether used in the main effort or in the South China Sea area, it will not be possible to commit it to operations prior to the spring of 1946.

Memorandum by the U.S. Chiefs of Staff

[Babelsberg,] 19 July 1945
Top secret
CCS 891/1

Combined Chiefs of Staff Machinery After the War with Japan

With reference to CCS 891, the political relationship of the United States with other nations in the period following this war is not yet sufficiently defined to permit the United States Chiefs of Staff to discuss at this date the post-war relationships between the respective military staffs.

The United States Chiefs of Staff will bring up for consideration the problem of the most effective military machinery to be used from now forward and prior to the end of the Japanese war.

171

Third plenary meeting, 4:05 p.m.

Present
United States United Kingdom Soviet Union
President Truman Prime Minister Churchill Generalissimo Stalin
Secretary Byrnes Foreign Secretary Eden Foreign Commissar Molotov
Fleet Admiral Leahy Mr. Attlee Mr. Vyshinsky
Mr. Davies Sir Alexander Cadogan Admiral of the Fleet Kuznetsov
Mr. Harriman Sir Archibald Clark Kerr Mr. Gromyko
Mr. Pauley Major Birse Mr. Gusev
Mr. Dunn Mr. Sobolev
Mr. Matthews Mr. Pavlov
Mr. Cohen
Mr. Bohlen
Mr. Thompson

Thompson Minutes

Potsdam, July 19, 1945, 5 p.m.
Top secret

Bulgarian-Greek Frontier Incident

MR. CHURCHILL said he wished to refer to a point which Stalin had raised at the previous meeting concerning an incident on the Bulgarian-Greek frontier. He had made inquiries. The British Government had heard of no fighting. These people did not like each other very much and he did not doubt but that there had been some sniping. There was no Greek field division in northern Greece, however. The British knew this, as they had their own people there. There were seven thousand Greek guards on the Albanian and Yugoslav frontiers. They were there for purposes of internal order. On the other side of the frontier there were 30 thousand Albanian, 30 thousand Yugoslav and 24 thousand Bulgarian troops. He only mentioned this because this Conference of the Great Powers should make clear that there should be no marauding attacks and that frontier questions should be settled by the peace conference. It should be indicated that those who try to violate frontiers are likely to prejudice their own claims.

THE PRESIDENT said he had never heard of this and that he did not hear it mentioned at the previous meeting. He agreed that frontier matters should be settled at the peace conference.

STALIN said there had been some misunderstanding. He had not raised this matter at the previous meeting but in a personal talk with Mr. Churchill. This did not affect the fact that this Conference could consider the matter and he might wish to raise the matter at a later date.

CHURCHILL agreed that it was not raised at the meeting, although it had been brought up at this table. He agreed with Mr. Stalin that it could be raised at the Conference.

THE PRESIDENT then proposed that Mr. Eden submit his report of the meeting of Foreign Ministers.

MR. EDEN said that the United States Secretary of State said this morning that he wished to submit an amendment to the redraft of paragraph 3 of the document on the Council of Foreign Ministers. This had been referred to a drafting committee.

German Political Question

The second point examined at their meeting was the German political question. The Foreign Ministers had considered the economic and political principles that were to guide the Control Council of Germany. Preliminary consideration had been given to this matter by the Heads of Government at a previous meeting. The Foreign Ministers were now submitting a redraft of the political section of the document on this question. In addition to redrafting, they had added some new material. They suggested that when the economic part had been agreed upon, they would consider it and refer it to the meeting of the Heads of Government.

The political section of the document was approved as revised.

Poland

MR. EDEN said that the British had submitted a new draft to replace the paper submitted by the Soviet Delegation on the Polish question at the previous meeting. The Foreign Ministers had had a useful discussion on this subject and had submitted it to a drafting committee. They hoped to present it tomorrow.

CHURCHILL observed that when the drafting committee had finished its work, they would discuss it.

THE PRESIDENT and STALIN agreed.

MR. EDEN said that apart from the two subjects already mentioned, the Foreign Ministers proposed the following subjects as the agenda for the present meeting:

  1. German Merchant and Naval Fleet.

  2. Spain.
    MR. EDEN pointed out that the Russians had submitted a memorandum on this subject.

  3. The Yalta Declaration on Liberated Europe.
    MR. EDEN stated that the United States Delegation had circulated a memorandum on this subject.

  4. Yugoslavia.
    The United Kingdom had submitted a paper on this.

  5. Rumania.
    EDEN said that the British had prepared a memorandum on the removal of oil equipment as trophies.

EDEN commented that as the meeting of Heads of Government had finished their previous session at an early hour, a long list had been prepared for the present meeting.

Disposition of German Merchant and Naval Fleet

THE PRESIDENT said that with respect to the first question, the disposition of the German fleet, the first thing to consider was, what is reparation and what is war booty. The merchant fleet was to be classified as reparations, as he thought it should; the matter would eventually have to be referred to the Reparations Commission. He said he was interested in the merchant fleet because the United States wanted it to operate under the present control in the Japanese war zone.

STALIN said that war material taken by armies in the course of a war is booty. Armies that laid down their arms and surrendered, turned in their arms and these arms were booty. The same thing applied to the navy. It was stipulated in the military proposals put forward by the Three Powers that the navy be surrendered. It was therefore, booty. It was possible, however, to discuss the question whether the merchant fleet was booty or reparations. Regarding the navy, there was no question about the matter. He recalled the case of Italy in which both naval and merchant fleets had been treated as booty and no question had been raised.

MR. CHURCHILL said he did not want to approach this matter from the juridical standpoint.

THE PRESIDENT said he held the same view.

CHURCHILL said he wanted to reach an agreement on this matter between the three powers as a part of their general agreement at the Conference. In saying this, he was speaking only of the German war fleet. He said that they had the whole of the German merchant fleet in their keeping at the present time. Should a general agreement be reached at this Conference and a friendly settlement of their problems be achieved, he would not be opposed to a division of the German fleet. He felt that the question of the Italian fleet could better be discussed in connection with the settlement with Italy. He went on to observe, however, that replacement of losses was relevant to this matter. The British had had immense naval losses in the war. Speaking from memory, they had lost about 10 capital ships and aircraft carriers, 20 cruisers and literally hundreds of destroyers, submarines and various kinds of small crafts. The question of U-Boats stood on a somewhat different footing. These U-Boats had a limited legal use. The Germans had used them in contravention of the international agreements on this subject. As many of them as possible should in his opinion be destroyed. The latest German U-Boats, however, might contain valuable information for the future and that should be reasonably shared by the three Powers. He did not look at the matter solely from a naval point of view. He was aware of the tremendous sacrifices which the Russians had made in the field. He suggested that there should be no final discussion today but he thought that the bulk of the U-Boats should be sunk and the remainder shared equally. With respect to the other naval vessels he thought that they should be divided equally, provided a general agreement was achieved at the Conference and that they parted amicably from this meeting. He had no objection to the Soviet proposal that the German naval fleet be divided. He did not feel that a nation as great and mighty as Russia should be denied this. It should have its flag welcomed. As it took so long to build new vessels, these vessels would be a means of developing a Russian navy and training personnel and would facilitate showing the Russian flag on the ocean.

With respect to the German merchant fleet CHURCHILL said he felt that while the Japanese war continued, all captured ships should play their role to the full and contribute to the ending of that war. The limit of the conduct of the Japanese war was shipping. They had sufficient men, planes and naval ships but merchant ships were needed for the movement of men and materials. There was also the difficulty in feeding the British Isles and liberated Europe. Every ton was needed in this critical period. They had all placed all of their shipping in the shipping pool. He would be sorry if this German fleet was not used to conclude the war with Japan.

He pointed out that the Finns had had a merchant fleet of some 400 thousand tons which had passed into the hands of their Russian ally. Two Rumanian ships, from available troop ships, had also fallen into Russian hands. If the German fleet was to be divided by three, the Rumanian and Finnish fleet should also be divided.

STALIN interrupted to state that the Russians had not taken a single merchant ship from Finland and had taken only one ship from the Rumanians which was used for carrying wounded troops.

CHURCHILL replied that he was speaking of the basis of the question. He went on to say that there were others besides the three at this meeting. The Norwegians had suffered terrible losses. Their oil tanker fleet had been very valuable and it had been made use of freely. Other Powers not at the meeting had suffered heavy losses. Perhaps the German fleet should be divided into four and the fourth part might be used for the other Powers not represented at this meeting. He only threw out these suggestions which he thought should be considered.

THE PRESIDENT said he would be agreeable to a three-way division of the German merchant and naval fleets but he should like it to be done after the Japanese war. We needed these ships not only for the conduct of the war but also to haul food and supplies for rehabilitation of Europe, to our great ally, Russia, Greece, and others.

THE PRESIDENT said that we will need every bomb and every ton of food.

STALIN said what about the navy?

THE PRESIDENT said he was ready to dispose of them now. He added that when the Japanese war was over, the United States would have merchant and naval ships for sale but he did not want to upset our war against Japan now.

STALIN inquired, “Are not the Russians to wage war against Japan?”

THE PRESIDENT replied that when Russia was ready to fight Japan, she would be taken in the shipping pool the same as the others. He added that we wanted them in the pool.

STALIN said he was interested in the question of Principle.

CHURCHILL suggested that the vessels could be earmarked, if they had any ears when the Japanese war was over; if any were damaged they could be made good from our general resources. He said he must avow himself as a supporter of the request of Marshal Stalin that the Russians receive a share of these war and merchant vessels. The only alternative was the sinking of the naval vessels. This would be a harsh procedure, when one of our trusty allies has a desire for them.

THE PRESIDENT observed that they were not apart on this question.

STALIN inquired what sort of ships were meant. Was it merchant ships?

CHURCHILL replied that he referred to merchant ships.

STALIN said that of course it was not possible to depict the Russians as having the intention to interfere with the war against Japan and the matter could not be put in a way to imply that they were to receive a gift from the Allies. They were not after a gift.

CHURCHILL interrupted to state that he did not mention that.

THE PRESIDENT said that he had not either.

STALIN continued that he should like for the matter to be cleared up as to whether Russia was to have the right to claim one third of the German merchant and naval fleet and that what they would receive they would receive by their right; if his colleagues thought otherwise, they should say so.

THE PRESIDENT said he did not think otherwise.

STALIN said that if the principle were recognized, the Russians would be satisfied. With regard to the use to which the merchant fleet would be put, including the one third to be handed over to Russia, of course they would raise no obstacles to the use of their third in the war against Japan.

THE PRESIDENT said he had no objection to this proposal.

STALIN said then he agreed that this matter be settled at the end of the Conference as suggested by Mr. Churchill. There was one thing he should like to see accomplished, however. His people were not allowed to see the German fleet. The Russians had set up a Commission to deal with this question but they were not allowed to see the fleet nor were they even given a list of the vessels. Was it not possible to list them and to allow this Commission to inspect the ships and to find out what ones were there?

CHURCHILL replied that it was quite possible but the British would want reciprocal facilities to be given them to see German installations in the Baltic. He believed that the Russians had obtained 45 German U-Boats in Danzig. They could arrange an exchange.

STALIN observed that these submarines were out of use but said that they could agree to Mr. Churchill’s request that the exchange of facilities be mutual.

CHURCHILL said that all they were asking for was fair play and equality.

THE PRESIDENT said that so far as the United States zone was concerned, the Russians were at liberty to see anything they wanted, only we would expect that this would be reciprocal.

CHURCHILL said he had made a distinction between U-Boats and other ships. He knew that Marshal Stalin would appreciate the sensitiveness of an island power which grows only two-thirds or less of its own food. They had suffered much from the U-Boats and the submarine was not consequently a popular form of naval vessel in Great Britain. He strongly suggested that the bulk of them be sunk. Great Britain had very nearly perished from them twice. Those who live with a large population on a small island do not welcome any nations of the world extending their construction of submarines. His consent was conditioned on further discussion of how many are divided and how many are sunk, but he agreed that they be divided equally. In this war, German submarines had damaged them severely and had eaten up a large part of their war making capacity.

STALIN stated he was also in favor of sinking a large proportion of the U-Boats.

THE PRESIDENT then said he thought that was sufficient discussion on this subject.

The Spanish Question

MR. EDEN said that the next question on the agenda was that of Spain.

STALIN said the Soviet proposals had already been submitted and he had nothing to add.

CHURCHILL said that his Government had a strong distaste for General Franco and the government of his country. He had been misrepresented as having been friendly to this gentleman. All he had said was that there was more to Spanish policy than drawing rude cartoons of Franco. The taking out of jail prisoners who had been in jail for years and shooting them for what had happened long before indicated that Spain was not a democracy in accordance with British ideas on that subject. Therefore, when Franco had written him a letter proposing that he and Churchill organize the western states against that terrible country, Russia, he had, with the approval of the British Cabinet, sent him a chilly reply. Mr. Molotov would remember that he had sent him a copy of this reply and a reply [copy? ] had also been sent to the President. British feeling was against the Franco regime.

STALIN stated that they had received the copy of the British reply.

CHURCHILL said that he saw some difficulty in Stalin’s proposal, particularly in the first paragraph concerning the breaking off of all relations with Franco Spain. It seemed to him that taking such a step in regard to a nation having a character like that of Spain, which was proud and touchy, might rally around Franco those elements now deserting him and making his position more precarious. The breaking of relations was not a satisfactory process. It would be a pleasure to do so but after that they would have no contact. Ambassadors were needed most of all in times of difficulty. If they took such action as this it would be a shock.

The result might strengthen Franco’s position. He has an army although it was not very good. If this action resulted in strengthening him, it would be necessary to consider whether to take a rebuff or to intervene with force. He was against the use of force. He was against interfering with countries which had a different regime unless we are molested by them. In the countries which we control, we have, of course, set up democratic governments. Insofar as the liberated areas are concerned, we cannot allow a Fascist regime to be set up. With respect to the countries which have not taken part in this war, however, there should be no exchange of cannon fire. His Majesty’s Government would have to give prolonged consideration to Stalin’s proposals to break relations with Spain. He was prepared to take every measure by all proper diplomatic means to speed the departing guest.

The breaking of relations with a state because of its internal conduct of affairs was a dangerous principle. He added that he would greatly deplore anything which would lead Spain to civil war. Spain had suffered terribly from its civil war in which two million people had been killed. The British would be sorry to intervene as a government in an active manner in the Spanish affair at this juncture. Forces there were working for a change for the better.

He pointed out that the World Organization which had just been agreed upon at San Francisco had a provision against interference in domestic affairs. While they were preparing to ratify the charter drawn up at San Francisco, it would be inconsistent to resort to action which would be prohibited under it.

THE PRESIDENT said that he had no love for Franco. He had no desire to have any part in starting another civil war in Spain. There had been enough wars in Europe. He would be happy to recognize another government in Spain but he thought that Spain itself must settle that question.

STALIN observed that this meant that everything would be unchanged in Spain. In his opinion, the regime of Franco was gaining strength. It was feeding semi-fascist regimes in other countries. Reference had been made to internal affairs. This was not an internal affair. The Spanish regime had been imposed on the Spanish people by Hitler and Mussolini whose regimes they were in the process of destroying. He believed that his colleagues had no love for Franco but this should be proved in deeds. He was not proposing military intervention nor that civil war be let loose, but he wished the Spanish people to know that the three Governments had taken a stand on the side of the democratic forces among the Spanish people and that the Spanish people should have ground to believe that they were against Franco. There was a diplomatic means of showing that they were against Franco and that they were for the democratic Spanish people. He said that suppose they assumed that the means of breaking relations was too severe. Was there not a more flexible means of letting the Spanish people know that the three Governments are in sympathy with the Spanish people and not with Franco. It was dangerous to let the Spanish regime remain as it was now. Public opinion in Europe and in America was not in sympathy with Franco and if the three Governments were to pass by in silence this cancer in Europe, it might be considered that they sanctioned Franco. That would be a grave charge.

CHURCHILL observed that the Soviet Union had no relations with Spain now.

STALIN replied that he had the right to raise and settle this question. Why should they be silent. People presumed that the Big Three could settle such a question and he was one of them just as Mr. Churchill was. Must they keep silent about what was going on in Spain, as well as to refrain from action against Spain which was giving shelter to Fascists? They could not shut their eyes to the grave danger of Franco Spain.

CHURCHILL said that individuals were not enjoined by governments from expressing opinions. Also the press, to which Marshal Stalin had referred, spoke very freely on this matter in the Soviet Union as did the British and sometimes the American press. His Majesty’s Government had spoken very frequently to Franco and to his Ambassador. They did not like, however, to break relations.

CHURCHILL referred also to the valuable trade relations which Britain maintained with Spain. Spain sent them many useful products and received British manufactured goods in return. This was an old and well-established trade. Unless he were convinced that it would bring about the desired result, he did not want this trade stopped. He fully understood the feeling of Marshal Stalin. Franco had had the audacity to send a Spanish Blue Division to Russia. Russia was in a different position, having been molested. Insofar as the British were concerned in this war, they had refrained from taking action against the British at a time when such intervention could have been disastrous.

CHURCHILL continued that during the Torch operation merely opening fire on the ships and Air Corps concentrated in the area of Gibraltar would have done them great harm.

STALIN interrupted to say that the Spaniards were afraid. They would have been doomed if they had dared to take such action.

CHURCHILL continued that they had not been specifically injured by the Spaniards. No one doubted that Marshal Stalin had no love for the Franco regime and he had no doubt that the majority of the English people shared this view. Churchill said he only intended to emphasize that the Russians had been injured in a way in which others had not.

STALIN said he thought that Great Britain had also suffered from Spain, which had provided bases on its shores for German submarines. He considered that all Allied Powers had suffered in this way. He did not wish, however, to look at the question from this point of view. What was important was the danger to Europe. This should be remembered. Some steps should be taken even if the breaking of diplomatic relations was too severe. They should say that they thought that the aspirations of the Spanish people were just. They had only to say this and nothing would be left of Franco. He considered that the Foreign Ministers should consider whether a milder statement could not be agreed upon.

THE PRESIDENT stated that he agreed.

CHURCHILL said he was opposed. The matter must be settled at the meeting of the Heads of Government.

STALIN pointed out that it would be settled by them. The Foreign Ministers would only give it preliminary study.

CHURCHILL said he did not think this was advisable. It was a question of principle. To interfere in the domestic affairs of other countries was very dangerous. He might not like some things in the United States, but he did not consider it wise to attempt to intervene.

STALIN said that this was not a question of a domestic affair. The regime of Franco was of external origin.

CHURCHILL rejoined to state that anyone could say this about any country.

STALIN replied that no other country in Europe had such a regime.

CHURCHILL observed that Portugal might be accused of being under a dictatorship.

STALIN replied that it was not the dictatorship that mattered. The regime in Portugal resulted from internal developments, whereas the regime of Franco resulted from intervention by Hitler and Mussolini. Franco’s behavior was provocative. He gave shelter to Nazis.

CHURCHILL said he was not prepared that any government in which he participated should interfere in the internal affairs of other states. This has always been their policy. Moreover, to push things might make matters worse. He would be very glad, although he knew this idea would not be received with enthusiasm, if the regime were overthrown and replaced by a constitutional monarchy with free democratic principles, elections, etc. If, however, he or any British Government pushed this proposal, all would turn against it in Spain. No country likes to be told how it is to be run. There was intervention on both sides in the Spanish civil war. The Soviet Union intervened on one side and then Hitler and Mussolini came in on the other. But that was already long ago. Action taken at this meeting was more likely to rivet Franco in his place. The British Government did not give the slightest support to Franco Spain other than trade, which they have always carried on.

THE PRESIDENT stated that he would be happy to have the matter sent to the Foreign Ministers to see if agreement could not be reached.

STALIN said he also fully appreciated the British difficulties, but felt that this matter could be facilitated by action here. He proposed that they prepare an appraisal of the regime of Franco, including observations made by Mr. Churchill on the trend of developments in Spain. This would be one of the items in the declaration to be made on Europe. He assumed that they would have some sort of declaration on the results of their work. This statement on Spain should be included in them. It would not be binding on the British Government. It would be a short statement on the situation in Spain which would make clear to public opinion that their sympathies were with the Spanish people. This was a most mild form – milder than the Yalta Declaration on Yugoslavia and Greece. He suggested that they let the Foreign Ministers consider what form this declaration could take.

CHURCHILL replied that he had not agreed to any declaration on Spain and he gathered that the President had also not agreed.

STALIN said it was not a question of a declaration on Spain alone, but on all countries.

CHURCHILL said that the line he had taken was that in all countries involved in this war that they should not interfere in their domestic affairs. This was a question of principle. There were many things in regard to Yugoslavia and Rumania which he did not like. They were involved in the war which gave us greater freedom there. He repeated that there was great danger in the intervention in the domestic affairs of other countries. If there were to be a declaration of the principles on which democratic governments were founded – he personally had always liked the statement in the American Constitution – and a statement on what governments had not fulfilled these principles, he could consider it, but he pointed out that many governments in Europe now do not fulfill these principles. He did not know what the Spanish people thought. There were many shades of opinion in Spain. Most of them would doubtless like to get rid of Franco without interference from outsiders.

THE PRESIDENT said there appeared to be no chance for agreement at the moment. He suggested that they pass on to something else upon which they could reach a decision and that they come back to the Spanish question at a later session.

STALIN suggested that it be referred to the Foreign Ministers to consider.

CHURCHILL said that this was the point on which they were not in agreement. He did not suggest an adverse decision but merely that they leave it for the moment.

THE PRESIDENT said that they could return to it at any time.

STALIN said that he agreed.

Declaration on Liberated Europe

THE PRESIDENT said that the document on this matter had been submitted at the first session.

STALIN suggested that discussion of this question be put off as the Soviet Delegation had another document on this question which they wished to submit.

This was agreed to.