Potsdam Conference (TERMINAL)

180

Youngstown Vindicator (July 19, 1945)

End of war? Late in 1946

…

181

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

740.00119 Control (Italy)/7-1745: Telegram

The Acting Secretary of State to the Ambassador in Italy

Washington, July 19, 1945 — 4 p.m.
Secret
1205

Dept has not yet received British concurrence (urtel 2010, July 17) in appointment of Douglas as Chief Commissioner of AC.

GREW
S[AMUEL] R[EBER]

182 
740.00119 PW/7-1945 Telegram

The Acting Secretary of State to the Secretary of State

[Washington,] July 19, 1945
Top secret
69

Rumors are increasingly current in the press and on the air that we propose to issue a statement elucidating unconditional surrender for Japan. Most prevalent rumor is that formulation of our position was taken by President to Berlin for discussion with Stalin and Churchill and that statement will issue as result of meeting. Another rumor has it that our “terms” to Japan will include agreement not to invade. Question submitted to the Department today by the Associated Press and the International News Services reads as follows: “Is it true that plans for the handling of Japan’s unconditional surrender have been fully formulated and that President Truman has taken them to the Potsdam Conference?” A second question asks whether the United States has “any unilateral definition of unconditional surrender for Japan.”

Seems to us desirable, for reasons affecting domestic situation as well as situation in Japan, to quiet these rumors insofar as possible. Would you approve a reply to the questions in following terms:

The policy of this Government on unconditional surrender by Japan has been repeatedly stated. Elucidations of this policy were issued by the President on May 8 and on June 1. Papers on this subject as well as on a number of other matters of present importance have been supplied to the President, but no plan altering the policy already announced has been formulated by this Government. The implementation of the announced policy will depend, of course, on the situation as it develops. The treatment to be accorded the Japanese under the unconditional surrender terms as defined by the President will depend upon the circumstances under which the surrender occurs. If the Japanese surrender now, before we invade their main islands on our inevitable march to Tokyo, it is logical that the situation thus created should call for treatment which would be different in character and degree from the treatment that would be required if the Japanese delay surrender or if they fail to surrender. The longer the period of the fighting, and the greater the loss of American lives and of the lives of the fighting men of other United Nations, the more severe must be the treatment accorded the Japanese under the announced terms. The reason for this is clear: the longer Japan resists the more certainly shall we know that the military war lords are still in firm control and the more drastic will be the measures required to rout them out and to insure their complete permanent downfall and elimination. We have declared our firm purpose to eliminate the forces in Japan which have made it a threat to the peace of the world, and that purpose we mean to carry out. In order to carry it out, we shall unquestionably be obliged to occupy Japan and to occupy it by an effective, not by mere token force. In the light of the sacrifices already made by the United Nations, it is unthinkable that we should pause or be deflected from the full attainment of our objectives.

In reply to the second question whether the United States has any unilateral definitions of unconditional surrender for Japan, I would say this.

The United States has never considered the possibility of unilateral action against Japan in fighting the war. Neither has it considered, nor will it consider, unilateral action in deciding upon the future of Japan following the war. It will continue in the future, as in the past, to act jointly with other nations concerned.

It will be necessary to reply in the near future to these questions posed by the Associated Press and the International News Services. Failing satisfactory answers I fear that the steadily mounting public clamor for a statement of our proposed terms for Japan will be harmful to the Administration and will create in Japan the impression that we are weakening in our determination to see the war through to unconditional surrender and final victory. This can only retard any movement in Japan to force the leaders to accept unconditional surrender before our invasion. Hope for your instructions as soon as possible.

[GREW]

183

Log of the President’s Trip to the Berlin Conference

Thursday, July 19:

1000: [Assistant] Secretary McCloy and Lieutenant General Lucius D. Clay (Staff of General Eisenhower) called at the Little White House and conferred with the President.

1300: Lunch at the Little White House. First Lieutenant James M. Vardaman, AUS (Captain Vardaman’s nephew), Colonel Howard A. Rusk, Medical Corps, AUS, and Sergeant Truman were guests.

The President and party left the Little White House at 1545 for Cecilienhof. The third session of the conference was called to order by the President at 1605. The meeting adjourned at 1655 when the President and party left for the Little White House. Mr. Stalin invited the President to stay for a buffet lunch, but the President declined. We reached the Little White House at 1710.

At 2030 the President entertained at a State Dinner at the Little White House in honor of Generalissimo Stalin and Mr. Churchill. Present were: The President, Prime Minister Churchill, Generalissimo Stalin, Mr. Byrnes, Mr. Attlee, Mr. Molotov, Admiral Leahy, Mr. Vyshinski, Sir Alexander Cadogan, Mr. Harriman, Mr. Gromyko, Lord Cherwell, Mr. Pauley, Mr. Davies, Mr. Sobolev, Mr. Bohlen, Mr. Pavlov, and Major Birse.

184

Mosely-Vyshinsky conversation

Present
United States Soviet Union
Mr. Mosely Mr. Vyshinsky 
740.00119 Control (Germany)/7-2045: Telegram

The Political Adviser to the Representative on the European Advisory Commission to the Ambassador in the United Kingdom

Babelsberg, July 20, 1945
[Extract]
Secret

Victory 115

From Mosely at Babelsberg to London for Winant and State Department at Washington for Grew.

Vyshinsky informed Mosely today Soviet Government has approved agreement on additional requirements except new title and new first paragraph; he expects latter will be cleared shortly.

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

185

The Syonan Shimbun (July 20, 1945)

Potsdam talks enter second phase

LISBON (Domei, July 19) – American President Harry Truman, British Prime Minister Winston Churchill and Soviet Premier Josef Stalin have now entered the second phase of their momentous talks at Potsdam, Denis Martin, Reuters correspondent, reported in a dispatch today from Potsdam.

He said it appears now that important preliminary objectives of the “three power” conference have been achieved.

The correspondent reported that main attention in Berlin is still focused on German problems, which cannot be lightly shelved as they affected Europe as a whole.

186

Salzburger Nachrichten (July 20, 1945)

Japans Flotte aufgestöbert

Japanische Presse diskutiert Potsdamer Konferenz

WASHINGTON, 19. Juli (OWI) – Trägerflugzeuge des britisch-amerikanischen Pazifikgeschwaders haben größere Teile der japanischen Flotte, die sich in der Bucht von Tokio versteckt hielt, erkundet und angegriffen. Es ist dies die erste Begegnung der beiden Flotten seit der Niederlage Japans in der Seeschlacht bei den Philippinen im Oktober 1944. Am fünften Tag richteten sich die amerikanischen Großangriffe der Flotten- und Luftstreitkräfte gegen Industrieziele südlich von Tokio. An diesen Angriffen nahmen zum ersten Male aus Europa nach Ostasien verlegte Bomberstaffeln teil.

Bei den zurzeit in den burmesischen Dschungeln tobenden Kämpfen haben die sogenannten patriotischen Streitkräfte Burmas einen bedeutenden Anteil an den Erfolgen errungen. Diese Guerillakrieger sind ursprünglich aus einer antifaschistischen Organisation, die sich während der japanischen Besetzung illegal gebildet hatte, hervorgegangen. Erfahrene britische Offiziere hatten sie unterstützt und ihnen Anweisungen gegeben. Die eingeschlossenen japanischen Einheiten in Burma wehren sich verzweifelt und wüten in den von ihnen noch besetzten Dörfern. Es wurden Fälle von Massen-Exekutionen bekannt. Auf Borneo ließ die Kampftätigkeit nach. Die siebente australische Division konnte trotz heftigsten feindlichen Widerstandes auf der Hauptstraße nach Samarinda vorstoßen.

Auf Neu-Guinea kämpften sich die australischen Truppen über die Hänge des Prinz-Alexander-Gebirges abwärts und nähern sich den äußeren Verteidigungslinien der japanischen Hauptbefestigungen. Hunderte von Granaten wurden auf die japanischen Stellungen im Südteil der Insel Bougainville abgefeuert. Heftige Regengüsse erschweren hier die Operationen.

Nicht zuletzt wird die Stimmung im japanischen Mutter1and durch die Potsdamer Konferenz bestimmt, die japanischen Zeitungsmeldungen zufolge auf die Ereignisse um Japan eine stärkere Wirkung als je zuvor haben Wird. Man erwartet nach Abschluss der Konferenz ein gemeinsames Kommuniqué zum Problem des Japankrieges und nimmt an, dass die, Vereinigten Staaten alle außenpolitischen Instrumente zur Vorbereitung einer Invasion der Mutterinseln spielen lassen werden. Die japanische Presse diskutiert auch lebhaft die im Zusammenhang mit dem Besuch des chinesischen Ministerpräsidenten bei Stalin eingetretene Lage. Da Stalin ein sehr realistischer Staatsmann ist, erhebt sich selbstverständlich die Frage, welche Konzessionen Tschungking in Erwiderung einer Verständigung mit Moskau eingegangen ist.

187

Potsdamer Konferenz tagt

BERLIN, 19. Juli (MCC) – Unter Vorsitz von Präsident Truman fand am Mittwochnachmittag die zweite Sitzung der Potsdamer, Dreimächte-Konferenz statt. Alliierte Korrespondenten melden in ihren Berichten, dass die Ergebnisse der Besprechungen bis zum Schlusskommuniqué der Konferenz Wahrscheinlich geheim gehalten werden. Wichtige politische Entscheidungen werden von den führenden Staatsmännern persönlich getroffen. Die Ausarbeitung der Einzelheiten wird den alliierten Fachausschüssen überlassen.

Offiziell wird heute bekanntgegeben, dass sich die „großen Drei“ regelmäßig treffen. Auch die drei Außenminister – Byrnes, Eden, und Molotow – halten regelmäßige Zusammenkünfte ab und arbeiten nun Tagesordnungen für neue Besprechungen aus.

Präsident Truman gibt heute Abend im „Weißen Haus“ ein offizielles Festessen für Stalin und Churchill. Die einzelnen Regierungen werden von je fünf Personen vertreten sein.

Präsident Truman hat General Omar Bradley nach Potsdam berufen, um dessen Ernennung zum Chef der Verwaltung für Veteranenangelegenheiten zu besprechen.

Die Alliierte Kommandantur in Berlin hielt heute erneut eine Sitzung ab. Der russische Vertreter führte den Vorsitz. Zur Beratung dürfte die endgültige Ausarbeitung von Plänen über die ersten interalliierten Treibstoff- und Lebensmittellieferungen nach Berlin gestanden haben Gegenstand der Beratungen war vermutlich auch die Einsetzung von Unterausschüssen zur Behandlung weiterer Verwaltungsfragen.

188

L’Aube (July 20, 1945)

Élaborées à Potsdam et transmises par l’URSS –
Des conditions de paix seraient fixées au Japon

…

189

La nuit de Potsdam

par Maurice Schumann

…

190

U.S. State Department (July 20, 1945)

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

JCS 199th Meeting

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

JCS Minutes

Potsdam, July 20, 1945, 10 a.m.
[Extracts]
Top secret

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

Basic Objectives, Strategy and Policies

GENERAL MARSHALL presented to the Joint Chiefs of Staff certain proposals by Lord Leathers for amending CCS 877, the United States Chiefs of Staff paper on this subject.

ADMIRAL LEAHY read out the proposed changes and these were compared with CCS 877.

ADMIRAL LEAHY read a paragraph in regard to shipping which General Somervell proposed for inclusion in CCS 877.

GENERAL MARSHALL said that Lord Leathers would probably accept as a part of the basic objectives the proposal made by General Somervell but he thought that it might better appear as a commentary on the basic objectives rather than as an integral part thereof.

ADMIRAL KING pointed out that Lord Leathers’ paper in fact involved a change in national policy, and therefore, in his opinion the Joint Chiefs of Staff could not consider it.

GENERAL SOMERVELL asked if his paragraph would be accepted by the Joint Chiefs of Staff in the final report by the Combined Chiefs of Staff to the President and Prime Minister.

ADMIRAL LEAHY said that the Joint Chiefs of Staff could not approve the paragraph outright at the present time but he was sure they viewed it in a favorable light. The other Chiefs of Staff concurred.

The Joint Chiefs of Staff:
a. Authorized General Somervell to inform the British Minister of War Transport that the proposed amendments to the basic objectives were not acceptable to the United States Chiefs of Staff.

b. Informed General Somervell that they viewed in a favorable light his memorandum of comment on the basic objectives.

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

Air Transport Route Between the United States and Moscow

GENERAL ARNOLD recalled that it had taken one year to get air transport operations established with Russia via Teheran. Attempts had been made to shorten the route via Turkey, and although Turkish acquiescence had been obtained, the Russians had not agreed to the adoption of this shorter route to Moscow.

Mr. Harriman had informed General Arnold that since the capture of Berlin he had endeavored to arrange with Mr. Molotov for an air route to Moscow through Berlin but he had found it impossible to complete such arrangements. Mr. Harriman had asked General Arnold to submit two memoranda for consideration by the Joint Chiefs of Staff in this connection.

The Joint Chiefs of Staff: Approved the memorandum to the President enclosing the message to Generalissimo Stalin as presented by General Arnold.

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

191

The Commanding General, Army Service Forces to the British Minister of War Transport

Potsdam, 20 July 1945
Secret

Dear Fred: In accord with your request, the U.S. Chiefs were shown a copy of the amendments to basic undertakings informally submitted by you and the substitute dictated during our conversation.

They state they cannot accept your proposal. Though also unwilling to accept the substitute as a part of basic undertakings, their reaction now is to view in a favorable light, its inclusion in the final report of the Combined Chiefs of Staff to the President and Prime Minister with the words “Isles” for “Commonwealth of Nations,” and “civil requirements” in lieu of British “rehabilitation and reconstruction plans.”

Cordially,
BREHON SOMERVELL

192

Memorandum by the British Chiefs of Staff

[Babelsberg,] 20 July 1945
Top secret
CCS 877/4

Basic Objectives, Strategy, and Policies

  1. We have considered the latest proposals of the United States Chiefs of Staff in CCS 877/2. In the attached schedule we have set out in one column the document as proposed by the United States Chiefs of Staff, together with the amendments which we should like to see introduced. In the right-hand column we set out our comments.

  2. The document, as far as paragraph 6, covers presently known military requirements. Against the possibility that additional military requirements may emerge which might conflict with presently accepted civil shipping programmes, it is considered desirable to add a further paragraph in the terms set out in paragraph 7.

  3. We recommend that the Combined Chiefs of Staff adopt the basic objectives, strategy, and policies as amended in the attached, and incorporate them in the final report of the TERMINAL Conference.

[Enclosure]

Top secret
Memorandum by U.S. Chiefs of Staff with Proposed Amendments by British Chiefs of Staff Comments by British Chiefs of Staff
I. Over-all objective
1. In conjunction with other Allies to bring about at the earliest possible date the unconditional surrender of Japan.
II. Over-all strategic concept for the prosecution of the war
2. In cooperation with other Allies to establish and maintain, as necessary, military control of Germany and Austria. We fully agree that the first priority should be given to the main operations against the Japanese Islands. We trust, however, that other operations in the Outer Zone, which will achieve the secondary object of evicting the Japanese from all occupied territories, will receive the fullest possible consideration.
3. In cooperation with other Allies to bring about at the earliest possible date the defeat of Japan by: lowering Japanese ability and will to resist by establishing sea and air blockades, conducting intensive air bombardment, and destroying Japanese air and naval strength; invading and seizing objectives in the Japanese home islands as the main effort; conducting such operations against objectives in other than the Japanese home islands as will contribute to the main effort; establishing absolute military control of Japan; and liberating Japanese occupied territory if required.
III. Basic undertakings and policies for the prosecution of the war
4. The following basic undertakings are considered fundamental to the prosecution of the war: The wording of paragraph 4b. as proposed by the United States Chiefs of Staff does not allow for the maintenance of the war-making capacity of such countries as Canada, India or Australia, all of which are making an important contribution towards the prosecution of the war. War-making capacity cannot be confined solely to that required for the defeat of Japan since it is also necessary to meet the requirements for military control of Germany and Austria as stated in the overall strategic concept for the prosecution of the war. If first priority is given only to the support of the war-making capacity of forces in the combat areas, this might lead to the withholding of priority from the forces destined to relieve or support them. For example, the forces in India are required for maintaining the forces in active operations and providing reinforcements. As is known many installations supporting the operations in Southeast Asia Command are outside those areas which can strictly be termed combat areas. Unless these requirements are recognized, the war-making capacity of forces in combat areas will be jeopardised.
a. Maintain the security of the Western Hemisphere and the British Commonwealth.
b. Maintain the war-making capacity of the United States and the British Isles insofar as it is connected with the prosecution of this war. The present wording would appear to limit this assistance strictly to those forces which can take part in the war against Japan. We feel, however, that the necessity for the maintenance of world order, particularly in Europe, must be recognised. Having brought about the liberation of Europe, it would be illogical to allow unrest to occur owing to lack of forces in the liberated areas to keep order. The last sentence of paragraph 6c. is unnecessary as it is now dealt with in paragraph 7 below.
a. Maintain the security and war-making capacity of the Western Hemisphere and the British Commonwealth as necessary for the fulfillment of the strategic concept.
b. c. Support the war-making capacity of our forces, in all areas, with first priority given to those forces in or destined for combat areas.
c. d. Maintain vital overseas lines of communication.
5. In order to attain the overall objective, first priority in the provision of forces and resources of the United States and Great Britain, including reorientation from the European Theater to the Pacific and Far East, will be given to meeting requirements of tasks necessary to the execution of the over-all strategic concept and to the basic undertakings fundamental to the prosecution of the war.
The invasion of Japan and operations directly connected therewith are the supreme operations in the war against Japan; forces and resources will be allocated on the required scale to assure that invasion can be accomplished at the earliest practicable date. No other operations will be undertaken which hazard the success of, or delay, these main operations.
6. The following additional tasks will be undertaken in order to assist in the execution of the over-all strategic concept:
a. Encourage Russian entry into the war against Japan. Provide such aid to her war-making capacity as may be necessary and practicable in connection therewith.
b. Undertake such measures as may be necessary and practicable in order to aid the war effort of China as an effective ally against Japan.
c. Provide assistance to such of the forces of liberated areas as can fulfill an active and effective role in the present war. or are required to maintain world order in the interests of the war effort. Within the limits of our available resources assist co-belligerents to the extent they are able to employ this assistance in the present war. Having regard to the successful accomplishment of basic undertakings, to provide such supplies to the liberated areas as will effectively contribute to the capacity of the United Nations to prosecute the present war.
d. In cooperation with other Allies conduct operations, if required, to liberate enemy-occupied areas.
7. Cargo Shipping
Present estimates of the requirements for cargo shipping indicate the position to be sufficiently manageable to provide for the maximum effort in the prosecution of the war against Japan, for the maintenance of the war-making capacity of the British Commonwealth of Nations and the Western Hemisphere, for an additional amount for the reconstruction and rehabilitation of the United Kingdom, and for supplies to liberated areas. Should further military demands arise for maintaining the maximum war effort which would bring about a substantial conflict with British rehabilitation and reconstruction plans, and supplies to liberated areas, the shipping situation will be examined by the two Governments at time in the light of changed conditions.
193

The Joint Chiefs of Staff to the President

Washington [Babelsberg], 20 July 1945
Top secret

Memorandum for the President

In the past we have experienced considerable delay in travel of individuals and important official mail between the United States and Moscow. This situation is now susceptible to considerable improvement if the air connection point were shifted from Tehran to Berlin.

Experience has shown that the Russians are extremely hesitant in coming to any agreements with foreign countries regarding air travel for fear of establishing precEdents that might carry over into the postwar period. Efforts to obtain Soviet agreement to a Berlin connecting point have been made without success by both our military and diplomatic representatives.

There is a good likelihood that Marshal Stalin would accede to a personal request made by you, and it is recommended that you either send the attached letter to Mr. Stalin or discuss the matter with him along the lines indicated.

For the Joint Chiefs of Staff:
WILLIAM D LEAHY
Fleet Admiral, U.S. Navy, Chief of Staff to the Commander in Chief of the Army and Navy

President Truman to Generalissimo Stalin

[Babelsberg,] 20 July 1945
Top secret

My Dear Generalissimo: At the present time American air traffic between the U.S. and the USSR is accomplished via Teheran. From the United States point of view this is an extremely wasteful use of critically needed air transport, in addition to the time lost in travel.

The U.S. has now established a military transport service into Berlin for handling official U.S. traffic which could be made available for official Soviet traffic as well. I therefore seek your approval to diverting American and Soviet traffic now carried through Teheran to a route through Berlin.

HARRY S. TRUMAN

194

Meeting of the Economic Subcommittee, 10:30 a.m.

Present
United States United Kingdom Soviet Union
Mr. Clayton Sir Walter Monckton Mr. Maisky
Mr. Pauley Sir David Waley Mr. Sobolev
Mr. Murphy
195

Memorandum by the Political Adviser in Germany

[Babelsberg,] July 20, 1945

The following is an exposition of ideas submitted by Messrs. Maisky and Sobelev:

  1. The main task of the Control Council is the elimination of the German war potential.

  2. For purpose of [blank] war potential in the future, the general policy which will be carried out uniformly in all zones of occupation will be in preventing recovery of those parts of the economy which are the basis of the heavy industry and at the same time giving Germany a free hand in agriculture and in light industry.

  3. Guiding ideas for the Control Council and for the German administration: (1) Reparation obligation according to plan which will be established, and (2) Meeting needs of occupying armies. (Russians try to establish that “first” general principle governing the Control Council will be reparations).

(MAISKY) It would be undesirable politically to say that imports have priority over reparations. Everybody would say that reparations come first and imports after because we have suffered so much – capitalists want to have profits from foreign trade and don’t care about reparations for those who suffered. Also when Germans know about it they will try to prove that without very considerable imports they can’t live and can’t export. Same as after last war and there is no reason to believe they won’t repeat same joke again as after last war.

German economy after this war will be a very strictly regulated economy, otherwise she couldn’t pay reparations etc. This regulated economy should provide the necessary means. It should be quite feasible to guarantee reparations and necessary imports. On (?) of principle we have a conviction that if there is a conflict between reparations and imports, then imports must give way. Political repercussions.

MONCKTON says political objectives are met by

  1. Imports approved by Government’s consent[.]

  2. Pauley said we are not going to consider that this will be a charge against once for all deliveries (capital assets, etc.).

CLAYTON – American people will not again, as they did after last war, finance Germany. That was President Roosevelt’s position. Germany has very little in way of natural resources except coal, potash, and some poor quality iron ore.

MAISKY suggests also that question of economic regime in Germany and machinery which will regulate this economy – proposes that in postwar period economic life of Germany should be regulated by comprehensive program on annual basis by Control Council and reparations authorities which we should have soon --(?) by Control Council and German authorities. Naturally supervisory power lies – with Control Council to approve and German authorities to execute.

This program should include (1) production, (2) distribution of goods, including unified system of rationing taking into account local conditions, and (3) program of exports and imports, (4) currency, (5) railroad communications and water transport. These are main items.

MAISKY also pointed out that pre-war Germany lived on a very high scale as compared with other European countries. Now he said we must visualize quite another Germany whose level will be that of “Middle” Europe which is very much lower. Therefore imports will be much lower and we will be able to use German iron ore and not Swedish.

CLAYTON said he was thinking of principle of minimum standards of living only and Reparations. Bankers will not finance.

MAISKY said question is theoretical.

WALEY – This is not a school debating society. This is practical.

CLAYTON suggests that we report this as one principle on which we cannot agree.

No – Approval of new paragraph 12.

No – Approval of new paragraph 13.

196

U.S. Delegation Working Paper

[Babelsberg,] July 20, 1945

Proposed Text

  1. A primary purpose of occupation is to obtain reparation for the damage and injury caused Allied countries by German aggression. To accomplish this purpose some importation of raw materials and other items will be necessary. The Control Council shall formulate as soon as possible a program of minimum required imports for Germany as a whole. Such a program shall include provision for equitable inter-zonal distribution of supplies available within Germany, so as to minimize the net deficit for, and imports into, Germany as a whole. With full recognition of the principle that the cost of imports must be met from the proceeds of exports from current production or stocks responsibility for the procurement and financing of approved imports for Germany as a whole shall be shared on a basis to be negotiated in the Control Council. Reimbursement for any initial net outlays made in connection with the provision of supplies for Germany shall be a first charge against the German economy.

U.S. Delegation Working Paper

[Babelsberg,] July 20, 1945

Proposed Text

  1. One of the primary purposes of occupation is to obtain reparation for the damage and injury caused Allied countries by German aggression. To accomplish this purpose some importation of raw materials and other items will be necessary. The Control Council shall formulate as soon as possible a program of minimum required imports for Germany as a whole. Such a program shall include provision for equitable inter-zonal distribution of supplies available within Germany, so as to minimize the net deficit for, and imports into, Germany as a whole. Responsibility for the procurement and financing of approved imports for Germany as a whole shall be shared on a basis to be negotiated in the Control Council. Reimbursement for all net advances made for approved imports into Germany shall be a first charge against the proceeds of any exports from Germany of current production and stocks of goods.

U.S. Delegation Working Paper

[Undated]

Memorandum

With reference to the “Proposed Agreement on the Political and Economic Principles To Govern the Treatment of Germany in the Initial Control Period, Text as Submitted to the Foreign Secretaries by Economic Sub-Committee,” the following recommendations are made:

Economic Principles
Paragraph 13: Proposed alternative substitute for first sentence:

During the period of occupation, Germany shall be treated as a single economic unit and the Allied Control Council shall have authority to issue directives to insure the consistent application of this principle in all zones of occupation.

During the period of occupation, Germany shall be treated as a single economic unit except in those instances as the Allied Control Council shall otherwise determine.

Paragraph 13: There shall be added a further sub-section upon which common policies shall be established in Germany during the period of occupation, as follows:
(g) finance, transportation, and communications.

Paragraph 14(d) on page 3, should either be stricken or amended to read as follows:

Except with the approval of the Control Council or except where determined by the Government concerned to be required for the payments of necessary imports, no grant or credit to Germany or Germans by any foreign persons or Governments shall be permitted.

197 
740.00119 (Potsdam)/7-3145

Report of the Economic Sub-Committee to the Foreign Secretaries

[Babelsberg, July 20, 1945]
Top secret

We have considered the proposals in a memorandum by the United States Delegation on the Economic Principles to govern the treatment of Germany in the initial control period, together with the Annex dealing with reparations.

We have unanimously agreed to recommend the adoption of the Economic Principles set out in the attached clauses for incorporation in the proposed Agreement.

On one matter, which relates both to the Economic Principles and to Reparations, we have to report that agreement has not been reached.

The U.K. and U.S. representatives consider that it is essential that such necessary imports into Germany as are approved by the Governments controlling Germany shall constitute a first charge against exports from Germany whether of capital equipment or current production and stocks of goods. They therefore recommend the adoption of the text attached hereto as Annex II for incorporation in the Agreement on Economic Principles. The Soviet Representatives do not accept this principle and express the view that reparation deliveries should have priority and that imports into Germany, should, if necessary, be confined to the amount that can be paid for by exports from Germany after reparation schedules have been met.

The U.K. and U.S. representatives point out that the provisions of paragraph 18 (to the effect that it shall be the general principle, that in the absence of special reasons to the contrary, each of the zones of occupation, including the Greater Berlin area, will draw its supplies, so far as practicable, from the areas in Germany on which it had drawn before the war) apply to the territory of Germany as it existed on December 31, 1937 whether or not any part of such territory is administered by or ceded to another State.

The Soviet representatives think that any decision on this point at the present time is premature, pending a decision by the Conference on the future boundaries of Germany.

The U.K. and U.S. representatives point out that there are two matters in addition to those mentioned in paragraph 13 on which a common policy is essential in the treatment of Germany as a single economic unit:

  1. Uniform method of treatment of the German civilian population;

  2. Subject to normal regulations, free circulation of nationals of U.K., U.S., USSR and France in all zones by land and air.

The Soviet representatives take the position that these two points, while having economic significance, have a wider political application, and that they should therefore not be considered by the Economic Sub-Committee.

The Allied Commission on Reparations has agreed on seven basic principles. The Sub-Committee recommend that these principles (Annex 1) should be accepted.

The Allied Commission on Reparations failed to reach agreement on the underscored last clause of an eighth principle:

After payment of reparations, enough resources must be left to enable the German people to subsist without external assistance. In working out the economic balance of Germany, the necessary means must be provided for payment of imports approved by the Governments concerned before reparation deliveries are made.

As stated above, the Sub-Committee have been unable to reach agreement on this point.

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

[Attachment]

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

Text as Submitted to the Foreign Secretaries by Economic Subcommittee

Economic Principles

  1. In order to eliminate Germany’s war potential, the production of arms, ammunition and implements of war as well as all types of aircraft and sea-going ships shall be prohibited and prevented. Production of metals, chemicals, machinery and other items that are directly necessary to a war economy shall be rigidly controlled and restricted to Germany’s approved post-war peacetime needs to meet the objectives stated in Paragraph 14. Productive capacity not needed for permitted production shall be destroyed, or shall be removed in accordance with the reparations plan recommended by the Allied Commission on Reparations and approved by the Governments concerned.

  2. At the earliest practicable date, the German economy shall be decentralized for the purpose of eliminating the present excessive concentration of economic power as exemplified in particular by cartels, syndicates, trusts and other monopolistic arrangements. Notwithstanding this, however, and for the purpose of achieving the objectives set forth herein, certain forms of central administrative machinery, particularly in the fields of Finance, Transportation and Communications, shall be maintained or restored.

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

  4. During the period of occupation Germany shall be treated as a single economic unit. To this end common policies shall be established in regard to:
    (a) mining and industrial production and allocation;
    (b) agriculture, forestry and fishing;
    (c) wages, prices and rationing;
    (d) import and export programs for Germany as a whole;
    (e) currency, central taxation and customs;
    (f) reparation and removal of industrial war potential.
    In applying these policies account shall be taken, where appropriate, of varying local conditions.

  5. Allied controls shall be imposed upon the German economy but only to the extent necessary:
    (a) to carry out programs of industrial disarmament and demilitarization, of reparations, and of approved exports and imports.

    (b) to assure the production and maintenance of goods and services required to meet the needs of the occupying forces and displaced persons in Germany and essential to maintain in Germany average living standards not exceeding the average of the standards of living of European countries. (European countries means all European countries excluding U.K. and USSR).

    (c) to ensure in the manner determined by the Control Council the equitable distribution of essential commodities between the several zones so as to produce a balanced economy throughout Germany and reduce the need for imports.

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

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

  6. In the imposition and maintenance of economic controls established by the Control Council, German administrative machinery shall be created and the German authorities shall be required to the fullest extent practicable to proclaim and assume administration of such controls. Thus it should be brought home to the German people that the responsibility for the administration of such controls and any breakdown in these controls will rest with themselves. Any German controls which may run counter to the objectives of occupation will be prohibited.

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

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

  9. In securing the objective mentioned in paragraph 14(c) it shall be the general principle that, in the absence of special reasons to the contrary, each of the zones of occupation, including the Greater Berlin Area, will draw its supplies so far as practicable from the areas in Germany on which it had drawn before the war.

[Annex I]

Agreed Principles of Reparations

I. Removals of property for reparations shall be primarily such as to assist in bringing to an end the war-making power of Germany by eliminating that part of Germany’s industrial capacity which constitutes war potential.

II. Reparations shall be such as will speed recovery and reconstruction in countries devastated at German hands.

III. For the purposes of making a reparations plan, Germany will be treated as a single economic unit.

IV. Any plan of reparations shall be avoided which necessitates external financial assistance either to enable reparations deliveries to be made or to facilitate economic reconstruction required for reparation purposes, or which might, in the opinion of the Governments concerned, prejudice the successful execution of the task entrusted to the Armies of Occupation.

V. To a maximum extent reparations shall be taken from existing national wealth of Germany. While for convenience claims may be stated in money, it is necessary to bear in mind that in contrast to reparations after World War I which were assessed and exacted in money, this time reparations will be assessed and exacted in kind in the form of things, such as plants, machines, equipment, stocks, foreign investments, etc.

VI. In order to avoid building up German industrial capacity and disturbing the long term stability of the economies of the United Nations, long run payment of reparations in the form of manufactured products shall be restricted to a minimum.

VII. In justice to those countries occupied by the enemy, reparations shall be calculated upon the basis that the average living standards in Germany during the reparation period shall not exceed the average of the standards of living of European countries. European countries means all European countries excluding U.K. and USSR.

[Annex II]
  1. The Control Council shall formulate as soon as possible a program of minimum required imports for Germany as a whole. Such a program shall include provision for equitable inter-zonal distribution of supplies available within Germany, so as to minimize the net deficit for, and imports into, Germany as a whole. Responsibility for the procurement and financing of approved imports for Germany as a whole shall be shared on a basis to be negotiated in the Control Council. Reimbursement for all net advanced [advances?] made for approved imports into Germany shall be a first charge against the proceeds of both exports of capital equipment and of current production and stocks of goods from Germany.
198

Byrnes-Gromyko conversation, morning

Present
United States Soviet Union
Secretary Byrnes Mr. Gromyko
199

Third meeting of the Foreign Ministers, 11:30 a.m.

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

Department of State Minutes

Potsdam, July 20, 1945, 11:30 a.m.
Top secret

The meeting of Foreign Ministers began at 11:30 on Friday, July 20, 1945. Mr. Molotov was in the Chair.

MR. MOLOTOV stated that the first question on the agenda was the German economic paper, which unfortunately was not yet ready. The question must therefore go over until tomorrow. He inquired concerning the status of the Polish paper, which was the second question on the agenda.

MR. VYSHINSKI stated that the committee had met yesterday and today but had not yet been able to produce a report. He hoped for results by tonight.

MR. MOLOTOV passed the subject over until tomorrow.

Council of Foreign Ministers

MR. MOLOTOV stated that the third question on the agenda was that of the peace settlement or the establishment of the Council of Foreign Ministers.

MR. BYRNES had suggested that a subcommittee be appointed to draft on this matter. He asked whether the subcommittee’s report was ready.

MR. MOLOTOV stated that no subcommittee had been appointed.

MR. BYRNES pointed out that the paper had been referred back to the drafting committee established to consider it.

MR. MOLOTOV asked whether there is a general drafting committee to cover all questions.

MR. BYRNES replied that a special committee had been appointed to draft the document on the Council of Foreign Ministers. The committee is working, and Mr. Byrnes wished to know whether they had completed their report.

MR. MOLOTOV asked who was acting on behalf of the American delegation.

MR. BYRNES stated that Mr. Dunn and Mr. Cohen had been appointed.

MR. COHEN stated that because of the fact that Sobolev was busy the committee had not been able to meet until this morning and its work was not yet finished.

MR. BYRNES remarked that nothing could be done until the committee had reported. Mr. Byrnes then suggested that the document on the implementation of the Yalta declaration on liberated areas1 be placed on the agenda for the meeting of the Heads of States this afternoon.

MR. MOLOTOV replied that this question would come up next and that the Russian delegation also wanted to reach agreement on the Council of Foreign Ministers.

MR. BYRNES stated that the American delegation is extremely anxious to reach agreement on the Council of Foreign Ministers and that he was willing to ask his appointees to leave the table to begin work immediately.

MR. MOLOTOV replied that the Soviet member of the drafting committee is now in an economic meeting.

MR. BYRNES inquired whether it was possible to substitute someone else for him since the economic meetings had been going on for a long time and might continue.

MR. MOLOTOV then suggested that the matter be settled by the Foreign Ministers without reference to the subcommittee.

MR. BYRNES stated it was his understanding that there were two or three separate proposals being considered by the subcommittee.

MR. MOLOTOV then said that it was better to leave the matter to the subcommittee and not discuss it in the present meeting.

MR. EDEN suggested that the matter go over until tomorrow.

MR. BYRNES then asked if agreement could be reached that the proposal under consideration by the subcommittee should be submitted to the Heads of State this afternoon. He remarked that the Foreign Ministers could, if necessary, meet a few minutes before the regular meeting to discuss it.

MR. BYRNES went on to suggest that if Mr. Eden preferred a short recess could be taken to discuss the matter.

MR. MOLOTOV then pointed out that the document was not available.

MR. BYRNES thereupon renewed his request for consideration at 4 p.m.

MR. MOLOTOV suggested 3:45 p.m., and this was agreed to.

Discussion of Agenda

MR. MOLOTOV suggested that the day’s agenda be concerned with (1) the Yalta declaration; (2) the western frontiers of Poland; (3) trusteeship questions; and (4) the fixing of an agenda for the Big Three.

MR. BYRNES asked whether this agenda was for the present meeting or for the afternoon meeting.

MR. MOLOTOV stated that the last point on today’s agenda is the Big Three agenda. He asked whether the agenda suggested was acceptable and stated that the Soviet delegation had certain draft proposals to circulate.

MR. EDEN remarked that neither the trusteeship question nor the Polish boundaries had been referred to the present meeting by the Heads of State.

MR. BYRNES suggested that the paper on the implementation of the Yalta declaration be placed on the Big Three agenda, and added that he had no objection to consideration of the western frontiers of Poland.

MR. MOLOTOV stated that the meeting was not discussing at this time the agenda for the afternoon meeting but for the present meeting.

MR. EDEN insisted that the Foreign Ministers’ agenda should be based on matters referred to them by the Big Three.

MR. MOLOTOV replied that this was not necessarily so. If the Foreign Ministers didn’t want to discuss a matter, it went to the Big Three, but he wanted to discuss the matters he had mentioned.

MR. BYRNES replied that the Big Three had assigned certain questions to the Foreign Ministers and that these questions should be discussed first. He asked what questions had been so assigned.

MR. MOLOTOV mentioned the German economic question, the Polish question, and the implementation of the Yalta declaration. He asked what other matters had been assigned to them.

MR. BYRNES stated that the declaration on liberated Europe had been passed over on the request of the Generalissimo since he had wanted to circulate a paper.

MR. MOLOTOV stated that the Soviet delegation had the paper now and asked whether the Soviet draft could be considered. After consideration by the Foreign Ministers the question will pass to the Big Three.

MR. BYRNES remarked that it would be helpful to circulate the paper and consider it in the present meeting.

MR. MOLOTOV stated that he wished to make it clear that the agenda mentioned by him was for this meeting.

MR. EDEN again remarked that he was unable to understand the consideration of questions not referred to the Foreign Ministers by the Chiefs of State.

MR. MOLOTOV then suggested that the meeting dispose of all questions referred to them.

MR. EDEN replied that these questions did not include either Poland or trusteeship.

MR. MOLOTOV stated that the Yalta declaration had not been discussed yesterday because no draft was available. He would now circulate drafts, after which it could be discussed.

MR. EDEN agreed but asked why other items referred to them were not used.

MR. MOLOTOV asked about specific items.

MR. EDEN cited the questions of Spain and Rumanian oil.

MR. MOLOTOV asked whether Spain would be considered.

MR. BYRNES replied that the question had been referred to the Foreign Ministers. He went on to state that on July 17 the President had proposed that the three Heads of State support the admission of Italy to international organizations. Mr. Byrnes now proposed the appointment of a subcommittee to draft a declaration on this matter. Mr. Byrnes went on to propose that instructions to the committee should include a statement that the three powers would not support the entrance of Spain into international organizations so long as Spain remained under the control of the present regime there.

MR. MOLOTOV asked whether he correctly understood that Mr. Byrnes was suggesting the appointment of a subcommittee on Italy and Spain.

MR. BYRNES replied that this subcommittee should be appointed only to carry out the President’s suggestion of the 17th, in addition to the inclusion of a mention of Spain.

MR. MOLOTOV agreed to both.

MR. EDEN asked what committee was contemplated.

MR. BYRNES replied, a drafting committee composed of persons who are not too busy.

MR. EDEN pointed out that this was not entirely a drafting matter but was primarily political.

MR. MOLOTOV agreed that the subcommittee could not work without the delegates.

MR. BYRNES suggested that a subcommittee could prepare a document for discussion by the Big Three.

MR. EDEN stated his belief that the Foreign Ministers must agree on principles on which the committee could work.

MR. MOLOTOV agreed that the matter could be put on the agenda.

MR. EDEN asked whether it would come up in the present meeting.

MR. BYRNES stated that if Mr. Eden wanted to discuss it now he agreed.

MR. MOLOTOV then reraised the matter of the agenda, which he recapitulated as

  1. Italy.
  2. Liberated Europe.
  3. Rumania.

Other items could be added if these are not enough.

MR. BYRNES asked for a consideration of the Big Three agenda.

MR. MOLOTOV said that the first question is Italy.

MR. BYRNES pointed out that the American position on Italy had been set forth in the President’s paper of July 17.

MR. EDEN stated his general agreement with the American position. He thought it was a good idea to favor the admission of certain states and clearly to state that we do not favor the admission of Spain into international organizations. He asked whether more could not be done. Specifically he recommended the admission into international organizations of all neutral governments but Spain, since this would make the reference to Spain more pointed.

MR. BYRNES agreed. His suggestion had been for the admission of Italy and the declaration regarding the non-admission of Spain. He agreed to the British suggestion that other neutral governments be added.

MR. MOLOTOV inquired what governments Mr. Eden had in mind and asked whether this was a secret.

MR. EDEN mentioned Sweden, Portugal, and Switzerland.

MR. BYRNES stated his assumption that this was only to strengthen stated disapproval of Spain.

MR. EDEN pointed out that the situation in Portugal was not the same as that in Spain.

MR. BYRNES believed that this would strengthen the statement and would be in line with the Generalissimo’s position.

MR. EDEN suggested that we say that we favor the entrance of all neutral states except Spain.

MR. MOLOTOV then asked whether Italy would be liable for the payment of reparations.

MR. BYRNES asked what they would pay with.

MR. EDEN agreed but stated that in principle Italy would be liable.

MR. MOLOTOV stated his understanding that Italy had signed an instrument of unconditional surrender.

MR. EDEN remarked that any declaration on the admission of Italy into international organizations should contain the phrase “on conclusion of peace.”

MR. MOLOTOV insisted that somebody must consider the question of Italian reparations.

MR. EDEN pointed out that this question would be dealt with in the peace settlement. Italy’s admission into international organizations would be conditional upon the fulfillment of her engagements. However, he frankly felt that Italy would be unable to pay.

MR. BYRNES pointed out that the United States Government has already advanced $200,000,000 to Italy and would probably have to advance $400,000,000 or $500,000,000 more. Therefore reparations do not seem to the United States to be an immediate problem.

MR. MOLOTOV asked whether it would be just to have small Finland paying large reparations and large Italy paying none. He asked how this would be understood by the world.

MR. EDEN asked what connection the question of reparations had with admission into international organizations. Reparations would be settled in the peace treaty and should have no effect on entrance into international organizations.

MR. MOLOTOV pointed out that United Nations do not pay reparations.

MR. BYRNES remarked that when the peace treaty was concluded it might be possible to work out some plan for Italy in future years to arrange some form of payment. However, in the best spirit he felt that he must say that the United States does not intend to make advances to any country in order that reparations may be paid by them.

MR. MOLOTOV stated that he had not suggested this.

MR. BYRNES replied that he knew that but wanted to make the situation perfectly clear.

MR. MOLOTOV suggested that the subcommittee to be appointed might consider the question of the advisability of reparations from Italy.

MR. BYRNES stated that the American position was that reparations should be decided at an early peace settlement. The United States wanted the peace settlement done and out of the way. He went on to state that the President’s specific proposal in the last paragraph did not contemplate the question of reparations. He read the section of the proposal in question.

MR. MOLOTOV stated that he had no objection to the appointment of a subcommittee but that reparations should be discussed.

MR. BYRNES felt that it was unnecessary for the subcommittee to consider this point: it must be considered by the Big Three. The Foreign Ministers could make recommendations but the subcommittee could not help us decide on revision of the short-term surrender document. The only purpose of the committee suggested is to draft a statement on the admission of Italy into international organizations and our objection to Spain becoming a member thereof.

MR. MOLOTOV then suggested that when the Foreign Ministers reported to the Big Three on the establishment of this subcommittee it be suggested that the question of reparations be referred to this or another subcommittee.

MR. BYRNES stated that he would not object to the reference of the reparations question to the subcommittee charged with the consideration of reparations matters.

MR. MOLOTOV agreed and then referred to the fact that Mr. Eden had mentioned states other than Italy. He asked for the inclusion of states which were enemy states but are now cobelligerents.

MR. EDEN stated that this could be considered and MR. BYRNES agreed.

MR. EDEN then pointed out that from the British point of view it was essential that the conclusion of the peace treaty precede admission into international organizations.

MR. MOLOTOV agreed.

MR. EDEN remarked that the contrast between neutral states and Spain was greater than between other states and Spain.

MR. BYRNES suggested that the reparations subcommittee might also consider the question of Austrian reparations.

MR. MOLOTOV and MR. EDEN agreed.

MR. MOLOTOV asked that members of the committee to draft on admissions into international organizations be named.

MR. BYRNES named Mr. Matthews and Mr. Cannon.

MR. EDEN named Mr. Hoyer Millar and Mr. Dean.

MR. MOLOTOV named Mr. Maisky.

MR. BYRNES then restated his understanding that reparations questions go to the present reparations committee.

Yalta Declaration on Liberated Europe

MR. MOLOTOV then raised the question of the Yalta declaration on liberated Europe and circulated the Soviet draft.

MR. EDEN, with some warmth, stated that he would like to say at once that the description of Greece given in the Soviet proposal is a complete travesty of fact. The Soviet Government had no representatives in Greece, although they were free to go there. The press of the whole world was free to go to Greece and see for themselves and tell the world without censorship what was going on. Unfortunately this was not possible in either Rumania or Bulgaria. The Greeks proposed regular elections open to all parties. The present Greek Government had invited international observers to regulate these elections. Unfortunately the situation in Rumania and Bulgaria was not the same.

MR. MOLOTOV stated that there were missions in Rumania and Bulgaria, including British representatives.

MR. EDEN replied that these representatives had few facilities to see anything and still less to get anything done. In addition, the press was not permitted freely to operate in these countries.

MR. MOLOTOV remarked that the number of British representatives in Rumania and Bulgaria was greater than the number of Soviet representatives. It was true that there were no British troops, but there were many political representatives. It was his understanding that the British Government had enough people there to keep it informed. In addition, Mr. Eden knew that the Soviet representatives had recently made proposals for greater cooperation.

MR. EDEN replied that he now hoped that the situation would improve.

MR. MOLOTOV asked what suggestions there were.

MR. BYRNES stated that so far as the United States was concerned it had hoped that the spirit of the Yalta declaration would be carried into effect. However, the governments in the countries concerned have restricted the movement of our representatives and the press has been denied admission. This had become a source of great irritation among our people. They believe that the Yalta agreement contemplated early elections. Mr. Byrnes considered that the determination of policy in these countries should not be the sole burden of one of the three powers but should be shared by all of them, and he felt that steps should be taken to see that the governments in question should not discriminate against either the Soviet, British, or American Governments. In view of the attitude of the governments concerned, we could not recognize them at this time. At Yalta we agreed in the declaration on liberated Europe, among other things, to form interim governments broadly representative of all democratic elements of the people and pledged to the earliest possible establishment of a government through free elections. If such elections were held, the United States would gladly recognize any governments resulting therefrom. It cannot do so now. As long as the governments in question deny to American representatives and press an opportunity to observe and report on conditions, recognition will be difficult.

MR. MOLOTOV stated that there were no excesses in Bulgaria or Rumania comparable to those taking place in Greece. He cited the American and British press as authority for this statement. He went on to say that there was no trouble in Bulgaria or Rumania. He admitted restrictions on British and American representatives during the war but stated that things will be different now. The Soviet representatives in the countries in question have therefore already made suggestions in Hungary, Bulgaria, and Rumania to the American and British representatives regarding the future operation of the control councils. He was willing to discuss the matter at this meeting. He pointed out that no elections had been held in Italy despite the fact that Italy had been out of the war for some time. Nevertheless, the United States has diplomatic representatives there. It was therefore difficult to understand why the United States should not recognize Bulgaria and Rumania, which gave greater assistance to the war effort than Italy. In any event, the Soviet Government can no longer delay diplomatic recognition of these countries. He suggested the consideration of a draft either in the present meeting or in a subcommittee.

MR. BYRNES pointed out that our press was able to get an account of conditions in Greece but was unable to do so in Bulgaria and Rumania. Many misunderstandings might disappear if the press was permitted to operate in these countries.

MR. MOLOTOV stated that there was no objection to this.

MR. BYRNES replied that he was sure that the Soviet Union did not object but the governments of these countries do. In Greece the United States is impressed by the fact that the Greeks invite us to supervise their elections. He had just this morning addressed to Mr. Molotov a letter inviting Russia to participate in the supervision of these elections.

MR. MOLOTOV stated that there was no doubt of free elections in Rumania and Bulgaria, which would be held as soon as candidates could be nominated.

MR. BYRNES asked whether the British Empire had been consulted regarding elections in Rumania and Bulgaria.

MR. EDEN replied that it had not.

MR. MOLOTOV confirmed this statement.

MR. EDEN pointed out the difference between Greece, where all parties would participate in the elections, and Bulgaria, where the vote would be only for or against a set list. This did not meet the British idea of democracy. The press of the world could send anything out of Greece, and this included the TASS representative. On the other hand, British press representatives could send nothing out of Rumania or Bulgaria without extremely heavy censorship.

MR. MOLOTOV said that censorship had been hard during the war but would be better now.

MR. BYRNES recalled that at Yalta we, and particularly President Roosevelt, had wanted to see Poland and other governments bordering Russia friendly to the Soviet Union. The United States has no interest in the Governments of Rumania and Bulgaria except that they be representative of the people and permit our representatives and press to observe conditions freely.

MR. MOLOTOV suggested that methods be discussed.

MR. BYRNES pointed out that if elections are held without asking for supervision by the Big Three, and governments were established which were distrusted generally by the people of our country, it will affect our relations. If the Big Three will see to it that free elections are held, the United States would recognize any government formed. We are interested in having governments friendly toward Russia.

MR. MOLOTOV stated that there was no reason to fear delay or that elections would not be free. However, the situation in Greece was different. The situation was dangerous. Mr. Molotov cited warlike speeches made in Greece against neighboring countries.

MR. EDEN interjected that he was aware that the Yugoslav press and radio were accusing Greece of aggressive intentions. The same charges were contained in the document presented this morning by the Soviet delegation.

MR. MOLOTOV insisted that there is no connection between the Soviet document and the Yugoslav Government.

MR. EDEN replied that he had only said that the language was the same. He pointed out that the Prime Minister yesterday had given figures proving that it was ludicrous to talk about an aggressive Greece. This was quite apart from the presence of British troops in Greece. He could only suppose that our Soviet Allies do not accept British assurances regarding the number of Greek troops. Greece has neither the intention nor the means to be aggressive.

MR. MOLOTOV remarked that Mr. Eden’s logic was correct, but the facts were that warlike speeches were being made.

MR. EDEN replied that he was well aware of the storm of abuse coming over the Moscow and Yugoslav radios regarding Greece, but could only say that these stories were not correct.

MR. MOLOTOV stated the facts had been obtained from the American and British press.

MR. EDEN at this point stated his hope that the Soviet paper would be withdrawn. It was an unhappy paper regarding an Ally.

MR. MOLOTOV replied that he was asking for consideration and for the facts.

MR. EDEN said that it was easy for the Soviet Government to go and look at the facts.

MR. MOLOTOV suggested that an end should be put to the reign of terror in Greece and that the Government should be reorganized.

MR. EDEN reiterated that there was no terror.

MR. MOLOTOV again remarked that he had read about it in the British press.

MR. BYRNES stated that it was unwise to base actions of this sort on press accounts. He was impressed by the fact that we could send representatives to Greece freely and to evaluate information received regarding conditions in that country. Since we are unable to do the same in Rumania and Bulgaria, all sorts of rumors are flying about which affect relations so long as we cannot check them.

MR. MOLOTOV asked that the American and British Governments say what they want and promised that they could have it.

MR. BYRNES replied that Mr. Molotov should see that we could send representatives where they wished to go and also permit the press to come in in order that information might flow freely.

MR. MOLOTOV insisted that American representatives now have the right and the press also, except for essential military censorship.

MR. BYRNES remarked that the difficulty is that the Soviet Foreign Minister is not there. Our representatives say that they are not permitted privileges. When they report that they are denied such privileges, we must accept their report.

MR. MOLOTOV again referred to the suggested improvement in operations made by the Soviet representatives in Rumania, Bulgaria, and Hungary.

MR. EDEN remarked that there was no reference to the press in these suggestions.

MR. BYRNES welcomed the statement that we should consult and decide. The difficulty had arisen out of the fact that we haven’t been consulted. He felt that the recent proposals constituted a step forward even though they did not cover the press.

MR. MOLOTOV stated that there was no doubt about the situation of the press. It would be the same as in Italy.

MR. EDEN said “or in Greece.”

MR. BYRNES stated that if we can accomplish that with certainty, we would be making great progress.

MR. MOLOTOV stressed the necessity for a common understanding. The government in Greece must be more representative and not warlike.

MR. EDEN remarked that the Greeks were only warlike in the imagination of their neighbors. He stated that only this morning he had suggested Soviet participation in the supervision of elections.

MR. BYRNES added that our information is that the Greek Government wishes us to supervise elections.

MR. EDEN pointed out that we would like the same procedure in other countries. He stated that he did not know what more the Greek Government could do than they were doing.

MR. MOLOTOV referred to the Varkiza agreement, which he termed excellent, but added that it was not being carried out and people were complaining.

MR. EDEN stated that he wished to report on the Soviet document to the Prime Minister, since it contained grave charges against the British Government.

MR. MOLOTOV denied this and stated that the charges were against the Greek Government.

MR. EDEN replied that Mr. Molotov knew very well that the British have troops in Greece. It was necessary to take the gravest exception to this Soviet document.

MR. BYRNES stated that the American Government is not anxious to supervise elections in any country. It regrets the necessity for so doing. But because we are satisfied that it is necessary in order to improve conditions, we would be willing to participate in the supervision of elections in Italy, Greece, Rumania, Bulgaria, and Hungary. The world knows we meant what we said at Yalta. Settlement of this matter would remove a source of irritation between us.

MR. EDEN suggested that each delegation draft its own requirements about what we want in each country.

MR. MOLOTOV, referring to the Soviet document, said that the Soviet suggestions are ready.

MR. EDEN replied that the Soviet suggestions stated that everything was all right in Rumania and Bulgaria and all wrong in Greece.

MR. BYRNES suggested that instead of finding fault with each other an agreement be drafted providing for the supervision of free elections in Italy, Rumania, Bulgaria, Greece, and Hungary, in addition to provision for freedom of the press.

MR. EDEN remarked that this was exactly what he had meant.

MR. MOLOTOV stated that the Soviet delegation had set forth its position in its document. He saw no reason to supervise elections in Rumania and Bulgaria. The press was now more free. However, he was willing to consider written suggestions. He suggested that drafts be prepared and hoped that they might be finished today.

Agenda for Meeting of Heads of State

The following agenda was set for the meeting of Heads of State on July 20:

  1. Council of Foreign Ministers.

  2. Italy (on this point MR. BYRNES made it clear that the document to be discussed was the President’s paper circulated on July 17 and not the question of admission to international organizations, or reparations, which had been referred to appropriate subcommittees).

  3. Austria.

  4. The western borders of Poland (Soviet paper and maps circulated).

  5. Trusteeship (paper circulated).