Potsdam Conference (TERMINAL)

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.

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.

Byrnes-Gromyko conversation, morning

Present
United States Soviet Union
Secretary Byrnes Mr. Gromyko

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

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

Department of State Minutes

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

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

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

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

MR. MOLOTOV passed the subject over until tomorrow.

Council of Foreign Ministers

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

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

MR. MOLOTOV stated that no subcommittee had been appointed.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Discussion of Agenda

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

MR. MOLOTOV asked about specific items.

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

MR. MOLOTOV asked whether Spain would be considered.

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

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

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

MR. MOLOTOV agreed to both.

MR. EDEN asked what committee was contemplated.

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

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

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

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

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

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

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

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

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

  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).

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.

740.00119 (Potsdam)/7-2045

Proposal by the Soviet Delegation

July 20, 1945
[Translation — Extracts]

The Yalta Declaration ‘On Liberated Europe’

In connection with the note of the USA delegation regarding the Yalta declaration on liberated Europe the Soviet Government deem it necessary to declare that they cannot agree to the statements regarding Rumania and Bulgaria expounded in the above-mentioned note.

The Soviet Government feel obliged to draw the attention of the USA Government to the fact that in Rumania and Bulgaria as well as in Finland and Hungary since the signature of the instruments of surrender by the Governments of these states, due order exists and legal power in acting, which has authority and is trusted by the population of these states. The governments of these states faithfully carry out the obligations assumed by them under their respective instrument of surrender. Rumania and Bulgaria gave the United Nations serious assistance by their armed forces in the struggle against German troops having put out against our common enemy 10-12 divisions each. Under these circumstances the Soviet Government see no reasons for interfering in the domestic affairs of Rumania or Bulgaria.

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

In accordance with the aforesaid the Soviet Government consider necessary:

  1. to restore in the nearest days diplomatic relations with Rumania, Bulgaria, Finland and Hungary as further delay in this respect could not be justified;

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

The Soviet Government express their assurance that the above-mentioned measures will find the support of the Governments of Great Britain and the United States of America and will be carried out.


740.00119 (Potsdam)/7-2045

Proposal by the Soviet Delegation

July 20, 1945
[Translation — Extracts]

The Yalta Declaration ‘On Liberated Europe’

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

But there is one country – Greece – in which no due order still exists, where law is not respected, where terrorism rages directed against democratic elements which have borne the principal burden of the fight against German invaders for the liberation of Greece. Moreover, the present Greek Government is breaking the peace with their neighbors and threatening Albania and Bulgaria with military action. All these circumstances create the necessity of taking urgent measures to eliminate such a situation in Greece.

In accordance with the aforesaid the Soviet Government consider necessary:

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

  1. to recommend to the Regent of Greece to take immediate measures towards the establishment of a democratic government in the spirit of the agreement reached at Varkiza, February 12, 1945, between the representatives of the then existing government of Greece and the representatives of Greek democracy.

The Soviet Government express their assurance that the above-mentioned measures will find the support of the Governments of Great Britain and the United States of America and will be carried out.


740.00119 (Potsdam)/7-2045

Proposal by the Soviet Delegation

[Translation]
Top secret

On the Question of Western Frontier of Poland

We have considered the question of western frontier of Poland and have, taking in consideration ethnographical and historic conditions recognized it necessary and equitable, pending the final settlement of territorial questions at the Peace Congress, the western frontier of Poland to fix along the line marked on the attached map viz: west of Swinemünde to the river Oder leaving Stettin on the Polish side, further up the river Oder to the estuary of the river West Neisse to the Czechoslovakian frontier.


501.BE/72045

Proposal by the Soviet Delegation

July 20, 1945
[Translation]
Top secret

On Trust Territories

In connection with the fact that the Charter of the United Nations Organization provides for bringing into effect the trusteeship system, the Conference deems necessary to lay down in conformity with the Charter measures for settlement, in the nearest future, of the question of the trust territories. By this are understood categories of territories defined in decision of the Crimean Conference and in the above mentioned Charter of the International Security Organization.

For the purpose of elaborating practical measures in order to bring into effect provisions on trusteeship system provided in the Charter the Conference deems necessary to authorize the Council of Foreign Ministers to consider in detail this question and work out practical proposals. In considering the question of preparing such proposals on category of territories which are detached from enemy states, the Council of Foreign Ministers shall be guided by the necessity of solution in the nearest future of the problem relating to the terms of trusteeship on the former colonial possessions of Italy in Africa and in the Mediterranean having in view herewith the possibility of establishing the trusteeship system exercised by individual states or by USSR, USA, and Great Britain jointly on the above-mentioned former colonial possessions of Italy.

The Council of Foreign Ministers shall also work out practical measures for reaching agreements on trusteeship system provided by the Charter of the United Nations including proposals on the further regime of territories now held under mandate of the League of Nations.

740.00119 (Potsdam)/7-2045

Proposal by the U.S. Delegation

July 20, 1945
Top secret

Declaration on Italy and Spain

In the statement on the policy toward Italy introduced by the President on July 17 we propose that there be included a statement to the effect that the Three Heads of Government will support the entry of Italy into the United Nations Organization.

The Three Heads of Government further declare that they will not support the entry of Spain into the United Nations Organization, so long as Spain is under the control of the present regime in that country.

868.00/7-1745

The Soviet Foreign Commissar to the Secretary of State

Berlin Conference, July 20, 1945
[Translation]

Dear Mr. Byrnes: In connection with your letter of July 19, containing a proposal regarding the establishment of Allied Control in connection with the national elections in Greece, I wish to state that on July 20 at the meeting of the three Ministers of Foreign Affairs, I put forward the point of view of the Soviet Government regarding the situation in Greece. Consequently you are now advised of the negative attitude of the Soviet Government toward the practice of control by foreign governments over national elections, and also (you are advised) that the Soviet Government has its proposals in relation to the state of affairs in Greece which, I hope, will be further examined by us.

Sincerely yours,
V. MOLOTOV

740.00119 Potsdam/7-2045

U.S. Delegation Memorandum

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

Summary of Meeting of Foreign Ministers Friday Morning, July 20

I. Agenda of meeting of heads of governments
It was agreed that the following subjects would be recommended to the Heads of Governments this afternoon:

  1. Procedure for Peace Settlements
    The Foreign Ministers are meeting 15 minutes before the meeting of Heads of Governments with a view to reaching agreement on the redraft of paragraph 3 of the proposal for the establishment of the Council of Foreign Ministers which was approved July 18. If they reach agreement the redraft will be presented to the Heads of Government at this meeting.

  2. Policy Toward Italy
    It is recommended that the basis of discussion be the U.S. paper presented to the Conference by the President on July 17.

  3. Situation in Austria, Particularly in Vienna
    The Prime Minister will make an oral statement on this subject. The question involved is the ratification by the three Governments of the agreements already approved by the European Advisory Commission on control machinery3 and zones of occupation for Austria and Vienna.

  4. The Western Boundary of Poland
    A Russian paper on this subject, together with a map, has been prepared for discussion.

  5. Trusteeship
    A Russian paper on this subject has been presented for discussion.

II. Economic policy for Germany
The Foreign Ministers were unable to act on this question as the subcommittee has not yet reported.

III. Polish question – liquidation of the London government and implementation of the Yalta Agreement
The Foreign Ministers were also unable to act on this question as the subcommittee has not yet reported.

IV. Statement on entry of Italy and Spain into the United Nations
The U.S. presented a draft statement under which the three Governments would support the entry of Italy into the United Nations Organization but would not support the entry of Spain as long as the present regime continues. This paper was referred to a subcommittee. It was also understood that reference might be made in the statement to other neutral countries and to other ex-enemies which fought on the side of the Allies.

V. Italian and Austrian reparations
The Soviet delegation having raised the question of Italian reparations, the question of reparations from Italy as well as from Austria was referred to the subcommittee now dealing with German reparations.

VI. Implementation of the Yalta Declaration on liberated areas
The Soviets presented the redraft to that presented by the U.S. After prolonged and inconclusive discussion, it was agreed that the three delegations would each prepare concrete statements of the action they believed should be taken in Rumania, Bulgaria, Hungary, and Greece and that these statements would be considered at a later meeting.

740.00119 Potsdam/7-2045

Rapporteur’s Report

Potsdam, July 20, 1945, 11:30 a.m.
[Translation]

Agenda of the meeting of Three Foreign Ministers included the following questions:

1. Economic principles related to Germany
It was stated that Commission authorized to prepare this question has not completed its work and therefore the question was not factually discussed. Resolved: to ask the Commission to complete its work not later than July 21st.

2. Polish question
Announcement was made that Commission dealing with this question has not yet completed its work as result of which the question was not factually discussed. It is resolved to ask the Commission to complete its work not later than July 21.

3. On peace settlement
In view of the fact that Commission authorized to prepare the draft on this question was not able to do it, members of the Commission being engaged in other Commissions, [it] was resolved: Foreign Ministers meet to-day at 15-45 in order to prepare the question for submission to the meeting of the Heads of Three Governments. At this meeting of the three Foreign Ministers was adopted the amendment to the paragraph 3 and in the result of it this paragraph reads as follows:

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

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

    Other members should be invited to participate when matters of interest to them are under discussion.

    Other matters may from time to time be referred to the Council by agreement between the States members thereof.

4. On Yalta Declaration on liberated Europe
People’s Commissar for Foreign Affairs V. M. Molotov handed to Minister for Foreign Affairs of Great Britain A. Eden and Secretary of State of USA J. Byrnes the Soviet draft proposals on this question. In connection with the submitted draft the question of the situation in Roumania and Bulgaria on one hand and in Greece on the other were discussed. As a result of the discussion, it was found out that Foreign Ministers vary in their estimation of the situation in these countries. In particular M[ess]rs. J. Byrnes and A. Eden stated that in Rumania and Bulgaria there are limitation[s] for the press. V. M. Molotov pointed out that there were certain inevitable limitations for press under wartime conditions. Of course at present time in view of termination of war the possibilities for work of the press representative] may be extended. This point raises no doubt. Secretary of State of USA Byrnes proposed that three Powers conclude an agreement on arranging for an observation by three Powers on procedure of elections in Italy, Greece, Roumania, Bulgaria, [and] Hungary and on provisions for the free access of press representatives of USA, USSR and Great Britain and for their unrestricted travels and possibility to freely send information. Mr. Eden seconded this proposal. People’s Commissar for Foreign Affairs V. M. Molotov stated he sees no necessity to send special observers to Roumania and Bulgaria. As far as Greece is concerned the Soviet Government position was stated in the submitted document. Mr. Molotov stated that in case Foreign Ministers of Great Britain and USA submit written proposals on this question they can be discussed at the meeting of Three Ministers.

5. On Italy
Secretary of State J. Byrnes submitted the draft decision of the Heads of Three Governments to the effect that they will support joining by Italy the Organization of the United Nations, but that they will not support the Spanish joining the Organization of the United Nations until [while] Spain remains under the control of the present regime in that country. Mr. Eden Foreign Minister of Great Britain stated that he supported this proposal and if any declaration on this question is worked out he would consider it expedient to mention in it that the Three Powers would also support the admittance to the membership of the United Nations of some neutral states, for example Sweden, Switzerland and Portugal. V. M. Molotov put a question whether this proposal could cover such countries, which were enemy states and now become cobelligerent states in the fight against Germany. Mr. A. Eden stated that this question could be discussed, but that he personally felt that such States could be admitted to the membership of the United Nations only after signing of the peace treaties with them. To study this question a subcommission of Matthews and Kennan [Cannon] of USA, Hoyer Millar and R. [P.] Dean of Great Britain and Maisky and Goussev of USSR was set up.

In connection with this it was agreed to ask the Commission dealing with reparations to consider the question of the reparations from Italy and Austria.

6. On Western Polish frontier
V. M. Molotov handed to Foreign Ministers [of the] USA and Great Britain the Soviet Government’s proposal on delimitation of the Western frontiers of Poland with the appropriate map. It was decided to submit the question to the meeting of the Three Heads of Governments July 20, 1945.

7. On trusteeship territories
V. M. Molotov handed to Foreign Ministers of the USA and Great Britain the Soviet Government’s proposals about trusteeship territories. It was decided to put the question on the agenda of the Three Heads of Governments July 20, 1945.

8. On agenda of the meeting of the Three Heads of Governments
Agreed to recommend to the Three Heads of Governments the following agenda:

  1. The peace settlement.
  2. Of the USA President’s memorandum of July 17 on the policy toward Italy.
  3. The situation in Austria and particularly in Vienna (The Prime Minister’s of the Great Britain information).
  4. The Western Polish frontier.
  5. The Trusteeship territories.
800.014/6-2045

The Soviet Ambassador to the Secretary of State

[Babelsberg,] July 20, 1945
[Translation]
Secret

Dear Mr. Secretary: I am sending you herewith in accordance with your request expressed at the time of our conversation this morning, a copy of my letter and the letter of former Secretary of State Stettinius on the question of territorial trusteeships. We exchanged these letters while at San Francisco at the time of the United Nations Conference.

A. GROMYKO

[Enclosure 1 — Translation]

The Soviet Ambassador to the Former Secretary of State

Secret

On the 9th of June in the study of the American document on trusteeship, I informed the member of the American Delegation, Mr. Stassen, of the desire of my Government to acquire under trusteeship some territory in conformity with point 3, section b, of the said document. Mr. Stassen replied that he had to consult his Government on this question. The same day Mr. Stassen informed the member of the Soviet Delegation, Mr. Novikov, that the American Government was prepared to support the Soviet Government in the turning over to it of trusteeship territories. At the same time you, Mr. Secretary, in a conversation with me on June 9th confirmed your agreement to satisfying the desire expressed above of the Soviet Government.

In accordance with our agreement my Government has directed me to define more clearly the question of trusteeship territories for the USSR. I hope that you will agree to discuss this question before the termination of the present conference.

[Enclosure 2]

The Former Secretary of State to the Soviet Ambassador

[San Francisco,] June 23, 1945

My Dear Mr. Ambassador: I have your letter of June 20 in which you refer to the conversation which took place between Commander Stassen and yourself on June 9 concerning the attitude held by the Soviet Government with reference to territorial trusteeship and your desire that our two Governments should be in accord on this matter.

Commander Stassen promptly conveyed to me your point of view, stating that your Government would like to be assured of the favorable attitude of the United States if the Soviet Government, at some future time, proposed a territory for trusteeship. He added that you indicated that you had no specific territory in mind but that you hoped that the two Governments could agree in principle upon this question.

Commander Stassen also reported that he was certain that your Government understood that, in accordance with the Yalta agreement, no specific territories were to be discussed at San Francisco and that the method by which a trusteeship would arise would be by the state which had the jurisdiction over a territory making a proposal to the appropriate body of the Organization.

I told Commander Stassen that I thought your point of view was eminently reasonable and that we would be happy to support in principle the Soviet proposal as to the eligibility of your Government as a potential administering authority.

Your letter of June 20 carries the point raised to a further stage beyond the principle agreed upon in the conversation. In accordance with the Yalta agreement no specific territories were to be discussed at the San Francisco Conference but I shall, of course, be glad to know your views on this subject, even though the matter falls outside the scope of the Conference. It might be more convenient, however, to both of us, to take this matter up after our return to Washington.

With kind regards [etc.]
[E. R. STETTINIUS]

Byrnes-Churchill luncheon meeting, early afternoon

Churchill’s quarters, 23 Ringstrasse, Babelsberg

Present
United States United Kingdom
Secretary Byrnes Prime Minister Churchill
Lord Cherwell
800.515/7-2045

The Assistant Secretary of War to the Assistant Secretary of State

Washington [Babelsberg], 20 July 1945

Memorandum for Mr. Clayton

Subject: GERMAN INTERIM FINANCING

I have looked at your memorandum from the Secretary to the President on the War Department’s responsibility for German interim financing. I have no difficulty with the paper as far as it goes, but I think it is incomplete. The following points should be clearly understood, and I would think the gist of them should be incorporated in any memorandum to the President:

  1. The War Department under present arrangements will be able to finance all food imports into Germany for whatever zone through October loadings.

  2. Testimony before Congress indicated that funds made available for the War Department would not be used for maintenance of zones other than the United States, except for a brief turnover period not extending beyond the current calendar year.

  3. With respect to any period of time or any zone, the funds which the War Department has received from the Congress for the present fiscal year are restricted to the prevention of disease and starvation.

  4. If the President approves Secretary Byrnes’ memorandum, it is necessary that the President send a letter of instructions to the Secretary of War, specifying the extent to which he desires the War Department to finance supplies under the disease and unrest formula outside of the United States zone, and in addition the extent of general economic assistance that he desires the War Department to finance with respect to all zones, including the United States zone. Unless some standard is specified, we would not be able to determine the amount of appropriations we should go to Congress to obtain. In effect, we should have a letter similar to that which President Roosevelt sent to the War Department in November 1943.

  5. It is suggested that the part of the paper entitled “German Import Program” would be strengthened as a negotiating agent for our representatives in the Control Council, if there were added the following: “Recognizing the principle that proceeds from the sale of exports from Germany as a whole must be used to finance essential imports” at the beginning of the sentence which now starts “Procurement and financing responsibility …”

I am returning the memorandum which you gave me.

JOHN J MCCLOY

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

CCS 197th Meeting

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

CCS Minutes

Potsdam, July 19, 1945
Top secret

Approval of the Minutes of the CCS 196th Meeting, 19 July 1945

The Combined Chiefs of Staff:
a. Approved the conclusions of the CCS 196th Meeting subject to the amendment of the conclusions under item 4 to read as follows:

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

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

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

Directive to the Supreme Allied Commander, Southeast Asia (CCS 892/1)

The Combined Chiefs of Staff had before them a draft directive to the Supreme Allied Commander, Southeast Asia, proposed by the British Chiefs of Staff.

The United States Chiefs of Staff proposed a few amendments to the text of the directive.

GENERAL MARSHALL said that the United States Chiefs of Staff were prepared to accept the directive on the understanding that the British Chiefs of Staff would be responsible for obtaining the approval of the Australian, New Zealand and Dutch Governments to the proposed reallocation of areas and command set-up in Southwest Pacific and Southeast Asia, since these governments had been party to the original arrangements.

The Combined Chiefs of Staff:
a. Approved the directive to the Supreme Allied Commander, Southeast Asia, in CCS 892/1 as amended during the discussion. (Subsequently circulated as CCS 892/2)

b. Took note that the British Chiefs of Staff would take steps to obtain the agreement of the Australian, New Zealand, and Dutch Governments to the proposed reallocation of areas and command set-up in Southwest Pacific and Southeast Asia.

Disposal of Enemy War Matériel in Germany and Austria (CCS 706/11 and 706/14)

The Combined Chiefs of Staff: Approved Appendices “A” and “B” to CCS 706/11, as amended in CCS 706/14. (Subsequently dispatched to SACMed as [message number] Fan 603)

Land-Leathers conversation, 3 p.m.

51 Ringstrasse, Babelsberg

Present
United States United Kingdom
Vice Admiral Land Lord Leathers
Major General Gross Major-General Holmes
Mr. Morse Brigadier Greaves
Mr. Bissell Mr. Weston
Mr. Nicholson
Mr. Picknett

The following subjects were discussed: allocation of shipping for civilian and military passengers; extension of the time during which the United States should have the use of the Queen Elizabeth and the Queen Mary; the conversion of 100 vessels by the United Kingdom; the allocation of captured German passenger vessels for United States use in the movement of troops; the use and possible conversion of the Gripsholm and the Drottningholm; American and British trooplift programs; the possible admission of Italy to the United Maritime Authority and the Mediterranean Shipping Board; possible British payment of charter hire for Italian vessels; the distribution of captured German vessels and their use during the war against Japan; and problems relating to the striking Polish crews on British-operated Polish vessels.

860c.85/7-2045: Telegram

The Acting Secretary of State to the Assistant Secretary of State

[Washington,] July 20 [1945]
Secret
73

For attention Clayton.

WSA have brought to our attention problem arising out of Polish seamen’s strike regarding which they are communicating to Admiral Land at Potsdam. Crews of merchant vessels controlled by London Polish authorities and chartered or allocated to British Ministry of War Transport struck last week in protest against recognition of Warsaw-Polish Government. Ships affected include five small American-owned coasting steamers transferred to Polish flag by regular procedure under Lend-Lease and operating in British coasting service. So far as known strike has not extended to the single Liberty ship similarly transferred to Polish operation and now loading on West Coast South America.

WSA state idleness of five Lend-Lease vessels on which crews have struck can not be justified for such a cause and only practical method to deal with the situation is to withdraw the ships under charter option requiring thirty days notice or more promptly on some other basis. However, they wish to avoid any action which might prove prejudicial in present Polish situation or which might prejudice atmosphere or otherwise prove embarrassing in connection with Potsdam conference.

Our view is that political character of strike voids essential purpose of allocation these ships to Polish operation, which was to provide crews for them. This seamen’s strike, however justified from viewpoint of the seamen themselves, constitutes interference with shipping and foreign policy operations of this Government and therefore cannot be tolerated; moreover, strike indicates prospect of continuing trouble with these seamen if existing arrangements continue. Therefore we believe ships should be withdrawn from Polish allocation by promptest legitimate procedure unless such action at this time would in any way embarrass proceedings of Potsdam conference. It is believed British would provide substitute crews if the vessels are allocated to them in view of importance to them of coasting services. If new Polish Government subsequently wishes to take over and operate American-owned ships under similar charter arrangements, this question can be discussed on the basis of then existing circumstances. Of course transfer of these ships to British or other allocation would likely make it more difficult to find other ships for later allocation to new Polish Government.

Possibility has been suggested that withdrawal of these ships from Polish operation might provide new Polish authorities with excuse for withdrawing from UMA and that Polish withdrawal might be followed by others. Since however withdrawal of these ships would reduce tonnage under Polish flag and in no way improve Polish ability to provide shipping space for Polish import requirements, disadvantage to Poland of withdrawal from UMA would not be lessened by transferring these struck ships to other operation. In light of information available to us therefore we do not believe possible repercussions UMA should be considered a significant factor as against greater objection to any course of catering to seamen who have struck for political reasons. We understand strike also affects about twenty Polish-owned ships chartered to British Ministry of War Transport but that presents problem for British to solve independently of action taken toward our ships allocated to Polish operation.

We presume this question will be subject of direct discussion with Admiral Land Potsdam, but would appreciate your instructions or comment.

[GREW]

860c.85/7-2045: Telegram

The Acting War Shipping Administrator to the Assistant to the War Shipping Administrator

[Washington,] July 20 [1945]
Secret
74

To Admiral Land for Morse from Conway. SD 4486.

In view of the Polish crew strike, Helmbold and I believe we should immediately withdraw N3’s and re-allocate. State Department also of this opinion but believe with us that no action should be taken pending clearance from you since it may embarrass your current negotiations or UMA questions. Liberty crew so far has not joined strike. At meeting in Shipping Division Office State Department Polish desk advised it would be an advantage to take action now on vessels as this would be a propitious time to take a necessary if unpleasant step. However Saugstad fully advising Clayton on situation. I have signed the following letter and dispatched it to the State Department today:

The State Department has been informed of the arrangements under which the War Shipping Administration has allocated six U.S. owned ships to the Polish Government on a “Bareboat out, time charter back” basis. Since the date on which the ships were delivered there has been a change in the recognized Polish Government.

Although we understand that the Polish Government now recognized is apparently the legal successor to the prior government, it has occurred to us that there may be reasons why it would not be desirable to continue the “Bareboat out, time charter back” arrangements with the new government. A strike on the part of the crews of five of the six ships involved has brought this point to an immediate head which will require action on our part. We are informed by a cable from London today that the crews have struck in protest against the recognition of the Warsaw-Polish Government.

From an operating point of view, we cannot justify the idleness of these ships for such a cause; and the only practical method by which we could deal with the present situation is to withdraw the ships from their present allocation either by taking advantage of our charter option to cancel the present arrangements on thirty days notice or otherwise. Since this might be interpreted as an uncordial act towards a newly formed friendly government we would appreciate your advices before taking any further action.

In the event that the ship delay problem is settled before we have been able to take any action along the above lines, it would appear to us, from an operating point of view, that the present arrangements could be continued and the ships thus kept moving without interruption until such time as a definite policy be established. We believe this possible even though, because of the many uncertainties involved, we have felt it necessary for the present to stop payment of charter hire to protect our interest.

The present arrangement was concluded with the then duly authorized Polish authorities, and we have worked with their duly appointed agency, the Gdynia-America Line, which is ninety-eight percent owned by the Polish Government. Pending official word from Warsaw, we feel there is some basis for continuance of the present arrangements. Because of the many factors involved and because of the maturing obligation to pay charter hire, we would also like your advice on this point.

In view of the operating problem involved, your immediate advice is urgently requested.

We have received following cable from Devlin: “Wsa 3714-W 2084 reference our Wsa 3590-W 2038 on five Polish coasters. Situation unchanged as regards Kowel[,] Kolno and Kielce. Kutno crew remains with exception of master and vessel continues in Liverpool-Belfast trade. Krosno anchored Southend with crew and cargo on board[;] crew will leave when vessel ties up at berth. London berthing situation tight account labour and British hesitate to berth vessel as she will be immobilized immediately she ties up. Prospects of settlement extremely uncertain. Unless otherwise advised by you we will take no action as problem apparently one of high level foreign relations.” To which we have replied as follows: “Your present method for handling situation approved. Settlement of dispute not desirable until we are prepared to act under necessary diplomatic clearances. Necessary that we be kept fully advised of any possibility that situation may be changed. We are handling with State Department here and with Morse in Potsdam.”

Informal meeting of the Foreign Ministers, 3:45 p.m.

No minutes have been found.

Fourth plenary meeting, 4 p.m.

Present
United States United Kingdom Soviet Union
President Truman Prime Minister Churchill Generalissimo Stalin
Secretary Byrnes Foreign Secretary Eden Foreign Commissar Molotov
Fleet Admiral Leahy Mr. Attlee Mr. Vyshinsky
Mr. Dunn Sir Alexander Cadogan Mr. Maisky
Mr. Clayton Sir William Strang Mr. Gromyko
Mr. Davies Mr. Gusev
Mr. Harriman Mr. Sobolev
Mr. Pauley
Mr. Murphy
Mr. Matthews
Mr. Bohlen
Mr. Cohen
Mr. Thompson

U.S. Delegation Working Paper

Potsdam, July 20, 1945, 4 p.m.

Agenda for Meeting of Heads of Three Governments

  1. Council of Ministers.
  2. Italy in the United Nations, including reference to Spain.
  3. Vienna – Austria (paper to be presented by Mr. Churchill).
  4. Western frontiers of Poland (paper presented by USSR this morning).
  5. Trusteeship (paper presented by USSR this morning).
  6. Turkey (paper to be presented by Mr. Churchill).

Thompson Minutes

Potsdam, July 20, 1945, 4 p.m.
Top secret

MR. MOLOTOV presented his report as rapporteur of the morning meeting of the Foreign Ministers which was as follows:

1. Economic Policy for Germany
Mr. Molotov said that notice had been taken by the Foreign Ministers of the fact that the subcommittee which was dealing with the question of economic policy for Germany had not yet reported.

2. Polish Question
The Foreign Ministers also noted that the committee on this question had not finished its work and they decided to ask it to finish its report by July 21.

3. Peace Settlement
Since the subcommittee instructed to prepare the draft on this subject had not had time to finish its work the Foreign Ministers had arranged to meet just before the present session and had agreed upon a text which they would submit to the present meeting.

Mr. Molotov read the revised text of paragraph 3 of the document on this question (attachment l).

4. Implementation of the Yalta Declaration on Liberated Areas
Continuing the reading of his report Mr. Molotov said that at the meeting of the Foreign Ministers he had submitted a Soviet draft proposal on this question. As a result the situation in Rumania and Bulgaria was discussed on the one hand and the situation in Greece on the other. The discussion revealed the different views held by the Foreign Ministers. Mr. Byrnes proposed that an agreement be concluded by the Big Three with regard to the supervision of elections in Bulgaria, Greece, Rumania, and Hungary; with assurances for the free admission of the press into these countries with opportunity to move freely and to be able freely to send in their reports. Mr. Eden associated himself with the proposal. Mr. Molotov had no reason for an agreement on this subject with reference to Bulgaria and Rumania. So far as Greece was concerned the Soviet delegation had submitted a document on this subject. If the United States and Great Britain wished to submit proposals in writing on this subject they could be considered.

THE PRESIDENT interrupted to state that he had understood that Mr. Molotov had agreed in principle that an agreement be drawn up.

MR. MOLOTOV replied that he wanted to discuss the proposals which Mr. Eden and Mr. Byrnes intended to submit. So far no proposals had been submitted.

MR. BYRNES rejoined that he had understood Mr. Molotov to agree on the necessity of drawing up an agreement and that it was merely a question of drafting.

MR. MOLOTOV replied that he had literally stated that since Mr. Byrnes and Mr. Eden were anxious to submit their proposals the Soviet delegation was prepared to discuss them.

MR. CHURCHILL intervened to state that in his opinion this should be done but that the word “supervision” should not be used as the British had not contemplated control of the elections.

THE PRESIDENT said that he had no desire to superintend elections in these countries.

MR. BYRNES suggested that “observe” would be a better word.

MR. CHURCHILL explained that the British wished to know what went on; they would not wish to have responsibility for the elections.

There being no further discussion, MR. MOLOTOV proceeded to read the next point in his report which related to Italy.

5. Italy
Mr. Byrnes proposed that there be submitted for decision to the three Heads of Government a proposal that they support the entry of Italy into the United Nations Organization and that they not support the entry of Spain while that country was under its present regime. Mr. Eden supported this proposal and said that if any declaration of the three powers was made on this subject the British declaration [delegation] would also support association with the United Nations of neutrals such as Switzerland, Portugal, and Sweden. Mr. Molotov had inquired if this would extend to the states which had become cobelligerents. Mr. Eden had replied that he was ready to discuss this question but that in his opinion the entry of these countries into the United Nations Organization could occur only after peace treaties had been contracted with them. This question had been submitted to the subcommittee consisting of Mr. Matthews, Mr. Cannon, Mr. [Hoyer] Millar, Mr. Dean, Mr. Maisky, and Mr. Gusev.

6. Western Frontier of Poland
Mr. Molotov had submitted the proposals of the Soviet Government for the establishment of the western frontier of Poland with a relative map. It was agreed that this question should be taken up by the Heads of Government at the present meeting on July 20.

7. Trusteeship
Mr. Molotov had submitted the Soviet proposals on this subject and it had been decided to refer it to the Heads of Government at the present meeting.

8. Agenda of Meeting of Heads of Government, July 20
Mr. Molotov said that the Foreign Ministers had then drawn up the agenda for the present meeting of the Heads of Government which was as follows:

  1. Procedure for Peace Settlements.
  2. Policy toward Italy.
  3. Situation in Austria, Particularly in Vienna.
  4. Western Boundary of Poland.
  5. Trusteeship.

MR. CHURCHILL raised a point of procedure and suggested that the meeting of Heads of Government be fixed for five o’clock in the afternoon.

This was agreed to.

THE PRESIDENT said he would also like to suggest that the Foreign Ministers not prolong their meetings and that they submit their reports not later than three o’clock in the afternoon.

Procedure for Peace Settlements

The American document on this subject with paragraph 3 as revised at the morning [afternoon?] meeting of the Foreign Ministers was approved.

THE PRESIDENT remarked that the only remaining questions on this subject were those of the time and place of the meeting of the Council of Foreign Ministers.

MR. EDEN added that there was the question of the secretariat.

THE PRESIDENT said he was willing to refer these questions to the Foreign Ministers to decide.

MR. CHURCHILL said he was pleased for the question to be discussed but he also held a clear opinion that the Council should have London as a permanent home of the secretariat. Meetings could be held elsewhere if necessary. He pointed out that London was the Allied capital which had been most under fire of the enemy and the longest in the war. It was, he believed, the largest city in the world, although there might be some dispute about this, and it was one of the oldest. Moreover it was more nearly half way between the United States and Russia than any location on the continent.

STALIN interrupted to say that the geographic position was the most important question.

CHURCHILL remarked that he had six times crossed the Atlantic during the war and that he had also visited Moscow on several occasions. With the exception of Mr. Molotov’s visit, Great Britain had not been used as a meeting ground in the whole of this war. There was strong feeling in London on this matter and he would ask Mr. Attlee to add a word in support of his position.

MR. ATTLEE said he entirely agreed with the Prime Minister and added that they had a right to see some of these famous people in England. British people had suffered very much and attached importance to this matter. He also thought that the geographic argument was a very strong one.

THE PRESIDENT said that he also agreed and he felt that the United States had had its share by being host to the recent San Francisco Conference. He also thought that the geographic position was important.

STALIN said that he agreed.

THE PRESIDENT said he did not want what he had said to preclude his inviting the Heads of Government to the United States.

MR. CHURCHILL thanked the President and Marshal Stalin for their courteous acceptance of his suggestion.

THE PRESIDENT said he thought the Foreign Ministers should take steps to insure that France and China take part in the Council of Foreign Ministers.

STALIN said he agreed.

THE PRESIDENT noted that the timing of the meeting of the Council was left for the decision of the Foreign Ministers.

Policy Toward Italy

THE PRESIDENT said he had handed in a paper on this subject on the first day. It is proper to recognize the contribution which Italy has made to defeat Germany. In this document he had suggested that the short terms of surrender and the obsolete clauses of the long terms be terminated and he had proposed that they be replaced by the following undertakings on the part of the Italian Government:

  1. That the Italian government will refrain from any hostile action against any of the United Nations pending the conclusion of the treaty of peace.

  2. That the Italian government will maintain no military, naval or air forces or equipment, except as authorized by the Allies, and will comply with all instructions on the subject of such forces and equipment.

    Under this interim arrangement, control of Italy should be retained only so far as is necessary:
    a. To cover Allied military requirements, so long as Allied forces remain in Italy or operate therefrom.

    b. To safeguard the equitable settlement of territorial disputes.

STALIN said it would be well for the three Foreign Ministers to discuss this question. He had no objections in principle, but it might well be that certain drafting amendments and improvements would be necessary. It would be advisable to refer this paper for final consideration of the Foreign Ministers and to ask them to discuss preliminaries with the question of Italy the other satellite states of Finland, Hungary, Rumania and Bulgaria. They had no grounds to single out the question of Italy in the consideration from the other satellites. There is no doubt that Italy was the first to surrender, but she had helped Germany. It was true that the forces she supplied were small but they had helped. She now proposed to come into the war against Japan which counted in her favor. The day after the surrender these countries had moved their troops into action against Germany. Bulgaria had sent eight divisions against Germany and Rumania had sent ten or twelve. He was bound to say that these divisions had fought well. With reference to Finland, he said that this country had not given much support against Germany, but her behavior had been all right. It would also be well to improve and facilitate her position. The same thing applied to Hungary. It would, therefore, be well in improving the position of Italy if they would also improve the position of the other satellite states and throw them all together. If his colleagues agreed, his proposal was that the three Foreign Ministers be instructed to examine the question of improving the situation of Italy and of the other satellite states.

THE PRESIDENT pointed out that his reason for bringing up the question of Italy was that Italy was the first to surrender and that the armistice terms imposed upon Italy had been more harsh than those imposed upon the other satellite states. He agreed with Marshal Stalin that the question of the other satellite states should be taken up. He had taken up Italy first for the reasons given and he agreed with Marshal Stalin’s proposals.

MR. CHURCHILL said that the British position with regard to Italy was not quite the same as that of his two honored colleagues. The British had been attacked by Italy in June 1940. They had suffered very heavily in naval losses in the Mediterranean and heavy losses in Africa at a moment when they were in very grave danger themselves. Their losses in warships in the Mediterranean had been very heavy, as had been their land casualties on the North African shore, when Italy put troops in there. Moreover, without help they had had to undertake the campaign in Abyssinia which had restored the Emperor to his country. Detachments of Italian planes had also been sent to bombard London. It should also not be forgotten that Italy had made a dastardly attack upon Greece; just before the war began Italy had made a lawless attack upon Albania and had seized that country. All this had occurred when the British were alone. He said he mentioned this because he thought it should be remembered and in order that it could not be said that they had not suffered most grievously at the hands of Italy. Moreover, he was bound to state that they could not acquit the Italian people of responsibility any more than they could acquit Germany, because it had come under the control of Hitler. Nevertheless, they had endeavored to keep alive the idea of the renewal of Italy as one of the important powers in Europe and the Mediterranean. When he had gone there a year ago he had made a series of proposals to President Roosevelt, the bulk of which with some improvement made by the President were embodied in a joint declaration. He had said this to show that he was not against Italy nor motivated by a feeling of vengeance. When it was agreed, as was decided at Tehran, to divide the Italian fleet between the three powers, or that if a division were not made the Soviet Union would receive a corresponding number of ships, of the fifteen ships provided the British had contributed fourteen, including the HMS Royal Sovereign and four submarines of a new type. He repeated that he mentioned all this to show the injuries they had received and that they were prepared to proceed in a broad manner with respect to the question of Italy’s future.

He had seen it said that they were hostile to Italy. It had been said when they spoke against Count Sforza that they wished to see Italy plunged into misfortune. He repudiated these press statements. He spoke in the name of his government and with a clean heart. He was anxious to join with the President and the Marshal in the principle of making a gesture to the Italian people who have suffered terribly and have aided in expelling the Germans from their land.

They did not dissent from the proposal to make a peace with Italy. This work will certainly take several months, however, and one wonders whether a general peace conference will be so far away when that work is finished. He also noticed that the Italian Government at the present time had no democratic foundation derived from free and unfettered elections. It simply consists of politicians who call themselves leaders of different political parties. It was the intention of the Italian Government, he understood, to hold elections before the winter. While he agreed that the Council of Foreign Ministers should start on this work of preparing the peace treaty, he thought it was not advisable that they come to a final conclusion until the Italian Government rests on a democratic foundation. Meanwhile, he was not in full agreement with the memorandum of the United States Delegation on the interim measures providing that the long and short terms of the armistice be withdrawn and replaced by an interim arrangement pending the conclusion of a final peace treaty. No government could be depended upon to carry out its undertakings if it were without a democratic foundation chosen by its people. If their existing rights in Italy were abolished, the long and short armistice terms withdrawn, and there was a considerable interval before the peace settlement, they should have lost their power to enforce their rights except by the use of force. He added that no one wanted to use force. They were entitled to receive from Italy compliance with the various terms which they had the right to ask from her. He pointed out that there would be a gap or a hiatus between the withdrawal of the armistice terms and the time when Italy would have a responsible government which could conclude a peace treaty.

He said, for example, that paragraph one of the American proposal which describes the undertakings which the Italian Government would give does not cover the future of the Italian fleet, the Italian colonies, the question of reparations and other important points. If they lost their existing rights under the surrender in the interval, they would not have the power to secure the peace to which they were entitled.

Finally, he must venture to submit to the President that the terms of surrender have been signed by a great many other people. Australia and New Zealand had lost many dead on African soil. The Greeks had, of course, also lost many men, but other countries had signed the armistice terms as well. He did not wish today to go further than to assent in principle to a peace treaty and he should be glad if it received priority by the Council of Foreign Ministers.

With regard to the other countries he was bound to say that Bulgaria had no claim to regard from Britain. It had struck them a blow and had done them all the harm it possibly could. It was not for him to say what the Bulgarians had done against the Russians. Bulgaria had hardly suffered at all in this war. She lay crouching in the Balkans, fawning on German aid. She had also committed many cruelties in Greece and Yugoslavia. She had prevented Turkey’s entry into the war when this would have been most helpful. There had been no proposal to disarm Bulgaria; on the contrary, he believed Bulgaria had some fifteen divisions. No arrangements had been made for reparations from Bulgaria. Bulgaria had also ill treated British and American prisoners of war. Their sympathies lay much more with concluding a peace with Italy than with Bulgaria.

He thanked his colleagues for listening to him and said he thought it was important that they have all the facts before them. He differed in some points from the President and Marshal Stalin.

STALIN stated it seemed to him that the question with regard to Italy and that with regard to the other satellite states generally were questions of high policy. The purpose of such a policy was to separate these countries from Germany as a great force. There were two methods by which this could be done. One was the use of force. This method had been successfully applied by the Allies in Italy and by the Soviet forces in other satellite states. But the use of force alone was not enough to separate the satellite states from Germany. If they confined themselves to the use of force alone, there was danger that they would create a medium unfavorable [favorable?] to the association of these countries to Germany. Therefore, it was expedient to supplement the method of force by the method of improving the position of these satellites. This seemed to him to be the only means to rally the satellites around them and to detach them once and for all from Germany. Compared with these considerations of high policy the questions of revenge and complaints lapsed. It was in the light of these considerations that he viewed the paper presented by the President and he felt that the President’s paper was in full harmony with this policy of detaching the satellites from Germany by easing their position. Therefore, he had no objection in principle to the proposal, but repeated that there might be some improvements of a drafting nature.

He also wished to refer to another aspect of the matter. Of course, Italy had committed great sins. It had committed sins against the Russians as well, but they had not been great ones. They had fought Italy on the Don and in the Ukraine, for they had penetrated that far into his country. He thought, however, it would be incorrect to be guided by the remembrance of injuries. The feeling of revenge, hatred or the desire for redress was a bad adviser in politics. He said it was not for him to teach, but he thought he should be guided in politics by the weighing of forces. The question was, do they wish to have Italy on the side of the United Nations so as to isolate all possible forces which might arise against them from Germany. This determined everything and the same principle applied to the other satellites.

He pointed out that there had been many difficulties and sacrifices caused to them by the satellite states. Rumania had used twenty-two divisions against them. At the termination of the war Hungary had twenty-six divisions and still greater injuries were caused to them by Finland. Of course, if it had not been for the help of Finland, Germany could not have maintained the blockade at Leningrad. Finland had moved twenty-four divisions against Soviet troops. Smaller injuries had been caused them by Bulgaria. She had helped Germany against Russia, but she did not send her troops against them. On the other hand, she had caused harm to the Allies, Yugoslavia and Greece. Bulgaria should be punished for this and he was not opposed to punishing her. The armistice terms provided for reparations to be paid to these two countries. He said not to worry, for the Russians would compel this payment. It was also contemplated in the armistice terms that Bulgaria was to provide troops to fight Germany. This armistice agreement had also been signed by the United States and the United Kingdom. The armistice terms provided that after the end of hostilities against Germany the Bulgarian army was to be reduced to normal. He said that this was being done and that it would be carried out. Bulgaria had no right to resist the execution of the armistice terms and the Soviets would see to it that they did not resist.

Such were the sins committed by the satellite states against the Allies generally and the Soviet Union particularly. If they started to take revenge against them for their brazen behavior and the losses which they had caused, this was one policy and he was against it. The Control Commission of the Three Powers started functioning to keep these countries under control. It was time for a different policy and for easing the position of these countries – not in such measure as the case of Italy – but still it was necessary. The only means to do this was to dig a channel between the Germans and the satellite states.

The specific proposals submitted by the President did not propose that a peace treaty with Italy be immediately prepared. All he had proposed was that the way be cleared for the conclusion in the near future of a peace treaty with Italy and that an intermediate arrangement be concluded which would cover the situation created by the ending of the armistice terms before the conclusion of a peace treaty. It was difficult to oppose this because it was practical and right. With regard to the satellites, he did not propose that peace treaties be signed with them nor even that some intermediate position be accorded them as the President had proposed for Italy. He thought they could start by resuming diplomatic relations with them. With regard to the statement that there were no freely elected governments in the satellite states, he pointed out that no such government existed in Italy and that in spite of this they had resumed diplomatic relations with Italy. The same thing was true of France and Belgium.

CHURCHILL pointed out that these were Allies.

STALIN replied that he understood this, but that democracy was democracy everywhere, no matter whether it was a question of allies or satellites.

THE PRESIDENT stated that as he understood the position he had made a concrete proposal. The armistice agreement with Italy had been signed by the three governments represented here. The same was true of the other armistice arrangements. He had made a proposition with regard to Italy and Marshal Stalin had made a proposal with regard to the others.

STALIN interrupted to point out that the Dominions had not signed these agreements.

MR. EDEN replied that the three countries had signed in the names of all the other United Nations.

THE PRESIDENT interrupted to state that he would like to keep the argument on the questions which they had been discussing, if his colleagues did not mind. On the agenda of their meeting there had been the suggestion of a statement of policy on Italy. Marshal Stalin has raised the question of Rumania, Bulgaria and Finland. The suggestion of Marshal Stalin is that the matter of these satellite states be referred to the Foreign Ministers. The President thought that agreement could be reached on all of these satellite countries. The United States policy in this matter is that it was trying to bring about a feeling of peace in the world and that this did not have to wait a final peace conference for the world as a whole. They were faced with the situation where the United States must expend enormous sums of money because of countries in Europe. With reference to the question of reparations from Italy, it was necessary to take into consideration that the United States was spending from 750 million to a billion dollars to feed Italy this winter. The United States was rich but it could not forever pour out its resources for the help of others without getting something in return. Unless they were able to get these governments on a self-supporting basis, and there was no prospect of getting them on a self-supporting basis the way things were now going, the United States would not be able to continue indefinitely to maintain them when they should be able to help themselves. They had to try at this meeting to prepare conditions which would bring about a situation in which these countries could help themselves. He hoped that they could send this question to the Foreign Ministers and get agreement on all these countries.

CHURCHILL replied that they certainly thought that they were agreed that the preparation of a peace with Italy should be remitted to the Council of Foreign Ministers. He had only deprecated tearing up the surrender terms for that would remove their right to obtain a proper peace.

THE PRESIDENT replied that he was not proposing to sweep away that right.

CHURCHILL replied that he agreed to the easing of the burden on Italy. He supposed that there was no objection to a declaration of policy on Italy.

THE PRESIDENT said he thought they should include the other satellite states.

CHURCHILL said he agreed with what had been said on the subject of not allowing the future to be governed by a spirit of revenge. It had been a great pleasure for him to hear these words from the leaders of the great communities which his colleagues represented. He had great sympathy for Italy. He had mentioned reparations but the British did not want them for themselves. They were thinking of Greece.

THE PRESIDENT pointed out that he had submitted concrete proposals with reference to Italy and that Stalin had submitted proposals with reference to the other satellite states. He suggested that they refer these proposals to the Foreign Ministers.

CHURCHILL replied that he could agree here and now to the preparation of a treaty by the Council of Foreign Ministers. With regard to the armistice terms for Italy he agreed that this could be referred to the Foreign Ministers at the morning meeting.

STALIN said that he suggested that the Foreign Ministers discuss the satellites as well and he urged Churchill to accept this.

CHURCHILL replied that he agreed and that he had not objected to this.

The Situation in Austria, Particularly in Vienna

CHURCHILL said that he regretted in the discussion today he appeared to be arguing against the Soviet view. The situation in Austria was very unsatisfactory. It had been agreed that sectors be assigned to them in Austria. The discussion on this matter had been going on for a very long time. Two months ago they were humbly asking that British officers be allowed to go to Vienna in order to look into the question of accommodations. All this had been agreed to in principle. It was with the greatest difficulty that this had been arranged and he had had to address several communications to Marshal Stalin. There had been no satisfactory results from this inspection. The British had no one in Vienna now and they were not allowed to take up their positions. The entry of British troops into Syria [Styria] had not been allowed, although this had been agreed to. Three or four months ago Austria had been liberated by the Soviets. Field Marshal Alexander had submitted a very unsatisfactory report on the situation. The British did not have a foothold. He thought they should be allowed to go to Austria and take up their zone. At the meeting yesterday Marshal Stalin had raised the question of a visit to the German ships. He proposed that they proceed in a reciprocal manner and pointed out that cities occupied by the Russians should also be opened up. He said that the information reaching them regarding conditions in their zone indicated that they were not satisfactory. In the north in Germany they had retreated to their occupation line and the United States forces had retreated from an enormous territory in occupying their zone, but they had not been allowed to set foot in their zone in Austria.

STALIN said that a general agreement had been reached on the question of zones in Austria. No agreement had been reached on the zones in Vienna. It had taken some time to hold negotiations and agreement had only been reached yesterday.

THE PRESIDENT pointed out that he had signed the document on this matter today.

STALIN said that there was also the question of airfields. Agreement had also been reached on this matter, but the French had only communicated their agreement yesterday. For some reason the French were always late. They agreed to fix the date of entry of the Allied troops into Vienna and the date for the Soviet troops to leave. The movement of troops could begin today or tomorrow.

He said that Mr. Churchill appeared to be indignant. He wondered why. The Soviets had not been permitted in the United Kingdom zone in Germany. They did not complain. They knew how hard it was to move troops. They had no intention of violating an obligation. If only Austria and Vienna were in question, this question was settled. A wiser action was taken in the case of Berlin and the question of occupation was settled more quickly. Field Marshal Montgomery [Alexander] had acted less skillfully. This was one of the factors that delayed matters. He behaves as if Russian troops were under his control. The British and American commanders in the German zone had behaved well and everything was all right there. There was no objection to each army occupying its zone whether in Vienna or in Austria. Only yesterday that agreement had been reached.

CHURCHILL observed that he was very glad to know that matters were now settled. With regard to Field Marshal Alexander, he wished to say that he really did not think that he had been able to give sufficient attention to all of these matters.

STALIN said that he had no complaints against Field Marshal Montgomery [Alexander], although he had not checked up on the matter.

CHURCHILL replied that he would be glad to have any complaints, if there were any.

STALIN said he did not wish to institute an investigation.

CHURCHILL said he was bound to say that in the absence of any complaint Field Marshal Alexander retains the complete confidence of His Majesty’s Government.

STALIN replied that he understood this. He had no complaint. He had only stated what he had been informed of by his commanders and that this was one of the factors that caused the delay.

CHURCHILL pointed out that the British were not the only people involved. There were American deputies involved and it was on record that the United States had been far from satisfied.

THE PRESIDENT agreed.

Western Frontiers of Poland

STALIN suggested that if his colleagues were not ready today they might discuss this matter at the next meeting.

This was agreed.