740.00119 Potsdam/7-3045
Rapporteur’s Report
[Babelsberg,] 31st July, 1945
Secret
P (TERMINAL) 69
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Mr. Bevin was in the Chair. The meeting began by conveying to Generalissimo Stalin an expression of the regret with which they had heard of his illness and their hope for a speedy and complete recovery.
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The meeting then agreed to the immediate despatch by each of the Three Governments of telegrams to the Governments of France and China inviting their participation in the proposed Council of Foreign Ministers. The telegram to the French Government would also refer to the dissolution of the European Advisory Commission.
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The meeting also approved the despatch of telegrams to the French Government communicating to them the text of the statement of political principles to govern the treatment of Germany in the initial control period.
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Reparations
The Foreign Secretaries considered a proposal by the United States Delegation as follows:Reparations claims of Russia and Poland to be satisfied from the Russian zone plus:
(a) 25% of such industrial capital equipment as we determine is not necessary for a peace economy and should be removed from the Ruhr on condition that there would be exchanged an equivalent value in food, coal, potash, zinc, timber, clay products and oil products, to be made available to us by the Soviets.(b) An additional 15% of such industrial capital equipment as is determined unnecessary for a peace economy should be transferred from the Ruhr to the Soviet Government without payment or exchange of any kind in return.
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The U.S. Delegation made it clear that there were two other questions which must be settled at the same time. The first was the proposal for admission of neutral and ex-enemy states to the United Nations as regards which the U.S. Delegation had circulated a revised note; the second was a proposal concerning the Western frontier of Poland, according to which the U.S. Delegation would agree that the Polish Provisional Government should administer the area claimed by them pending final arrangement of the actual frontier at the Peace Conference. The U.S. Delegation insisted that all three proposals must be the subject of agreement at the same time.
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The Foreign Secretaries also considered proposals about reparations and sources of supply for the zones of occupation put forward by the U.K. Delegation.
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The discussion showed that there was general agreement with the lines of the American proposal, subject to the following two points:
(i) The U.S. and U.K. Delegations considered that the figures in the U.S. proposal should be 12½% from all the western zones in exchange for goods, and 7½% from all the western zones without payment. The Soviet Delegation on the other hand maintained that these figures should be 25% from the Ruhr on the basis of exchanges and 15% from each of the Western zones free.
(ii) The Soviet Delegation wished to see a minimum figure of either weight or value stated in addition to the percentages. The U.S. and U.K. Delegations could not accept this suggestion.
As there was no agreement on this question, the other two proposals by the U.S. Delegation were not discussed.
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Economic Principles
The British Delegation proposed that the following should be included in the Economic Principles: “Payment for approved imports into Germany shall be a first charge against the proceeds of exports out of current production and out of stocks of goods”.The Soviet Delegation asked for the addition of the following sentence: “As regards the rest, priorities should be given to reparations, as compared with the satisfaction of other economic needs”.
The U.S. and U.K. Delegations were unable to accept the Soviet suggestion.
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German Fleet and Merchant Navy
The U.K. and Soviet Delegations submitted memoranda on the subject. These memoranda were referred to a Sub-Committee composed as follows:- U.S. Delegation: Admiral Cooke and Mr. Russell
- U.K. Delegation: Admiral McCarthy, Mr. Weston and Mr. Ward
- Soviet Delegation: Admiral Kuznetsov and M. Sobolev
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German External Assets
The U.S. Delegation submitted a memorandum on this subject, which was referred to the Economic Sub-Committee. -
Germany – Political Principles
The U.K. Delegation had proposed two additions to the statement on political principles. The first of these, which was adopted, reads as follows: “So far as is practicable there shall be uniformity of treatment of the German population.”The second proposed addition was as follows: “Subject to normal regulations there shall be free circulation of nationals of the Powers represented on the Control Council in all zones by land and air.”
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It was agreed that this should be referred for examination by the Control Council for Germany, who should be asked to submit their recommendations about it to the first meeting of the Council of Foreign Ministers in September 1945.
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The Soviet Delegation then suggested a third addition to the statement on political principles as follows:
Assistance will, however, be rendered to the establishment of a central German administration composed of secretaries for respective branches of administration – in the first instance of central administrative institutions for foreign trade, industry, finance, transport and communications. The central German administration shall act under the direction of the Control Council, and it will be their task to coordinate the activities of the Provincial Governments in order to ensure the fulfilment of the decisions of the Control Council and the exercise of functions connected with the solving of problems of an all-German character.
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It was agreed to defer this until the Delegations had had an opportunity to study it.
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Yugoslavia
Memoranda on this subject were circulated by the U.K. and Soviet Delegations. It was agreed to consider these memoranda at a subsequent meeting. -
War Crimes
Memoranda on this subject were circulated by the U.K. and Soviet Delegations. It was agreed to consider these memoranda at a subsequent meeting. -
Activities of Russian Fascists in Germany and Austria
The Soviet representative referred to the memorandum circulated by the Soviet Delegation on 27th July. The U.S. and U.K. Delegations said that they had asked for reports from the competent military authorities, which had not yet been received. -
German Troops in Norway
The Soviet representative referred to a memorandum on this subject circulated by the Soviet Delegation on 27th [25th?] July. The U.K. representative said that a reply on this topic had been received and would be sent to M. Molotov as soon as possible. -
Administration of the Ruhr Industrial Area
The Soviet Delegation circulated a memorandum on this subject. -
Repatriation of Soviet Citizens from the Baltic, Western Ukraine and White Russia
The Soviet Delegation circulated a memorandum on this subject.