Potsdam, July 31, 1945, 4:00 p.m.
MR. BEVIN reports for the Foreign Secretaries.
TRUMAN: The first point on the agenda is the United States proposal regarding reparations, Polish frontier, and admission into the United Nations of various categories of states.
MR. BYRNES presents reparations paper.
MOLOTOV: We should like to circulate our own draft.
BYRNES: The United States proposal on reparations is one part of a proposal dealing with three controversial subjects. The other subjects are the western frontier of Poland and admission of states to the United Nations. The United States delegation has made it plain that concessions in proposals were conditioned on the acceptance of all three points.
STALIN: The questions are not connected.
BYRNES: The subjects are different but they have been before the Conference for two weeks. The United States is making concessions which it would not make except to obtain an all around settlement.
As to the first question, reparations, United States proposes a [that] 25 percent of the industrial capital equipment determined to be unnecessary for the peace economy should be exchanged for an equivalent of food, coal, potash, timber and other articles from Soviet zone and additional 15 percent of such equipment not necessary for peace economy should be removed and transferred to Soviet [Union] on reparation account without further consideration. In our original proposal this equipment was to come from the Ruhr zone.
In the foreign secretaries’ meeting the British said they could not agree if exactions were from the Ruhr only but could agree if they came from the three western zones. It was agreed that the only difference would be one of percentages and that the percentage would be just one-half of what was in the American proposal regarding the Ruhr; that is if all the unneeded equipment in the western zones is included, the percentages would drop to 12½ and 7½ percent.
MOLOTOV: Those figures were not agreed upon.
BYRNES: They were suggested by the British and I agree that they are better from an administrative point of view and more advantageous to our Soviet friends.
STALIN: We agreed, not only the Ruhr but all the zones should be considered.
BYRNES: As to the reparations proposal, there were two or three suggestions made at the foreign secretaries’ meeting which ought to be adopted. There was the machinery for the determination of equipment not needed for peace, therefore available for reparations. The Soviet delegation stated that they wished to be specific as to how this should be done. This should be done by the Allied Control Commission in accordance with policies laid down by the reparations commission subject to the approval of the zone commander. I suggest determination be made by the Control Commission because four governments are on that Council and it is an administrative body while the reparations commission is a policy body. The removal of the industrial equipment should be completed in two years in exchange for instalments to be delivered over five years. It should also be stated that the reparations claims of other countries except Poland should be met from the western zones.
My other proposals relating to Poland’s western frontier and the admission of states into the United Nations. The Polish paper gives to the Polish government the interim administration of all the territory they have asked for. The admission of states to the United Nations paper contains language which I hope meets the approval of the Soviet. It originally provides that the three governments in the near future should examine the question of the resumption of diplomatic relations with the satellites. The British stated that that presented constitutional difficulties for them. Mr. Churchill said they could recognize them 90% but not completely until peace was concluded. Finally, Marshal Stalin asked if the British would agree to recognize them completely or partially. I, therefore, suggest that we examine the question of diplomatic relations in the near future in the light of conditions prevailing to the full extent possible prior to the conclusion of peace. Our British friends have not been pleased but have agreed to accept this proposal in principle.
STALIN: We have no objection in principle.
BYRNES: The other changes are the insertion of a provision that the three governments expressed the desire that the representatives of the Allied press be given freedom to report developments in the satellite states. The language is substantially the same as used in the Polish paper.
STALIN: I have an amendment. I should say three governments have no doubt that the Allied representatives will have freedom to report.
BYRNES: That is satisfactory, is it not, Mr. President?
TRUMAN: Yes.
ATTLEE: It is satisfactory to us.
BYRNES: Those are my proposals.
STALIN: Our suggestions are circulated, (paper read)
MR. BYRNES suggests tying three questions together. Mr. Byrnes can use such tactics as those if he wishes, but the Russian delegation will vote on each question separately. I have just read our suggestions on reparations. The Soviet delegation has accepted the view of the American delegation not to mention a definite amount. I must also read paper circulated on removals made from the Russian zone by the Americans and British. Today we have a report that American and British have taken 11,000 railroad cars. Should they be returned or compensated? You will see that the Russians are not the only ones to remove equipment.
TRUMAN: I think there should be a central transport authority for this purpose.
STALIN: I want to make it clear that not only the Russians have sinned but the Americans and British have also. We should now be able to agree on reparations. Exactions should come from the three western zones. Part of the equipment will be exchanged for products for five years. Council determines the equipment to be removed from the western zone [zones?]. We want time limit when the amount of equipment to be removed is mentioned.
TRUMAN: We agree.
BYRNES: We provide two years for the removal of equipment and five years for the exchange of products.
STALIN: I have in mind a time limit for determination what equipment is to be removed, say three months.
BEVIN: That is not sufficient.
STALIN: Let it be three or five months.
BEVIN: I will agree to six.
STALIN: All right. I hope my friends will agree.
BEVIN: Your basis is 15 percent of the total. Our proposal was 15 percent of what was left after the retention of enough equipment to keep the economy going. I am sorry I can not support it. The Soviet refers to total industrial equipment. Our proposal refers to what is left after retention of what is needed for peace economy.
STALIN: The Allied Control Commission determines what should be removed.
BEVIN: I must insist that the Control Commission first determine what is necessary for peace economy.
STALIN: It is the same.
BEVIN: Will you accept our word [wording]?
STALIN: What is the difference?
BEVIN: I don’t want any misunderstanding.
STALIN: We have in mind 15 percent of what is to be removed and is not needed for peacetime industry. The Control Council decides.
BYRNES: But we have it in our proposal. (Byrnes rereads his proposal regarding authority of control council)
STALIN: I agree.
BYRNES: If that is so, the only point in dispute is the percentage. You want 15 and 10 instead of 12½ and 7½. In addition you add on the second page of your proposal, you want shares in industrial and transport companies to the amount of 500 million dollars and 30 percent of foreign assets and 30 percent of gold. As to gold, our staff contends the ownership of this is identifiable. It is looted gold. It should be returned to its owners. Is the Soviet insisting on the five [500?] million in shares in addition to increases in percentages of 30 percent of gold and foreign assets?
STALIN: That is what we would like to have.
BYRNES: What have you in mind in reference to foreign assets?
STALIN: Assets that have been frozen.
BYRNES: That is a matter to be determined by our Congress. The President has called my attention to the fact that the Congress has already determined this. There are claims of refugees. We could not make such an agreement. There will be claims for reimbursement of losses.
BEVIN: Yesterday we agreed on determination that France be added to the reparations committee.
STALIN: I don’t object.
BEVIN: In regard to percentage we thought we had met you yesterday by agreeing to 12½ and 7½. We thought that was very liberal.
STALIN: That was not liberal – just the opposite.
BEVIN: It was generous.
STALIN: We have a different point of view.
BEVIN: I take it reparations will not interfere with the exchange of goods. We take it it involves no departure from our economic principles arrived at in our report of July 20.
STALIN: These should be discussed.
BEVIN: The gold presents very great difficulties. As to German foreign assets, we could consider limiting this to neutral territory.
STALIN: We could agree.
BEVIN: I do not know if my American friends can agree.
BYRNES: We stand on our proposals and we cannot accept the additional point added by the Soviets.
STALIN: Then we should increase the percentage. You have taken equipment from our zone.
TRUMAN: We have been informed by the Russians of these alleged removals. We have asked General Eisenhower to investigate. The removals were not authorized by the American government and you need not worry about them.
STALIN: I quite accept it.
TRUMAN: Neither were any people removed by the authorities. We have too many people to take care of now.
STALIN: Let us agree to the percentages 15 and 10.
TRUMAN: I agree if our British friends do.
STALIN: I agree.
BEVIN: Take out paragraph 4 and I will give you 12½ and 10 percent.
STALIN: Paragraph 5 remains. If America agrees will not the British agree? You need not worry about France. She signed an armistice with Hitler. Neither Great Britain, Holland, nor Belgium broke the common front. France did.
BEVIN: But we must also take care of Yugoslavia, Greece, Belgium and Holland as well as France. I want nothing but raw materials. Neither Holland nor Belgium broke the common front as France did.
BYRNES: In the proposal of the American delegation, it is stated that claims other than Poland should be met from the western zone. I ask you to consider the language of that proposal.
STALIN: You wish not to mention the names of the countries? We have no objection.
BEVIN: My impression is that this will give you more than 50 percent of the reparations.
STALIN: No, less than 50 percent. The 15 percent is in exchange. Our proposals are the minimum. We received [receive?] from you only 10 percent.
BEVIN: I will give you 17½ percent on exchange and 7½ on the free.
STALIN: That is your suggestion.
BEVIN: I think that it is better.
STALIN: We receive only 7½ percent then? I think 15 and 10 is fair.
BEVIN: Well, I will agree.
TRUMAN: The next question is Poland.
BYRNES: I need not read the proposal. I hope our British and Soviet friends will agree.
BEVIN: I think the document should be read.
BYRNES reads the proposal, indicating that the Poles are to have provisional administration of the area bounded by the Oder and the Western Neisse.
BEVIN: I have been instructed to hold for the eastern Neisse. Does it mean that the zone will be handed over to the Poles entirely and that the Soviet troops will be withdrawn? I have met the Poles on this question and in the light of the declaration in the United States document, I have asked them what their intention really is because any change of a territory must be defended in Parliament. That defense will be effected but what will happen in the new Poland? I asked the Poles their intention in regard to free election[s] on universal suffrage. They assured me that they will hold elections as soon as possible, not later than January, 1946, subject to conditions beyond their control. They also agreed to the freedom of the press. They gave assurance on the freedom of religion. But one very important matter is repatriation of troops. I asked them if they would make a declaration so we would be sure that they would receive equal treatment. Another point which concerns the Soviets and ourselves that the Poles can not settle with us is the establishment of an air service between Poland and London so as to enable His Majesty’s Government to maintain regular communications with the embassy at Warsaw. I should like an agreement on that immediately. In the United States document it says area under the administration of Polish state and not part of Soviet occupation. That means it is under Poles for all matters.
TRUMAN: That is subject to the peace treaty. It is only for administration.
BEVIN: Although it is under the Polish administration, technically it is under Allied control. I only wish to get this point clear. If it is a transfer, would I not have to get French approval?
STALIN: The French have nothing to do with it. It is the Russian zone.
BEVIN: Can we do this, Marshal, without the consent of those on the Control Council?
STALIN: In this case, yes. The Polish state must have a border but it is subject to the final decision of the Peace Conference.
BEVIN: I want to settle this but does not the Control Council agreement give it jurisdiction over Germany with its 1937 boundaries? I don’t press the point. What happens in this zone? The Poles take over and the Soviet forces withdraw.
STALIN: The Soviet troops would withdraw if territory did not constitute a line of communication with our troops in Germany. There are two communication lines running through POLAND. These are the routes through which our armies are fed just as your[s] are fed through the roads of Belgium and Holland.
BEVIN: Troops are limited to your communication needs?
STALIN: Yes. We have already removed four divisions of our troops and we contemplate further reduction by agreement with Polish government. This zone is now actually administered by the Poles.
BEVIN: Could you help in this interim period with this air communication? We only want one or two planes a week taking in and out officials and mail. The Soviet military command is involved. We must fly over Russian zone.
STALIN: They fly now over the Russian zone to Berlin.
BEVIN: Can you agree to Warsaw?
STALIN: This must be discussed with the Poles. We can agree if our planes can go to London from France. As to communication to Warsaw, you could use Russian pilots from France. We would use French and British pilots.
BEVIN: That is too complicated to settle here. It would assist if we could settle Warsaw-London communication here.
STALIN: I will do all I can.
TRUMAN: This settles the Polish question.
STALIN: Stettin is in the Polish territory.
BEVIN: Yes. We should inform the French.
STALIN: Yes.
TRUMAN: Next question. Mr. Byrnes will speak.
BYRNES: This is the proposal regarding the admission of states to the United Nations.
BEVIN: We agree.
STALIN: Mr. Molotov will speak.
MOLOTOV: Amendment to paragraph 4. We want to say the governments have no doubt instead of the governments express their wish that the Allied press will have full freedom to report.
TRUMAN: A few other things. Economic principles for Germany were postponed. There should be no trouble now.
MOLOTOV: Paragraph 19. Our draft deals with priority of reparations.
BYRNES: Since we have agreed to reparations plans giving the Soviet claim to equipment only, there is no need for this paragraph.
STALIN and MOLOTOV: That is right. There is no need for it at all.
BYRNES: In this paper there are two amendments I should like to submit. On page 2 there is enumerated a common policy embracing various items. The section regarding the currency should read currency, banking, central taxation and customs. A new subheading should also be added to include transportation and communication.
TRUMAN: That takes care of your freight cars.
STALIN: There will be need for central machinery.
BYRNES: My suggestion on page 3, paragraph 14, amendment on extension of credit. No credit except where determined by occupying power necessary to pay for imports. In view of reparations agreement it would not affect our Soviet friends.
STALIN: This would be applicable in all zones.
BYRNES: Yes.
BEVIN: I propose we delete sentence altogether.
STALIN: I agree.
BYRNES: For the same reason we propose deletion of paragraph 18.
BEVIN: We propose approved imports should be first charge on proceeds on exports from current production.
STALIN: There is no necessity for this.
BYRNES: You have control in your zones.
BEVIN: But this is cutting the zones up. The [That] presents great difficulty.
MOLOTOV: We have circulated a paper on the Ruhr. In this draft the Ruhr should be part of Germany but there should be a control by four powers and a four power council.
BEVIN: I can’t discuss this without the French. It is an important point of principle. They are vitally affected.
STALIN: Is there any doubt that the Ruhr should be considered part of Germany?
TRUMAN: Not for purposes of the occupation and control.
STALIN: Let us confine ourselves to the paragraph that the Ruhr is a part of Germany and under the control council.
STALIN: Perhaps we should mention it. This question is being raised because at Tehran the point was raised that the Ruhr should be made a region separate from Germany under the great powers. When Churchill visited Moscow he was favorable to the separation of the Ruhr. This idea was the consequence of the principle of dismemberment. Since then the views of the leaders have changed and they think dismemberment inadvisable. The Russian delegation wants to know if the Ruhr is to remain with Germany.
TRUMAN: The Ruhr is part of Germany and is under the jurisdiction of the Control Council.
BEVIN: I can [not] agree on this question now. I know that the internationalization of the Ruhr has been discussed, but it must remain under the Control Commission pending further discussion. I should be quite willing for this to go to the Council of Foreign Ministers.
TRUMAN: That is agreeable to me. I think the American delegation has circulated a paper regarding the Allied property in the satellite countries.
BEVIN: Before going into that, I should like to discuss the Soviet amendment to the economic [political] principles for Germany which would authorize the establishment of Central Germany and [central German] administrative agencies to assist the Control Council. I have a redraft of the Soviet amendment. It is really a short version of the Soviet proposal.
STALIN: It is acceptable to us.
TRUMAN: We accept it.
BEVIN: I should also like to suggest paragraph (9) [19] of the economic principle[s] should go back to the Economic Committee [Subcommittee] for further consideration.
STALIN: When will the committee discuss it.
TRUMAN: Immediately. The next question relates to the transfer of populations from Poland, Czechoslovakia and Hungary.
BYRNES: My understanding is that the proposal was agreed to by the committee except for the last paragraph requesting the deferment of further expulsions pending report of the Control Council. I urge acceptance of the last paragraph.
MOLOTOV: The document intended to make all this business orderly. That is the way it can be understood by the Poles and the Czechs, but it is not possible to adopt the decision without hearing the Poles and the Czechs.
STALIN: If we adopt the decision it could not be carried out. The Germans themselves prefer to get away because of conditions. If we adopt the decision proposed it would be a shot in the void.
BYRNES: There is a difference in the information that we have received. According to our information these expulsions are forcible.
STALIN: I will agree if you insist.
ATTLEE: These governments should realize that they are creating a burden for other countries.
STALIN: I have no objection.
BEVIN: I wish the French to be notified of this decision.
TRUMAN: Next item is the German Fleet.
STALIN: We should like a final decision today, if not today, tomorrow.
TRUMAN: I agree, although I had hoped to get away.
LEAHY: The committee will be ready in the morning
STALIN: As the principle has been decided on, perhaps we could leave this for the Foreign Ministers.
BYRNES: We may be able to settle it here.
STALIN: It has been decided that we get one-third of the Navy, except the submarines, the greater part of which are to be sunk and that the merchant fleet will be at the disposal of the Allied Command for use in the war [against Japan] and decide it at the end of the war. Let us settle it here.
TRUMAN: I agree that it should be settled before we leave. We now consider our paper on the implementation of the Yalta Agreement.
BYRNES: Most of our proposal was not agreed to. The committee has simply agreed on two paragraphs for revised and improved procedures for the Allied Control Commission in Rumania, Bulgaria and Hungary.
STALIN: The question was not on the agenda. We may not object until [after?] we have read it.
TRUMAN: We will defer it until tomorrow.
MOLOTOV: We have circulated the draft on Greece yesterday. We circulated the paper [on] Trieste.
BEVIN: We presented a reasonable request regarding Yugoslavia. In view of the lateness of the hour, I do not think we can consider Greece or Yugoslavia, or Trieste.
STALIN: We will drop it then.
TRUMAN: The next item relates to the war criminals.
MOLOTOV: The Soviet delegation agrees to accept the British draft with one amendment. The amendment is in the last sentence after the words “War criminals”. We wish to add specific names “Such as Goering, Hess, Rosenberg, Ribbentrop, etc.”
ATTLEE: It is not wise to put in names.
STALIN: We merely suggest that such people as Goering and Ribbentrop be tried. If we remain silent it will cast a shadow on our prestige. If we name persons as an example we do not leave out the others. It is no offense to the prosecution. It will be helpful politically.
BYRNES: Yesterday I urged it was unwise to name names. Every country has its favorite criminal. It will be difficult to explain to each country why its pet criminal was not named.
STALIN: We suggest only “such as”.
BEVIN: There is some doubt whether Hitler is alive. He is not on the list.
STALIN: But he is not in our hands. I quite agree that Hitler should be hanged.
ATTLEE: The world knows quite well who are the major criminals.
STALIN: But if we remain silent the world thinks we want to save them and to go after only the minor ones.
BYRNES: This morning I spoke to Justice Jackson. He expressed the hope that this afternoon or tomorrow morning his committee might reach an agreement. If Stalin could urge his representatives to agree an announcement as to the agreement on a tribunal and place a [of] trial could be made. This would be good news.
STALIN: That is another question.
BYRNES: We could include it in our statement.
STALIN: If we do not mention criminals known to the whole world by names our work will not have the same worth. Russian lawyers advise us that naming the defendants help them and give them the needed orientation.
TRUMAN: I have been interested in the freedom of waterways. I should like to have some discussion of my paper on this subject. The committee appointed for this purpose never met. Some policy regarding the Rhine and Danube should be worked out. It would be a great preventative of future wars. I do not expect an agreement on details here, but it should be discussed.
ATTLEE: I am in general agreement with the President.
MOLOTOV: This question has arisen in connection with the Straits and that question has been proposed [postponed]. The question of internal waterways requires study. We need people who know something about it.
TRUMAN: I suggest the matter be referred to the Council of Foreign Ministers.
STALIN: All right.
ATTLEE: We agree.
TRUMAN: Would it be proper to notify the Polish officials of our decision on the Polish Boundary.
STALIN: The President, as our chairman, can act or designate others to act for or with him to advise the Poles on our decision.
TRUMAN: The Foreign section [Secretaries] will meet at 11:00 o’clock tomorrow and we will meet at 3:00. Adjourned.
