Foreign Relations of the United States: Diplomatic Papers, The Conference of Berlin (The Potsdam Conference), 1945, Volume II

Truman Papers

Cohen Notes

Potsdam, July 27, 1945, 4 p.m.

Mr. Molotov acted as Chairman.

Molotov: Our first question relates to Italy and the other satellite states being admitted to the United Nations. This question was virtually settled at the meeting of the Big Three.

Byrnes: I did not so understand.

Molotov: Let us discuss this question today. What other questions are there?

Byrnes: I have a list of questions for discussion by the Big Three. I think I should read it as we are approaching the end of the Conference.

The pertinent questions are: [1.] German economic question[.]

Molotov: The question of reparations is even more urgent.

Byrnes: I agree. That is the next question on my list. You may put it first if you wish.

2. German reparations.

3. Italian and Austrian reparations.

4. Oil for western Europe.

5. Admission of Italy and satellites to United Nations.

Molotov: I thought that was our first item on this afternoon’s agenda.

Byrnes: That is right. I am merely listing the questions without regard to priority.

6. Implementation of Yalta agreement on the satellite states.

7. Policy toward Italy and other satellite states.

The paper of the United States¹ has not been acted upon.

Molotov: What is that?

Byrnes: The paper presented the first day.

Molotov: What is contemplated?

Byrnes: It refers to the terms of the Armistice.

8. British paper on oil equipment in Rumania.

9. Western boundary of Poland.

10. Cooperation in solving immediate European economic problems.

All items on the original United States and Soviet agenda have been raised before the Conference.

Two questions have been raised and not fully discussed or disposed of—war crimes and the transfer of German population from Czechoslovakia and Poland.

Molotov: A committee has been set up to deal with the latter question.

Byrnes: I am now ready to discuss the paper submitted by the United States on the admission of Italy into the United Nations.

Cadogan: There is a question of political significance which could be taken from the economic principles regarding Germany and put into the political principles.

Molotov: We must have an interchange of views. You have recalled all your questions? Then I should like to recall the disposition of the German fleet. There is also the question of war criminals. Should this not first be discussed by the Big Three?

Byrnes: I do not see on my list another question—that of inland waterways. This is also in the hands of a committee.

As to policy for Italy. My understanding was that the Prime Minister did not agree with the paper as submitted or amended and it was passed over.

Molotov: So far as I understand, the President indicated his assent.

Byrnes: That is true, subject to drafting changes.

Cadogan: It is not possible for us to enter into complete diplomatic relations with a government with which we are at war. We could say that the conclusion of a peace treaty with a responsible democratic government should make possible the resumption of diplomatic relations and its entrance into the United Nations. I offer this suggestion as a possible compromise.

Molotov: It differs entirely from what the Soviet Delegation proposed. The Prime Minister suggested that the first sentence should be made to read treaty “for” and not “with” these states. No other amendments suggested.

Cadogan: That is true but he was unable to accept the Soviet amendment. I offered [offer this?] text as compromise.

Byrnes: The Prime Minister made the statement that he did not approve the language the President acquiesced in. I do not know if the entire statement was translated. I have regretted that I had proposed the paper regarding the admission of Italy. I thought it was a matter as to which there would be no objection. I was then presented with a proposal to agree to a policy regarding the admission of neutrals and then to a proposal for the admission of the other satellite states on the same basis as Italy. After days of discussion we could not agree. I have reached the conclusion that the United States paper on Italy should be withdrawn. If the Soviet and British delegations do not agree on the language proposed, I withdraw entirely our proposal. There are many important matters which should not be delayed, such as reparations, the German fleet and western boundary of Poland, which are all immediate and vital. We should prepare for final adjournment within the next day or two.

Molotov: We have spent many a day on this. The American delegation brought it up. President Truman accepted the amendment.

Byrnes: That is true, subject to drafting changes. He had in mind one word.

Molotov: I propose we refer it to the Big Three to consider or withdraw. We can’t do it ourselves. Mr. Attlee will come tomorrow. The President and Generalissimo will be present.

Byrnes: I have no objection. I am simply stating the position of our delegation which has the approval of the President. The paper was proposed by the United States but it related only to the admission of Italy as other proposals had [been?] added. In the absence of agreement, we should withdraw it if we can’t agree.

Molotov: I propose the question be referred to the Big Three. The next question is German reparations or German economic problems. Which shall we discuss first?

Cadogan: I am at the disposal of the Chairman, but I don’t see what we can do now.

Byrnes: My information is that the Committee is far apart.

Molotov: I propose we discuss reparations.

The Soviet delegation regards the work done by the economic committee [subcommittee] as unsatisfactory. We should direct these questions then to other channels that [when?] we are not able to settle them ourselves. I should like to know if the American delegation has changed their views expressed at Yalta. Is the Yalta understanding still valid as regards fixing the total sum of reparations and its distribution among the Allies. Yalta took as a basis for discussion 20 billion dollars and 50 percent should be allocated to the Soviets. Yalta provided for discussion at Moscow.

Byrnes: Yalta merely says that reparations commission should take Soviet total figure as basis of discussion and study. If you mean by submitting the questions to study we agreed to the amount, the answer is no.

Molotov: I understand. But I have heard that Mr. Pauley officially withdrew the view taken by the American delegation at Yalta. That may be necessary but I should like to know whether the American delegation withdraws its Yalta opinion. I am not insisting on this. I want simply to find out.

Byrnes: At Yalta the United States expressed no opinion as to amount. Maisky suggested figures, not Mr. Roosevelt. At the conclusion of discussion Mr. Roosevelt said it would be all right to accept it as a basis for discussion and study. Mr. Pauley says what he stated was he had received and considered proposals and in view of circumstances now existing he regards it as impractical.

Molotov: Should Secretary Byrnes be understood to state that in [at] Yalta ten billion dollars for the Soviets was considered possible and now it is not?

Byrnes: Neither the President nor anyone else agreed to 20 billion at Yalta. When you ask for 20 billion and I say I will discuss it, it does not mean that I shall write a check for it.

Molotov: The same applies to our position. The Soviet delegation is willing to reduce the amount. Mr. Maisky says that Mr. Pauley officially withdrew the basis.

Byrnes: Mr. Pauley did discuss this basis at Moscow.

Molotov: Maybe the American government has made a new decision.

Byrnes: Mr. Pauley did consider it at Moscow and here. Investigating conditions, he did determine in his opinion that it was impracticable. I have already gone over this matter with Mr. Molotov. Since Yalta a lot of property has been destroyed by the Russian Army and by the American Army. They did a tremendous job. I do not know Mr. Pauley’s view of the figures. But if he told me the figures had not been altered by events, I would not have a good opinion of his judgment. No opinion was expressed at Yalta. Twenty billion dollars [was] suggested for the whole of Germany, including Silesia. Since then there has been a great dispute as to what is war booty and what is war reparations. Mr. Pauley and Mr. Clayton tell me that in the American zone in Berlin they saw a plant of the I. T. and T. stripped of all machinery and four other plants were stripped, rayon plant, Zeiss plant, and others. When Mr. Pauley said circumstances made it impossible under these conditions to tell what reparations are available in Germany, it was certainly the understanding of the American delegation that such plants would be available for reparations. It is difficult to reconcile the views of our representatives and the Soviets on the reparations commission. I want to see an agreement but I do not see how they can reach one.

Molotov: Perhaps the American delegation can suggest a different basis.

Byrnes: I understand that the American delegation has. I think it important to find another plan. We do not want a plan which will cause constant friction between us.

Molotov: My understanding, Secretary Byrnes, is that you have in mind the proposal that each country should take reparations from its own zone. If we fail to reach an agreement the result will be the same.

Byrnes: Yes. As I stated, the United States is not seeking reparations. We would not trouble in agreeing on what we want for ours [ourselves]. We assert our claim because we have to look after others, Belgium, Holland, Yugoslavia. We have already sent five hundred million dollars to Italy. We must send more to France. We are trying to do the best we can in a very complicated situation.

What impresses me is that more important than the money involved is the removal of the source of irritation between our two governments so that we may work together.

Molotov: I understand.

Byrnes: Our instructions to the Army were not to remove factories. Only one or two experimental [plants?] or models were removed from our zone.

Molotov: Neither United States nor Great Britain was occupied. Our plants were laid waste. We think that our right to reparations [is] inalienable. The United States’ and Great Britain’s position morally is entirely different. Countries which were occupied have a right to reparations. Perhaps certain plants were removed from Germany but this is small compensation for our losses. We shall maintain our view even though the United States and Great Britain find that not a dollar of reparations should be exacted. We do not insist on the Yalta figures but we want a clear reply from the United States and Great Britain. The right of occupied and invaded countries to reparations is inalienable. Economic committee is marking time and it is high time that we have our answer.

Byrnes: The economic committee recognizes your right to reparations.

Molotov: It is unsatisfactory.

Byrnes: It is not satisfactory to anyone. We can’t satisfy anyone.

Molotov: What do you suggest?

Byrnes: I have made one suggestion. If that is not satisfactory I suggest we pass it over until tomorrow when Mr. Attlee will be here. The Soviets spoke of the Ruhr. That is in the British zone. We can’t make progress until the British delegation can discuss this with us.

Molotov: Perhaps the British representative can speak for the British government.

Cadogan: Not at this stage. The British [Government?] accepted and has not abandoned the Yalta agreement. No one wants to deprive Russia of her due share of reparations.

Molotov: Secretary Byrnes wishes to pass the question over until tomorrow.

Byrnes: We can’t do anything before then. My suggestion is that we pass it over until tomorrow.

Molotov: Shall it come up before the Big Three?

Byrnes: I don’t see how it can be discussed on the basis we have discussed here. We must make another final effort before we refer it to the Big Three. Can you tell us, Sir Alexander, when Mr. Attlee will come?

Cadogan: Mr. Attlee simply said he hoped to be here for a late meeting tomorrow.

Molotov: Three ministers think it advisable to postpone question until their next meeting. After such consideration results should be reported to the Big Three.

Cadogan: Mr. Attlee may bring a foreign secretary with him or he may instruct me.

Molotov: We will discuss it tomorrow if possible. If not, the following day.

We passed the question of reparations from Austria and Italy. The work of the economic committee on this subject is unsatisfactory to the Soviet delegation. We suggest that the foreign ministers discuss this. We propose three paragraphs for reparations from Austria and I ask that these be taken as a basis for further discussion. We propose regarding Austria two hundred fifty million dollars reparations[—]less than that exacted from the satellites. The kind of goods can be agreed upon later. The period of time would be six years. Reparations would go to the Soviet [Union], Great Britain and United States and Yugoslavia.

Byrnes: Our representatives on the commission think it is impossible to hope for reparations from Berlin [Italy?]² and Austria out of current production. The United States, Great Britain, and Canada have already supplied a half billion dollars to Italy to prevent starvation and unrest. That much [more] will be required. We would be unwilling to advance money and goods to be used for reparations. Our representatives are prepared to consider the removal of war equipment having no peacetime use. The United States does not want this war equipment. It can be paid as reparations to the Soviets. As to current production, there can be none unless we advance money and we are unwilling to do this.

Molotov: No one suggests that. Austria will be bound to pay for her imports by her exports.

Byrnes: We can not get the money back we put in there.

Molotov: United States territory was not occupied by Austria.

Byrnes: Nothing material can compensate you for the lives lost.

Molotov: I speak of land and property devastated.

Byrnes: That is different. When it comes to property there is not so much difference between the destruction and [of?] buildings and money costs. We have paid out 400 billion dollars.

Molotov: Our war expenditures were immense. I have not referred to them. Can we let our land be devastated and not be compensated? Why should Rumania pay and not Austria? United States was a party to the Rumanian armistice.

Byrnes: The United States does not expect reparations from Rumania.

Molotov: Rumania is paying reparations.

Byrnes: Not to us.

Molotov: It is your right. You can waive it if you like.

Byrnes: As to Greece, she has a claim against Italy—a prior claim.

Molotov: Yes, Greece, Albania and Yugoslavia. We can provide a prior claim for Greece and other invaded countries.

Byrnes: I can not see reparations from these countries except their war plants. Austria must get relief from UNRRA.

Molotov: This has no application to reparations.

Byrnes: No country paying reparations is entitled to relief from UNRRA. Let us place our differences on record and report to the Big Three.

Cadogan: Our views accord with those of the American delegation.

Molotov: Can we place on record this difference in views? The American and British governments favor reparations only from equipment.

Byrnes: Only war plants and equipment having no peacetime use.

Molotov: Let us say equipment. This [is] reparations, not war booty.

Byrnes: I say machinery and equipment from war industries having no peacetime use.

Molotov: Let us put that on the record. I should make it clear that no provision is in the UNRRA document that a country paying reparations is not entitled to relief.

Byrnes: My information is otherwise. We will have to look it up.

Molotov: Next question is the economic principles for Germany. Paragraphs 18 and 19³ should be considered.

Byrnes: This depends on other economic questions. Let us pass it.

Molotov: Next question—oil for western Europe.

Byrnes: Committee is not ready to report. Soviet representative was to secure information.

Molotov: Let us put it off.

Byrnes: We should discuss the cooperation in solving immediate European economic problems. I have copy of report.

Molotov: I have it but must read it. We have no objection.

Byrnes: It states that the Soviet government will participate in the inland transport conference. I think we should thank the committee for reaching an agreement. But other parts merely say that the Soviets will review documents. Do you want to report it that way?

Molotov: Whichever way you like.

Cadogan: We could add Soviet government is considering further participating in the other agencies mentioned.

Molotov: I suggest that report of committee be approved.

Byrnes: I agree.

Molotov: Next question.

Byrnes: I have no further question.

Cadogan: Has Soviet delegation considered our Rumanian oil proposal?

Molotov: We have sent a memorandum on the subject today.

Adjourned.

1. Document No. 1089, post. For the other documents referred to in these notes, see the footnotes to the minutes, supra.
2. Cf. the minutes, ante, p. 432.
3. See documents Nos. 863, 872, 873, 875, and 876, post.