740.0011 EW(Peace)/2–1247

Memorandum by the Counselor of the Department of State ( Cohen ) to the Secretary of State

secret

Subject: Summary Statement on Important Phases of Austrian and German Settlements For Use in Connection With Meeting of Foreign Relations Committee.26

a. austrian settlement

I.
Mr. Byrnes was pressing throughout the past year to get consideration of a treaty for Austria but it was only in New York in December that he finally obtained agreement of the Council of Foreign [Page 159] Ministers (CFM) to direct their deputies to prepare an Austrian Treaty for submission to the CFM at its Moscow Meeting.
Mr. Byrnes was eager to secure the prompt consideration and settlement of the Austrian Treaty for two important reasons:
(a)
We are committed to treating Austria as a liberated and not an enemy country. As a liberated country, Austria should not be subject to the burden of occupation and occupation troops. We do not intend and Austria does not wish us to get out of Austria before the other occupying powers get out, but Austria wishes and we wish to have all occupying powers get out at the earliest possible moment.
(b)
We not only wish to get the troops of occupation out of Austria in order to reduce the burden on ourselves and Austria, but to make possible the complete removal of troops from Rumania and Hungary. One of the principal objectives of Mr. Byrnes in pressing for the conclusion of treaties with the ex-satellite states was to get the occupation troops as quickly as possible out of all countries in Europe with the exception of Germany. In concluding treaties with Rumania and Hungary it was necessary, however, to allow the Soviets to retain troops in those countries so long as necessary to protect their communication lines with Austria. Therefore, when the occupation troops are withdrawn from Austria, the Soviets will be obligated to withdraw their troops from Rumania and Bulgaria. After that is done, occupation troops will be left only in Germany, although the Soviet will continue to have troops in Poland supposedly for the purpose of guarding the communication lines.
II.
Our interest in the Austrian settlement is to see that Austria is freed from the continuance of restrictions and burdens which might endanger her independence and make her a vassal of the Soviet or any other power.
III.
At Potsdam we obtained agreement that no reparations should be exacted from Austria. But it was also agreed at Potsdam that appropriate German foreign assets should be taken for reparation and it was agreed that these German assets in certain countries should go to the Western Allies and in certain other countries to the Soviet. German assets in western Austria were to go to the Western Allies and in eastern Austria to the Soviet. The Soviet has taken the position that as the occupying power she can determine for herself what are and what are not German assets and to take them out of Austria or use them in Austria in any way she wishes no matter what the effect of her action may be on the Austrian economy. While many difficult legal and interpretative questions are involved, we and the British will do everything we can in the treaty and otherwise, to protect Austria from what we regard as an unfair and inequitable application of the Potsdam Agreement by the Soviet.
IV.
We are also endeavoring, in the treaty and otherwise, to protect the political refugees in Austria from being turned over against their [Page 160] will to the countries of their origin without satisfactory proof that they are guilty of war crimes. There are several hundred thousand displaced persons in Austria and many of these the Soviet regard as hostile to the Soviet Union, and we fear that they will not be dealt with in accordance with our traditional concepts of due process if they fall into Soviet hands. Some of these displaced persons can be absorbed in the Austrian economy, but we will have to assist in finding homes for most of them elsewhere. General Clark has suggested that despite the overpopulation of Germany it would be best to move many of them to Germany than to leave them in Austria where their presence might complicate and delay the Austrian settlement and place too heavy a burden on the shattered Austrian economy.

b. the german settlement

While the deputies of the Council of Foreign Ministers (CFM) on the Austrian settlement have been instructed to draw up a draft treaty for the consideration of the CFM at Moscow, the deputies on the German settlement have only been instructed to hear and report the views of the other allied states which participated with armed forces in the struggle against Germany and to report on the question of procedure with regard to the preparation of the German settlement. While it is hoped that the CFM at Moscow will be able to consider the definitive terms of the Austrian treaty, the CFM will not have before it a definitive draft of the German settlement but will try to formulate the principal directives which should guide the Deputies in working out the definitive terms of the German settlement.

The principal objectives of the United States in regard to the German settlement have been set forth by Secretary Byrnes in his speech at Stuttgart last summer. At this time no more than a brief statement of these principal objectives should be attempted.

I. Military Objective.

Germany should be disarmed and demilitarized and kept disarmed and demilitarized. To secure this objective, President Truman and Secretary Byrnes with the full support and encouragement of Senators Vandenberg and Connally, have proposed a treaty by which the four principal allied powers undertake to see to it that Germany remains disarmed and demilitarized. The proposed treaty provides for a continuing system of quadripartite inspection and control to make certain that Germany does not rearm or rebuild her armament plants or reconvert her civilian industries for war. As Secretary Byrnes has stated, “the United States is firmly opposed to the revival of Germany’s military power. It is firmly opposed to a struggle for the control of Germany which would again give Germany the power to divide [Page 161] and conquer. It does not want to see Germany become a pawn or a partner in a struggle for power between the East and the West.”

II. Economic Objective.

(a)
Germany should be obliged to do her part to repair the devastation caused by her aggression.
To secure this objective, the Potsdam Agreement provided that, as part of a combined program of demilitarization and reparations, Germany’s war potential should be reduced by the elimination and removal of her war industries and the reduction and removal of heavy industrial plants so that Germany would be left with levels of industry capable of maintaining in Germany average European living standards without assistance from others.
The plants so to be removed from the Soviet zone were to go to the Soviet Union and Poland and the plants so to be removed from the western zones were to go in part to the Soviet Union, but in the main to the Western Allies.
The levels of industry fixed under the Potsdam Agreement make no allowance for reparations out of current production. The levels fixed are scarcely sufficient to enable the German people to become self-supporting at the average European standard of living. Secretary Byrnes has stated that the United States will not agree to the taking from Germany of greater reparations than was provided by the Potsdam Agreement.
Some upward adjustment of the levels of industry for Germany should be made to take into account agreed changes in her boundaries and the larger than contemplated population which will have to live within her reduced boundaries. Any upward adjustment in the levels of industry would reduce the plants removals which could be made for reparations. If there were to be any reparations from current production, the levels of industry would have to be raised very substantially and plant removals reduced proportionately. The Soviet Union has probably already taken from her zone most, if not all, the plants which she had a right to take under the Potsdam Agreement and so in our view would be entitled to very little if any current production even if the levels of industry affecting primarily the western zones were raised.
The United States is not prepared to approve any change in the Potsdam Agreement which would make it more difficult for Germany to become supporting without external assistance. In other words, the United States is not prepared to finance the payment of reparations.
(b)
While Germany should be obliged to make reparations within her means, Germany must be given a chance to maintain a minimum European standard of life without outside aid.
To secure this objective, Germany must be permitted within the reduced territory left to her to operate her economy as an economic unit. Zonal barriers to the exchange and distribution of her indigenous resources must be removed.
(c)
German economy should be geared to the economy of Europe as a whole. While German trade should not be restricted by zonal barriers, Germany should not be allowed to deny access on equal terms to her great iron and steel resources to other European countries. We should not shortsightedly try to keep Germany weak and poverty-stricken, but we should not permit Germany to build herself up economically by depriving France and other European countries of the resources they need.

III. Political Objective.

(a)
The German people throughout Germany should be given the primary responsibility for running their own affairs under proper safeguards which will ensure that Germany remains disarmed, maintains the democratic character of her governmental institutions and respects the human rights and fundamental freedoms of all who dwell within her gates.
To accomplish this objective, the Potsdam Agreement provided that the administration of affairs of Germany should be directed towards the decentralization of the political structure and the development of local responsibility. In carrying out the Potsdam Agreement the United States has organized its zone into three länder or provinces. It is our view that the government of Germany should be a federation of länder or provinces with a federal government with limited powers, but with the powers necessary to deal with matters, particularly economic matters, which require nation-wide treatment. The federal government should be denied the right to maintain any military department or establishment or to have control over internal security or education. The Allies should lay down the principles which should govern the drafting of the Constitution, but should permit the responsible representatives of the länder or provinces to draft the Constitution subject to the approval of the completed instrument by the Allies.
(b)
The boundaries of Germany should be drawn with a view to the peace and prosperity of Europe.
We are committed to the assignment of the Koenigsburg area of East Prussia to the Soviet Union. We are committed to the detachment of the Saar from Germany and its economic integration with France.
We are committed to giving Poland some compensation in the East for the lands taken from her east of the Curzon line. But the German-Poland [Page 163] boundary was only provisionally fixed at Potsdam for the administrative purposes of occupation, subject to the final decisions of the Peace Conference. The area in dispute is primarily a food growing area. It is now sparsely populated, most of the Germans having fled or been expelled therefrom. It has only been partially settled by the Poles. We are inclined to believe that the provisional line should be adjusted to enable German farmers to raise there the food which Germany and Europe so badly need.
Other claims have been made for small portions of prewar Germany by other neighboring countries. These must be carefully examined, but in the interest of peace a very clear case should be made out for taking any further territory from Germany.
We are concerned not to make a hard peace or a soft peace, but a peace which will be effective and enduring.
  1. The Secretary of State testified before a closed session of the Senate Foreign Relations Committee on February 14, 1947; see post, p. 166.