740.00119 Council/1–2447

Memorandum of Conversations, by the Assistant Chief of the Division of Central European Affairs (Lightner)

Participants: Mr. Benjamin V. Cohen
Gen. John H. Hilldring
Mr. Willard L. Thorp
Mr. H. Freeman Matthews
Mr. Charles E. Bohlen
Mr. E. Allan Lightner, Jr.

Three meetings were held in Mr. Cohen’s office on January 22 and 23 to discuss the preparatory work for the CFM meeting in Moscow on March 10 with the object of deciding on specific studies and recommendations which should be prepared in the Department as soon as possible. It was agreed that papers on the following subjects should be prepared (this list is not intended to be a complete list):

U.S. proposal for presentation to CFM on the Polish-German frontier, with memo giving supporting background.
Statement of U.S. position on other boundary questions.
Statement of U.S. position on reparations, particularly the Soviets’ desire for reparations from current output.
U.S. proposal for presentation to CFM on organization of the central government, to ensure the maximum degree of decentralization consistent with the need for a viable economy for the whole country (central administrations in certain agreed economic fields); also memo giving supporting background.
U.S. proposal for presentation to CFM on control machinery in the period after the end of the occupation—inspection system and security troops required to carry out inspection tasks.
U.S. proposal for presentation to CFM on reduction of forces of occupation prior to the establishment of the German government (A–H).
Outline of Peace Treaty; treaty headings and, if possible, draft provisions.

Territorial Questions.

With respect to the Polish-German border it was felt that it might be a mistake in tactics to reach a decision on the frontier until we see what the rest of Germany looks like. At the same time it would be well for the U.S. to come forward with a concrete suggestion. We should make it clear that the frontier should not be settled purely on grounds of Poland’s national prestige but on solid economic grounds as well. Our proposal should take into account the fact that the U.S. favors territorial compensation to Poland but that it is also important that the food producing areas of northeastern Germany must not remain fallow while Europe is starving. Information should be obtained with regard to what the Poles have done with the area under their administration. The question should be approached on the basis of a revision of the Oder-Neisse line rather than as a new proposal based on Poland’s old borders.

A paper should be prepared for presentation to the CFM setting forth a U.S. proposal for the Polish-German frontier. Alternative proposals, which we might fall back on in bargaining with the Russians, should be prepared, together with supporting data. Another paper on the U.S. position on other boundary problems should be available, although it is not expected that the U.S. will initiate any proposals on these questions.


In considering the Soviet desire for reparations from current output we must start from the premise that we should adhere to the agreement already reached at Potsdam, which does not envisage reparations from current production. If we should make any compromise at all on this point we should only do so in return for something else which would help to improve the situation in Germany, and then only if the reparations from current output are limited in amount and short in [Page 199] point of time. We should also propose that the Level of Industry Plan65 should be reexamined, not in connection with reparations from current production but because we consider the plan too low based on the standards of the Potsdam Agreement itself. At Moscow we should make it clear that we are not holding up deliveries of capital equipment merely for bargaining purposes, that we are eager to go ahead as soon as possible but that we need to know whether Germany will be treated as an economic unit. In any case we should not resume deliveries of capital goods before the Moscow meeting.

The bargaining on reparations matters will, of course, be closely linked with the question of economic unity. Thought should be given as to what we mean by economic unity. It will not depend on a paper agreement but on how it is carried out, particularly how the Russians and French carry it out. We must be careful to see that if we get agreement on economic unity it does not result in political centralization. Probably the French would have no objections to economic unity if we convinced them that we insist on a decentralized political structure for Germany such as a confederation of states. The important goal, not to be lost sight of, is to get a Germany which will be integrated into Europe.

A paper should be prepared on reparations problems, particularly our position on reparations from current production.

Structure of the German Government.

The U.S. favors decentralization with large powers in the Laender governments. We must clarify our thinking on the details. How many Laender should there be? Would a federal state be composed of these Laender or should the Laender be grouped into larger units in order to reduce the number of units participating in the central government? These questions can hardly be decided until we know what the structure of Germany will be. To what extent can a confederation of states meet the economic problems of a modern state? We must examine this question in detail, indicating what powers will be given to the component states and what powers to the federal government. Will the legislative organ take the form of a Reichstag or a Bundestag? In any case there should be no central control of education and police (interior). There may have to be central control of such things as the post office, telephones and railways. The power to tax is a more difficult question. A compromise solution will have to be worked out in order to reconcile economic needs with our concept that politically [Page 200] Germany should consist of a loose federation. Political checks must be supplied on economic power where such power is centralized. At Moscow firm agreement on these matters may not be possible but it is hoped that some sort of directive can be agreed upon for the deputies.

A paper should be prepared for presentation to the CFM describing the organization of the central government, which shall be decentralized as far as possible and yet still provide for the central economic controls required in a modern state. An accompanying memo should present background material. A cable is expected from Dr. James K. Pollock, who is now on a mission to Berlin, outlining his views on this subject.

Control of Ruhr Industries.

Concrete plans should be advanced as to what we mean by control of Ruhr industries. Presumably we will support the second British plan on the control of the Ruhr but we should emphasize that the controls to be established should be truly economic ones, within well defined limits, rather than political controls. The question of Russian participation is important and no arrangements should be agreed upon or proposed which would permit any Russian representatives to take part in operational control. There should be no danger in Russian participation if they are not permitted to exercise a veto and if the powers of the commission are well defined.

The Ruhr problem involves the question of inspection and controls, not only for that area but for all of Germany, as a means of enforcing the proposed treaty for the disarmament and demilitarization of Germany. We should sketch out how the inspection corps or security forces will work in the period after the end of the occupation. The CFM should endeavor to frame directives for the deputies on this subject.

A paper on such control machinery for presentation to the CFM should be prepared; it should deal with the inspection system and the token forces required to support it. Proposals regarding the security forces, the tasks which they are to perform, where they will be stationed and the numbers to be employed should be worked out with the War Department through General Hilldring’s office. A memo giving background discussion to support the U.S. proposals should also be prepared.

It would also be useful to present at Moscow a paper urging the reduction of forces during the period of occupation. This would entail agreement with the other occupying powers in order that the forces be reduced proportionately in all zones. The U.S. would favor drastic curtailment, as for purposes of security vis-à-vis the German population only a small number (35,000 or 40,000) are now believed to be necessary. A paper on this subject would be useful.

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Draft Peace Treaty.

It was felt that if the personnel situation in the Department makes it possible, work should be started on the first draft of the Peace Treaty. At least thought should be given to the matters to be covered. An outline of treaty headings might be started, perhaps in DRE. The Delegation at Moscow should be prepared to present treaty headings and possibly even a tentative draft treaty.

Note: It was pointed out that the preparation of the papers discussed above was urgent and that Mr. Riddleberger (CE) should be responsible for seeing that they were ready at the earliest possible date.

  1. For the Level of Industry Plan for Germany as approved by the Allied Control Council for Germany in March 1946, see Department of State Bulletin, April 14, 1946, pp. 63–641 or Documents on Germany Under Occupation 1945–1954, selected and edited by Beate Ruhm von Oppen (London, New York, Toronto, Oxford University Press, 1955), pp. 113–118.