740.00119 EW/3–2347
Memorandum of Conversation, by the Secretary of State
Mr. Bevin called on me at 12:45 and left at 2:30. We had lunch together.
Greece
[The portion of this memorandum dealing with Greece is included in the documentation on U.S. Economic and Military Aid to Greece and Turkey, in volume V.]
Reparations
Mr. Bevin stated that he had only attended the Potsdam Conference during its last four days, arriving Saturday and the Conference completing work the following Wednesday, and had a very brief time to gain impressions. He himself was not clear on the over-riding completeness of the Potsdam Agreement on reparations in relation to the previous tentative agreement at Yalta. In other words, he did not feel that reparations from current production were by the Potsdam Agreement completely barred. Mr. Bevin reiterated his statements that the British Government would not commit itself to any reparations out of current production until Germany had been made self-sustaining.
Mr. Bevin then inquired how fixed our stand was regarding reparations from current production—to what extent were we determined to stand on our statement that there should be no retreat from Potsdam to Yalta.
I told Mr. Bevin that we were clear in our minds, particularly those gentlemen who had been present at both Yalta and Potsdam, that the Potsdam Agreement completely superseded the Yalta expressions regarding reparations. I summarized our view of the existing situation, that is (a) the fact that the transfer of plants and machinery generally had not been a profitable procedure (b) that the Soviets by their policy of a five-year plan for the building up of the military potential of their government now found themselves in a difficult, if not desperate, economic plight in some sections of the country and therefore would be the more determined in their negotiations to obtain reparations from current production, particularly during the next two years (c) that we had been examining the situation to see if there might not be some procedure such as the operation in Germany of reparation plants for the benefit of the Soviets, they providing the raw materials, etc., which would permit a form of reparations from current production without delaying the creation of a self-supporting German economy.
[Page 274]I indicated the political impossibility of securing agreement by an American Congress to a course of action which involved the indirect payment of reparations and I opposed this with the view that the Soviet demand for some form of reparations out of current production during the next two years would be implacable.
Mr. Bevin said that he felt that it would require very expert investigation to determine whether or not such a course of operating reparations plants in our zones for the benefit of the Russians, they furnishing the raw material, was practical.46
He then turned to his relations with the French and explained that he had agreed prior to coming to Moscow on at least two occasions to delay any cut in the export of coal deliveries because of critical French election situations, but finally had been forced to advise Mr. Blum that he could go along no longer on that basis, that critical repairs would have to be made in order to really get ahead on the matter of production and had counseled a frank statement to this effect by Mr. Blum to the French people. Then Bidault had approached him for another delay and later had stated that unless a suitable adjustment in coal was made for France, the French could not go through with this conference regarding other matters. He had told Bidault that that was not acceptable procedure and advised him not to bring it up in the Conference. However, it had been brought up and I had heard his remarks on the subject. He added that they were made as much for Molotov’s benefit as for Bidault’s—that he was opposing this business of stating that unless there was an agreement on one point, they would not go ahead on others, and that it would be his course throughout the Conference. He would not submit to such procedure. He stated, incidentally, that Mr. Molotov had been trying to draw him on the reason for the slow development of the capacity of the Ruhr mines, which in Mr. Bevin’s opinion was caused by his concession to the French to meet their political crisis which had thus delayed the genuine reconditioning of the mines.
There followed a discussion on the Polish boundaries, density of population, and related matters, during which Mr. Bevin gave expression [Page 275] to no definite and important points of view. He did not state what the stand of the British Government would be on the subject.
I failed to mention in the first place that I told Mr. Bevin that the American Delegation felt that it was very important to make no concessions, especially at this time, if ever, on the Potsdam Agreements, particularly as related to reparations.
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On March 23, Foreign Secretary Bevin wrote the following letter to the Secretary of State:
↩“I have been thinking over our private talk of yesterday, and I feel that you should know that His Majesty’s Government would not find it possible to agree to any settlement of the German problem involving reparation from current production which would entail further expenditure by His Majesty’s Government. The terms of the Loan and Fusion Agreement with the United States, and our heavy and widespread liabilities contracted as a result of two wars, render it impossible for us to assume further financial burdens. His Majesty’s Government cannot contemplate imposing more sacrifices on the British people, who, as I feel sure you will recognize, are already undergoing sacrifices at least as acute as those of many other nations whose difficulties, being more obvious, excite the sympathy of the world.” (740.00119 EW/3–2347)