Foreign Relations of the United States, 1948, Germany and Austria, Volume II

Policy Planning Staff Files: Lot 64 D 563: Box 20029: Germany

Report by the Policy Planning Staff ¹

[Extract]

secret

Washington , November 15, 1948.

PPS 37/1

Position To Be Taken by the U.S. at a CFM Meeting

the problem

To define the course of action to be taken by the United States at a possible meeting of the Council of Foreign Ministers in the near future to discuss the problem of Germany.

facts bearing on the problem

1. The problem is: whether, in the event of a CFM meeting, to come forward with a positive program, making clear the terms on which we would be prepared to consider the establishment of a German government for all of Germany and the withdrawal of forces from the major part of German territory, along the lines of Program A (Tab A), or to rest on a basically negative position, leaving it open to the Russians and the others to come forward with proposals which we would answer, and presumably decline, on an ad hoc basis.

2. In the main, the considerations pro and con, concerning the ad vantages and disadvantages to U.S. interests of a broad general settlement of the German question, are those set forth in the first part of PPS 37 (Tab B²). That paper, it will be recalled, addressed itself mainly to the question whether it would be acceptable to U.S. interests to have a settlement along the lines of Program A, if one could be achieved at this time, and answered that question, on balance, in the affirmative. It is, however, highly unlikely that agreement could be obtained to anything like Program A in less than a year, at the earliest. The Staff is therefore inclined to feel that the question, whether such a program should now be advanced, should also be carefully weighed from the standpoint of its psychological and tactical effect, as a proposal not likely of immediate acceptance. The present paper is addressed to this point.

3. Of the group of outside consultants called in to examine this program on September 15–16, all but two (Mr. Armstrong and Father Walsh) appeared to favor a course of action along the lines of Program A.³ The consensus among them certainly ran to such a conclusion. Most of them made it plain that they considered the advantage of our proposing such a program to lie primarily in the favorable position in which we would thereby be placed, from the standpoint of keeping negotiations open and the situation flexible from here on out. They emphasized the importance of our continuing to “keep talking”, and seemed to favor something in the nature of a permanent CFM discussion (principally among deputies), in which we would patiently discuss any and all phases of our program for as long as anyone wished to discuss them.

conclusions and discussions

In the event of an early meeting of the CFM, the Staff would favor the proposal by this Government of something along the lines of Program A, provided we can obtain in advance assurance of a wide enough degree of British and French acquiescence to maintain basic three-power unity.

The Staff’s reasons are:

1. To put forward such a program gives us the initiative. If we do not make some such a proposal, our scope of action at a CFM meeting will apparently be limited to reacting to the proposals of others. It is better that we place on the board something to which others will be forced to react.

2. To put forward such a program makes it impossible for others to portray our position as negative. It likewise offsets charges that we do not really want any settlement with Russia or that our policy is lacking in vision and imagination. It makes possible for us to state our objective and to keep it clearly before the public and the other members of the CFM.

3. By putting a proposal of this sort on the table and evincing readiness to negotiate on it at any length, we keep the situation flexible, as between the Russians and ourselves, for an eventual softening of the Russian position. In this way, the mere proposal of such a program and continuance of negotiations about it, however difficult and slow-moving these negotiations may be, helps to mitigate the congealment of the present division of Germany and Europe which will tend to take place as long as this division endures. It is possible, as many believe, that the continuance of a firm policy with regard to Berlin and the western German arrangements might, in the absence of our making any proposals along the lines of Program A, eventually disrupt the Russian position in eastern Germany so seriously as to bring the Russians to a point where they would be prepared to negotiate realistically for a German settlement. However, if no proposals along the lines of those embodied in Program A have been placed before the CFM, and there is only the sort of deadlock that exists today, the Russians might have no means of yielding without excessive loss of prestige, and the possibility of a settlement might have been lost by default. By putting forward these proposals we may help keep open the door for an eventual peaceful withdrawal of the Russians from central Europe. Unless that door is kept open, the Russians may not be able to withdraw even when they have come to the conclusion that it would be to their own interest to do so.

4. There seems to be no alternative other than a completely negative position.

The position which we took at former CFM meetings would no longer be realistic, in the light of the events of the past year. We cannot look to four-power collaboration in the government of Germany as a realistic solution when the four powers cannot even agree, after two months of the most strenuous inter-governmental negotiation, on the problem of currency for Berlin. Similarly, we cannot hope that the economic unification of Germany could be accomplished as long as the Soviet police have full control in the Soviet zone; for it has been amply demonstrated that the Russians do not trust their own powers, and cannot maintain their own position, without the most desperate measures of segregation of the population under their control and its isolation from western influences.

Similarly, we cannot seriously limit ourselves to recommending, at CFM meetings, that the Russians bring their zone in on the present western German arrangements, thus extending the applicability of the London decisions to all Germany. In the first place, the London decisions would not be suitable for application to all Germany. They, too, envisage intimate collaboration of the occupying powers in the control of a German government, particularly in such important matters as foreign trade and foreign affairs, on which Russian views could scarcely ever be expected to be anything but in conflict with those of the three western powers. They also envisage a continuation of military occupation; we have just seen what this would mean. Secondly, any such proposals would necessitate months of detailed and difficult preliminary negotiation with the French and British; for the London decisions represent a compact between the three powers, and any proposal for their extension to the remainder of Germany would have to be in all respects an agreed tripartite one. Finally, it would hardly be realistic to expect the Russians to adhere to a set of arrangements in the negotiation of which they themselves had had no part; for this would amount to a complete capitulation on their part. A proposal along these lines would therefore bear a “take it or leave it” character, and would not appear to U.S. and world opinion to have been a serious bid for an agreed settlement.

In the light of these considerations, it is difficult to see what proposals of a positive nature we could place before the CFM other than ones along the lines of Program A. The alternative to proposing Program A would therefore appear to be the adoption of a negative position, consisting necessarily in the rejection of proposals advanced by others coupled with the necessity of evading demands for a clear statement of our own desiderata.

5. Even though a CFM meeting would presumably not take place unless there had been a lifting of the blockade, it is idle to hope that after a possible unsuccessful outcome of the CFM discussions we would be able to carry on in Berlin as we were carrying on before the outbreak of the recent difficulties. It must be taken for granted that the Russians would continue to bend every effort to force us out of Berlin, whether by a re-imposition of the restrictions or otherwise. Certainly, our position there would never be a comfortable one; and we would be living constantly on the edge of an abyss in the form of the danger of further serious friction.

Constituting as it would at least the offer of the set of arrangements which would resolve the Berlin deadlock by getting all Allied forces out of that city, the proposal of Program A would place us in a more favorable position to continue the struggle both in Berlin and in Germany as a whole. It is true that Program A is unlikely to be accepted at this juncture, and therefore unlikely to constitute in itself a solution of the Berlin difficulty at the present time. It does, however, provide one more channel of possible negoiation through which a solution can be sought and achieved if and when the Russians should wish to have such a solution. For this reason alone, it would seem that we would be remiss if we did not at least make the offer. Having made it, we would also be in a relatively favorable propaganda position vis-à-vis the Germans in Berlin and elsewhere. For if, in the long run, the hardships resulting from the blockade should begin to cause real distress and discontent among the German population of Berlin, we would be able to point out that we had proposed and urged an arrangement under which all Allied forces would have left the city and its entire vicinity, and we would thereby be able to disclaim basic responsibility for the resulting difficulties.

[Annex]

Memorandum by the Director of the Policy Planning Staff ( Kennan ) to the Secretary of State

secret

[ Washington , November 12, 1948.]

Mr. Secretary: 1. There is enclosed a document setting forth a program for Germany labelled for the sake of convenience “Program A”.

2. This program is designed for use in the event that this Government wishes to put forward publicly, either before the Council of Foreign Ministers or in any other way, a program revealing plainly the terms on which we would be prepared to consent to the establishment of a German government for all of Germany and to the withdrawal of forces from most of Germany.

3. The program was evolved by a working group in the Department, operating under my general direction. This working group included representatives of the Office of European Affairs, the Division of Central European Affairs, the Assistant Secretary for Economic Affairs, the Assistant Secretary for Occupied Areas, the Legal Adviser on Military Affairs and Occupied Areas, and the Plans and Operations Division of the Department of the Army.

4. The group has not undertaken to answer, in the drafting of the program itself, the question whether this Government ought to come forward now with a positive proposal of this nature. There are, in fact, still some differences of opinion among the members of the group on this subject. Reservations on this point also exist among various people in higher circles of the Government. The final decision, I think, will be yours, unless you should wish to get a decision of the National Security Council.

5. For these reasons, the program may be considered cleared as a program with the interested divisions of this Department and in process of clearance with the Department of the Army; but this clearance is without prejudice to the overall problem of whether or not such a positive program should be submitted to the CFM by us at this time. If it is decided that a positive program should be advanced, there is agreement here that it should be some such comprehensive plan as this.

6. Before making a final decision you will doubtless wish to consult with your advisers in Paris and with other qualified persons, particularly General Clay. Your final decision will also no doubt have to be made in the light of preliminary discussions with the French and British. It has always been the thought of those of us who worked on this paper that it would not be formally proposed at a CFM meeting or otherwise if this would seriously disrupt three-power unity. In this case, however, there would still remain the question whether this Government should not find some means of informing the world at large that it was prepared, had the other European Allies been willing, to consider a solution along these lines.

George F. Kennan

[Sub-Annex]

Paper Prepared by the Policy Planning Staff

secret

[ Washington ,] November 12, 1948.

A Program for Germany (Program A)⁴

outline of the program

1. This paper sets forth a program for a new interim arrangement with respect to the government of Germany, for possible submission by the Secretary of State to a new meeting of the Council of Foreign Ministers, or for promulgation in any other manner as a U.S. position.

2. The arrangement envisages, under proper safeguards:

• a new control machinery agreement to be worked out by CFM deputies, to govern relationships among the Allies, and between them and the Germans, pending the final peace settlement;
• the early election and establishment of a provisional German government;
• the simultaneous termination of military government throughout all of Germany; and
• the withdrawal of all occupying forces to specified garrison areas.

3. The safeguards would include:

• free elections under satisfactory supervision;
• safeguards against any misuse of German police;
• provision for complete disarmament and demilitarization of Germany;
• avoidance of any economic arrangements which could give the Russians undue influence over the German government or constitute an undue burden on Germany;
• timing or phasing of the successive stages in their proper order, for example, forces would not be withdrawn until a duly elected German government was prepared to function; and
• effective elimination of the veto by any individual power.

4. This arrangement would be intended to function until the conclusion of a peace treaty.

5. The program is presented here in five parts:

I. The Underlying Considerations

II. The Proposal for a Program for Germany as It Would Be Initially Advanced

III. Notes on the Proposal

IV. The U.S. Position on Other Subjects Apt to Come Up for Discussion

V. Presentation and Tactics

i. underlying considerations

1. The program has been drawn up for use in the event that this Government should decide to make clear at this time the terms on which we would be prepared to agree to an interim settlement envisaging the establishment of a German government with authority over all of Germany and to the withdrawal of forces from the major part of German territory.

2. If it is not our desire to come forward with such a program at this time, this paper would have no validity. If, however, we do desire to make such a proposal, it would apparently have to be essentially along the lines of the one set forth in this paper.

3. On the theory that we should not put forward proposals which we would not ourselves be prepared to accept, this program has been so devised that it could, in the opinion of the working group, be implemented to the overall benefit of U. S. interests.

4. The program has also been devised on the theory that it must constitute a genuine and sincere bid for agreement. Every effort has therefore been made to meet legitimate Russian interests and requirements to a reasonable degree.

5. On the other hand, it must be recognized that there is no serious possibility of its acceptance by the Russians in toto at this time. It is drawn up, therefore, with the thought that it should constitute a starting point for what will probably be long and difficult negotiations. These negotiations would presumably take place for the most part among CFM deputies. These negotiations would not necessarily have to have any specified time limit. Their primary purpose would be to keep things flexible for an eventual agreement on Germany when and if the Russians finally decide that it is to their interests to have one.

6. This program is not designed to constitute or to replace a treaty of peace. It is specifically intended as another interim arrangement for the governing of Germany, to replace that worked out at Potsdam.

7. In drafting this program it has been taken as axiomatic, in the light of the experience of the past few years, that the four Allied powers cannot be expected to collaborate effectively in the actual government of Germany or in the exercise of any control authority in which their failure to agree would hinder the effective administration of the country. The project is therefore so devised as to call for a minimum of four-power collaboration. And an effort has been made to restrict four-power control powers to a negative, rather than a positive basis (i.e., the Germans can do everything which the four powers do not agree unanimously that they should not do.) This means, in contradistinction to the concepts governing our proposals at previous CFM meetings, that the unification of Germany would have to be accomplished by the German government, and that such matters as the establishment of a common currency, the dropping of zonal economic barriers, the drawing up of a common export-import plan, etc., would not have to be discussed among the four powers.

8. A second basic point of departure has been the belief that no unification of Germany is possible as long as zonal boundaries are maintained and that the boundary between the Soviet and other zones probably will not disappear as long as Russian troops are stationed in the Soviet zone.

9. These two considerations (5 and 6) have made it necessary to consider the immediate establishment of a German government (to replace military government), to be followed by an early evacuation of forces from all but specified garrison areas. These two factors are basic, and are logically linked together. If there is to be a four-power arrangement for Germany, some way or other a situation must be created which will eliminate the Russian veto. If troops are not withdrawn to specified garrison areas, zonal barriers will probably remain in effect, and the prospects for any successful economic unification of the country will be accordingly diminished. Again, in this case, the Russians could sabotage the arrangements by making economic unity, and accordingly economic recovery, impossible. If, therefore, either of these major elements should, for any reason, be eliminated, then the whole program should be discarded; for without both of them, it could become a very dangerous thing.

10. The same applies, of course, to the safeguards which are imbedded in the proposals and which are designed to assure against the “capture” and exploitation of Germany by Russia, as well as against a, revival of German aggression. The main ones of these are:

(a) the electoral arrangements, providing for free and supervised elections;

(b) the arrangements to guard against misuse of German police units;

(c) the provision for complete disarmament and demilitarization of Germany;

(d) our refusal to accede to economic arrangements which would give the Russians undue influence over a German government or constitute an undue burden on Germany.

(e) the timing of the successive stages of realization, under which, for example, forces would not be withdrawn until a duly elected German government was in office and prepared to function.

If any of these safeguards cannot be basically assured or replaced with others which would have the same effect, then again the whole program should be reexamined.

11. For these reasons the plan should be specifically presented as an integral program, the various component parts of which must be considered in relation to each other.

12. The sections on government and Allied control constitute the essence of the attached program. They are formulated with a view to adaptation to whatever conditions exist at the time of CFM discussions. If a CFM is held late this year or early in 1949, the deliberations of the Bonn Constituent Assembly will be well advanced, or possibly a western German government with an eastern zone counter-part may already be in existence. The proposed Constituent Assembly for all of Germany elected by free vote would be likely to adopt a governmental system not far different from that devised for western Germany at Bonn by the constituent representatives of the majority of the total German population.

13. The proposed governmental arrangements are all drawn up on the theory that anti-communist forces can probably win a working majority in any reasonably free national election at this time and hold it for the foreseeable future, in the absence of actual armed pressure from Soviet or German communist elements. This is a theory which cannot be demonstrated in advance. The danger that it might prove incorrect must therefore be considered as a calculated risk. It is assumed, for purposes of this paper, that this risk is an acceptable one, from our standpoint. This is a vital factor, for only if we are prepared to rely on this probability can we avoid the necessity of strong and continuing controls by the western powers over the working of a German government. And if such controls were to be retained, then it would plainly be preferable to carry on with the existing western German arrangements than to attempt to work out any device whereby we would try to exercise this control function in collaboration with the Russians. The reliance on the ability of the Germans to elect and maintain a government capable of resisting communist pressures is therefore basic to this program. If this is not accepted as a strong likelihood, then again the whole program is unworkable and should be abandoned.

14. The disarmament program plays an important part in the basic concept of this program. In the light of east–west differences and of communist tactics, the disarmament problem becomes one of preventing not only renewed German aggression but also any connivance by either side with the Germans to permit rearmament against the wishes and the interests of the other. For that reason, and to simplify the problem of control, it is recommended that disarmament and demilitarization be sweeping and complete. On the other hand, while it is recognized that there will have to be certain prohibited industries and activities, the identification of which would have to constitute part of any interim settlement along the lines of this program, the idea of any general restrictions on the level of industry is rejected, as well as anything in the nature of a limited functioning of individual branches of activities under four-power control with individual veto. This accords with the principle, mentioned above, that we should avoid everything that would call for continued, day-to-day collaboration with the Russians in control arrangements of a positive nature. In general, to meet this principle, the older drafts of a disarmament and demilitarization treaty⁵ require extensive revision. (Work is now in progress on this revision.) On the other hand, the idea of our continuing to offer to conclude such a treaty is considered sound, and, in fact, indispensable to the present program.

15. The proposal for the withdrawal of forces to specific garrison areas is a compromise between the desire to get Russian forces out of Germany entirely and the necessity of keeping U.S. forces there to meet the wishes and security requirements of the western European allies. That the Soviet forces must be required to leave the Soviet zone as a whole, and that they must be placed in a position where they cannot exercise any influence on civil affairs, is clear. On the other hand, it is unlikely that the French could be brought to consent either to the departure of U.S. troops from Germany or to any arrangement which would call upon Allied forces to get out of the Rhineland. If western forces remain in their zones, Russian forces will remain in theirs. The withdrawal of forces to garrison areas therefore appears to be the best compromise. At the same time, the provision that these garrison areas shall be, in the case of powers non-contiguous to Germany, in the neighborhood of seaport towns, is designed to make possible the further requirement that the Russian troops, like those of the U.S. and U.K., be supplied by sea and air, and in this way to deprive the U.S.S.R. of the justification for the maintenance of armed forces in Poland.

16. The Russians, who view economic matters almost solely in their political connotations, will seek some means whereby they can gain, through these arrangements, an economic hold over Germany which will permit them later to exert political pressure on a German government. The main one of these devices will of course be the demand for reparations beyond any reasonable capacity of the Germans to pay. While this and similar attempts must be rejected, it is recognized that the Russians probably deserve to have some assurance—particularly if Germany is to be left free to join ERP—that German trade will not be oriented exclusively to the west. Since the initiative in raising this question should come from the Russians, nothing is said on this subject in the initial U.S. proposal itself. However, allowance is made for this requirement in the recommendation that a fair share of German foreign trade would be available for the east.

17. With respect to ERP itself, this is not mentioned in the draft proposal, because it is considered that a provisional German authority, with power to control Germany’s foreign relations and foreign trade, would have no choice but to participate in ERP, and would be at liberty to do so in the absence of any special restrictions. We would therefore leave it to the Russians to raise this subject if they so wished. We would, however, accept no arrangements which would inhibit the Germans from participating in ERP. To do so would place Germany economically at the mercy of Russia and would defeat the purposes of this program.

18. A word of clarification is in order as to the relationship of this program to the present western German arrangements. The program envisages an adaptation by common agreement of the London decisions to which the U.S. is committed. It has heretofore been thought that through the intensified development of the western German arrangements agreed last June we would be able to exert such pressure on the eastern zone of Germany that eventually we would be able to force the Russians to permit the eastern zone to become a part of the western German arrangements. The present program is based on the belief that the Berlin situation, the desirability of combatting Soviet propaganda about withdrawal of forces, and the unlikelihood of any helpful Russian participation in four-power control make desirable a somewhat modified approach.

19. This program embraces the essential principles of the London program. The latter’s objective of returning authority to the Germans would be accelerated with a view to reducing Soviet interference and this purpose would be furthered in the proposed troop withdrawals which would recognize the fact that we cannot expect of four-power collaboration the same things that we can expect of three-power collaboration. On the other hand, the guarantees against German disarmament would gain force by acceptance on a four-power basis. While it can be hoped that we might obtain British and French acquiescence to the plan as a development of the London program and as representing no abandonment of the initiative we have acquired with respect to the major part of Germany under that program, our proposals would be presented in the CFM as a new program standing by itself in order to obviate raising an unnecessary and undesirable prestige factor which will militate strongly against Soviet acceptance.

20. The proposal of this program, based as it is on an effort to get rid of the sharp line of division through central Germany and the resulting dangers connected with the status of Berlin, would not be logical unless it went hand in hand with a parallel effort to bring about the evacuation of Austria.

ii. a program for germany ⁶

German Government

1. A constitutional government for all of Germany should be established as soon as possible.

2. The four occupying powers shall authorize the Ministers-president of the sixteen German Laender (states) and the Lord Mayor of Berlin to convoke a constituent assembly for the whole of Germany. Members of the assembly shall be chosen by popular election in proportion to the population of the respective Laender. In addition, two representatives from each Land (state) and from Berlin shall at the same time be chosen by popular vote to constitute a Laenderrat (senate) which shall participate in the constituent assembly. The general election shall be held throughout Germany within [90] days of the conclusion of CFM agreement, provided the International Commission hereinafter mentioned approves.

3. All political parties at present authorized in any zone should be permitted to offer candidates throughout Germany. A system of UN supervision and inspection shall be established and maintained uniformly in all electoral districts throughout Germany to ensure that all authorized political parties may operate freely and that elections are held by universal equal and direct suffrage, and by secret ballot. Complete freedom of speech, assembly, and communication, and non-discrimination in the use of all media of information for electoral purposes shall be guaranteed. Zonal boundaries shall be eliminated as political barriers, and freedom of movement for persons and ideas shall be assured throughout Germany. New elections for local and Land authorities throughout Germany shall also be held at or about the same time under the same supervision.

4.(a) To administer the system of supervision and inspection for free elections, an International Commission, with appropriate staff, shall be established under United Nations auspices immediately following the conclusion of CFM agreement, and shall commence to function at least [60] days prior to the date of the general elections. The Commission shall have authority to make recommendations which will be implemented by the Four Military Governors unless disapproved by them unanimously. The Commission shall appoint a Central Police Director for Germany as a whole who (with appropriate staff) shall have direct control over all German police units for the maintenance of law and order and the exercise of police power in an entirely impartial manner completely divorced from political purposes. This Director shall not be a German, nor a national of any one of the occupying powers, and he shall select under the same limitations of nationality a Police Commissioner, responsible to himself, for each Land.

(b) Within [one] week from the date of designation of the Central Police Director, the Military Governors of the four zones shall furnish him complete information regarding all German police forces and other German armed units within their respective zones. They will also comply promptly with any requests he may make for supplemental information on this subject.

(c) After the Central Police Director has assumed charge of police affairs, no person in Germany other than members of the occupying forces shall be permitted to bear arms or conduct any activities of a police nature except with his permission and under his authority, exercised through the Police Commissioners of the Laender.

(d) The authority of the International Commission and the Central Police Director shall be effective during the electoral period and until the German provisional government has assumed governmental responsibilities.

5. The constituent assembly, together with the Laenderrat, shall exercise the dual functions of a provisional government and a constitution-making body.

(a) In its capacity as provisional government, the assembly, together with the Laenderrat, shall be enabled to perform all functions essential to the legal, economic, and political unity of Germany. It shall be authorized to create at once central administrative departments in the necessary fields. Subject to the approval of the Laenderrat, the constituent assembly shall determine the procedures for the provisional exercise of legislative and executive authority, and determine as may be required for temporary purposes the division of powers between the provisional government and the Laender governments. The constituent assembly shall submit these procedures for review to the Four Military Governors; they shall go into effect, if not disapproved within twenty-one days by unanimous vote of the Four Military Governors. The jurisdiction of the provisional government shall be clearly defined by an allied statute reserving specifically only those powers essential to the maintenance and enforcement of demilitarization and of other controls in a few specific fields (as outlined below in paragraphs 7 to 9 inclusive on the “Allied Commission for Germany”).

(b) In its capacity as a constituent organ, the assembly, together with the Laenderrat, shall proceed to draft a constitution for Germany. In order to ensure the utmost freedom to the constituent assembly, no detailed requirements for the constitution shall be imposed on the assembly by the occupying powers, but the draft constitution, before submission to the electorate for ratification, shall be subject to disapproval by unanimous vote of the Allied Commission, as hereinafter provided for (see paragraph 7).

6. If not disapproved by the Allied Commission, the draft constitution shall be submitted to the German electorate, for ratification, and if ratified a constitutional German government shall without delay be formed in accordance with the constitutional procedures.

Allied Commission for Germany

7. At the time the German provisional government assumes governmental responsibilities, the Allied Control Council shall be dissolved and there shall be established an Allied Commission for Germany, consisting of four civilian High Commissioners, one appointed by each of the Four Powers, with appropriate staffs to function until the peace settlement. At the same time, military government shall be terminated, and in particular, occupation troops shall cease to exercise military government functions. Zonal boundaries for these purposes shall thereby be definitively eliminated.

8. The Allied Commission for Germany shall deal directly only with the central German government. Pending a general settlement with Germany the Allied Commission shall exercise reserved powers to be specified in an allied statute. In particular, special powers in the following fields shall be reserved to the Allied Commission which may act directly in these fields as well as through orders to the central German government.

(a) Disarmament and demilitarization, including related fields of scientific research, and civil aviation (subject to the provisions of a disarmament and demilitarization treaty);

(b) Reparations;

(c) Protection and security of Allied forces and representatives, their immunities and satisfaction of their requirements.

Powers to be exercised by the Ruhr Control Authority shall also be reserved in the Allied statute to the extent necessary to carry out the International Control of the Ruhr. The Allied Commission shall transmit orders or requirements to local or Land authorities through the central German government.

9. All legislative and constitutional measures and international agreements which the German government wishes to make, except agreements with one of the Four Powers, shall, before they take effect, be submitted by the German government to the Allied Commission. All such measures and agreements shall come into force automatically if not disapproved within [21] days by unanimous vote of the Allied Commission. The German government shall be obliged to inform the Allied Commission of all international agreements entered into with one or more of the Four Powers. Subject to disapproval by the Allied Commission, the German government may repeal or amend, except in the reserved fields, all existing legislation, including Control Council and Military Government enactments. The Allied Commission may at any time inform the German government of its disapproval of any legislative measures or administrative actions of the government or of local and Land authorities, and may direct that the action in question shall be cancelled or amended.

Withdrawal of Troops

10. (a) Within 150 days from the date on which the provisional German government assumes governmental responsibilities, the total occupation forces in Germany will be reduced so as not to exceed 160,000. The U.S., U.K., USSR and France shall each provide a complement not to exceed 40,000. The garrison forces of the U.S., U.K., and USSR shall be stationed in specifically defined limited areas containing port facilities; suitable locations might be: U.S.–Bremen area; U.K.–Hamburg area; USSR–Stettin area. French military forces shall be stationed in the Rhineland at a location to be determined. The restricted areas shall contain port facilities, training areas, air fields and suitable storage, quartering and recreation facilities. The U.S., U.K., and USSR forces will not utilize land lines of communications to or from their respective limited areas. They will maintain their forces by sea or air lines of communications terminating within the respective restricted areas. The occupation forces will exercise no local governmental functions, but will carry out specific tasks according to the instructions of the Allied Commission.

(b) The extent to which Germany shall be obliged to meet requirements and furnish funds for the maintenance of the forces in garrison areas shall be determined from time to time by the Allied Commission. All unused German currency and all German goods in the possession of the Allied forces, except such as the Allied Commission decides are necessary for the maintenance of the forces in the garrison areas, shall be turned over to the provisional German government by the time that the withdrawal to garrison areas is completed.

11. Reduction of forces shall commence immediately after the conclusion of the Council of Foreign Ministers. In any event, the overall troop strengths, of each of the four occupying powers, must be reduced to 100,000 or less within [90] days of the conclusion of the CFM. Reduction to the agreed 40,000 must be concluded and forces of all four occupying powers concentrated in their respective restricted areas no later than 150 days subsequent to the provisional government’s assumption of responsibility. Withdrawal of the forces shall take place under quadripartite or U.N. supervision. In the case of the U.S., U.K., and France, provision must be made for these nations to retain the right of free transit and the right to guard military supplies necessary to maintain the forces of occupation in Austria, until such time as an Austrian Treaty is concluded and the withdrawal of troops and military stores as a result thereof is completed. This arrangement will be necessary unless an agreement of some other type is obtained that provides for the supply of the forces of occupation in Austria should they remain in Austria subsequent to an agreement for Germany.

Disarmament and Demilitarization

12. The United States shall propose again a Four Power treaty for the disarmament and demilitarization of Germany along the lines of the Byrnes proposal. The prohibitions and restrictions to be imposed upon Germany shall be stated clearly either by reference to existing Control Council legislation and directives, or by including annexes specifically defining the items subject to prohibition or control (war materials, para-military organizations, military installations, research, etc.). Restrictions shall in general be limited to those of a distinctly military character in order to avoid undue interference with essential economic activities and in the interest of simplicity of enforcement. It is envisaged that enforcement action may be taken by three or more of the signatory powers if they agree, but shall not be taken by less than three.

13. Responsibility for the enforcement of the disarmament and demilitarization of Germany shall, pending the conclusion of the peace settlement, be vested in the Allied Commission for Germany. For this purpose a special Demilitarization Board shall be established under the Allied Commission, headed by military representatives of the Four Powers, assisted by the necessary expert technical staffs.

14. The Board will carry on appropriate inspections and will by majority vote recommend to the Allied Commission measures necessary to maintain and enforce the disarmament and demilitarization restrictions. On receipt of such recommendations the Allied Commission will determine by majority vote what action should be taken.

15. Upon termination by a peace settlement of the Allied Commission for Germany, the disarmament control functions shall be exercised by a special Allied Disarmament Commission to be specified in the disarmament treaty and embodied in the final German peace settlement.

Reparations

16. The powers in occupation of the Western Zones of occupation of Germany shall, within 60 days of the termination of the CFM meeting, make a final determination of the industrial plants and equipment to be removed from these Zones as reparation. Deliveries of such plants and equipment shall be made at the earliest possible date, in accordance with paragraphs 3 and 4 of Part IV of the Potsdam Agreement. No other deliveries on reparation account shall be made from any part of Germany.

17. The Four Powers agree that industrial plants and equipment previously removed from Germany, uncompensated deliveries from German current production prior to the CFM meeting, German foreign assets made available for reparation, and all other assets received as reparation by claimant nations together with such further deliveries as are made under paragraph 16 shall constitute a final settlement of all Allied reparation claims on Germany. The Four Powers will not support additional reparation claims on the part of any other power.

Foreign Property in Germany

18. The Allied Commanders in Germany shall be immediately instructed to hasten the examination of claims for the restitution of United Nations property looted by Germany, in accordance with existing Allied agreements, with a view to completing the return of such property by the time the German provisional government is established.

19. Pending the conclusion of a German peace settlement, United Nations property in Germany shall be no less favorably treated than German property. The German government shall be required to ensure its protection and non-discriminatory treatment.

20. All property, rights and interests in Germany which have been acquired by the governments of any of the occupying powers since May 8, 1945, except property or facilities acquired for the discharge of diplomatic and consular functions, shall be relinquished. Pending the determination by the German government of the ultimate status of such property, rights and interests, they shall be placed under the provisional administration of the governments of the Laender in which they are located.

The Ruhr

21. An International Authority for the Ruhr shall be created to perform the following functions:

(a) To make allocations of coal, coke and steel from the Ruhr as between German consumption and export, in order to ensure adequate access to supplies of these products, taking into account the essential needs of Germany.

(b) To ensure that the German authorities do not institute, carry out, or permit artificial measures which would distort the movements of Ruhr coal, coke and steel in international trade except for measures of self-protection approved by the International Authority.

22. The International Authority for the Ruhr shall be composed of representatives of the governments of the United Kingdom, France, and Germany, which shall have three votes each, and the governments of the Netherlands, Belgium and Luxembourg, which shall have one vote each. Decisions of the Authority shall be taken by majority vote, except that Germany shall have no vote on questions involving Germany’s compliance with its obligations under the agreement. The organization and functions of the Authority, and the obligations of Germany in its regard, shall be specified in detail in an instrument approved by the occupying powers after consultation with the governments of the Netherlands, Belgium and Luxembourg.

The Peace Settlement

23. The four Allied Powers, in collaboration with the other nations which have been at war with Germany, shall formulate a peace settlement which will establish finally Allied requirements on Germany, thus opening the way for the eventual admission of Germany into the UN.

[This paper concludes with the following sections:

iii. notes on the program for germany

This section explained the Program for Germany in greater detail elaborating the measures and policies that would be necessary to implement the basic concepts of the program. It included subsections of notes corresponding to the various parts of the program for Germany, dealing with those parts paragraph by paragraph.

iv. the u.s. position on other subjects apt to come up for discussion

In this section of PPS 37/1 the Policy Planning Staff outlined U.S. policy on the Saar, residual controls, war damages to U.N. property in Germany, and boundaries, since these topics had not been considered in the Program for Germany but might arise during a meeting of the Council of Foreign Ministers.

v. presentation and tactics

In the final section the Policy Planning Staff sketched various methods of presenting the Program for Germany, stressing that the paper was not a final document, but was subject to further consideration. The program was meant for a meeting of the Council of Foreign Ministers, since it was the only body which could translate the proposal into a four power agreement, but it could be used outside the Council. Finally, its presentation would undoubtedly evoke French objections and special steps would have to be taken to impress the safeguards of the program on the French.]

1. PPS 37/1 was circulated within the Department of State to EUR and O and a copy was sent to Berlin for comments by Clay and Murphy. The responses of EUR and O were similar to those for Kennan’s August 12 memorandum (footnote 1, p. 1287).

   Lovett pencilled his opinion of PPS 37/1 on a memorandum of December 1, not printed, which transmitted the comments of EUR and O to the Under Secretary. He wrote: “Mr. Kennan—I think this should be reconsidered in light of non-concurrences.” (740.00119 Control (Germany)/12–148)

   Murphy reported his own and Clay’s views on the paper in a letter to Beam of December 7, not printed. Murphy found the program for Germany “… a very worthwhile document and as blueprints go it should be valuable. The trouble with our good blueprints often seems to be that they get bloody noses bumping into Russian, French, and at times, British stone walls.” Murphy quoted Clay as follows: “An interesting study. I believe, though, our French friends, if they saw it, would immediately re-classify you and me as ‘les meilleurs amis’. I won’t put this in the hopper for study until we are asked for comment for fear of leakage.” (740.00119 Control (Germany)/12–748)

2. Tab B not printed here; for the text of PPS 37, see p. 1287.
3. The reference here is to the Special Consultative Group on German Policy Questions. A full transcript of the Group’s discussions of the German question September 15–16 with members of the Department is in the Policy Planning Staff Files: Lot 64 D 563: Box 20029.
4. This paper was circulated separately within the Department of State as FMP D–6/21a.
5. The reference here is to a draft treaty presented by Secretary of State Byrnes, at the Paris Session of the Council of Foreign Ministers, April 30, 1946. The text is printed in Foreign Relations, 1946, vol. ii, p. 190.
6. The bracketed interpolations in this section appear in the source text.