Sunday, July 29, 1945 at Potsdam,Germany
Just before noon, Soviet Foreign Minister Molotov arrived to the Little White House in Babelsberg. He said that Stalin had caught a cold and that his doctors would not let him leave his house. Therefore, he asked that President Truman excuse him from the next plenary session scheduled for that afternoon.
This gave Truman and Secretary of State Jimmy Byrnes a chance to talk one on one with Molotov. The Polish western boundary and German reparations dominated much of the meeting as these were two of the largest issues that had not been agreed upon up until this point.
The following minutes were recorded by the President’s interpreter, Chip Bohlen:
The Secretary said that if we were able to get an agreement on reparations along the lines of his proposals to Mr. Molotov that the United States was prepared to go further to meet the Soviet wishes in regard to the Polish western frontier and would make the following proposal in that regard. (He handed Mr. Molotov a copy of the proposed United States suggestion with regard to the Polish western frontier, copy attached).
After it had been translated, Mr. Molotov said that this would not put under Polish administration the area between the Eastern and Western Neisse. He said the Poles were most insistent upon receiving this and he recalled that Mr. Mikołajczyk had made a most convincing and definite argument before the three Foreign Ministers as to the vital importance of this area for Poland.
The Secretary pointed out that this was true, but that since the final determination of the boundary would await the peace settlement, it did not follow that Poland might not receive this additional area if the peace conference so desired. He then said that as the President had frequently remarked, it had been agreed at Yalta and elsewhere that there would be four occupying powers in Germany, but that we now had a situation when there was in fact a fifth—Poland—which had been assumed without consultation or agreement with the United States, French, or British Governments.
Mr. Molotov replied that this was no one’s fault; it was an extraordinary condition, since all Germans had fled the region.
The President then remarked that he had thought that this suggestion would be agreeable to the Soviet Delegation, since in his opinion it represented a very large concession on our part and he hoped Mr. Molotov would submit it to Marshal Stalin.
Mr. Molotov replied that he would, of course, do so but he thought he could say here that Marshal Stalin was most insistent that this region as well should be placed under Polish administration.
The Secretary pointed out that for the purpose of the occupation of Germany we had, of course, thought that all of this area would be the responsibility of the Soviet occupying forces.
Mr. Molotov replied that even though the Poles were administering this, Soviet troops were still in the area. He repeated, however, that he would submit the proposal to Marshal Stalin.
The Secretary then inquired whether Mr. Molotov had had an opportunity to really think about his proposal in regard to reparations, namely, that each country look to its own zone for reparations and then exchange reparations between zones.
Mr. Molotov said that the Secretary’s proposal was acceptable in principle but that the Soviet Delegation would like to have clarity on certain points, in particular, the amount of equipment which would be turned over from the Ruhr to the Soviet Union. He said they had spoken of equipment to the amount of two billion dollars or five or six million tons.
(Mr. Molotov did not specify exactly what he meant by five or six million tons, whether productive capacity or actual weight of equipment).
The Secretary explained that our experts felt that it was impossible to put any specific dollar value or tonnage on the equipment which would be available for reparations from the Ruhr, but that our proposal was to offer the Soviet Union 25% of the total equipment considered as available for reparations from the Ruhr.
Mr. Molotov said that 25% of an undetermined figure meant very little and that they wished to have a fixed sum or quantity agreed upon.
The Secretary replied that at Yalta Mr. Maisky, who was the only one who would mention figures, had suggested in his proposal a total of twenty billion for reparations from Germany, of which ten billion would go to the Soviet Union.7 He said that from further study and the discussions here it had been made clear that these figures had no relation to reality and that this was a very good illustration of the danger of attempting to fix sums prematurely. He added that if we were to do that now, in the absence of sufficient data, six months from now if the figure turned out to be incorrect the Soviet Government might charge we were going back on the agreement reached at the Berlin Conference.
There was further discussion on this point, with Molotov maintaining his position that some fixed sum be set otherwise the percentage would be meaningless, and The Secretary maintaining from our point of view that it would be impossible to give any fixed figure. There was an extended discussion as to the Soviet share of reparations, with the Secretary maintaining that according to our calculations 50% of the national wealth of Germany lay in the Soviet zone, and with Mr. Molotov stating that according to their calculations only 42% lay in the Soviet zone.
Mr. Molotov said that under their figures the Russians would be entitled to obtain some reparations from the British, American and French zones in order to complete the 50%.
The Secretary said that in his opinion percentage figures fixed at Yalta were no more agreed to except as a basis of discussion than had been the actual amounts of reparations.
The President stated that what they were trying to do here was to fix a workable plan for reparations and that he desired to see the Soviet Union receive 50% of the total.
Mr. Molotov expressed his appreciation at the President’s statement.
The Secretary reviewed his argument in favor of his proposal, pointing out that it would do away with almost certain points of friction in the future.
Mr. Molotov inquired whether we still intended to have some central German administration, not a government, but some central organization through which the Control Council could operate in matters affecting finance, transport, foreign trade, etc. on which it had been agreed to treat Germany as an economic whole. He pointed out that if reparations were not treated as a whole, what would happen to overall treatment of economic matters.
The Secretary pointed out that under his scheme nothing was changed in regard to overall treatment of German finance, transport, foreign trade, etc. The Secretary subsequently repeated this statement in reply to a further observation of Mr. Molotov that the reparation proposal would affect the overall economic administration of Germany. The Secretary then said there was one other subject he had forgotten to mention, namely, that of the division of the German navy and merchant fleet.
The President stated that in his opinion they had reached agreement on that, namely, that Russia was to get one-third of the navy now and that the merchant fleet was to be utilized in the war against Japan, with one-third earmarked for the Soviet Union.
The Secretary thought it would be well to embody that agreement in writing and suggested the formation of a sub-committee for that purpose. He added that part of the agreement had been Mr. Churchill’s suggestion that a large part of the submarines be destroyed.
Mr. Molotov said what they desired was one-third of the navy and one-third of the merchant fleet. He said that the Soviet Union was also interested in shipping for the Far Eastern war and that, of course, they would be used for that purpose.
The President said it was his understanding that the merchant fleet should be used for the prosecution of the war against Japan.
The Secretary said that the Russian portion should be earmarked and used in the Pacific.
Mr. Molotov repeated that the Soviet Union would use these ships in the Pacific.
The Secretary said in addition to that question, it would be important to clarify the question of replacement. For example, if the Soviets did use them in the war and they were sunk, it would be necessary to consider the question of their replacement.
Reverting to the subject of reparations, Mr. Molotov said he wished to have the Secretary’s proposal clearly in mind; as he understood it the Soviet Union would look to its own zone for a fixed amount of reparations and would receive as reparations 25% of the equipment from the Ruhr available for reparations.
The Secretary replied that this was not quite accurate, since in the first place the Soviet Union would take what it wished from its zone, and second, the 25% to go to the Soviet Union from the Ruhr would be exchanged for food, coal and other products needed in western Germany from the Soviet zone.
Mr. Molotov said they [the United States?] had understood that all the equipment which the Soviets might receive from the Ruhr would have to be balanced off by exports from the Soviet zone. He said he had understood that only part would be so covered and that in any event it was a matter for discussion as to how much and what the Soviet zone could offer in return.
The Secretary added that there had been another possibility, namely, instead of 25% from the Ruhr alone, the Soviets could receive 12½% of equipment available for reparations from the French, British and American zones taken together.
Mr. Molotov returned to the question of a fixed sum and inquired whether the Secretary could give him even a rough estimate of what we thought might be available to the Soviet Union.
The Secretary repeated that he was unable to do this that all our experts agreed that it was impossible to place any value on the equipment available for reparations for the following reason[s]:
- 1. It was difficult to agree on a standing valuation to be placed on the equipment; and,
- 2. The Soviets would undoubtedly have preferences as to the type of machinery which would affect the valuation.
Mr. Molotov replied that they were interested in heavy metallurgical machinery, machine-building and chemical installations. He added that they had proposed using 1938 prices.
The Secretary answered that our experts thought it was impossible at this stage to fix any value; it would require long study on the spot and therefore we preferred the percentage basis. During the course of this discussion the Secretary remarked that at Yalta at one point Mr. Maisky had suggested ten billion in reparations for the United States and that our experts considered that there were only three or four billion dollars in all of possible reparations in western Germany. What, therefore, would Mr. Molotov say if we should ask for an additional six billion from the Soviet zone to make up the figure mentioned by Mr. Maisky. The Secretary added that he was merely citing this illustration to show the danger in agreement on any fixed sum.
Mr. Molotov said that in conclusion he had one other matter that the Marshal wished him to take up and that was the immediate cause of the Soviet entry into the Far Eastern war. He said that the Soviet Government considered that the best method would be for the United States, England and the other allies in the Far Eastern war to address a formal request to the Soviet Government for its entry into the war. He said that this could be based on the refusal of the Japanese to accept the recent ultimatum to surrender and made on the basis of shortening the war and saving of lives. He added, of course, that the Soviet Government was assuming that the agreement with the Chinese would be signed before the Soviet Union entered the war.
The President said that he would, of course, examine carefully this Soviet request
Later on that afternoon, President Truman met with Prime Minister Attlee to discuss his earlier meeting with Molotov.
The eleventh plenary session was cancelled due to Stalin’s being ill.