advance "expansionist aims." Apart from the complete absurdity of these charges, to discontinue this aid to some 40 million Germans in the U. S. and U. K. zones until they have become self-supporting would doom them to mass starvation.

The Soviet Union demands reparations for itself and Poland of 10 billion dollars at 1938 values, which is at least 15 billion dollars today. These reparation payments to an undisclosed degree would take the form of current production over 20 years. This demand is not in accordance with the Potsdam agreement. It is utterly impossible of achievement on practical economic grounds. It implies the establishment of an economic power so comprehensive that it would be in reality a power of life and death over any German govern

ment.

It was accepted by all at Moscow that full agreement on economic principles was essential to the establishment of political unification. We are unable to agree on what shall be the area of the German economy; we cannot agree how to make German resources available to Germany as a whole, a condition prerequisite to the revival of German economy; we are confronted with a demand for reparations in excess of the Potsdam agreement which would make a German government subservient to its reparations creditor. It is therefore clear that agreement can be reached only under conditions which would not only enslave the German people but would seriously retard the recovery of all Europe.

If real economic unity could have been established, the United States would have been ready for the German people to be immediately accorded, under agreed controls, self-government with the authority, responsibility, and initiative this entails. But free government cannot succeed under conditions of economic serfdom. True political and economic unity would require a free movement of goods, persons, and ideas throughout Germany and the establishment of a rule of law and political freedom which the occupying powers themselves would respect.

A German government of any type established to function in present conditions and under the supervision of a control council reflecting these basic disagreements would be powerless. In such circumstances a German government would be only a façade, and its establishment would subtract from rather than add to a real union of the German people. It is useless to debate the characteristics of a German government when actual governmental power would be elsewhere.

The simple fact is, the present division of Germany has been caused by the policies and practices of the occupying powers themselves. Only the occupying powers can create German unity in the present circumstances. That is why the United States has consistently pressed for certain fundamental decisions by the occupying powers themselves as the absolutely essential first step for the achievement of a unified Germany.

Three delegations at this conference have registered their willingness to take these decisions here and now. The Soviet Union alone refuses to agree.

In view of these facts, it seems impossible at this time to make practical progress. Therefore, I reluctantly conclude that no useful purpose would be served by a debate on the other points on our agenda; and I suggest that the Council of Foreign Ministers might now consider adjournment of this session.

96. CONVERSATIONS ON GERMANY BETWEEN THE UNITED STATES, UNITED KINGDOM, FRANCE, AND THE BENELUX COUNTRIES

(a) Communiqué, March 6, 1948 1

The informal discussions of German problems which began in London on 23rd February between the representatives of the United States, United Kingdom and France, and as from February 26th with the representatives of the Benelux countries, went into recess today.

At the request of the other delegations, the meetings were held under the chairmanship of the U. K. representative, Sir William Strang. The U. S. and French delegations were led by Mr. Douglas and M. Massigli, the U. S. and French Ambassadors in London. At the first meeting it was agreed to invite the Benelux countries to take part, on an equal footing, in the discussions of all items on the agenda, except those dealing with administrative matters which are the direct. responsibility of the occupying powers controlling the three occupied areas. The chief representatives of the Benelux delegation were Jenkheer Michiels van Verduynen, the Netherlands Ambassador, Vicomte Obert de Thiesieus, the Belgian Ambassador, and M. Claessen, the Luxembourg Minister.

Important progress has been made and it has been decided that these discussions will be resumed during April for the purpose of reaching conclusions on the remaining question, so that the delegations may be in a position to submit to their governments, at the end of the next session, their recommendations over the whole field. In the meantime various aspects of certain of these problems will be the subject of more detailed examinations.

The continuous failure of the Council of Foreign Ministers to reach quadripartite agreement has created a situation in Germany which if permitted to continue, would have increasingly unfortunate consequences for western Europe. It was therefore necessary that urgent political and economic problems arising out of this situation in Germany should be solved. The participating powers had in view the necessity of ensuring the economic reconstruction of western Europe including Germany, and of establishing a basis for the participation of a democratic Germany in the community of free peoples. While delay in reaching these objectives can no longer be accepted, ultimate Four Power agreement is in no way precluded.

The various items on the agenda were the subject of a detailed study, with the exception of security questions, which were given preliminary examination and will be considered in detail upon resuming the discussion. Similarly discussion of territorial questions will be held over until the next session.

Discussions took place among the U. S., U. K., and French delegations on certain limited aspects of the question of reparations from Germany relating to internal policy in the Zones for which they are responsible as Occupying powers.

The relationship of western Germany under the occupying powers to the European Recovery Programme was also discussed by the

Released to the press in London on March 6, 1948, and in Washington on March 8, 1948. Department of State Bulletin, March 21, 1948, pp. 380-381.

U. S., U. K., and French delegations. It was agreed that for the political and economic well-being of the countries of western Europe and of a democratic Germany there must be a close association of their economic life. Since it has not proved possible to achieve economic unity in Germany, and since the eastern zone has been prevented from playing its part in the European Recovery Programme, the three western powers have agreed that close cooperation should be established among themselves and among the occupation authorities in western Germany in all matters arising out of the European Recovery Programme in relation to western Germany. Such cooperation is essential if western Germany is to make its full and proper contribution to European recovery. It was also agreed to recommend to the three governments that the combined zone and the French zone should be fully associated in the European Recovery Programme and adequately represented on any continuing organization. Proposals in this sense will be presented at the forthcoming meeting of the C. E. E. C.

Agreement in principle has been reached on recommendations for the association of the Benelux countries in policy regarding Germany. Consideration was given of all delegations to the establishment of an international control of the Ruhr on which Germany would be represented. The purpose of this international control would be to ensure that the economic resources of this area should not again be used for the purposes of aggression and that there should be adequate access to the coal, coke and steel of the Ruhr for the benefit of extensive parts of the European community including Germany. Agreed recommendations in this respect will be submitted to the governments concerned on the scope and form of this control.

A constructive discussion among all the delegations took place on the present situation and the possible evolution of the political and economic organization of Germany in the combined U. S./U. K. zone and the French zone. A wide measure of agreement was reached on a number of controversial points. In particular it was agreed that a federal form of government, adequately protecting the rights of the respective states but at the same time providing for adequate control authority, is best adapted for the eventual reestablishment of German. unity, at present disrupted. Moreover, in order to facilitate the association of western Germany with the European Recovery Programme the three delegations concerned further agreed that prompt action should be taken to coordinate as far as possible the economic policies of the three zones, in such matters as foreign and inter-zonal trade, customs, and freedom of movement for persons and goods.

(b) Communiqué, June 7, 1948 1

In accordance with an announcement issued today at the conclusion of informal discussions on Germany between representatives of United States, United Kingdom, France and three Benelux countries a report containing agreed recommendations on all items discussed was submitted to their respective governments. These recommendations have been submitted as a whole since their main provisions are

Department of State press release, June 7, 1948.

mutually dependent and form an indivisible program. Principal features of this report are the following:

I. ASSOCIATION OF BENELUX COUNTRIES IN POLICY REGARDING GERMANY.

The recommendations include specific provisions for a close association between military governments and Benelux representatives in Germany on matters affecting Benelux interests. Moreover full opportunities will be given the Benelux representatives to be kept informed of developments in the western zones.

II. ROLE OF THE GERMAN ECONOMY IN THE EUROPEAN ECONOMY AND CONTROL OF THE RUHR.

(A) As stated in the communique of March 6 it had been agreed that for the political and economic well-being of the countries of Western Europe and of a democratic Germany, there must be a close association of their economic life. This close association, which will enable Germany to contribute to and participate in European recovery, has been ensured by the inclusion on April 16 of the combined zone and French zone in the organization for European economic cooperation as full members.

(B) It was agreed to recommend the establishment of an international authority for the control of the Ruhr in which United States, United Kingdom, France, Benelux countries and Germany would participate, and which does not involve the political separation of the Ruhr area from Germany. It does, however, contemplate control of distribution of coal, coke and steel of Ruhr in order that on the one hand industrial concentration in that area shall not become an instrument of aggression, and on the other will be able to make its contribution to all countries participating in a European cooperative economic program, including, of course, Germany itself. A draft agreement containing the provisions for its establishment is attached as annex I. This agreement is to be concluded by the United States, United Kingdom and France as occupying powers. Moreover the Benelux countries are to be fully associated with the preparation of the more detailed agreement provided for in Article 12, and are to be consulted as to the time when the authority begins to exercise its functions. (C) Arising out of the discussions on the Ruhr it has been recommended that the principle of non-discrimination against foreign interests in Germany be reaffirmed, and that each government should promptly study the problem of safeguarding foreign interests in order that there may be subsequently established as soon as possible an intergovernmental group to review the question and make recommendations to their governments.

III. EVOLUTION OF POLITICAL AND ECONOMIC ORGANIZATION OF GERMANY.

(A) Further consideration has been given by all delegates to the problem of the evolution of the political and economic organization of Germany. They recognize, taking into account the present situation,

that it is necessary to give the German people the opportunity to achieve on the basis of a free and democratic form of government the eventual re-establishment of German unity at present disrupted. In these circumstances they have reached the conclusion that it would be desirable that the German people in the different states should now be free to establish for themselves the political organization and institutions which will enable them to assume those governmental responsibilities which are compatible with the minimum requirements of occupation and control and which ultimately will enable them to assume full governmental responsibility. The delegates consider that the people in the States will wish to establish a constitution with provisions which will allow all the German states to subscribe as soon as circumstances permit.

Therefore the delegates have agreed to recommend to their governments that the military governors should hold a joint meeting with the Ministers-President of the western zone in Germany. At that meeting the Ministers-President will be authorized to convene a Constituent Assembly in order to prepare a constitution for the approval of the participating states.

Delegates to this Constituent Assembly will be chosen in each of the states in accordance with procedure and regulations to be determined by the legislative bodies of the individual states.

The constitution should be such as to enable the Germans to play their part in bringing to an end the present division of Germany not by the reconstitution of a centralized Reich but by means of a federal form of government which adequately protects the rights of the respective states, and which at the same time provides for adequate central authority and which guarantees the rights and freedoms of the individual.

If the constitution as prepared by the Constituent Assembly does not conflict with these general principles the military governors will authorize its submissions for ratification by the people in the respective states.

At the meeting with the military governors the Ministers-President will also be authorized to examine the boundaries of the several States in order to determine what modifications might be proposed to the military governors for the purpose of creating a definitive system which is satisfactory to the peoples concerned.

(B) Further discussions have taken place between the United States, United Kingdom and French delegations on measures for coordinating economic policies and practices in the combined zone and the French zone. Agreed recommendations have been reached on the joint conduct and control of the external trade of the whole area. It has been recognized that a complete economic merger of the two areas cannot effectively take place until further progress has been made in establishing the necessary German institutions common to the entire

area.

IV. PROVISIONAL TERRITORIAL ARRANGEMENTS.

The delegations have agreed to submit for the consideration of their governments proposals for dealing with certain minor provisional territorial adjustments in connection with the western frontiers of Germany.