Britain and the making of the Post-War World: the Potsdam Conference and beyond

Britain and the making of the Post-War World: the Potsdam Conference and beyond

Britain and the making of the Post-War World: the Potsdam Conference and beyond

Edited by Gill Bennett and Richard Smith

Documents from the British Archives: No. 1

Documents from the British Archives: a thematic series with documents drawn from, or supplementing, volumes of Documents on British Policy Overseas, produced by the Foreign & Commonwealth Office Historians.

Series editors: Patrick Salmon & Richard Smith

This publication is available online: www.issuu.com/fcohistorians

Š 2020 Crown Copyright

Cover illustration: Potsdam Conference group portrait, 1 August 1945 Seated, from left to right: Clement R. Attlee, Harry S. Truman, Josef Stalin. Standing: Admiral William D. Leahy, Ernest Bevin, James F. Byrnes and Vyacheslav Molotov Credit: Harry S. Truman Library and Museum (62-477)

ISBN: 9798664342123

CONTENTS Introduction

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List of persons

16

List of Documents

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DOCUMENTS

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INTRODUCTION On 2 July 1973, British Foreign Secretary Sir Alec Douglas-Home announced in the House of Commons the decision to extend into the post-Second World War period the practice of publishing documents on British foreign policy. Rohan Butler, Historical Adviser to the Secretary of State and head of the Foreign Office Historical Section, was left to decide, together with Joint Editor Margaret Pelly, at what point the coverage in the new series, Documents on British Policy Overseas (DBPO) should begin.

Butler explained in the Preface to Volume I, published in 1984, why the decision had been taken to begin the series with The Conference at Potsdam. Rejecting possible alternative start dates, such as the conference at Yalta in February 1945, the end of the war in Europe in May, the conclusion of the San Francisco Conference in June, or indeed the end of war in the Far East in August, Butler argued that the Conference at Potsdam, which ran from 17 July to 2 August 1945, was characterised uniquely by its position in the ‘overlap between war and peace’. It was, he said, the last of the great tripartite conferences of the war, and ‘directly formative for international relations in the post-war period’.

Arguments can certainly be made against Butler’s choice. After all, no peace treaty was concluded at Potsdam, nor was there a complete end to the war, as fighting continued against Japan. The atomic bomb had been tested successfully in New Mexico only the day before the Conference opened; some decisions, for example in relation to Polish frontiers and the future of Germany, had been preempted at Yalta or even earlier, and some were to be deferred yet again, in anticipation either of a future peace treaty or of settlement by the new World Organisation, the United Nations. Yet all the major issues confronting the post-war world were raised at Potsdam. It provides a vivid snapshot of the complex legacy of six years of war, and of the personalities of many of the major players, whether heads of state, officials or military leaders. As well as the ‘Big Three’—the UK, USA and USSR—other powers, like liberated France, were now drawn into the decision-making 1

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machinery.

For victors and vanquished alike, the realities of political, economic and demographic dislocation, as well as a change in the balance of global power, became brutally clear at Potsdam. For some, relief at victory or liberation was tempered by anxiety and a sense of burdensome responsibility. For all except the US, economic hardship loomed, and many faced intractable problems arising from the massive displacement of populations. In an important sense, Potsdam represented a doorway between the old world and the new. Some would find crossing that threshold a difficult, and indeed painful step to take. Many countries, including Britain, were forced to confront a dissonance between the way they saw themselves, and the way they were seen by others. And crucially, for a series that is, after all, intended to document British foreign policy, Potsdam contains real insights into the challenges facing the British government. In that context, the starting point for DBPO chosen by Butler makes sense.

The documents printed in this Collection are taken from the first eight volumes published in Series I of DBPO, and cover the period between 11 July and 27 December 1945. In addition, a small number of intelligence-related documents have been included, concerning the case of Igor Gouzenko (‘CORBY’), the Soviet cypher clerk in Ottawa whose defection in early September caused considerable upheaval behind the scenes. These documents were not available to the Editors at the time: indeed, the publication of early DBPO volumes coincided with the passage of legislation placing the UK’s intelligence agencies on a statutory basis,1 making it possible for the first time to refer openly to their existence, activities and relationship with government departments. The transfer of a large number of Security Service (MI5) records into the public domain, together with files from the Foreign Office’s Permanent Under-Secretary’s Department (PUSD, responsible for liaison with the intelligence community), has made it possible to 1

The relevant legislation included: the Security Service Act 1989 in respect of MI5; and the Intelligence Services Act of 1994, placing both the Secret Intelligence Service (SIS) and Government Communications Headquarters (GCHQ) on a statutory footing and establishing the Intelligence Services Committee as a Parliamentary oversight body.

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include these documents, which demonstrate how the ‘missing dimension’ can illuminate the diplomatic record.

Together, the documents in this collection are intended to show the wide range of issues faced by the British government in the immediate aftermath of war, and how they tackled them. The seeds of all these issues were already sown at Potsdam. That is why the Protocol of the Conference, signed on 2 August in Berlin by US President Harry S. Truman, Soviet leader Marshal Josef Stalin, and British Prime Minister Clement Attlee, is published in full as No. 4. In this rather tortuous document, bearing all the signs of prolonged negotiation and compromise wording, can be found key provisions that were to make the Protocol, though it did not constitute a peace treaty, a reference document for years to come.

Covering topics from Albania to Zara2 and all points in between, key provisions included the creation of a Council of Foreign Ministers (whose first and second meetings feature here in Nos. 14, 29 and 31), and Allied control machinery to operate in Austria and central Europe, as well as technical questions relating to inland waterways, shipping and trusteeship.

As one of the ‘Big Three’ wartime Allies, Britain naturally played a major part in the detailed negotiations at Potsdam. Yet as the documentation makes clear, the Conference also brought the British government3 face to face with a number of uncomfortable truths. Broadly, these fall into three interconnected categories: firstly, Britain’s place in the postwar world—in its own estimation, and others’—including its economic predicament, global obligations and relations with the Dominions and wider Commonwealth; secondly, its relations with the United States, 2

Zara and the Adriatic Islands were the subject of dispute between Italy and Yugoslavia.

3 For the early part of the Conference, the British delegation was led by Winston Churchill, Prime Minister of the caretaker government that had succeeded the wartime Coalition in May 1945, and his Foreign Secretary Anthony Eden.

Following the declaration of the results of the British General Election on 26 July 1945, the Churchill government was replaced by a Labour administration under Clement Attlee (who had been a member of the British delegation at Potsdam since the beginning). Together with the new Foreign Secretary Ernest Bevin, Attlee flew to Berlin on 28 July to rejoin the Conference as head of the British delegation.

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tight-knit during the war but now, though still close, strained by economic disparity and by disagreements over matters like sharing atomic know-how, and future protocols for global commerce; and thirdly, British policy towards the Soviet Union, which had ensured Allied victory at massive human and economic cost to itself, but whose future intentions, in Europe and the wider world, remained worryingly uncertain in July 1945.

All three of these uncomfortable truths are acknowledged in the first document in this collection, ‘Stocktaking after VE-Day’, submitted by Foreign Office Deputy Under-Secretary, Orme Sargent, on 11 July 1945 during planning for Potsdam. Britain, said Sargent, knew its place in the post-war world: the weakest and smallest of the Great Powers, and in no position to exercise ‘control’ in Europe as it might wish to (it would, he noted, be even weaker in the Far East when war ended there). Neither of the superpowers, the US nor USSR, would be likely to consider British interests if they interfered with theirs, ‘unless we assert ourselves’.

The United States, though Britain’s closest ally, was likely to treat it rather as Britain had treated France after the First World War, as ‘troublesome, quarrelsome and reactionary’, and would try to ‘free themselves from what they consider to be British tutelage in European affairs’. As for the Soviet Union, it was to be expected that Stalin, in order to achieve security against the encroachment of the ‘liberal powers’, would try to ‘pocket’ countries like Austria, Bulgaria, Czechoslovakia, Finland, Poland and Yugoslavia, as well as establishing influence in Germany, Greece, Italy and Turkey.

In the face of this rather stark appraisal of the balance of power at the end of war in Europe, Sargent was quite clear about the remedy. Inferior status was clearly unacceptable. Britain must increase its strength in the diplomatic, economic and military spheres, enrolling the Dominions, France and ‘the lesser Western European Powers’ as collaborators, in order ‘to compel our two big partners to treat us as an equal’. It must devise a policy—then persuade the Americans to make it their own. In particular, Sargent stressed that it would be fatal to allow ‘the emotions and ignorance of the people of the United States’ to determine policy towards Germany, giving it the opportunity to decide its own future and so opening the way for the Soviet government to carry off the ‘prize’.

Britain must ‘take a stand’ to prevent the USSR from getting a 4

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foothold throughout Europe (Sargent did concede that this would require the ‘whole-hearted cooperation’ of the US.) He concluded, somewhat paradoxically, that Britain must not be afraid of having a policy independent of the US and USSR, based on British fundamental traditions, opposed to totalitarianism of Right or Left.

It should refuse to be bullied.

Sargent’s thesis should not be dismissed as the judgement of a mandarin class living in the past. His assumptions were shared generally in Whitehall by ministers, officials and the military alike.

This applied just as much to the Labour government in office from 26 July 1945 as to that led by Churchill since 1940, whether as leader of a coalition or a Conservative administration. Attlee and Bevin, with other Labour ministers, had served in the wartime Cabinet and had been involved in post-hostilities planning since 1943. They were well aware of the geopolitical realities. Their understanding of the importance of remaining close to the US, and suspicion of Soviet intentions in Europe were no less than that of their Conservative former colleagues. They, too, were convinced that Britain remained a great Power (albeit an impoverished one) with the right to influence political developments in areas where it considered itself to have strong and important interests—such as the Middle East. They too believed in the centrality of Britain’s relations with its Dominions and the wider Commonwealth, albeit with a commitment to the transfer of power to India and a willingness to discuss independence for other territories.

The Attlee government were, however, well aware of the threats posed to this vision of Britain’s place in the world—not to mention their ambitious domestic reform programme—by bankruptcy, Anglo-American tensions and Soviet intransigence. The financial position at the end of the war in Europe was indeed perilous: in March 1945, the distinguished economist and Treasury adviser Lord Keynes had summarised the situation in a memorandum entitled ‘Overseas Financial Arrangements in Stage III’.4 Keynes 4

According to the arrangements set out in the Lend-Lease Act of 11 March 1941 and Mutual Aid Agreement of 23 February 1942, providing for financial aid to Britain from the US and Canada during the war, Stage III was the period of military and economic demobilisation that would follow the defeat of Japan and the restoration of a peacetime economy.

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saw the alternatives for post-war British economic policy as isolation (‘Starvation Corner’), borrowing from the US (‘Temptation’) or what he termed ‘Justice’, a general settlement based on a free grant from the US with contributions from the sterling area.5 Treasury discussions on these options proceeded before and during the Potsdam Conference, and Edmund HallPatch, Foreign Office Assistant Under-Secretary for economic affairs, noted on 3 August that William Clayton, his US counterpart, was expected in London that week for talks on future commercial policy and the question of financial aid for Britain in Stage III, when Lend-Lease ended (No. 5).

But neither Keynes, ministers nor officials had anticipated the American decision, communicated to London on 10 August, to cut off Lend-Lease and Mutual Aid abruptly after VJ Day (15 August, the day of Japanese capitulation). The shock of this announcement led to the revised assessment of British overseas financial prospects set out by Keynes in a memorandum of 13 August (No. 7), tabulating in stark detail the scale of the current and probable future deficit, with uncertain prospects for recovery. In 1945 alone, £425 millions would be spent on British armed services stationed overseas, in South-East Asia, the Mediterranean, Africa and Asia, not to mention Germany; £300m on war supplies and munitions, mainly in India, South Africa and Australia; and a further £75m on Reciprocal Aid, loans to allies, relief, and other operations. These were, Keynes observed, ‘burdens which there is no reasonable expectation of our being able to carry’ after six years of war, particularly in view of the need for increased domestic expenditure.

Britain, therefore, faced a ‘financial Dunkirk’ that could only be avoided by an intense concentration on expanding exports, drastic cuts in overseas expenditure and, crucially, substantial aid from the United States (Keynes estimated $5 billions would be needed), ‘on terms which we can accept’. The qualification was important.

Keynes already knew that the US were likely to impose conditions on any aid that would be very hard for Britain to accept, such as the 5

Keynes’s memorandum is printed in Donald Moggridge (ed), The Collected Writings of John Maynard Keynes, vol. XXIV (Cambridge University Press, 1979). See also L.S. Pressnell, External Economic Policy since the War, Vol. I, The Postwar Financial Settlement (London: HMSO, 1989).

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early convertibility of sterling and the abandonment of all trade restrictions. They would also be likely to demand concessions in other areas, including rights over overseas bases and commercial air and telecommunications routes. All these were, indeed, to come into the mix during the negotiations that led to the signature of an Anglo-US Financial Agreement in December 1945.

In August, before departing for Washington, Keynes imagined that in recognition of Britain’s financial sacrifices during the war, the Truman Administration would take a generous view and agree to a grant in aid, or at worst an interest-free loan. After five meetings with US negotiators, however, he reported to the Chancellor of the Exchequer on 18 October that it was clear any agreement would be on purely commercial terms (No. 16). There was plenty of goodwill, Keynes agreed; but, as Clayton put it, for any financial assistance to Britain to be acceptable to Congress and the American people it must ‘escape notice wearing a business suit’. Keynes and his team, and—despite some doubts— government ministers were forced to swallow their disappointment and accept there was no alternative to an interest-bearing loan of £3.75bn on US terms (which, were in the end, quite generous).

More troubling, as Sir W. Eady of the Treasury noted after the agreement had been signed, were the ‘strings’ attached, including the requirement to liquidate balances held within the Sterling Area and to relinquish the Bretton Woods transitional period, which the Americans had made a condition of granting the loan (No. 30). The difficulties arising from these provisions can be followed in later volumes in Series I of DBPO. The Anglo-American loan negotiations between September and December 1945 laid bare a number of underlying tensions between Britain and the United States, sublimated during their wartime alliance. Hall-Patch had warned (No. 5) that British obstructionism in the commercial sphere might well affect the view that the US took of Britain as a partner in world affairs generally, leading to ‘unsavoury’ accusations of ‘exclusiveness’ and ‘imperialism’. But there was more to it than this. On both sides of the Atlantic there was a failure, partly rooted in differences of political culture, partly because of profound power shifts arising from the war, to appreciate the other’s point of view. The US was stronger and richer than either of its Big Three partners, and the lesson it took 7

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from victory in the Second World War was that it could now call the shots. At Potsdam, Truman was clearly impatient with what he saw as inconclusive wrangling between Churchill and Stalin, saying he had come to the Conference not just to discuss, but to decide: otherwise he would go home.6 The Soviet Union, the only serious rival to the US (though not in money or military might) deserved a cautious respect and a collaborative effort in the cause of peace and security. Britain, however, was family, a junior partner that could be criticised freely without imperilling an already close relationship.

On the British side, many commentators (Nos. 6 and 27 are examples of an extensive body of such analysis) clearly found it difficult to accept that the Truman administration, with a President only a few months in office and inexperienced Cabinet and officials, was disinclined to seek or welcome advice from its more ‘experienced’ transatlantic partner, still less adopt British policies as its own (as Sargent suggested). British diplomats and officials did not always conceal these sentiments, which aroused resentment and raised the hackles of American negotiators. The US, commented Jock Balfour from Washington (No. 27), valued British wartime sacrifices and accepted that Britain’s survival as a prosperous country was essential for American security. But the relationship was complex. On the one hand, most Americans regarded Britain as their closest friend (though the advent of a socialist government was worrying). On the other, they felt the British were hanging on doggedly to an outdated and unacceptable world view, and disapproved of ‘everything connoted by the word colonial’. (They would, naturally, have rejected indignantly the idea that US pressure on Britain to surrender bases, air routes or wireless networks in order to secure predominance for American companies amounted to imperialism of a different kind.)

Of course these differing perceptions were, in a sense, displayed at a ‘public’ level—between leaders, ministers, and sets of officials conducting negotiations under scrutiny. Both governments had domestic audiences to consider when framing policy, whether that meant Congress, the Labour Party or the wider populations in 6

See Memoirs by Harry S. Truman, Volume One: Year of Decisions (New York: Doubleday & Co, 1955), p. 349.

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Britain and the US. At a more ‘private’ level, the relationship remained close, and in some respects grew closer, particularly in the spheres of security and intelligence,7 or in military issues. The solidity of the Anglo-American relationship at liaison level in such matters was—and remains—remarkable, whatever may be said in public by politicians. Nevertheless, in 1945 there were some areas where the Truman administration was determined not to compromise. One of these was controlling the flow of information on the development and use of nuclear power.

British scientists had played a vital part in the Manhattan Project: but the fact that the atomic bomb was ultimately developed, tested and delivered by the US meant that by VJ Day the bomb, and the technology that produced it, was regarded as an American asset over which control must be maintained and to which access must be restricted. After the dropping of the bombs on Hiroshima and Nagasaki on 6 and 9 August 1945, Attlee proposed to Truman a joint declaration of their intention to ‘utilise this great power not for our own ends, but as trustees for humanity’.

Truman had responded with a public statement that because the atomic bomb was ‘too dangerous to be loose in a lawless world’, Britain and the US, who knew the secret of its production, ‘do not intend to reveal the secret until means have been found to control the bomb so as to protect ourselves and the rest of the world from the danger of total destruction’.8 Attlee acquiesced, though convinced that the advent of the bomb had changed the rules of war utterly and that Great Power action was needed to prevent the destruction of civilisation (see No. 8). He was soon to find that US determination to control nuclear secrets would also mean limiting information-sharing with the UK. In London, questions were raised as to whether the atomic bomb made the arrangements agreed at the San Francisco for the United Nations Organisation (see No. 2) meaningless. Foreign Office Assistant Under-Secretary Nevile Butler pointed out on 11 September, in a memorandum on the international background to atomic energy, that although the UN 7

Tangible proof of this can be seen in the conclusion of the British-US Communication Intelligence Agreement (UKUSA) of 5 March 1946, printed as an Appendix to DBPO, Ser.1, Vol. 11.

8 See DBPO, Ser. 1, Vol. 2, Nos. 187 and 190.

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still had a role to play, there was nothing in the Charter stating that ‘our new weapon’ must be placed at the World Organisation’s disposal (No. 12).

Attlee’s visit to Canada and the US in November 1945 ended with an Agreed Declaration signed in Washington advocating the establishment of a commission under the UN to make recommendations on the control of atomic energy for peaceful purposes, and the elimination of atomic weapons from national armaments (No. 22). It was signed by Truman, Attlee and Canadian Prime Minister Mackenzie King, representing ‘the three countries which possess the knowledge essential to the use of atomic energy’.

In modern parlance, the Soviet Union was the elephant in the room here. Truman had told Stalin about the atomic bomb at Potsdam, receiving a non-committal response; at the Council of Foreign Ministers in September, Molotov remarked that Russia had ‘got the atomic bomb’.9 But neither Attlee, Mackenzie King nor Truman was yet aware quite how much the Soviet Union knew, although the defection in Ottawa of Soviet cypher clerk Igor Gouzenko early in September had revealed penetration of the atomic project, including the fact that British physicist Alan Nunn May was a Soviet agent. The documents on the CORBY case (Nos. 10, 11, 13, 15, 17, 20, 23 and 26) show how worries about the negative effects of publicity, both on relations with the Soviet Union and on public opinion, meant that no action was taken on the revelations of Soviet espionage until 1946, despite considerable Foreign Office frustration. However, concerns that delay might give time for the agents to be tipped off were groundless: all the correspondence on CORBY passed through the hands of Kim Philby, then a senior SIS officer. The full extent of Soviet penetration of the British, Canadian and US governments, and of the atomic project, was not to be revealed for some years.

While the British government may have found relations with the Americans difficult and frustrating at times, they had no doubt that the US was committed to the support of democracy and preservation of peace. They were not so sure this was true of their Soviet ally, whose forces occupied great swathes of central and eastern Europe at the time of Potsdam, and were not hurrying to 9

See DBPO, Ser. 1, Vol. 2, No. 200.

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withdraw. As the British Ambassador in Moscow, Sir Archibald Clark Kerr, commented on 6 September (No. 9), when the Potsdam Conference opened the prevailing mood of the Soviet people was ‘boundless confidence in the achievement and in the future of the Soviet Union’, despite the devastation of Soviet industry and infrastructure that made economic reconstruction the first imperative. Since then, however, events had ‘jostled one another’: the Soviet entry into the war against Japan on 9 August, the SinoSoviet treaty,10 the Japanese capitulation, the unexpected (to Stalin) result of the British General Election, and the atomic bomb. These events had, said Clark Kerr, placed the Soviet Union on the defensive, resentful at what it perceived as Soviet exclusion from the Anglo-American axis, and concerned to take any steps needed to ensure its own security. Soviet memories were long, and four years of Big Three collaboration had not erased more than twenty years of Western anti-Bolshevism. The revelations emerging from the CORBY case gave Western intelligence agencies, and governments, a glimpse of Soviet espionage operations that were later shown to have been organised on a global scale. At Potsdam and beyond, nevertheless, both Britain and the US sought to work with, rather than against the Soviet Union wherever possible. In 1945, no one foresaw forty years of what we now call the Cold War. Although even during the Second World War there had been warning signs of Soviet non-cooperation, based on a profound suspicion of Western intentions, in 1945 there was a genuine, if wary, hope that a workable relationship could be maintained on issues of mutual interest.

Soviet distrust of Western intentions, and consequent hardening of its determination to dominate the states on its borders, vitiated that hope. Assessing relations with the Russians in October 1945 (No. 18), the Joint Intelligence Committee started from the assumption that British policy was ‘to achieve the maximum collaboration with Russia, compatible with our own vital interests’.

They noted, however, that relations were already deteriorating, as the Russians insisted on treating Eastern Europe as their exclusive 10

Under this treaty of 14 August, Stalin undertook not to support the Communists, led by Mao Tze-tung, against the Nationalist regime led by Chiang Kai-shek; see, however, No. 27.

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sphere of influence, argued with Britain and the US over interpretation of decisions taken at Yalta and Potsdam, and were resentful of Western reluctance to supply long-term credits to aid Soviet reconstruction. Against this background, difficult sessions with Russian negotiators—noted for their toughness—at Potsdam, and at the first Conference of Foreign Ministers held in London in September (see No. 14) were not encouraging. Problems arising from the repatriation of prisoners of war and refugees did nothing to improve relations (see No. 24). At the second CFM meeting in Moscow in December 1945—arranged by US Secretary of State Byrnes without consulting Bevin—the agreed Report (No. 31) conveys less of the adversarial flavour of discussions than the records of personal conversations between Bevin and Molotov, of which No. 29 is a representative example. In London, much time was spent analysing Soviet policies and intentions, as well as those of Britain’s transatlantic partner.

At the heart of many of the discussions and disagreements between Britain, the Soviet Union and the US during the period covered in this Collection was the vexed question of the defeated Germany: its administration and control, industrial disarmament and the allocation of reparations, how its people should be treated, fed, housed, re-educated and employed—and who should pay for it. The future of Germany was one of the most contentious issues at Potsdam, as well as in the following months and indeed years. In principle, agreement had already been reached before the Conference on Zones to be administered by the UK, US, USSR and France, with Germany treated as an ‘economic whole’. But as Potsdam revealed, major differences persisted between the Occupying Powers on a wide range of issues, including central German administrations, denazification, the level of industry to be permitted, and reparations. (One issue they did agree on, generally, was the need to put Nazi war criminals on trial: see No. 25 for a powerful and an atmospheric description of the Nuremberg Trials

by Ivor Pink, of the Political Division of the British Element of the Control Commission for Germany.)

After Potsdam, as Zonal and quadripartite control mechanisms began to operate in Germany, each of the Occupying Powers had its own imperatives. The Soviet Union, suspicious of Western intentions, took a tough line in negotiation, determined to extract 12

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maximum reparations and exploit the fact that Berlin, though divided on a quadripartite basis, lay within its Zone—making Berlin the fault line of the Cold War for the next forty years.11 The French were determined to thwart any developments that could permit the resurgence of Germany as a threat to its security. The Americans, whose military and financial muscle far outweighed that of their Occupation partners, tended to be impatient with all three of them, partly driven by a desire to limit the amount of time, and armed forces, required to ‘settle’ Europe and allow the US to withdraw. (In September 1945, for example, exasperated by French resistance to the setting up of central administrations in Germany, General Eisenhower threatened to recommend to Washington that he be recalled, and US occupation forces withdrawn.)12 The British government, on the other hand, became increasingly convinced that it was inevitable, indeed essential that German civic life, industry and institutions should resume, even if that meant dealing with, or employing people with a suspect political history (No. 28). Struggling with a shortage of money and supplies and a surfeit of obligations, they found that the financial burden on Britain of feeding its own troops and people in its Zone, including those in refugee camps, was crippling. The fate of the German population, not to mention the thousands of displaced persons and refugees in the country, was a cause for concern on economic, humanitarian and political grounds, particularly as the ‘Battle of the Winter’ loomed.13 The British government were determined to do what they could to help, in addition to providing food and coal to other European countries, including France and Austria, and supplies to other parts of the world, including rice for India. All this meant the British population would have to accept a continuance of rationing in peacetime. Ministers, nevertheless, remained 11

British policy during the three major Cold War Berlin crises in 1948, 1961 and 1989 is documented in DBPO, Ser.3, Vol. 6.

12 Sir William Strang, Political Adviser to F-M Montgomery, Commander-inChief of British Occupation Forces in Germany, reported this in a letter of 21 September 1945 to the Foreign Office, printed in DBPO, Ser.1, Vol. 3, No. 31.

13 F.-M. Montgomery used this phrase in a telegram of 28 October 1945, warning that any reduction in supplies to Germany would result in ‘famine conditions to an extent which no civilized people should inflict upon their beaten enemies’.

See DBPO, Ser. 1, Vol. 5, No. 52.

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committed to the efficient, and humane management of the enormously complex issues involved in governing the British Zone.

British military government, while by no means perfect, in many respects provided a good model for post-conflict administration.

And despite Soviet obduracy, French obstructionism and American impatience, the quadripartite control mechanisms in Germany also functioned remarkably well.

During the period covered by this Collection, the Executive Committee appointed by the Preparatory Commission to prepare for the first meeting of the new United Nations Organisation met in London between August and October 1945. Its work is recorded in the Editorial Note printed as No. 32, detailing British policy on key issues. At the San Francisco Conference held between 25 April and 26 June 1945, it was already clear that British influence on the development of the future UN ranked a poor third behind that of the US and USSR. Gladwyn Jebb, who had represented the UK at San Francisco and became Secretary to the Executive Committee, bemoaned the fact that the policy of allowing the Americans to take principal credit for the drawing up of the UN Charter meant that people in Britain took little interest in the important role played by their country in the shaping of the World Organisation (No. 2). The mood of disillusion and cynicism he detected in the British public was to some extent shared by the incoming Attlee government, whose commitment to UN principles was tempered by scepticism as to the organisation’s ability to force states to sublimate their national interests to the preservation of world peace. By 8 November, when Bevin warned in a forceful memorandum that the world was being divided into spheres of influence (the ‘Three Monroes’) with Britain and Western Europe caught between US dominance to the West and Soviet to the East (No. 21), it was clear that any hope that the UN would be a ‘beneficent protection against war’ was already being undermined by ‘power politics naked and unashamed’. Despite this, and the difficulties encountered in the Council of Foreign Ministers, 1945 still ended on a relatively optimistic note for British policy. *** The documents extracted from DBPO Series I for use in this collection have been printed with a simplified form of heading and 14

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editorial apparatus. A single footnote, in each case, identifies the DBPO volume from which the document comes, and its TNA file reference. Those wishing to follow up cross-references or a point of detail may do so in the published hard copy volumes, or in the digitised collection published by ProQuest. In a few cases, where part of a document had been omitted (for example, where a telegram omitted the repetition of a passage included in an earlier telegram), the missing passage has been restored, for sake of clarity.

In the case of documents added to this Collection from other sources, editorial material has been added where necessary to the sense. We are most grateful to the staff of The National Archives for facilitating access to material during lockdown.

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LIST OF PERSONS Allen, Roger, lawyer, later diplomat, attached to the Foreign Office (FO) since 1940 Anderson, Sir John, Chancellor of the Exchequer from September 1943 to July 1945 and Minister responsible for atomic energy from 1941; head of the Advisory Committee on Atomic Energy from August 1945 Attlee, Clement R.A., Prime Minister from 27 July 1945 Balfour, John, Minister in HM Embassy in Washington Bevin, Ernest, Foreign Secretary from 27 July 1945 Bidault, Georges, French Foreign Minister from 27 August 1945 Boyd Shannon, G.E., Assistant Secretary in the Dominions Office Brand, R.H, Head of UK Treasury Delegation in Washington (UKTD) Bridges, Sir Edward, Permanent Secretary to HM Treasury and Secretary to the Cabinet Bromley, T.E., Private Secretary to Sir A. Cadogan Bruce. S.M., Australian High Commissioner in London, 1933-45 Butler, Nevile M., FO Assistant Under-Secretary superintending North and South American Departments, with particular responsibility for atomic issues Byrnes, James F, US Secretary of State since 3 July 1945 Cadogan, Sir Alexander, FO Permanent Under-Secretary of State Campbell, Sir R.I., Acting FO Under-Secretary and Deputy to the Secretary of State on the Council of Foreign Ministers Churchill, Winston S. Prime Minister from 10 May 1940 to 26 July 1945 Clark Kerr, Sir Archibald, HM Ambassador in Moscow Clayton, William L., US Assistant Secretary of State for Economic Affairs Cobbold, Cameron F., Deputy Governor of the Bank of England Collado, E.G., Director of the US Office of Financial and Development Policy 16

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Cranborne, Lord (Robert), Secretary of State for the Dominions until 3 August 1945 Cripps, Sir Stafford, President of the Board of Trade from 27 July 1945 Dalton, Hugh, Chancellor of the Exchequer from 27 July 1945 Davies, Joseph E., Special Adviser to President Truman during the Potsdam Conference Dimitrov, Georgi, Bulgarian Communist leader and leader of the Comintern, 1933-43 Dรถnitz, Grand-Admiral K., former Commander-in-Chief of the German Navy, succeeded Hitler as German Chancellor on 1 May 1945 Eady, Sir Wilfrid, Joint Second Secretary in H.M. Treasury Eden, Sir Anthony, Secretary of State for Foreign Affairs until 27 July 1945 Elmhirst, Air-Marshal T.W., Assistant Chief of Air Staff (Intelligence) Evatt, Dr H.V., Australian Foreign Minister 1941-49 Forde, F., Prime Minister of Australia, 6-13 July 1945, thereafter Deputy PM Franco, Gen. Francisco, Spanish Head of State, 1939-75 Frank, Hans, Governor General of the Occupied Polish Territories, 1939-45 Fraser, P., Prime Minister and Foreign Minister of New Zealand Frick, W., Reich Minister of the Interior 1933-43 and Protector of Bohemia and Moravia, 1943-45 Funk, Dr W., Reich Minister of Economics, 1938-45, Minister without Portfolio, 1937-43 Galsworthy, J., member of FO Northern Department George, W.F., US Senator (Democrat, Georgia) Goebbels, Josef, Reich Minister for Public Enlightenment and Propaganda, 1933-45 Goering, Hermann, President of the Reichstag, 1932-45 and Commander-in-Chief of German Air Force, 1935-45 17

Britain and the making of the Post-War World

Gouzenko, Igor, Soviet cypher clerk in Soviet Embassy in Ottawa, defector ‘CORBY’ de Guingand, Sir F., Chief of Staff of the 21st Army Group Halifax, Lord (Edward), H.M. Ambassador at Washington Hall-Patch, E.L., FO Assistant Under-Secretary superintending economic departments Harriman, W. Averell, US Ambassador in Moscow Hawkins, H.C., Economic Counsellor to US Embassy in London Hess, Rudolf, Reich Minister without Portfolio and Deputy to Hitler, 1933-41 Hitler, Adolf, Chancellor of Germany, 1933-45 Hopkins, Harry, Special Adviser and Assistant to President Truman Hull, Cordell, US Secretary of State, March 1933 to November 1944 Hurley, P.J., US Ambassador to China Jackson, Robert H., Associate Justice of US Supreme Court and Chief US Prosecutor at the Nuremberg Trials Jebb, H.M. Gladwyn, Head of FO Reconstruction Department, appointed Executive Secretary of the UN Preparatory Commission in August 1945 Jodl, Gen. Alfred, Head of the Operations Staff of German High Command, 1939-45 Keynes, Lord (Maynard), distinguished economist and adviser to H.M. Treasury Kaltenbrunner, Ernst, Chief of Security Police and Reich Security Office, 1943-45 Keitel, Field-Marshal W., Chief of Wehrmacht High Command, 1938-45 King, W.L. Mackenzie, Canadian Prime Minister, 1935-48 Kramer, J., former guard at the Belsen concentration camp Krug, J.A., Chairman of the US War Production Board Krupp, Gustav von Bohlen and Hallbach, head of Krupps armaments firm until 1943 when succeeded by his son Alfried

18

Britain and the making of the Post-War World

Lawrence, Lord Justice G., Principal British judge at the Nuremberg Trials Liesching, Sir Percivale, Joint Second Secretary in the Board of Trade Lippmann, Walter, a leading American political commentator MacArthur, Gen. Douglas, Commander of US armed forces in the Far East, and Supreme Commander for the Allies in Japan MacDonald, Malcolm, British High Commissioner in Canada, 1941-46 Macready, Lt-Gen Sir G.N., Head of the British Army Mission in Washington Mallaby, Brig. A.W.S., Commanding Officer of 49th Indian Infantry Brigade, killed in Indonesia 30 October 1945 Mason, P., Head of FO North American Department Menzies, Sir Stewart, Chief of the Secret Intelligence Service (MI6), 1939-52 Molotov, Vladimir M., Soviet Commissar for Foreign Affairs Mook, H. van, Acting Governor-General of the Dutch East Indies, 1942-48 Morrison, Herbert, Lord President of the Council from 27 July 1945 Mussolini, Benito, Prime Minister of Italy and Fascist leader, 1922-43 Neurath, Baron Constantin von, Reich Minister for Foreign Affairs, 1932-38, Protector for Bohemia and Moravia 1939-41 Noel-Baker, Philip, FO Minister of State from 3 August 1945 Papen, Franz von, Vice-Chancellor to Hitler 1933-34, Ambassador to Austria, 1934-38 and to Turkey, 1939-44 Pearson, Drew, political columnist in Washington Pethick-Lawrence, Lord (Frederick), Secretary of State for India and Burma from 3 August 1945 Pink, I., member of Political Division of Control Commission for Germany (British Element) Poynton, H., senior Colonial Office official Radenko, Gen. R.A., Prosecutor-General of the Soviet Union and 19

Britain and the making of the Post-War World

Chief Russian Prosecutor at the Nuremberg Trials Raeder, Grand-Admiral Erich, Commander-in-Chief of the German Navy, 1928-43 Ribbentrop, Joachim von, Reich Foreign Minister, 1938-45 Roberts, Frank K., Counsellor in HM Embassy in Moscow Robertson, Norman A., Canadian Under Secretary of State for External Affairs Robbins, Professor Lionel, Director of the Economic Section of the War Cabinet Roosevelt, Franklin D., US President from 1933, died 12 April 1945 Rosenberg, Alfred, Reich Minister for the Occupied Eastern Territories, 1941-44 Sargent, Sir Orme G., FO senior Deputy Under-Secretary of State Sauckel, Fritz, Gauleiter of Thuringia, Reich PlenipotentiaryGeneral for the Utilisation of Labour, 1942-45 Schacht, Dr Hjalmar, former President of Reichsbank and Minister of Economics, Reich Minister without Portfolio, 193743 Schirach, Baldur von, former leader of Hitler Youth, Gauleiter of Vienna, 1940-45 Self, Sir H., Chairman of the British Supply Council in North America Seymour, Sir Horace J., HM Ambassador to China Seyss-Inquart, Artur, Reich Commissioner for the Occupied Netherlands, 1940-45 Sjahrir, Sutan, Prime Minister of Indonesia from 18 August 1945 Smuts, Field-Marshal Jan, Prime Minister of South Africa, 193948 Soekarno, Dr, first President of Indonesia from 18 August 1945 Speer, Prof Albert, Reich Minister for War Production and Armaments, 1942-45 Stalin Josef V., Marshal of the Soviet Union Stassen, Harold, prominent US Republican politician, former governor of Minnesota Stephenson, Sir John, Deputy Under-Secretary in the Dominions Office Stephenson, Sir William S. SIS representative in the US and head 20

Britain and the making of the Post-War World

of British Security Coordination (BSC) Stettinius, Edward, US representative to the United Nations from 27 June 1945 Streicher, Julius, publisher of anti-semitic newspaper, Gauleiter of Franconia 1925-40 Truman, Harry S., US President since 12 April 1945 Tze-tung, Mao, Chairman of the Central Executive Committee of the Chinese Communist Party de Valera, Eamonn, Head of the Irish Government and Minister for External Affairs Vinson, Fred M., US Secretary of the Treasury Vyshinsky, A.Y., Soviet Deputy Commissar for Foreign Affairs Wallace, Henry, US Secretary of Commerce Ward, J.G., Acting Head of FO Reconstruction Department Webster, Professor Charles, FO Research Department, 1945-46 and member of the UN Preparatory Commission White, Dr Harry Dexter, Assistant Secretary in US Treasury Zabotin, Col. Nikolai, Soviet Military AttachĂŠ in Ottawa Zaroubin, Georgy, Soviet Ambassador to Canada

21

LIST OF DOCUMENTS 1

Memorandum by Sir O. Sargent: ‘Stocktaking after VE-Day’ 11 July 1945

26

2

Memorandum by Mr Jebb: ‘Reflections on San Francisco’ 25 July 1945

40

3

Proclamation by the Heads of Government United States, United Kingdom and China relating to Japan 26 July 1945

47

4

Protocol of the Proceedings of the Berlin Conference 2 August 1945

50

5

Memorandum by Mr Hall-Patch on US commercial policy and financial aid 3 August 1945

69

6

Despatch No. 1038 from Mr Balfour (Washington) to Mr Bevin analysing the American view of Britain 9 August 1945

73

7

Memorandum by Lord Keynes: ‘Our Overseas Financial Prospects’ 13August 1945

88

8

Memorandum by Mr Attlee on the Atomic Bomb [28 August 1945]

22

100

Britain and the making of the Post-War World

Despatch No. 642 from Sir A. Clark Kerr (Moscow) to Mr Bevin reviewing the Soviet domestic and foreign situation, especially Anglo-Soviet relations 6 September 1945

103

10 Note on the Soviet defector Igor Gouzenko, ‘CORBY’ September 1945

110

11 Telegrams to Sir A. Cadogan relating to CORBY 9-10 September 1945

113

12 Memorandum by Mr Butler: ‘Atomic Energy: The International Background’ 11 September 1945

118

13 Telegram from Sir W. Stephenson to ‘C’ relating to CORBY 24 September 1945

130

14 Memorandum by Mr Boyd Shannon: ‘Council of Foreign Ministers, 11th September-2nd October, 1945’ 2 October 1945

132

15 Minute from Mr Bevin to Mr Attlee on the CORBY case 11 October 1945

135

16 NABOB Telegram No. 177 from British Missions (Washington) to Cabinet Offices giving views on the current state of financial negotiations with the US 18 October 1945

138

9

23

Britain and the making of the Post-War World

17 Telegram from Sir W. Stephenson to ‘C’ relating to CORBY 18 October 1945

146

18 Report by the Joint Intelligence SubCommittee: ‘Relations with the Russians’ 18 October 1945

147

19 Despatch No. 1098 from Sir H. Seymour (Chungking) to Mr Bevin discussing Communism in China and its relationship with Moscow 25 October 1945

155

20 Minute from Mr Bevin to Mr Attlee on the CORBY case 27 October 1945

157

21 Memorandum by Mr Bevin on the Foreign Situation (the ‘Three Monroes’) 8 November 1945

159

22 ‘Atomic Energy: Agreed Declaration by the President of the United States, the Prime Minister of the United Kingdom, and the Prime Minister of Canada’ 15 November 1945

164

23 Minute from Mr Butler to Sir A. Cadogan on the CORBY case 21 November 1945

167

24 Minute by Mr Galsworthy on the Soviet treatment of repatriated citizens 28 November 1945

169

25 Note by Mr Pink: ‘Some Impressions of the Nuremberg Trial’ [29 November 1945]

171

24

Britain and the making of the Post-War World

26 Telegram from Mr MacDonald (Ottawa) to Sir A. Cadogan relating to CORBY 4 December 1945

176

27 Despatch No. 1588 from Lord Halifax (Washington) to Mr Bevin enclosing a memorandum by Mr Balfour: ‘Analysis of the present attitude of the United States towards world affairs’, 28 November 1945 12 December 1945

178

28 Control Commission for Germany (British Element) Intelligence Review No. 1 12 December 1945

189

29 Record of Meeting in Moscow between Mr Bevin and M. Molotov covering Iran, Indonesia, India and the Balkans, especially Greece.

18 December 1945

198

30 Letter from Sir W. Eady (H.M. Treasury) to Mr R. H. Brand (Washington) on the implications of the American loan agreement for domestic and overseas finance, notably India and Argentina 22 December 1945

207

31 Report of the Meeting of the Foreign Secretaries of the Union of Soviet Socialist Republics, the United States of America and the United Kingdom 27 December 1945

213

32 Editorial Note: THE UNITED NATIONS PREPARATORY COMMISSION, 1945

224

25

1 Memorandum by Sir O. Sargent1 Secret

FOREIGN OFFICE, 11 July 1945

Stocktaking after VE-Day The end of the war in Europe leaves us facing two main problems, neither of which has any resemblance to the problems with which we were faced at the end of the last war. They are (a) the military occupation by Soviet troops of a large part of Eastern Europe, and the Soviet Government’s future policy generally; and (b) the economic rehabilitation of Europe so as to prevent a general economic collapse.

2. Our own position, too, in dealing with these problems is very different from what it was at the end of the last war, when we and France shared and disputed, and eventually lost, control of Europe.

This time the control is to a large degree in the hands of the Soviet Union and the United States, and neither of them is likely to consider British interests if they interfere with their own and unless we assert ourselves.

3. For this very reason it suits us that the principle of cooperation between the three Great Powers should be specifically accepted as the basis on which problems arising out of the war should be handled and decided. Such a co-operative system will, it is hoped, give us a position in the world which we might otherwise find it increasingly difficult to assert and maintain were the other two Great Powers to act independently. It is not that either the United States or the Soviet Union do not wish to collaborate with Great Britain. The United States certainly find it very convenient to do so in order to fortify their own position in Europe and elsewhere; and the Soviet Union recognise in Great Britain a European Power 1

The National Archives, UK (TNA) FO 371/50912, U5471/5471/70. Documents on British Policy Overseas, Ser. 1, Vol. 1, No. 102. Sir O. Sargent submitted the memorandum to Sir A. Cadogan on 11 July in response to Mr Bevin’s request for a ‘Stock-Taking Memo on the general political situation at the end of the European war’.

26

Britain and the making of the Post-War World

with whom they will certainly have to reckon. But the fact remains that in the minds of our big partners, especially in that of the United States, there is a feeling that Great Britain is now a secondary Power and can be treated as such, and that in the long run all will be well if they‒the United States and the Soviet Union‒as the two supreme World Powers of the future, understand one another. It is this misconception which it must be our policy to combat.

4. For this reason and because we are numerically the weakest and geographically the smallest of the three Great Powers, it is essential that we should increase our strength in not only the diplomatic but also the economic and military spheres. This clearly can best be done by enrolling the Dominions and especially France, not to mention the lesser Western European Powers, as collaborators with us in this tripartite system. Only so shall we be able, in the long run, to compel our two big partners to treat us as an equal. Even so, our collaboration with the United States and the Soviet Union is not going to be easy in view of the wide divergence between our respective outlooks, traditions and methods.

5. To take the Soviet Union first. It is particularly dangerous to assume that the foreign policies of totalitarian governments are opportunist and fluctuating, like those of liberal governments (using the term ‘liberal’ in its widest sense as representing all that is opposed to totalitarianism, whether to the Right or to the Left).

All totalitarian governments‒and Russia is certainly no exception‒ are able to conduct a consistent and persistent foreign policy over long periods because the government is not dependent on public opinion and changes of government. And precisely because totalitarian governments need not explain or justify their policy to their own people it is much more difficult for the foreigner to analyse the governing principles which underlie it. It is true that in the case of Nazi Germany Hitler kindly explained in Mein Kampf both his objectives and methods. We were thus duly warned, but did not heed the warning. Again, Mussolini, by crudely imitating Hitler, revealed to us the secrets of his long-term policy. But in the case of the Soviet Union Stalin is not likely to be as obliging. We shall have to try and find out for ourselves what is his plan of campaign and to anticipate the tactics which he intends to employ from time to time to carry it through. And this is not going to be 27

Britain and the making of the Post-War World

easy, nor shall we always be able, even among ourselves in this country, to agree on the conclusions to be reached.

6. Without attempting on this occasion to analyse Russia’s foreign policy and foretell its future course, it is worth calling attention to one factor in the policy of modern totalitarian governments which seems to be fairly constant, namely, their desire to obtain for their régime the maximum degree of security both at home and abroad. As a result of the defeat of 1918 the Nazis feared encirclement by the rest of Europe and sought security by means of territorial conquest. Hence their demand for Lebensraum.

Mussolini resented the encirclement of the Mediterranean by France and Great Britain and tried to break out into Africa. Soviet Russia now fears a world coalition of the liberal Powers (‘liberal’ again being used in its widest sense), and the revival of Germany as a ‘liberal’ Power; for Stalin knows even better than we do that it was the material strength and wealth of the liberal Powers, combined with the belief in their own philosophy of life, which really won the war, and he probably has fewer illusions than we and the Americans have about the capacity of Germany to recover first her economic, then her political, and lastly her military power in Europe. Stalin, however, does not necessarily intend to obtain his security by territorial conquest, as Hitler wanted to. He may well prefer to obtain it by creating what might be termed an ideological Lebensraum in those countries which he considers strategically important. If he eventually is convinced that the danger of a liberal coalition is not going to materialise he may relax somewhat his search for security, or rather change its nature so as to apply only to Germany. It must be remembered, too, that, unlike Hitler, he fortunately has not the motive of revenge to spur him on.

7. At the present moment the Soviet Union has been so weakened by the war that Stalin is hardly in a position to force through ruthlessly his policy of ideological penetration against definite opposition. For instance, in the case of Greece, Venezia Giulia, and to a certain extent Poland, he has not pressed matters to extreme and has actually compromised, though it may well be that he has only made a temporary retreat. But at the present moment it can surely be assumed that he does not want and could not afford another war in Europe, and it is also doubtful whether he aims at 28

Britain and the making of the Post-War World

further territorial expansion. At Annex I [not printed] will be found a memorandum by Sir R. Bruce Lockhart on Soviet policy and the best means of reacting to it.

8. The economic strength of the United States has certainly impressed Stalin no less than the potentiality of the Western Air Forces. He has seen what has happened to Germany from the air and what is happening to Japan. No doubt Stalin feels that now before his troops have been withdrawn from the countries which they are now occupying and before their demobilisation has begun he must seize the opportunity to reap the fruits of victory to the full, since if he delays or hesitates there may be some which later on he will no longer be able to grasp. As for ourselves, though economically we shall grow stronger as time goes on, militarily our strength in Europe will soon decline from its present peak‒even quicker than the Russian strength. For this reason we must take a stand in the immediate future if we are to prevent the situation crystallising to our permanent detriment. This means in practice that we must keep our foot firmly in Finland, Poland, Czechoslovakia, Austria, Yugoslavia and Bulgaria, even though we may have to abandon perhaps for the moment Roumania and Hungary as beyond our reach.

9. If there is to be a trial of strength between us‒that is to say a diplomatic trial of strength‒now is the time for us to take the offensive by challenging Russia in these six countries, instead of waiting until the Soviet Government threatens us further west and south in Germany, in Italy, in Greece, and in Turkey. This is what inevitably will happen if we let Stalin pocket for good these six countries which at present he controls by a combination of political force and military pressure. Further reasons for this change of policy and the tactics to be employed in applying it are examined in Annex II. 10. We must, of course, also be prepared for the Soviet Government to make an effort to establish their influence in Germany, Italy, Greece and Turkey. In the three latter countries we ought to be able to maintain our position, and our object must be to build them up as bastions of ‘liberalism’, even though this may involve us in responsibilities and commitments of which we otherwise would be only too glad to be rid. But the struggle for 29

Britain and the making of the Post-War World

Germany, if it is engaged, will not only be much harder, but the result will be decisive for the whole of Europe, for it is not overstating the position to say that if Germany is won over to totalitarianism this may well decide the fate of liberalism throughout the world.

11. In every country of Europe the Soviet Government will have the great advantage of being able to exploit for their own ends the economic crisis which in the coming months may well develop into a catastrophe capable of engulfing political institutions in many European countries and paralysing all orderly government in a large part of the Continent. It is the existence of this economic crisis which makes it so important to obtain the wholehearted cooperation of the United States, who alone have the material means of coping with it.

12. If the United States realise both the political and economic implications of the European situation it will not be too difficult for us to perform the double task of holding the Soviet Government in check in Europe and at the same time amicably and fruitfully cooperating with the United States and Soviet Governments in the resettlement of Europe. But we must be prepared for the United States to falter from time to time when called upon to pull their weight in Europe, and to prefer the more agreeable and less arduous rĂ´le of mediator in European affairs generally and in particular in any disputes between Great Britain and Russia, even threatening maybe that only on such terms will they be prepared to make their indispensable contribution in the economic sphere.

13. Unfortunately the foreign policy of the United States is, like that of the Soviet Union, difficult to forecast, but not because, as in Russia, it is secret, but because the ‘liberalism’ of the United States constitution makes it fluctuating, uncertain, and emotional. But if we accept the view that after this war the United States Government is going to be very much in the same position as Great Britain was after the last war, it may be easier to guess the general tendency of American policy in Europe. Just as we considered France troublesome, quarrelsome and reactionary after the last war, so the United States will consider us to be so now. If they tend to act as conciliators between us and Russia (and Germany), if they try to free themselves from what they consider to be British tutelage in 30

Britain and the making of the Post-War World

European affairs, they will be following the same line as we took after the last war, when we tried to reconcile France and Germany at the expense of France’s policy of weakening Germany in every way possible. This policy of ours gradually broke the spirit of France, and final disillusionment came with the reoccupation of the Rhineland in 1936. We must take care that United States policy does not have the same effect upon us now. France felt that she could not rely upon Great Britain and at the same time could not stand up to Germany without us. We must not allow ourselves to get into the same defeatist mood in dealing with post-war Europe.

We must have a policy of our own and try to persuade the United States to make it their own. But failing that, we must be prepared to stand by it, even if the United States refuse to support us and insist upon mediating instead. We must face the fact that they will feel that being the richest and strongest Power they must also be the wisest and the most fair-minded, and will therefore resent any contradiction by us. In particular, they may suspect our political motives to be reactionary when we, rather than they, intervene in the countries which the Soviet Government is intent on controlling.

They will, however, be more ready to co-operate in solving the economic problems of Europe, and once their interest and prestige is engaged in these questions it is to be hoped that they will find it difficult to disinterest themselves in the political development of the countries whom they are saving materially. An estimate of the outlook of the men who will be responsible for United States policy in the immediate future will be found in Annex III. 14. At present our problems, as far as they are political, are concerned with the Soviet Government rather than with Germany.

But Germany will shortly have it in her power to play an important and dangerous part. She will have a still greater incentive than in 1918 to seek revenge, and it would be wise not to under-estimate her innate capacity for recuperation and reconstruction. Against this there is this time nothing left of her administration and institutions, and she will have to evolve a new political and economic system without being able, as after 1918, to use the Army with its traditions, and big business with its machinery, as the nucleus around which to build. Thus the process of reconstruction will be slower, but it is likely, for the same reason, to be more 31

Britain and the making of the Post-War World

carefully thought out and planned. After the last war Germany was hamstrung until 1933 by having a liberal form of government alien to her temperament. This will not happen this time, unless we make very great efforts to impose such a rĂŠgime on Germany, for her natural tendency will be to strive to return to some form of authoritarianism. If we hesitate or allow our German policy to be at the mercy of the emotions and ignorance of the people of the United States we shall be lost, for it will give Germany the opportunity not only to decide and plan her own future but also, when the times come, to put herself up to the highest bidder so as to play off each of the three Great Powers one against the other. Once such a competition begins the Soviet Government has the best chance of carrying off the prize, and, as already said, the winning of this prize may well decide the future of Europe and of ‘liberalism’ throughout the world.

15. The problems we have considered have been primarily those of postwar Europe. It is too early to make a similar analysis of the corresponding problems which will face us in the Far East. So long as the war there still continues it is impossible to foresee what will be the relative positions of both victors and vanquished when victory has been achieved. It is, however, fairly safe to suppose that British interests will again be best served by a policy of cooperation between the three Great Powers, for in isolation we should be in a weaker position even than in Europe. For the same reason we shall probably find it useful to organise under our leadership the lesser colonial Powers who have a stake in the Far East; in other words, France, the Netherlands and Australia. For the rest, the United States are more likely to be more aggressive and pertinacious in the Far East than they will be in Europe, while the Soviet Government may well be less security-haunted than it is in Europe. If so, its Asiatic policy may be less coldly realistic and more opportunist. But all will in the last resort depend on the state in which Japan and China are left by the war, and what part they will be able to play in Far Eastern politics after it is over. It seems almost inevitable that the United States and the Soviet Union will eventually struggle for the body and soul of China unless the latter can acquire in time such a degree of national unity as is necessary to enable her to develop her latent resources in manpower and 32

Britain and the making of the Post-War World

economic resources in defence of her national independence. In the course of such a struggle it seems almost inevitable that Japan would sooner or later be called in to help by one of the protagonists.

16. To sum up:(a) We must base our foreign policy on the principle of cooperation between the three World Powers. In order to strengthen our position in this combination we ought to enrol the Dominions and especially France not to mention the lesser Western European Powers, as collaborators with us in this tripartite system. (b) We must not be afraid of having a policy independent of our two great partners and not submit to a line of action dictated to us by either Russia or the United States, just because of their superior power or because it is the line of least resistance, or because we despair of being able to maintain ourselves without United States support in Europe. (c) Our policy, in order not to be at the mercy of internal politics or popular fashion, must be in keeping with British fundamental traditions and must be based on principles which will appeal to the United States, to the Dominions, and to the smaller countries of Europe, especially in the West. It must be definitely antitotalitarian, and for this purpose be opposed to totalitarianism of the Right (Fascism, &c.), as much as to the totalitarianism of the Left (Communism, &c.). In pursuance of this policy of ‘liberalism’ we shall have to take risks, and even live beyond our political means at times. We must not, for instance, hesitate to intervene diplomatically in the internal affairs of other countries if they are in danger of losing their liberal institutions or their political independence. In the immediate future we must take the offensive in challenging Communist penetration in as many of the Eastern countries of Europe as possible, and we must be ready to counteract every attempt by the Soviet Government to communise or obtain political control over Germany, Italy, Greece or Turkey. (d) We must not desist from this course or be discouraged even if the United States give us no help and even if they adopt a policy of appeasement towards Russian domination, as well they may. (e) We must exert every effort to grapple with the economic crisis in Europe‒not only in our own interests (a prosperous Europe is Great Britain’s best export market) but in order to use the 33

Britain and the making of the Post-War World

material resources at our and America’s disposal as a makeweight throughout Europe against Communist propaganda, which the Soviet Government will use for their own ends wherever possible.

O.G. SARGENT Annex II Till our invasion of France, that is to say, till the Second Front had been opened, our attitude was, and indeed had to be, defensive and almost apologetic. Even since then, during the spectacular advances of the Russian armies last year, the Soviet Union seemed in Europe to be establishing a military predominance which would show its full force at the Peace Settlement and which it would be folly to ignore. Indeed, it looked until the other day that it would be the Russian armies which would invade and occupy the heart of Germany, including Berlin, before the British and Americans had penetrated the German defences in the West.

In these circumstances it was only prudent that we should in our diplomatic dealings with the Soviet Government set ourselves to humour and to propitiate our Russian Ally. The policy was, no doubt, the right one at the time, and though it produced no spectacular results, and indeed, very little response from the Soviet Government, who can say that the situation would not have been very much worse if we had during this period asserted our rights on every occasion by the various means of pressure open to us, such as retaliation in kind, denial of material help, and isolated action in those parts of Europe where our interests and those of the Soviet Union appeared to conflict?

But with the sudden, almost unexpected, break-through in the West, involving the collapse of the German armies and the opening of the heart of Germany to invasion by British and American armies, the situation had radically changed. Instead of the Russians being in the position in Germany to dictate their terms to their Allies, these latter are meeting them on equal terms in that country and, indeed, the terms on which they meet may end by being more favourable to the Western Allies than to the Russians.

34

Britain and the making of the Post-War World

One might suppose that this would make the Soviet Government more anxious to humour us and the Americans, but, unfortunately, their reaction may take quite a different form, especially if they think, as they no doubt do, that we and the Americans intend to rehabilitate Germany as we have undertaken to rehabilitate Italy so as to save her from Communism. Thus they may well decide that there is not a moment to be lost in consolidating their cordon sanitaire, not merely against a future German danger, but against the impending penetration by the Western Allies. In such a mood they might not stop to count in terms of Allied co-operation, the cost of destroying the last vestiges of bourgeois rule and sovereign independence in the countries to be sacrificed for this purpose.

This may be a too gloomy view of the situation, but given the Russian character it is sufficiently possible to warrant our considering whether our present diplomatic technique in dealing with the Soviet Government is the best calculated to divert them from this policy, or at least to minimise its effects.

Has not the moment come to speak plainly to the Soviet Government, to show our resentment, and to formulate what we consider our rights? To propitiate Stalin when we were weak he would understand, but for us to do so now when we are strong would surely appear to him as a cunning manoeuvre intended to put him off his guard. He is much more likely to understand if we insist on clearly stating our case at this juncture because our respective positions in the European scene have altered.

It would, no doubt, be easy to strike a bargain with the Soviet Government if we were prepared to recognise their exclusive interests in certain countries. But it is inconceivable that we should adopt this course. Not only would we never be sure that the Soviet Government would observe such a bargain, but it would appear in the eyes of the world as the cynical abandonment of the small nations whose interest we are pledged to defend; and for ourselves it would represent the abdication of our right as a Great Power to be concerned with the affairs of the whole of Europe, and not merely with those parts in which we have a special interest.

If, however, we cannot found our policy of co-operation on a system of spheres of influence, we must confine ourselves to making it abundantly clear to the Soviet Government that the policy 35

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of Anglo-Soviet co-operation must apply fully in Central and South-Eastern Europe as in the rest of the world, and that, indeed, we are not prepared to work the policy on any other basis.

It is difficult to foresee what would be the Soviet Government’s reaction to such a summons. It would largely depend on the value they attach to the continuance of co-operation with Great Britain and the United States after the war; on the extent to which they fear the prospect of Great Britain and the United States organising an anti-Russian and anti-Communist bloc in Europe; and lastly, on the material difficulties they may foresee in embarking after an exhausting struggle on a policy of political expansion which might easily develop into a military occupation. In any event the Soviet Government’s reaction could not very well be worse than a continuance of the present state of uncertainty and drift which is operating all the time to our disadvantage.

We should, of course, have to demonstrate that this plainspeaking was, in our view, necessary in order to establish in the changed circumstances of to-day a new basis on which to continue and develop Anglo-American-Soviet co-operation during the difficult times ahead of us, and we should be at pains to show that it is precisely because of the importance that we attach to this cooperation that we feel it necessary to tackle this difficult and disagreeable subject in such a frank, realistic and comprehensive manner.

In such a discussion with the Soviet Government we should be well advised not to lay too much stress, as the United States Government are inclined to do, on the outward forms of Parliamentary Government, such as free elections, party administrations, &c., which are probably unattainable in present circumstances, and are, in any case, not in keeping with the traditions and outlook of the peoples concerned. We had better instead concentrate on essentials which will enable those countries to develop their own institutions as best suit their conditions and traditions, so long as these involve no persistent persecution of any political parties, or individuals in the interests of Communism, and provided that the individual can in one way or another enjoy that degree of liberty of action and speech and elementary justice to 36

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which he was accustomed before the war and before the advent of the Communist conception of the totalitarian State.

Annex III The following opinions about Mr Byrnes have recently been expressed by Mr Tom Finletter and General Macready. Mr Tom Finletter served for several years as a temporary official in the State Department where he dealt with economic matters and showed himself extremely co-operative, broad-minded, friendly and resourceful. He is by profession a lawyer in the firm of Coudert Brothers. Mr Finletter said he did not think that the appointment of Mr Byrnes as Secretary of State would be a good one. Byrnes had both the Liberal and Conservative elements of public opinion against him on the basis of his voting record when in Congress as Representative and Senator. For Conservatives and for Republicans in general he was the Southern Democrat and therefore suspect on grounds of liberalism (in other than questions to do with the Negro).

By the Conservative elements represented by the Roman Catholic hierarchy and Roman Catholic circles in general he was mistrusted as a renegade from his religion. Liberal opinion was opposed to him because he was a regular Southern statesman with all that that meant in the way of reactionary tendencies. Negro and Liberal sentiment had misgivings about him because of his regular Southern Democrat attitude towards the Negro. Both the Labour movements, the C[ongress of] I[ndustrial] O[rganisations] and the A[merican] F[ederation] of L[abour], were united against him. For these reasons, in Mr Finletter’s opinion Mr Byrnes’s path as far as internal sentiment was concerned would not be likely to be smooth, notwithstanding the fact that he stood well with Congress. (Mr Finletter gives perhaps rather more than their due weight to the above factors.)

General Macready has been Head of our Army Mission in Washington for several years, has pretty wide contacts and knows the Washington scene pretty well. He, like Mr Finletter, feels misgivings about Mr Byrnes. His two chief grounds are that Mr Byrnes, having by the nature of his offices concentrated on internal American affairs (his last office was Director of War Mobilisation), 37

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has had no time to become acquainted with foreign affairs or the world outside the United States. He is therefore entirely ignorant in respect of such matters. Moreover, Mr Byrnes’s concern with practical internal questions has inclined to make him look at external questions overmuch from the point of view of their effect on immediate American interests in the first place. I.e., his view of what are American interests is too parochial.

The opinions of Mr Finletter and General Macready on President Truman may also be of interest. Mr Finletter, while saying that the President had up to the present done extremely well, and that his stock was high, stated that it should be remembered that as far as Congress was concerned he was in the honeymoon period. We should not assume that Mr Truman would enjoy Congressional goodwill indefinitely. There was a sort of Congressional truce as long as the war with Japan continued, but the need for this truce would cease to be felt as soon as the war ended. Even then, as long as President Truman merely continued to follow Rooseveltian policies things might go on all right; but the moment the President began to put forward policies and measures of his own trouble with Congress should be anticipated. (It is none the less reasonably certain that the personal popularity that President Truman won in the Senate will militate in his favour and will keep the temperature low in any possible disputes.)

General Macready considers that the President, while an honest, friendly and co-operative man has, like Mr Byrnes, an outlook to some extent limited by concern with the home scene of the United States. He is much in the hands of his advisers. A particular aspect of this is his relationship with the American Chiefs of Staff.

Whereas President Roosevelt was independent of these, and whereas they had always to expect that the President might at any moment overrule them, this was no longer the case. If a suggestion was made by the Prime Minister to President Truman that the opinion of their advisers should in a given instance be overruled, President Truman’s reply merely repeated and endorsed the opinion of his Chiefs of Staff.

Mr Finletter mentioned Mr Stettinius’s speech of the 28th May in which he made his reference to ‘mediation.’ Mr Finletter said that the intention of this remark had been misunderstood in this 38

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country. So far from its portending American aloofness and a germ of isolationism, and so far from it being dictated by a mere fear of appearing to gang up with us against others, its intention had been quite different. It was meant to convey that though American interests would not be so intimately engaged in, say, Syria as in, say Mexico, yet in areas in which the United States were less closely interested they would play their part, on the principle that all nations should act helpfully everywhere. The phrase was really used with the intention of removing foreign apprehensions that the United States might behave again as they had in the case of Greece in December last, i.e., tell this country that as far as they were concerned it was free to go ahead and act as it thought best, and then come out and criticise its actions and dissociate themselves therefrom. The Americans had been rather disappointed at our first reaction about the phrase ‘mediation’.

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2 Memorandum by Mr Jebb1 FOREIGN OFFICE, 25 July 1945 Reflections on San Francisco (A paper written before the General Election) On arriving back in this country after ten weeks’ absence at San Francisco, the British official is struck by the widespread lack of interest in this country in all questions connected with the World Organisation. America is another world. There the question is anxiously debated in all sections of the community. Sometimes rather unrealistically it is true; but generally speaking the approach is one of constructive criticism and tempered enthusiasm. There is no question of the interest which Americans take in the whole affair, and the general impression created is that they are willing and anxious to assume responsibilities and will not fall by the wayside if the United Nations does not work out in quite the way which is now expected.

2. Here, on the other hand, if anybody can be induced to talk about the subject at all, it is in a mood of disillusionment, not unmixed with cynicism. No one seems to think that it greatly matters whether there is a World Organisation or not, and most people fall back on the stock argument that, if constituted on the lines now proposed, it will simply be a Great Power Alliance which will last just so long as the interests of the Great Powers do not clash. There is, of course, a great deal of truth in this simple thought, but the approach is negative rather than positive and ignores the hopeful features of the Charter and notably the very fact that a machine will now be constituted whereby the Great Powers can attempt to settle their own difficulties as well as those of other people. There seems to be no popular conception of the immense importance attaching to some positive role by this country and to 1

TNA FO 371/50732, U5998/12/70. Documents on British Policy Overseas, Ser.1, Vol.1, No. 407. On Mr Bevin’s instructions the memorandum was circulated to King and Cabinet.

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the enormous dangers of a purely cynical outlook on the problem as a whole. ‘Where there is no vision the people perish.’ 3. Yet it cannot be denied that in the production of the great plan now brought to fruition at San Francisco, HMG in the UK played a very great, perhaps even a preponderating part. The essential features of the original British papers circulated before Dumbarton Oaks have all been incorporated in the final document, with one notable exception on which more will be said later. The very basis of the scheme, namely, continued co-operation between the Great Powers, and notably between the Soviet Union, the United States and the United Kingdom, had its origin in this country and was imparted by devious means to our two great Allies. The Military Staff Committee is a purely British invention, and the Economic and Social Council is modelled on the Bruce report which was in accordance with British ideas. The Declaration on Colonial Policy was largely based on our initiative. Finally, the famous Yalta Voting Formula was originally produced by the British Delegation at Dumbarton Oaks.

4. If we examine the Charter in detail, moreover, we find that the Purposes and Principles (Articles 1 and 2), the criteria for election to the Security Council (Article 23), the crucial Articles 24 and 25 whereby States pledge themselves to carry out the decisions of the Security Council, Article 37 which entitles the Security Council to frame an indictment against a Great Power if need be, Article 38 dealing with disputes other than those likely to produce a breach of the peace, Article 44 allowing a non-member of the Council to vote on decisions concerning the employment of its forces, almost all of the military paragraphs (Articles 47-50), and Art. 99, which provides for the Secretary General bringing to the attention of the Security Council any matter which in his opinion may endanger the peace, were the result of great and successful efforts made by the United Kingdom Delegation, which, as is known, consisted of representatives of all the major political parties.

5. These points must be noted in any fair attribution of responsibilities. But at the same time it must be recalled that our policy has been, and presumably still is, not to emphasise our achievements in public, but rather to allow the Americans to claim 41

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the principal credit for the production of the Charter as a whole.

This they have not failed to do in their equivalent of a ‘White Paper’, presumably with the object of persuading the American people that the new Organisation is, so to speak, their own property, thereby overcoming the forces of isolationism. It is also true, I think, that many Americans really believe that most of the important features in the Charter originated in the United States. I understand that they have practised the same kind of self-deception in regard to RADAR, the secret of which was furnished to them by us at the beginning of the war. But I have no doubt that, although irritating, this general attitude is on balance to our advantage seeing that we want the Americans to regard the World Organisation as their special interest in order that they should play their full part in its operation. Nevertheless there may be a point at which the absence of even the smallest blast on our own trumpet produces an impression among our own people that we have done nothing except plod dutifully in the footsteps of the United States; and it is for consideration whether we should not‒perhaps in the Secretary of State’s speech during the ratification debate‒make some appropriate allusion to our own part in the production of the San Francisco document.

6. However this may be, it is indisputable that our major foreign political objectives have largely been secured by the constitution of the new World Organisation. Thus the United States, we hope, will shortly be committed to intervene if trouble breaks out anywhere in the world. The Soviet Union will shortly be bound by the most solemn obligations, which it must surely hesitate to repudiate. And, finally, the position of the smaller states, their independence and integrity, have all been made vastly more secure than they would have been if no Organisation had been agreed upon‒and the position of the smaller states has always been considered to be one of the major interests of Great Britain.

7. In the long run too, the prospects seem to be better, and not worse, than they were in 1919. An Organisation has now been created which will include all the existing major powers. Those powers which recently bid for domination of the world have been, or shortly will be, smashed to pieces, and are not likely to recover for a very long period. It is therefore essential that the major powers 42

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should continue their cooperation for a long period to come, and it is not unreasonable to hope that they may do so. There seem, therefore, to be considerable grounds for self-congratulation and indeed for some small measure of enthusiasm. Why, therefore, do we have this mood of apathy and disillusion in Great Britain, and what are the compelling reasons for the cynicism which now prevails?

8. I think that the chief reason is sheer fatigue. It seems quite probable that, by and large, the average citizen of this country has worked harder during the last five years than the citizen of any other country. But this by itself does not altogether explain the phenomenon. There is, for instance, also the thought, whether formulated or unformulated, that whereas in 1919 we were the almost undisputed leaders in urging the establishment of international machinery for the preservation of peace, now that leadership has passed to Russia and America and that all that we can do is to follow in the wake of one or the other as our outlook on, and our station in life, may determine. This, in itself, I suggest, is partly due to the fact that there is an unresolved conflict between Right and Left in the United Kingdom, and perhaps more to the fact that this country alone is obviously less important than its two great Allies until and unless it can either develop a workable Commonwealth system in regard to Foreign affairs, or establish some entity in Western Europe, or both.

9. Frankly, I think that our failure to do either of these things was partly responsible for an impression which a number of my foreign colleagues gained at San Francisco to the effect that we were playing a secondary rather than a primary part. There were other reasons for such an impression which, however mistaken, was fairly widespread. In the first place the demands of the General Election deprived the Delegation of nearly all its leaders before the really crucial debates took place in the Technical Committees. Lord Cranborne, of course, stayed on and played what was perhaps the outstanding rôle in the discussions on Trusteeship. But in all other matters we had to continue with Lord Halifax as the sole political representative of His Majesty’s Government, and he was, of course heavily engaged in all the Five Power discussions, with the result that he could only very occasionally intervene (with great success) 43

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in the Committee’s debates. Consequently a depleted band of permanent and temporary civil servants had to carry on as best they could; and, apart from anything else, it is no reflection on them to say that Civil Servants, however capable and distinguished, are at a disadvantage when coping in public with eminent foreign and Dominion politicians. The Canadians, also owing to their election, were in a precisely similar position.

10. But more important still was the unfortunate clash which took place with the representatives of Australia and New Zealand.

Dr. Evatt from the outset adopted the attitude that HMG had made various concessions to the Dominions’ point of view during the Dominion talks which preceded the Conference, and had subsequently declined to carry these out. He ignored the other equally important consideration, universally accepted at the Empire talks, that any views expressed in London might have to be modified at San Francisco, if that were necessary to secure the paramount objective, namely the acceptance of the Charter by the United States and the Soviet Union. Whatever justification Dr Evatt may have had for asserting that we had changed our attitude‒and I should myself have thought that there was very little‒the fact remains that Dr Evatt and Mr Fraser, who was influenced by him, were obviously not prepared to follow the lead of the United Kingdom, and tended to act, not primarily as members of a great Commonwealth of Nations, but rather as small or middle nations.

It is only fair to add that Dr. Evatt’s views were not shared by Mr Forde, the Deputy Prime Minister of Australia, and leader of the Australian delegation, and that the Canadian delegation, an unusually able one, were generally helpful and cooperative. Field Marshal Smuts for his part was so convinced of the paramount importance of avoiding any breach in the unity of the Big Three that he instructed the South African delegation from the start of the Conference to accord the United Kingdom representatives their constant and whole-hearted support on all occasions. It is clear however that membership by the United Kingdom of the Big Three Club will increase the importance of consulting the Dominions in advance on all important questions of foreign policy, and that even with such consultation, it may not be possible to prevent the expression of dissenting views on some issues by one or other of 44

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the Dominions. It is arguable that, if we were ever to come to some working arrangement with France, our hand might be very considerably strengthened and to that extent therefore the solution of the Commonwealth problem may be bound up with any plans which we may have for increased unity in Western Europe.

11. There was also a third element which detracted from the force with which the UK Delegation was able to argue its case. That was the undeniable fact that we were on record as disapproving the Russian proposal that parties to a dispute should vote on the enforcement sections of the Charter. It was quite true that the Americans also had (after some hesitation) rallied to our thesis at Dumbarton Oaks; but this fact was not generally known and was certainly never publicised by the Americans themselves.

Consequently, whereas the Russians and to some extent also the Americans could argue with force and conviction that the Yalta Voting Formula was the best possible solution of the problem, we could only say that it was the best solution possible in the circumstances, and this created an impression that we were halfhearted and were being dragged along reluctantly by our two powerful friends. It was suggested that, if we had had our way, we would have sided with the smaller powers against the greater, but that we had sacrificed our principles to expediency. Finally, this attitude of ours in regard to parties to a dispute not voting was confused with a secret willingness to dispense altogether with the famous ‘Hidden Veto’, which of course was a totally different thing. For the ‘Hidden Veto’ is nothing else than the principle of unanimity of the Permanent Members of the Security Council (other than parties to a dispute) in all matters relating to the pacific settlement of disputes. If this principle were abandoned, it would mean, for instance, that a dispute between Holland and Belgium could be dealt with quite regardless of the opinion of Great Britain, France and the United States, and a dispute affecting Turkey quite regardless of the feelings of the Soviet Union and the United Kingdom. It was from the first a rather unreal issue, and in any case bore no relation to the simple proposal that parties to a dispute should not vote.

12. On this last issue there is no doubt that there is widespread opinion in this country opposed to the Yalta Voting Formula and 45

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that such opinion is largely responsible for the lack of interest to which allusion has been made above. I suggest that the best way to deal with such opinion is not to be apologetic in regard to the Yalta Voting Formula, but rather to suggest that the main principle enshrined in it is one which is best adapted to the realities of the world of today. To confuse the ideal with the real is a very dangerous matter in Foreign Affairs; and fundamentally what we have to do is to choose between behaving as a Great Power or joining the ranks of the ‘Little 45’. A resolute attitude on this point, and an expressed determination to play our part as a Permanent Member of the Security Council with special responsibilities, might give rise to some criticism, but in the long run would avoid serious misunderstandings and even more extensive criticism in the future.

GLADWYN JEBB

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3 Proclamation by the Heads of Government United States, United Kingdom and China 26 July 19451 (1) We, The President of the United States, the President of the National Government of the Republic of China, and the Prime Minister of Great Britain, representing the hundreds of millions of our countrymen, have conferred and agree that Japan shall be given an opportunity to end this war.

(2) The prodigious land, sea and air forces of the United States, the British Empire and of China, many times reinforced by their armies and air fleets from the west, are poised to strike the final blows upon Japan. This military power is sustained and inspired by the determination of all the Allied nations to prosecute the war against Japan until she ceases to resist.

(3) The result of the futile and senseless German resistance to the might of the aroused free peoples of the world stands forth in awful clarity as an example to the people of Japan. The might that now converges on Japan is immeasurably greater than that which, when applied to the resisting Nazis, necessarily laid waste to the lands, the industry and the method of life of the whole German people. The full application of our military power, backed by our resolve, will mean the inevitable and complete destruction of the Japanese armed forces and just as inevitably the utter devastation of the Japanese homeland.

(4) The time has come for Japan to decide whether she will continue to be controlled by those self-willed militaristic advisers whose unintelligent calculations have brought the Empire of Japan to the threshold of annihilation, or whether she will follow the path of reason.

1

TNA FO 371/46346, F4672/584/61. Documents on British Policy Overseas, Ser. 1, Vol. 1, No. 281. Date of release as notified by the US Delegation at Potsdam in communicating on 28 July 1945 to the British Delegation this undated and unsigned copy of the proclamation.

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(5) Following are our terms. We will not deviate from them.

There are no alternatives. We shall brook no delay.

(6) There must be eliminated for all time the authority and influence of those who have deceived and misled the people of Japan into embarking on world conquest, for we insist that a new order of peace, security, and justice will be impossible until irresponsible militarism is driven from the world.

(7) Until such a new order is established and until there is convincing proof that Japan’s war-making power is destroyed, points in Japanese territory to be designated by the Allies shall be occupied to secure the achievement of the basic objectives we are here setting forth.

(8) The terms of the Cairo Declaration shall be carried out and Japanese sovereignty shall be limited to the islands of Honshu, Hokkaido, Kyushu, Shikoku and such minor islands as we determine.

(9) The Japanese military forces, after being completely disarmed, shall be permitted to return to their homes with the opportunity to lead peaceful and productive lives.

(10) We do not intend that the Japanese shall be enslaved as a race or destroyed as a nation, but stern justice shall be meted out to all war criminals, including those who have visited cruelties upon our prisoners. The Japanese Government shall remove all obstacles to the revival and strengthening of democratic tendencies among the Japanese people. Freedom of speech, of religion, and of thought, as well as respect for the fundamental human rights shall be established.

(11) Japan shall be permitted to maintain such industries as will sustain her economy and permit the exaction of just reparations in kind, but not those industries which would enable her to re-arm for war. To this end, access to, as distinguished from control of, raw materials shall be permitted. Eventual Japanese participation in world trade relations shall be permitted.

(12) The occupying forces of the Allies shall be withdrawn from Japan as soon as these objectives have been accomplished and there has been established in accordance with the freely expressed will of the Japanese people a peacefully inclined and responsible government.

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(13) We call upon the Government of Japan to proclaim now the unconditional surrender of all the Japanese armed forces, and to provide proper and adequate assurances of their good faith in such action. The alternative for Japan is prompt and utter destruction.

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4 Protocol of the Proceedings of the Berlin Conference1 Top Secret

BERLIN, 2 August 1945

The Berlin Conference of the Three Heads of Government of the USSR, United States and United Kingdom which took place from the 17th July to the 2nd August, 1945, came to the following conclusions: I. Establishment of a Council of Foreign Ministers A. The Conference reached the following agreement for the establishment of a Council of Foreign Ministers to do the necessary preparatory work for the peace settlements: ‘(1) There shall be established a Council composed of the Foreign Ministers of the United Kingdom, the Union of Soviet Socialist Republics, China, France and the United States.

(2) (i) The Council shall normally meet in London, which shall be the permanent seat of the joint Secretariat which the Council will form. Each of the Foreign Ministers will be accompanied by a highranking Deputy, duly authorised to carry on the work of the Council in the absence of his Foreign Minister, and by a small staff of technical advisers. (ii) The first meeting of the Council shall be held in London not later than the 1st September, 1945. Meetings may be held by common agreement in other capitals as may be agreed from time to time.

(3) (i) As its immediate important task, the Council shall be authorised to draw up, with a view to their submission to the United Nations, treaties of peace with Italy, Roumania, Bulgaria, Hungary and Finland, and to propose settlements of territorial questions outstanding on the termination of the war in Europe. The Council 1

TNA FO 371/50867, U6197/3628/70. Documents on British Policy Overseas, Ser. 1, Vol. 1, No. 603. Note in filed copy: ‘Text compared and agreed with the United States and Soviet Delegations’. Following discussion of the Protocol on 7 August, the Cabinet expressed its ‘gratitude and admiration’ to the Prime Minister and Foreign Secretary ‘for the skill with which they had handled the discussions at the Berlin Conference and for the results which they had secured’.

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shall be utilised for the preparation of a peace settlement for Germany to be accepted by the Government of Germany when a Government adequate for the purpose is established. (ii) For the discharge of each of these tasks the Council will be composed of the Members representing those States which were signatory to the terms of surrender imposed upon the enemy State concerned. For the purposes of the peace settlement for Italy, France shall be regarded as a signatory to the terms of surrender for Italy. Other Members will be invited to participate when matters directly concerning them are under discussion. (iii) Other matters may from time to time be referred to the Council by agreement between the Member Governments.

(4) (i) Whenever the Council is considering a question of direct interest to a State not represented thereon, such State should be invited to send representatives to participate in the discussion and study of that question. (ii) The Council may adapt its procedure to the particular problem under consideration. In some cases it may hold its own preliminary discussions prior to the participation of other interested States. In other cases, the Council may convoke a formal conference of the State chiefly interested in seeking a solution of the particular problem.’ B. It was agreed that the three Governments should each address an identical invitation to the Governments of China and France to adopt this text and to join in establishing the Council. The text of the approved invitation was as follows: Council of Foreign Ministers Draft for identical invitation to be sent separately by each of the Three Governments to the Governments of China and France ‘The Governments of the United Kingdom, the United States and the USSR consider it necessary to begin without delay the essential preparatory work upon the peace settlements in Europe.

To this end they are agreed that there should be established a Council of the Foreign Ministers of the Five Great Powers to prepare treaties of peace with the European enemy States, for submission to the United Nations. The Council would also be 51

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empowered to propose settlements of outstanding territorial questions in Europe and to consider such other matters as member Governments might agree to refer to it.

‘The text adopted by the Three Governments is as follows: (Here insert final agreed text of the Proposal.)

‘In agreement with the Governments of the United States and USSR, His Majesty’s Government in the United Kingdom and USSR, the United States Government, the United Kingdom and the Soviet Government extend a cordial invitation to the Government of China (France) to adopt the text quoted above and to join in setting up the Council. His Majesty’s Government, the United States Government, the Soviet Government attach much importance to the participation of the Chinese Government (French Government) in the proposed arrangements, and they hope to receive an early and favourable reply to this invitation.’

C. The establishment of the Council of Foreign Ministers for the specific purposes named in the text will be without prejudice to the agreement of the Crimea Conference that there should be periodical consultation between the Foreign Secretaries of the United States, the Union of Soviet Socialist Republics and the United Kingdom.

D. The Conference also considered the position of the European Advisory Commission in the light of the Agreement to establish the Council of Foreign Ministers. It was noted with satisfaction that the Commission had ably discharged its principal tasks by the recommendations that it had furnished for the terms of surrender for Germany, for the zones of occupation in Germany and Austria and for the inter-Allied control machinery in those countries. It was felt that further work of a detailed character for the co-ordination of Allied policy for the control of Germany and Austria would in future fall within the competence of the Control Council in Berlin and the Allied Commission at Vienna. Accordingly it was agreed to recommend that the European Advisory Commission be dissolved.

II. The Principles to Govern the Treatment of Germany in the Initial Control Period A. Political Principles 1. In accordance with the Agreement on Control Machinery in Germany, supreme authority in Germany is exercised, on 52

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instructions from their respective Governments, by the Commanders-in-Chief of the armed forces of the United States of America, the United Kingdom, the Union of Soviet Socialist Republics and the French Republic, each in his own zone of occupation, and also jointly, in matters affecting Germany as a whole, in their capacity as members of the Control Council.

2. So far as is practicable, there shall be uniformity of treatment of the German population throughout Germany.

3. The purposes of the occupation of Germany by which the Control Council shall be guided are: (i) The complete disarmament and demilitarisation of Germany and the elimination or control of all German industry that could be used for military production. To these ends: (a) All German land, naval and air forces, the S.S., S.A., S.D. and Gestapo, with all their organisations, staffs and institutions, including the General Staff, the Officers’ Corps, Reserve Corps, military schools, war veterans’ organisations and all other military and semi-military organisations, together with all clubs and associations which serve to keep alive the military tradition in Germany, shall be completely and finally abolished in such manner as permanently to prevent the revival or reorganisation of German militarism and Nazism; (b) All arms, ammunition and implements of war and all specialised facilities for their production shall be held at the disposal of the Allies or destroyed. The maintenance and production of all aircraft and all arms, ammunition and implements of war shall be prevented. (ii) To convince the German people that they have suffered a total military defeat and that they cannot escape responsibility for what they have brought upon themselves, since their own ruthless warfare and the fanatical Nazi resistance have destroyed German economy and made chaos and suffering inevitable. (iii) To destroy the National Socialist Party and its affiliated and supervised organisations, to dissolve all Nazi institutions, to ensure that they are not revived in any form, and to prevent all Nazi and militarist activity or propaganda.

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(iv) To prepare for the eventual reconstruction of German political life on a democratic basis and for eventual peaceful cooperation in international life by Germany.

4. All Nazi laws which provided the basis of the Hitler rĂŠgime or established discrimination on grounds of race, creed, or political opinion shall be abolished. No such discriminations, whether legal, administrative or otherwise, shall be tolerated.

5. War criminals and those who have participated in planning or carrying out Nazi enterprises involving or resulting in atrocities or war crimes shall be arrested and brought to judgment. Nazi leaders, influential Nazi supporters and high officials of Nazi organisations and institutions and any other persons dangerous to the occupation or its objectives shall be arrested and interned.

6. All members of the Nazi party who have been more than nominal participants in its activities and all other persons hostile to Allied purposes shall be removed from public and semi-public office, and from positions of responsibility in important private undertakings. Such persons shall be replaced by persons who, by their political and moral qualities, are deemed capable of assisting in developing genuine democratic institutions in Germany.

7. German education shall be so controlled as completely to eliminate Nazi and militarist doctrines and to make possible the successful development of democratic ideas.

8. The judicial system will be reorganised in accordance with the principles of democracy, of justice under law, and of equal rights for all citizens without distinction of race, nationality or religion.

9. The administration in Germany should be directed towards the decentralisation of the political structure and the development of local responsibility. To this end: (i) local self-government shall be restored throughout Germany on democratic principles and in particular through elective councils as rapidly as is consistent with military security and the purposes of military occupation; (ii) all democratic political parties with rights of assembly and of public discussion shall be allowed and encouraged throughout Germany; 54

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(iii) representative and elective principles shall be introduced into regional, provincial and state (Land) administration as rapidly as may be justified by the successful application of these principles in local self-government; (iv) for the time being, no central German Government shall be established. Notwithstanding this, however, certain essential central German administrative departments, headed by State Secretaries, shall be established, particularly in the fields of finance, transport, communications, foreign trade and industry.

Such departments will act under the direction of the Control Council.

10. Subject to the necessity for maintaining military security, freedom of speech, press and religion shall be permitted, and religious institutions shall be respected. Subject likewise to the maintenance of military security, the formation of free trade unions shall be permitted.

B. Economic Principles 11. In order to eliminate Germany’s war potential, the production of arms, ammunition and implements of war as well as all types of aircraft and sea-going ships shall be prohibited and prevented. Production of metals, chemicals, machinery and other items that are directly necessary to a war economy, shall be rigidly controlled and restricted to Germany’s approved post-war peacetime needs to meet the objectives stated in paragraph 15.

Productive capacity not needed for permitted production shall be removed in accordance with the reparations plan recommended by the Allied Commission on reparations and approved by the Governments concerned or, if not removed, shall be destroyed.

12. At the earliest practicable date, the German economy shall be decentralised for the purpose of eliminating the present excessive concentration of economic power as exemplified in particular by cartels, syndicates, trusts and other monopolistic arrangements.

13. In organising the German economy, primary emphasis shall be given to the development of agriculture and peaceful domestic industries.

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14. During the period of occupation Germany shall be treated as a single economic unit. To this end common policies shall be established in regard to:(a) mining and industrial production and its allocation; (b) agriculture, forestry and fishing; (c) wages, prices and rationing; (d) import and export programmes for Germany as a whole; (e) currency and banking, central taxation and customs; (f) reparation and removal of industrial war potential; (g) transportation and communications.

In applying these policies account shall be taken, where appropriate, of varying local conditions.

15. Allied controls shall be imposed upon the German economy but only to the extent necessary: (a) to carry out programmes of industrial disarmament and demilitarisation, of reparations, and of approved exports and imports; (b) to assure the production and maintenance of goods and services required to meet the needs of the occupying forces and displaced persons in Germany and essential to maintain in Germany average living standards not exceeding the average of the standards of living of European countries. (European countries means all European countries excluding the United Kingdom and the Union of Soviet Socialist Republics); (c) to ensure in the manner determined by the Control Council the equitable distribution of essential commodities between the several zones so as to produce a balanced economy throughout Germany and reduce the need for imports; (d) to control German industry and all economic and financial international transactions, including exports and imports, with the aim of preventing Germany from developing a war potential and of achieving the other objectives named herein; (e) to control all German public or private scientific bodies, research and experimental institutions, laboratories, &c., connected with economic activities.

16. In the imposition and maintenance of economic controls established by the Control Council, German administrative machinery shall be created and the German authorities shall be 56

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required to the fullest extent practicable to proclaim and assume administration of such controls. Thus it should be brought home to the German people that the responsibility for the administration of such controls and any breakdown in these controls will rest with themselves. Any German controls which may run counter to the objectives of occupation will be prohibited.

17. Measures shall be promptly taken: (a) to effect essential repair of transport; (b) to enlarge coal production; (c) to maximise agricultural output; (d) to effect emergency repair of housing and essential utilities.

18. Appropriate steps shall be taken by the Control Council to exercise control and the power of disposition over German-owned external assets not already under the control of United Nations which have taken part in the war against Germany.

19. Payment of reparations should leave enough resources to enable the German people to subsist without external assistance. In working out the economic balance of Germany the necessary means must be provided to pay for imports approved by the Control Council in Germany. The proceeds of exports from current production and stocks shall be available in the first place for payment for such imports.

The above clause will not apply to the equipment and products referred to in paragraph 4 (a) and 4 (b) of the Reparations Agreement.

III. Reparations from Germany 1. Reparation claims of the USSR shall be met by removals from the zone of Germany occupied by the USSR, and from appropriate German external assets.

2. The USSR undertakes to settle the reparation claims of Poland from its own share of reparations.

3. The reparations claims of the United States, the United Kingdom and other countries entitled to reparations shall be met from the Western Zones and from appropriate German external assets.

4. In addition to the reparations to be taken by the USSR from its own zone of occupation, the USSR shall receive additionally from the Western Zones: 57

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(a) 15 per cent of such usable and complete industrial capital equipment, in the first place from the metallurgical, chemical and machine manufacturing industries, as is unnecessary for the German peace economy and should be removed from the Western Zones of Germany, in exchange for an equivalent value of food, coal, potash, zinc, timber, clay products, petroleum products, and such other commodities as may be agreed upon. (b) 10 per cent of such industrial capital equipment as is unnecessary for the German peace economy and should be removed from the Western Zones, to be transferred to the Soviet Government on reparations account without payment or exchange of any kind in return.

Removals of equipment as provided in (a) and (b) above shall be made simultaneously.

5. The amount of equipment to be removed from the Western Zones on account of reparations must be determined within six months from now at the latest.

6. Removals of industrial capital equipment shall begin as soon as possible and shall be completed within two years from the determination specified in paragraph 5. The delivery of products covered by 4(a) above shall begin as soon as possible and shall be made by the USSR in agreed instalments within five years of the date hereof. The determination of the amount and character of the industrial capital equipment unnecessary for the German peace economy and therefore available for reparations shall be made by the Control Council under policies fixed by the Allied Commission on Reparations, with the participation of France, subject to the final approval of the Zone Commander in the Zone from which the equipment is to be removed.

7. Prior to the fixing of the total amount of equipment subject to removal, advance deliveries shall be made in respect of such equipment as will be determined to be eligible for delivery in accordance with the procedure set forth in the last sentence of paragraph 6.

8. The Soviet Government renounces all claims in respect of reparations to shares of German enterprises which are located in the Western Zones of occupation in Germany as well as to German 58

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foreign assets in all countries except those specified in paragraph 9 below.

9. The Governments of the United Kingdom and United States renounce all claims in respect of reparations to shares of German enterprises which are located in the Eastern Zone of occupation in Germany, as well as to German foreign assets in Bulgaria, Finland, Hungary, Roumania and Eastern Austria.

10. The Soviet Government makes no claims to gold captured by the Allied troops in Germany.

IV. Disposal of the German Navy and Merchant Marine A. The following principles for the distribution of the German Navy were agreed: (1) The total strength of the German surface navy, excluding ships sunk and those taken over from Allied Nations, but including ships under construction or repair, shall be divided equally among the USSR, United Kingdom and United States.

(2) Ships under construction or repair means those ships whose construction or repair may be completed within three to six months, according to the type of ship. Whether such ships under construction or repair shall be completed or repaired shall be determined by the technical commission appointed by the Three Powers and referred to below, subject to the principle that their completion or repair must be achieved within the time limits above provided, without any increase of skilled employment in the German shipyards and without permitting the reopening of any German ship building or connected industries. Completion date means the date when a ship is able to go out on its first trip, or, under peace-time standards, would refer to the customary date of delivery by shipyard to the Government.

(3) The larger part of the German submarine fleet shall be sunk.

Not more than thirty submarines shall be preserved and divided equally between the USSR, United Kingdom and United States for experimental and technical purposes.

(4) All stocks of armament, ammunition and supplies of the German Navy appertaining to the vessels transferred pursuant to paragraphs (1) and (3) hereof shall be handed over to the respective Powers receiving such ships.

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(5) The Three Governments agree to constitute a tripartite naval commission comprising two representatives for each Government, accompanied by the requisite staff, to submit agreed recommendations to the Three Governments for the allocation of specific German warships and to handle other detailed matters arising out of the agreement between the Three Governments regarding the German fleet. The Commission will hold its first meeting not later than the 15th August, 1945, in Berlin, which shall be its headquarters. Each Delegation on the Commission will have the right, on the basis of reciprocity, to inspect German warships wherever they may be located.

(6) The Three Governments agree that transfers, including those of ships under construction and repair, shall be completed as soon as possible, but not later than the 15th February, 1946. The Commission will submit fortnightly reports, including proposals for the progressive allocation of the vessels when agreed by the Commission.

B. The following principles for the distribution of the German Merchant Marine were agreed: (1) The German Merchant Marine, surrendered to the Three Powers and wherever located, shall be divided equally among the USSR, the United Kingdom and the United States. The actual transfers of the ships to the respective countries shall take place as soon as practicable after the end of the war against Japan. The United Kingdom and the United States will provide out of their shares of the surrendered German merchant ships appropriate amounts for other Allied States whose merchant marines have suffered heavy losses in the common cause against Germany, except that the Soviet Union shall provide out of its share for Poland.

(2) The allocation, manning and operation of these ships during the Japanese War period shall fall under the cognisance and authority of the Combined Shipping Adjustment Board and the United Maritime Authority.

(3) While actual transfer of the ships shall be delayed until after the end of the war with Japan, a Tripartite Shipping Commission shall inventory and value all available ships and recommend a specific distribution in accordance with paragraph (1).

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(4) German inland and coastal ships determined to be necessary to the maintenance of the basic German peace economy by the Allied Control Council of Germany shall not be included in the shipping pool thus divided among the Three Powers.

(5) The Three Governments agree to constitute a tripartite merchant marine commission comprising two representatives for each Government, accompanied by the requisite staff, to submit agreed recommendations to the Three Governments for the allocation of specific German merchant ships and to handle other detailed matters arising out of the agreement between the Three Governments regarding the German merchant ships. The Commission will hold its first meeting not later than the 1st September, 1945, in Berlin, which shall be its headquarters. Each delegation on the Commission will have the right, on the basis of reciprocity, to inspect the German merchant ships wherever they may be located.

V. City of Kรถnigsberg and the Adjacent Area The Conference examined a proposal by the Soviet Government to the effect that, pending the final determination of territorial questions at the peace settlement, the section of the western frontier of the Union of Soviet Socialist Republics which is adjacent to the Baltic Sea should pass from a point on the eastern shore of the Bay of Danzig to the east, north of Braunsberg-Goldap, to the meeting point of the frontiers of Lithuania, the Polish Republic and East Prussia.

The Conference has agreed in principle to the proposal of the Soviet Government concerning the ultimate transfer to the Soviet Union of the City of Kรถnigsberg and the area adjacent to it as described above subject to expert examination of the actual frontier.

The President of the United States and the British Prime Minister have declared that they will support the proposal of the Conference at the forthcoming peace settlement.

VI. War Criminals The Three Governments have taken note of the discussions which have been proceeding in recent weeks in London between British, United States, Soviet and French representatives with a view to reaching agreement on the methods of trial of those major war criminals whose crimes under the Moscow Declaration of 61

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October 1943 have no particular geographical localisation. The Three Governments reaffirm their intention to bring these criminals to swift and sure justice. They hope that the negotiations in London will result in speedy agreement being reached for this purpose, and they regard it as a matter of great importance that the trial of these major criminals should begin at the earliest possible date. The first list of defendants will be published before the 1st September.

VII. Austria The Conference examined a proposal by the Soviet Government on the extension of the authority of the Austrian Provisional Government to all of Austria.

The three Governments agreed that they were prepared to examine this question after the entry of the British and American forces into the city of Vienna.

It was agreed that reparations should not be exacted from Austria.

VIII. Poland A. Declaration We have taken note with pleasure of the agreement reached among representative Poles from Poland and abroad which has made possible the formation, in accordance with the decisions reached at the Crimea Conference, of a Polish Provisional Government of National Unity recognised by the Three Powers.

The establishment by the British and United States Governments of diplomatic relations with the Polish Provisional Government of National Unity has resulted in the withdrawal of their recognition from the former Polish Government in London, which no longer exists.

The British and United States Governments have taken measures to protect the interests of the Polish Provisional Government of National Unity, as the recognised Government of the Polish State, in the property belonging to the Polish State located in their territories and under their control, whatever the form of this property may be. They have further taken measures to prevent alienation to third parties of such property. All proper facilities will be given to the Polish Provisional Government of National Unity for the exercise of the ordinary legal remedies for 62

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the recovery of any property belonging to the Polish State which may have been wrongfully alienated.

The Three Powers are anxious to assist the Polish Provisional Government of National Unity in facilitating the return to Poland as soon as practicable of all Poles abroad who wish to go, including members of the Polish armed forces and the merchant marine. They expect that those Poles who return home shall be accorded personal and property rights on the same basis as all Polish citizens.

The Three Powers note that the Polish Provisional Government of National Unity in accordance with the decisions of the Crimea Conference has agreed to the holding of free and unfettered elections as soon as possible on the basis of universal suffrage and secret ballot in which all democratic and anti-Nazi parties shall have the right to take part and to put forward candidates; and that representatives of the Allied Press shall enjoy full freedom to report to the world upon developments in Poland before and during the elections.

B. Western Frontier of Poland In conformity with the agreement on Poland reached at the Crimea Conference the three Heads of Government have sought the opinion of the Polish Provisional Government of National Unity in regard to the accession of territory in the north and west which Poland should receive. The President of the National Council of Poland and members of the Polish Provisional Government of National Unity have been received at the Conference and have fully presented their views. The three Heads of Government reaffirm their opinion that the final delimitation of the western frontier of Poland should await the peace settlement.

The three Heads of Government agree that, pending the final determination of Poland’s western frontier, the former German territories east of a line running from the Baltic Sea immediately west of Swinemßnde, and thence along the Oder River to the confluence of the western Neisse River and along the western Neisse to the Czechoslovak frontier, including that portion of East Prussia not placed under the administration of the Union of Soviet Socialist Republics in accordance with the understanding reached at this conference and including the area of the former free city of Danzig, shall be under the administration of the Polish State and for 63

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such purposes should not be considered as part of the Soviet zone of occupation in Germany.

IX. Conclusion of Peace Treaties and Admission to the United Nations Organisation The three Governments consider it desirable that the present anomalous position of Italy, Bulgaria, Finland, Hungary and Roumania should be terminated by the conclusion of Peace Treaties. They trust that the other interested Allied Governments will share these views.

For their part the Three Governments have included the preparation of a Peace Treaty for Italy as the first among the immediate important tasks to be undertaken by the new Council of Foreign Ministers. Italy was the first of the Axis Powers to break with Germany, to whose defeat she has made a material contribution, and has now joined with the Allies in the struggle against Japan. Italy has freed herself from the Fascist rĂŠgime and is making good progress towards re-establishment of a democratic government and institutions. The conclusion of such a Peace Treaty with a recognised and democratic Italian Government will make it possible for the Three Governments to fulfil their desire to support an application from Italy for membership of the United Nations.

The Three Governments have also charged the Council of Foreign Ministers with the task of preparing Peace Treaties for Bulgaria, Finland, Hungary and Roumania. The conclusion of Peace Treaties with recognised democratic Governments in these States will also enable the Three Governments to support applications from them for membership of the United Nations. The Three Governments agree to examine, each separately in the near future, in the light of the conditions then prevailing, the establishment of diplomatic relations with Finland, Roumania, Bulgaria and Hungary, to the extent possible prior to the conclusion of Peace Treaties with those countries.

The Three Governments have no doubt that in view of the changed conditions resulting from the termination of the war in Europe, representatives of the Allied press will enjoy full freedom to report to the world upon developments in Roumania, Bulgaria, Hungary and Finland.

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As regards the admission of other States into the United Nations Organisation, Article 4 of the Charter of the United Nations declares that: 1. Membership in the United Nations is open to all other peaceloving States who accept the obligations contained in the present Charter and, in the judgment of the organisation, are able and willing to carry out these obligations; 2. The admission of any such State to membership in the United Nations will be effected by a decision of the General Assembly upon the recommendation of the Security Council.

The Three Governments, so far as they are concerned, will support applications for membership from those States which have remained neutral during the war and which fulfil the qualifications set out above.

The Three Governments feel bound, however, to make it clear that they for their part would not favour any application for membership put forward by the present Spanish Government, which, having been founded with the support of the Axis Powers, does not, in view of its origins, its nature, its record and its close association with the aggressor States, possess the qualifications necessary to justify such membership.

X. Territorial Trusteeship The Conference examined a proposal by the Soviet Government on the question of trusteeship territories as defined in the decision of the Crimea Conference and in the Charter of the United Nations Organisation.

After an exchange of views on this question it was decided that the disposition of any former Italian Colonial territories was one to be decided in connection with the preparation of a peace treaty for Italy and that the question of Italian Colonial territory would be considered by the September Council of Minister[s] for Foreign Affairs.

XI. Revised Allied Control Commission Procedure in Roumania, Bulgaria and Hungary The Three Governments took note that the Soviet Representatives on the Allied Control Commissions in Roumania, Bulgaria and Hungary have communicated to their United Kingdom and United States colleagues proposals for improving the 65

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work of the Control Commissions, now that hostilities in Europe have ceased.

The Three Governments agreed that the revision of the procedures of the Allied Control Commissions in these countries would now be undertaken, taking into account the interests and responsibilities of the Three Governments which together presented the terms of armistice to the respective countries, and accepting as a basis, in respect of all three countries, the Soviet Government’s proposals for Hungary as annexed hereto. (Annex I [not printed]) XII. Orderly Transfer of German Populations The Three Governments, having considered the question in all its aspects, recognise that the transfer to Germany of German populations or elements thereof, remaining in Poland, Czechoslovakia and Hungary, will have to be undertaken. They agree that any transfers that take place should be effected in an orderly and humane manner.

Since the influx of a large number of Germans into Germany would increase the burden already resting on the occupying authorities, they consider that the Control Council in Germany should, in the first instance, examine the problem, with special regard to the question of the equitable distribution of these Germans among the several zones of occupation. They are accordingly instructing their respective representatives on the Control Council to report to their Governments as soon as possible the extent to which such persons have already entered Germany from Poland, Czechoslovakia and Hungary, and to submit an estimate of the time and rate at which further transfers could be carried out having regard to the present situation in Germany.

The Czechoslovak Government, the Polish Provisional Government and the Control Council in Hungary are at the same time being informed of the above and are being requested meanwhile to suspend further expulsions pending an examination by the Governments concerned of the report from their representatives on the Control Council.

XIII. Oil Equipment in Roumania The Conference agreed to set up two bilateral commissions of experts, one to be composed of United Kingdom and Soviet 66

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members, and one to be composed of United States and Soviet members, to investigate the facts and examine the documents, as a basis for the settlement of questions arising from the removal of oil equipment in Roumania. It was further agreed that these experts shall begin their work within ten days, on the spot.

XIV. Iran It was agreed that Allied troops should be withdrawn immediately from Tehran, and that further stages of the withdrawal of troops from Iran should be considered at the meeting of the Council of Foreign Ministers to be held in London in September 1945.

XV. The International Zone of Tangier A proposal by the Soviet Government was examined and the following decisions were reached.

Having examined the question of the Zone of Tangier, the three Governments have agreed that this Zone, which includes the city of Tangier and the area adjacent to it, in view of its special strategic importance shall remain international.

The question of Tangier will be discussed in the near future at a Meeting in Paris of representatives of the Governments of the Union of Soviet Socialist Republics, the United States, the United Kingdom and France.

XVI. The Black Sea Straits The three Governments recognised that the Convention concluded at Montreux should be revised as failing to meet presentday conditions.

It was agreed that, as the next step, the matter should be the subject of direct conversations between each of the three Governments and the Turkish Government.

XVII. International Inland Waterways The Conference considered a proposal of the United States Delegation on this subject and agreed to refer it for consideration to the forthcoming meeting of the Council of Foreign Ministers in London.

XVIII. European Inland Transport Conference The British and United States Delegations to the Conference informed the Soviet Delegation of the desire of the British and United States Governments to reconvene the European Inland 67

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Transport Conference, and stated that they would welcome an assurance that the Soviet Government would participate in the work of the reconvened conference. The Soviet Government agreed that it would participate in this conference.

XIX. Directives to Military Commanders on Allied Control Council for Germany The three Governments agreed that each would send a directive to its representative on the Control Council for Germany informing him of all decisions of the Conference affecting matters within the scope of his duties.

XX. Use of Allied Property for Satellite Reparations or ‘War Trophies’ The proposal (Annex II [not printed]) presented by the United States Delegation was accepted in principle by the Conference, but the drafting of an agreement on the matter was left to be worked out through diplomatic channels.

XXI. Military Talks During the Conference there were meetings between the Chiefs of Staff of the three Governments on military matters of common interest.

J.V. STALIN HARRY S. TRUMAN C.R. ATTLEE

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5 Memorandum by Mr Hall-Patch1

FOREIGN OFFICE, 3 August 1945 Mr Clayton is arriving in London this week. He is the Assistant Secretary of State specially charged with economic questions. He wishes to discuss: (a) Commercial policy in the light of the unofficial and exploratory talks which have been conducted by Mr Hawkins of the American Embassy with the Treasury and the Board of Trade. (b) The terms, duration and size of any financial aid required by the United Kingdom after the end of Lease-Lend (Stage III).

He will, in the first instance, discuss these questions with officials of the Treasury and the Board of Trade, and subsequently with Ministers.

2. In the exploratory talks on commercial policy, it has not so far been possible to give any firm indications of the views of HMG, as everything turns upon the interpretation to be given to Article VII of the Mutual Aid Agreement, upon which there were divergent views in the Coalition Government. We have been stalling with the Americans on this subject for a long time on the ground that a Coalition Government was in power, and we could not be expected, in these circumstances, and in the middle of a war, to enter into commitments on a long term commercial policy.

3. Now that a new Government with a large majority is in power, and the war in Germany over, Mr Clayton will press hard for some clear indication of our future intentions.

4. He will press the harder as he, himself, is one of the leading protagonists of a multilateral approach to international trade. What we say to him may well influence the attitude of the US Administration to the help we shall require in Stage III. This is the most difficult external problem we shall have to face immediately 1

TNA FO 371/45706, UE 3595/1094/53. Documents on British Policy Overseas, Ser. 1, Vol. 3, No. 1. This minute was the result of a discussion between Sir O. Sargent, Sir R. Campbell, Mr N.M. Butler and Mr E.L. Hall-Patch.

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after the end of the war with Japan. Caution in handling the talks on commercial policy is therefore very desirable.

5. The general trend of American economic policy is, at present, away from their old heresies which hit us so hard, and towards what our own economic policy had been until the 1930s when we were forced to abandon it under pressure of the exorbitant American tariff, and the world wide increase in economic nationalism.

6. But the situation has changed since 1930. While at that time, we might have been willing and able to continue our traditional policy, we are less able to do so now. We are now the world’s greatest debtor nation, and we are committed to a policy of full employment. These are both new factors with wide implications.

Moreover, we have learned the advantages of bulk purchases, which are an anathema in America, and we may now wish to maintain, or possibly to extend, these practices.

7. There is already in America a lively interest in the domestic programme of the new Government. There is a feeling that it can only be realised by shielding the domestic economy behind currency and commercial controls. Such a policy, in the American mind, is in direct conflict with Article VII of the Mutual Aid Agreement. The Americans are convinced that full employment in their own country is an indispensable condition to the recovery of the world. So Mr Clayton has been assigned the duty of finding very large numbers of ‘jobs from the export trade’. He is likely to tell us with a good deal of force that if our commercial policy seems designed to exclude imports from the US, which has helped us so generously with Lease-Lend, it will be politically impossible to persuade Congress to give us further financial easement.

8. It would do us great harm if a current of opinion were formed that, at a time when America was ready and eager to enter into broad international commitments, we were intent on pursuing, what in American eyes, was a contrary policy. If this feeling became widespread, it would affect detrimentally the possibility of economic collaboration, e.g. in reparation and reconstruction on the continent of Europe, and also the degree and conditions of any direct help which the Americans may be disposed to give us. It might even affect the whole view the Americans take of us as partners in world affairs. ‘Discrimination’, ‘Exclusiveness’, 70

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‘Monopoly’, ‘Imperialist Economy’—all these unsavoury words will be freely used against us, and will gain spontaneous, and often unthinking response from the US public.

9. We cannot ignore the gradual change of attitude which has been taking place in America towards international affairs. The first definite steps have now been taken by America at Hot Springs, Bretton Woods and San Francisco to enter into international affairs as an active working partner. The passing of the Trade Agreements Act shows a willingness to turn away from the high tariff policy which has caused such havoc in international trade. This tendency of America to assume international responsibilities, commensurate with its resources, is one of the most hopeful signs for the future.

Any action on our part which might dam back this tendency would have the most unhappy results both for the world and for us. The World Organization would be disastrously weakened and this would weaken us. Even if the American tendency to participate fully in world affairs were not slowed down or reversed, any doubt of our value or respectability as partners in world affairs would be serious for us, since we can hardly afford to be ignored or looked upon askance by any of the Great Powers of the world Organization, least of all by the United States, whose support and co-operation we will need in so many ways.

10. In this connexion, the recent leader in The Times, of which an extract is attached [not printed], is of great interest. It expresses very clearly, in words to which nobody in the Foreign Office would dissent, the implications of the present trend in America, and it indicates that public opinion in this country is commencing to weigh these implications.

11. The position can be briefly summarised as follows. We are on the threshold of a great and beneficial change in America, and we should be chary of action which would hamper or arrest the present trend. It is to America we must look for that assistance in Stage III, without which our recovery from the effects of war will be almost intolerably protracted and painful. Indeed, without such assistance, the prospects of being able to maintain even our present standards are bleak. And, in the last analysis, if America feels we are pursuing a policy inimical to her own interests, she may demand consideration for the vast Lease-Lend deliveries we have received, 71

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which would threaten our liberty of action in both the economic and political fields.

12. As far as it is possible to judge these things, the Americans seem ready to accept the necessity for us to maintain controls, and all they imply, on a temporary basis i.e. during the transitional period, for which they are ready to admit a duration of three or possibly as much as five years after the end of hostilities. During this period they may well be ready to continue to help us notwithstanding our maintenance of a policy contrary to their aims and beliefs. But this tolerance would be dependent upon an assurance that, after the transitional period—or even progressively during that period—we abandon our restrictive system and promote, and then fully adopt, a system of multilateralism and an expanding economy. The question of this assurance is likely to be the main hinge of the discussions with Mr Clayton.

13. In these circumstances, it may be thought desirable to give a word of warning to those who will conduct these initial discussions with Mr Clayton. We shall be playing for large stakes and these initial discussions may set the tone for the all-important discussions on Stage III which are at present arranged to take place in Washington in the Autumn.

E. L. HALL-PATCH

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6 Despatch from Mr Balfour to Mr Bevin1 No. 1038

WASHINGTON, 9 August 1945

Sir, During recent months the concept has steadily gained ground in this country that Great Britain has come to occupy a position on the world stage which in terms of power and influence is inferior to that of the USA and the USSR The degree to which this concept has now implanted itself in the American mind was revealed in a recent five nation Gallup poll conducted in the United States, Canada, France, Denmark and Australia, on the question of which country would have most influence in the post-war world. Only 5% of the Americans questioned during this survey recorded their vote for Great Britain, as compared with respective percentages in favour of the United States and the Soviet Union of 63% and 24%. The United States easily headed the survey in the other four countries, although in France the margin was 43% in favour of the United States as compared with 41% for the USSR. In Canada 19% voted for Britain and in France no more than 4%.

2. In order that this idea of Britain’s inferiority to her two associates in the Big Three partnership may be assessed in its true perspective, I propose in the present despatch to describe the various factors which have caused it to become prevalent amongst the American public, and to examine what effect it is likely to exercise on Anglo-American relations.

3. It is in the first place evident to every thinking American that the contribution of his country on this occasion to the defeat of Germany is out of all proportion to that rendered during the First World War. Whereas in 1917-18 America was in process of transforming herself into the main arsenal of democracy and became, from the date of Russia’s collapse, the principal source of Allied manpower reserves, she has emerged from the present 1

TNA FO 371/44557, AN2560/22/45. Documents on British Policy Overseas, Ser. 1, Vol. 3, No. 3. Received 23 August. Mr Balfour was in charge of HM Embassy during the absence of the Ambassador on leave.

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European struggle as the one great power in the world whose population and metropolitan territories have suffered nothing from enemy action. Of the leading Western Allies in the former Armageddon, liberated France is no more than a shadow of her former self: a poor relation admitted on sufferance to the family of the Great Powers. Italy, thanks to her apostasy under Fascist rule, has but lately ceased to be a battle-ground and is a suppliant for the good graces of the conquerors. Great Britain alone, who won imperishable renown for herself in a year of single-handed resistance to Nazi aggression, has ridden out the storm to a triumphant finish. But in the course of a bitter struggle for existence she has been severely strained and her resources have been greatly depleted. For this and other reasons presently to be enumerated her star has ceased in American eyes to burn with quite the same accustomed radiance in the international firmament.

4. By contrast with the exhausted and devastated countries of Western Europe, the United States sees itself, as a result of the war, endowed with colossal productive and fighting capacity. Ever since the inception of lend-lease in March, 1941, it has been plain to the average American that other nations, beginning with Great Britain, have been largely dependent upon US bounty for their ability to wage effective warfare. Although there is a widespread feeling that recompense of one sort or another ought eventually to be forthcoming for lend-lease aid, it is generally recognised that on this occasion the USA has been constrained to make good the deficiencies of others rather than, as in the earlier war, to sustain them with loans which it was thought at the time would be repaid in full at some later date. In spite of constant efforts on our part at enlightenment, the general public still too often ignores all that Great Britain has done in the way of reverse lend-lease assistance.

5. Whilst the press and radio are apt with unstinted exuberance to dwell almost exclusively on American achievements in the common struggle, the war output which the United States has attained is in itself miraculous enough to inspire the most sober minded citizens with the liveliest satisfaction and patriotic pride. In three and a half years, moreover, of front line combat, and at the cost of casualties which now exceed one million, American fighting men have proved their valour in every major theatre of war. With 74

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however little justification, the idea is prevalent among the public that after D-Day American forces took the lion’s share of fighting in the European theatre. In the Pacific Britain’s role is popularly regarded as still more puny by comparison with that of the United States. Looking towards the future Americans see their own twoocean Navy as mistress of the waves. If anything further were needed to convince Americans that their country has become the amphibious Leviathan of modern times, it is the knowledge that its stupendous war output and mobilisation of manpower has been achieved without any substantial encroachment on normal activities. As Mr J.A. Krug, Chairman of the War Production Board, put it in his report on war production in 1944, made public on the 14th June last, ‘the important and astounding fact is that in 1944, the year in which the crescendo of war mounted to a thunderous climax, the American consumer was furnished with more goods and services than in any year since 1941.’ The only shadow on the landscape, and it is a lengthening one, derives from the many complex problems of reconversion and redeployment which are even now putting a certain strain on the national economy.

6. Turning now to the light in which Americans view Great Britain: As already indicated, the prestige that we acquired for ourselves before the USA became a belligerent has since been largely eclipsed by the burden imposed upon us as a result of six years of warfare. Whilst thoughtful Americans were profoundly impressed by the analysis of the UK war effort recorded in the White Paper issued last November, the extent of British sacrifices which it revealed stimulated their awareness that very onerous demands had been placed upon our resources, including manpower.

To a people inclined to measure power in terms of monetary wealth our situation may well appear somewhat parlous. And it is widely felt that, quite apart from her domestic difficulties, a Britain heavily denuded of her overseas assets and of other sources of invisible exports, will find herself grievously handicapped in achieving equilibrium in her post-war balance of payments.

7. In the field of foreign relations the aggressively independent line followed by the Australian Minister for External Affairs throughout the San Francisco Conference demonstrated once and 75

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for all that there was no truth in the popular American fallacy that the British Commonwealth voted as a block at international gatherings under United Kingdom ægis. However salutary in this respect, Dr Evatt’s attitude, by demonstrating with equal clarity that Britain could not count in her international dealings on the steady support of her sister nations of the Commonwealth, also gave an added impetus to the belief that the influence of the mother country and of the Commonwealth in general as a unit of world power is now on the wane. Whilst Americans take small stock of an Eire which has maintained a stubbornly neutral position during the war, the recent cryptic announcement of Mr de Valera that his country is an independent republic served to lend its particle of colour to the picture of an enfeebled and isolated Britain. A threat to our lines of imperial communication is moreover seen in such current developments as the Russian interest in Tangier and the Dardanelles, in the pressure of a Soviet-influenced Yugoslavia on the frontiers of Istria and western Thrace, and in the mounting nationalism of the Arab states. Although far from typical of the public attitude as a whole, the light in which we to-day appear on the lunatic fringe of American opinion may be illustrated by citing the recent remark of an anti-British US General: ‘Britain is nowadays of no more significance than Costa Rica’.

8. The war, which by one sided and incomplete comparison has somewhat dimmed the reputation of Britain as a world power, has placed the prestige of Soviet Russia well in the ascendant. Here, as earlier reports have indicated, American public opinion, according to the particular outlook of the groups or individuals concerned, is animated by a gamut of feelings ranging from unreasoning fear and hatred to genuine admiration. Almost all thoughtful Americans are however imbued with the belief that, by reason of her vast size, limitless resources in men and raw materials, and industrial potential, Soviet Russia is the only world power comparable in stature to the United States.

9. This Big Two concept derives in the first instance from the spectacle of Soviet Russia’s newly-fledged military might spread athwart Central and South-Eastern Europe and now in at the death against the Japanese in Northern China. Anxiety on this score is however to some extent assuaged in moderate minded and liberal 76

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circles by those factors in her contemporary life which appear to provide a basis for the long term development of peaceful relations between herself and the United States. The most notable of many recent expositions of these factors was contained in two speeches delivered at New York on the 24th May and 4th June last by Mr Henry Wallace, the Secretary of Commerce, and former VicePresident. In them Mr Wallace developed the thesis that, having now emerged to the most powerful positions on the world stage, and occupying geographical situations which had never led to any essential conflict of interests, Russia and the United States could find common ground for permanent amity because the one symbolised economic democracy to backward peoples and the other was the great exponent of political democracy. Neither country, he pointed out, possessed colonies. Both of them were groping for a way of life which would enable the common man everywhere to derive the most good out of the maximum use of modern technology. In his earlier and more detailed address Mr Wallace declared that Germany had supplanted England from 1900 onwards in the domination of world commerce; that the cultural and political overlordship of western nations had now passed and that in the conditions of the world to-day there was no place for oldfashioned or economic imperialism.

10. When examining the effect which the Big Two concept is likely to exercise on Anglo-American relations it is important to recollect that many other attitudes of mind also determine the outlook of Americans towards foreign countries in general and Great Britain in particular. At the risk of platitudinous repetition of what has been said in former reports from this Embassy, it cannot in the first place be too strongly emphasised that the events of the war have revolutionised American thinking on the subject of security. The new and deep-seated conviction that the United States must assume wider responsibilities to buttress its own and world security was aptly symbolised in the Senate on the 27th July when its members paid Senator George of Georgia, a former Chairman of the Foreign Relations Committee, the rare tribute of rising to their feet after he had eloquently appealed to them to ratify the United Nations Charter as a means of redeeming the promise of a 77

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better world for which the flower of American youth had given their lives.

11. In their search for security in a world that modern science has contracted, Americans may be counted upon to display the virtues and defects inherent in a people which, throughout the comparative short span of its history, has seen itself as dedicated to the advancement of human freedoms and blessed beyond the inhabitants of other lands with a moral and democratic way of life.

Now that the full strength of their country has become manifest to them, Americans hold that they are bound to take a leading part in the readjustment of international relationships. Faith in the magic of large words; an enthusiastic belief that the mere enunciation of an abstract principle is equivalent to its concrete fulfilment; a tendency to overlook the practical difficulties that obstruct the easy solution of current problems; above all a constant disposition to prefer the emotional to the rational approach—these are amongst the salient traits that are likely in the future, no less than in the past, to provoke Americans to impatience with the more stolid, disillusioned and pragmatic British, and to give rise to current misunderstandings between our two Governments. Taken in the aggregate these traits, for all that they at times bear the stamp of arrogant self-righteousness, spring from a core of genuine idealism which requires to be handled with more generosity and imagination and, be it also said, in a less patronising spirit than it has always received. In the meantime increased contacts with other regions are causing many Americans to shed their ignorance of the outside world.

12. The fact that Americans now tend to rate Great Britain somewhat lower in the scale of power values than their own country and the USSR does not mean that they have written her off as a negligible factor in the comity of nations. On the contrary, esteem for the sterling qualities of the British stands as high as it ever did.

This esteem, fortified by the thousand and one strands of sentiment that derive from the background of a common Anglo-Saxon heritage, co-exists, as it always has done, with a keen sense of rivalry and with the apparently ineradicable idea that nature has endowed the British with a well-nigh inexhaustible store of superior cunning, of which they are only too prone to make the 78

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fullest possible use in international negotiations with the object of ‘outsmarting’ the more simple-minded Americans.

13. Whenever they find reason to complain of our actions Americans do not fail to apply to us a number of ugly catch-words that owe much of their origin to the traditional mistrust of British policies and to the above-mentioned sense of rivalry—e.g. balance of power, Spheres of Influence, reactionary imperialist trends, colonial oppression, old-world guile, diplomatic double-talk, Uncle Sam the Santa Claus and sucker, and the like. Anti-British outbursts are as a rule the result of the propensity of Americans to oversimplify vexatious issues which lie beyond their immediate ken.

They need not therefore unduly disturb us, provided always that our own conscience is clear and that we are able in any given instance to rebut the accusations levelled against us by reference to some yard-stick of readily understood first principle—whether it be expressed in terms of moral responsibility, idealism, or leadership.

It must in any case be borne in mind that criticism of Britain is something that is bound to recur in a country of the continental proportions of the United States which comprises so many hyphenated communities within its borders and elements that are either inveterately anti-British or self-impelled to advertise their genuine Americanism. This being so, we should beware of hastily attributing to Americans as a whole the anti-British sentiments of one section of them.

14. To return to the central theme of this despatch: Americans, to whom as a witty observer once remarked all facts are free and equal, attach particular importance to quantitative standards of value. It follows that they are bound on a basis of sheer statistics to draw unfavourable comparisons between the British Isles, with their static population and dependence upon imported goods and raw materials, and the USSR with its huge untapped resources and conglomeration of peoples destined, according to expert forecasts, to expand in numbers far beyond the two hundred million mark. To an America which, on all reasonable showing, has ceased to believe that she can remain safely sheltered behind ocean barriers, the Soviet Union appears as the only country in the world now capable, if it feels so inclined, of measuring odds with her.

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15. Much public uncertainty prevails as to how best to deal with this new international portent. Accustomed enough at home to the idea of bigger and better elephants, most Americans none the less find themselves filled with a sense of uneasy bewilderment when they contemplate an unfamiliar Russian bear which is barred off from the cakes and buns of alien propaganda and refuses to be coaxed into behaviour that approximates to Western notions of democratic propriety. In their fear of the unknown, the bulk of American commentators, who share the well-nigh universal conviction of the public that armed conflict with the Soviet Union is an unthinkable expedient, have tended to relapse into a mood of baffled dismay whenever danger seems to threaten from unilateral Russian action. Their main theme on such occasions has been to bewail the ineffectiveness of their own diplomatic agents and, as often as not, to accuse them of allowing themselves to be dragged along in a campaign of bear-baiting ‘at the tail of the British kite’.

These aspersions, which were particularly vocal early this summer at the time of the Polish and Trieste crises, began to subside after Mr Stettinius in his speech at San Francisco on the 28th May had declared that the United States, whose interests extended to the whole world, must mediate between other great powers when their interests conflicted amongst themselves. Much comfort is now derived from the belief that President Truman can be counted upon to pursue an independent American policy, and that Mr Byrnes, who is reputed to be a born mediator, will succeed in resolving Soviet and American differences on a basis of honourable compromise.

16. The uncertainty in American thinking where the Soviet Union is concerned is much less marked when it comes to questions that relate to the role of the United States in that segment of the world which lies outside the Russian orbit of power. Here a blend of idealism, hard business instinct, and motives of security is propelling the United States to a greater extent than ever before into international fields far beyond the limits traced by the timehonoured Monroe Doctrine and notions of hemispheric defence. An America which has found her place in the sun is resolved that the more efficient units of her vastly augmented merchant fleet shall not be laid up in idleness as occurred with the bulk of her ocean80

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going commercial vessels after the last war. Federal regulated civil aviation lines can rely upon constant official support to secure the foreign bases and facilities necessary to enable them to girdle the globe. The weight of administrative backing can readily be mobilized for the establishment of American-controlled telecommunications systems in undeveloped regions, and for securing the maximum possible American share in the exploitation of Middle East oil resources.

17. As citizens of a country that has tended to acclaim rapidly acquired material success as proof of moral rectitude the leaders of the influential pressure groups that promote these activities may be pardoned if they regard them not merely as profit-making enterprises but also as the media for disseminating the blessings of the American way of life to other and less fortunate peoples. By the same token they are quick to suspect the use of a privileged position to exclude themselves whenever circumstances confront them with the older established competing rights of Great Britain in her imperial possessions or in other territories vital to her security where she has hitherto exercised a paramount influence. For the time being at any rate a Soviet Union rotating within its own orbit represents no comparable points of friction, with the exception of a nascent Russian interest in Middle Eastern affairs and the possibility of future clashes of interest in the Far East, in regard to which speculation, long since manifest, is likely to become more acute now that the Red Army is sharing the credit for the coup de grâce of the Japanese.

18. A world that rotates in two orbits of power. Enough has been said to show that this concept is beginning to crystallize in the American mind. At the same time, as already indicated, the fact that Americans have come to believe that the key to world peace lies in the relationship of their country with the Soviet Union does not mean that they have ceased to view Great Britain with a twin sense of esteem and rivalry. Along, moreover, with this familiar psychological pattern there is to be found a deep seated conviction amongst a wide range of Americans, and not least amongst persons prominent in the Administration and general staff, that, whether from the political economic or strategic point of view, a strong and prosperous Britain is an essential US interest. Indeed, even if many 81

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of them would not acknowledge the fact to themselves, it is no exaggeration to say that the majority of those elements which give shape and purpose to all that is best in their country’s mode of existence are aware in their heart of hearts that the continuity of her moral values is inseparably bound up with the welfare of Great Britain. Even these elements, however, would incline to distinguish in their thoughts between Britain and her Empire and to hold the view that in areas of Europe and the Middle East adjacent to the Soviet orbit of power British foreign policy is liable at times to embark on ill-advised courses which in the last analysis might constitute a threat to United States’ security.

19. All in all, therefore, it begins to look as though we are witnessing a gradual American shift away from the pattern traced

by President Roosevelt in his grand design which, at any rate when he first conceived it at the height of the war, envisaged the coequal collaboration of Great Britain, the Soviet Union and the United States with the object of defeating the enemy and of creating a United Nations Organisation for the maintenance of world peace.

Victory in Europe is won. America has committed herself in spectacular fashion to the United Nations’ Charter, in the elaboration of which at San Francisco she can justly claim to have played a leading part. But, unless appearances are deceptive, the United States is also now groping towards a new order of things in which Great Britain, whilst occupying a highly important position as the bastion of Western European security and as the focal point of a far-flung oceanic system, will nevertheless be expected to take her place as junior partner in an orbit of power predominantly under American ægis. This theory of a USA destined for the role of leadership was implicit in a passage of the speech delivered by President Truman at Kansas City on the 3rd of July [sic: 28 June] where he stated: ‘I am anxious to bring it home to you that the world is no longer county-size, no longer state-size, no longer nationsize—it is one world, as Willkie said. It is a world in which we must all get along. And it is my opinion that this great Republic ought to lead the way.’

20. On the economic side the US Administration sees itself as destined to point the way to an era of economic liberalism which will promote the exchange of goods and services between nations 82

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and restore prosperity to a war-stricken world. The renewal by Congress this summer of the Reciprocal Trade Agreement[s] Act and its approval of the Bretton Woods proposals are regarded as milestones that mark progress to this end. The next and most important stage on the road will be to complete the discussions with His Majesty’s Government preparatory to the international conference on trade and employment planned for the early part of next year. It is the present hope of the United States Government that this conference will in its turn lay the basis for the expanding world economy contemplated in Article VII of the master lendlease agreements.

21. Excepting in the Far East where the United States has plainly asserted its leadership, the outlines of the new dispensation in the political sphere are as yet somewhat imprecise. An Administration conscious of its country’s stake in world security but sensitive to the movements of an immensely variegated public opinion that is by no means rid of isolationist phobias, still displays hesitancy as to the lengths to which it should go to dispel storm clouds in distant regions. It is of course true that, quite apart from collaborating in the manifold tasks connected with the liquidation of the European war and the preparation of peace settlements, the United States has given many other positive proofs that it recognises the need for sharing the burden of world responsibilities. Thus, American influence has been steadily exerted to secure an equitable solution of the Polish problem. It has also been brought to bear to mitigate the crisis which arose last autumn in Soviet-Persian relations and to support our intervention this summer in the Levant. In the Trieste affair the United States went further than mere diplomatic representations and, albeit somewhat reluctantly, joined us in action which might have resulted in an armed clash between American troops and Yugoslav Partisans. The United States stands ready to participate in the future Administration of Tangier and in supervising the Greek elections. America has sought to encourage a reconciliation between Chungking and the Yenan Communists.

22. The above mentioned occurrences do not, however, imply that the United States is invariably prepared to march on parallel lines to His Majesty’s Government in resolving problems of immediate concern to ourselves and more particularly those that 83

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arise in our dealings with the Soviet Union. The late President Roosevelt himself, although a firm believer in Anglo-American collaboration and to some extent under the spell of the superior genius of Mr Churchill, jealously preserved the appearance of independent manoeuvre. Indeed, after the Moscow and Tehran conferences he was not averse to encouraging the idea that the United States occupied the position of mediator between the Soviet Union and Great Britain, and that his powers of conciliation had more than once averted a breach between Marshal Stalin and Mr Churchill. After the Greek crisis in December last the view gained ground that Britain was concerned to perpetuate reactionary governments in Europe. It was felt that, unless the United States intervened to promote more liberal tendencies, that continent would relapse into anarchy from which only the Soviet Union could derive benefit.

23. Against this background the previously unannounced decision of President Truman to send Mr Hopkins on his mission to Moscow at the end of May, together with the concomitant visit of Mr Davies to London, is to be regarded as no mere move to demonstrate to the US public and to the world at large that the new President was continuing the mediatory role of his predecessor at a time when differences over Poland and the veto dispute at San Francisco seemed to imperil inter-Allied relations. It must also be ascribed to the growing belief in responsible official circles, already noticeable under the late Administration, that it should devolve on the United States in the first instance as the major Western power to take the initiative in determining the shape of things on the periphery of the Soviet orbit no less than elsewhere. President Truman’s decision to proceed direct from Washington to Potsdam without breaking his journey in Britain provided another sign of the same process of thought.

24. Out of the hubbub of emotional talk which the announcement this week about the atomic bomb has unleashed throughout the country, it is already clear enough that America’s consciousness of superior power, or as one columnist puts it ‘her capacity for Promethean rule’, is being vigorously stimulated by the fact that she alone, for the present at any rate, possesses the means to exploit this awe-inspiring and revolutionary invention.

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25. Whilst the advent of a Labour Government in Great Britain should in no way alter the shrewd reckoning of the Americans that the pattern of world power has radically shifted in their country’s favour, it has injected new and unexpected factors into their calculations. Even amongst the more conservative minded, who now see the USA as the last stronghold of capitalistic economy, there would be few if any supporters of the notion that a Britain about to embark on a Socialist experiment is in the least likely to gravitate towards Communism. At the same time warnings are heard in financial and business circles that America should beware of countenancing any proposal to grant extensive credits to a Britain which would be likely to employ them to underwrite State Socialism. Of even more importance than these vested interests, which are doubtless influenced by the knowledge that the British Labour victory will be attended by repercussions at home, is the attitude of official Washington. In this quarter the change has come as something of a shock from the standpoint of its probable effect upon the US programme for fostering world revival through the international relaxation of restrictive financial and trade practices.

The Administration is apprehensive lest Britain, for all her temperamental caution, will now commit herself to a thoroughgoing system of State trading with its attendant features of subsidies, bulk purchases and quotas which might effectively defeat any sound working of the reciprocal trade programme.

26. An event that has multiplied our critics on economic grounds has none the less served to appreciate our political stocks. By capturing the imagination of Americans the vivid dynamic personality of Mr Churchill had hitherto somewhat obscured the extent of our economic plight which is now revealed in fuller nakedness. On the other hand, the Labour landslide should remove the hitherto persistent impression that Great Britain is concerned to encourage European reaction. No less than Left Wing pressure groups, middle-of-the-road and liberal opinion in general, which includes some of the most prominent newspaper and radio commentators with the widest audiences, has hailed the election results as a notable democratic achievement destined to usher in the era of the plain man. It is widely conceded that Britain, now further left of centre than America herself, is presented with a new 85

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opportunity to assume the leadership of all progressive forces and to arrest the drift in Europe towards anarchy and Communism.

27. During the months to come Britain promises to be the cynosure of American eyes. Our official pronouncements will be eagerly awaited: the development of our economic and foreign policies will be scrutinised with the utmost care. If in the former respect our position from the point of view of enlisting a sympathetic American attitude has become more complicated, in the latter respect there can be no question but that our credit has been sensibly improved. From now onwards we should be less exposed to captious criticism of our actions in Europe; the charge that it is we who are needlessly provoking the Soviet Union to display intransigence should become void of content; our handling of vexatious problems in India and the Middle East should command a more receptive audience; there is a somewhat enlarged prospect of enlisting American support, whenever we feel so disposed, in the effort to resolve debatable issues.

28. In general, and this would seem to be of the first importance, we may expect the US Administration to show a disposition to promote early reference to the World Organisation of all matters that seem likely to occasion friction between the Anglo-American and Soviet orbits of power. Within the broad overall framework set up by the United Nations Charter, which has been resoundingly approved by the nation at large, the United States Government is free to move with the Governments of other like-minded countries along firmer lines to secure what it considers to be just solutions than if it chooses to manoeuvre on its own with the knowledge that whatever decisions it takes will have to answer on their independent merits at the bar of a highly temperamental public opinion. By adopting the former course the US Administration is in any case far less exposed to the charge that it has shaped its policy in deference to the wishes of His Majesty’s Government. Whenever negotiations are conducted on a purely Three Power basis United States domestic reasons, in the future as in the past, will undoubtedly play a certain part in causing the Administration to share our view that there should be no appearance of an Anglo-American attempt to ‘gang up’ on the Russians. So too we may anticipate an analogous reluctance to aligning American policy too closely with that of 86

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Britain in the adjustment of post-war relations with China where, as already indicated, the United States is in any event peculiarly concerned to avoid possible causes of friction with the USSR 29. In our own bilateral dealings with the United States Government we should be careful to formulate requests for their support in such a manner as to avoid the appearance of teaching the Americans where their best interests lie. It is equally selfunderstood that in any instance where we have reason to protest against US actions our ground should be well chosen and our complaint prompted by no mere shift of selfish expediency or passing mood of irritation. As men who themselves prefer the simple forthright approach, the Americans appreciate plain speaking in others. Nor will they take it amiss if we stand up for ourselves when our interests are well founded, or, conversely, interpret it as a sign of weakness if, whenever there is scope for the adjustment of conflicting Anglo-American views, we eschew methods of obstinate bargaining. In inter-governmental negotiations our case to the Americans should be presented not so much on grounds of sentiment as upon lucidly argued appeals to reason and the logic of hard fact.

30. Last, but not least, the progressive elements of America will test our every word and deed on the touchstone of broad democratic principle. The early ratification by His Majesty’s Government of the San Francisco Charter will be greeted here as an earnest of our intention to place ourselves squarely behind the cause of world peace. Rapid approval of the Bretton Woods proposals may do something to ease the thorny path of our trade discussions with the United States Government. In our day-to-day dealings with the Administration on current problems of foreign policy the omens are favourable. In the course of the last two centuries we have twice stood alone and have saved ourselves by our exertions. We are now seen to be better placed than ever before to save Europe by our example.

31. I am forwarding copies of this despatch to the High Commissioner for the United Kingdom in Ottawa, His Majesty’s Ambassador at Moscow and the Joint Staff Mission at Washington.

JOHN BALFOUR 87

7 Memorandum by Lord Keynes1 Secret

13 August 1945 Our Overseas Financial Prospects 1. Three sources of financial assistance have made it possible for us to mobilise our domestic man-power for war with an intensity not approached elsewhere, and to spend cash abroad, mainly in India and the Middle East, on a scale not even equalled by the Americans, without having to export in order to pay for the food and raw materials which we were using at home or to provide the cash which we were spending abroad.

2. The fact that the distribution of effort between ourselves and our Allies has been of this character leaves us far worse off, when the sources of assistance dry up, than if the rôles had been reversed.

If we had been developing our exports so as to pay for our own current needs and in addition to provide a large surplus which we could furnish free of current charge to our Allies as Lend-Lease or Mutual Aid or on credit, we should, of course, find ourselves in a grand position when the period of providing the stuff free of current charge was brought suddenly to an end.

3. As it is, the more or less sudden drying up of these sources of assistance shortly after the end of the Japanese war will put us in an almost desperate plight, unless some other source of temporary assistance can be found to carry us over whilst we recover our breath‒a plight far worse than most people, even in Government Departments, have yet appreciated.

4. The three sources of financial assistance have been (a) Lend-Lease from the United States; (b) Mutual Aid from Canada; (c) Credits (supplemented by sales of our pre-war capital assets) from the Sterling Area (including credits under Payments 1

TNA CAB 129/1, CP(45)112. Documents on British Policy Overseas, Ser. 1, Vol. 3, No. 6. This memorandum was circulated to the Cabinet by Mr Dalton on 14 August with the comment: ‘I am anxious that my colleagues should be informed, without delay, of this most grim problem. I shall shortly submit proposals for action.’

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Agreements with certain countries, especially in South America, which are outside the Area, but have made special agreements with it).

5. In the present year, 1945, these sources are enabling us to overspend our own income at the rate of about ÂŁ2,100 millions a year, made up roughly as follows (these figures were compiled on the assumption that Lend-Lease and Mutual Aid would continue on the basis of recent provisions until the end of 1945): Lend-Lease (munitions) Lend-Lease (non-munitions) Canadian Mutual Aid Sterling Area, &c.

ÂŁ millions 600 500 250 750 2,100

(The Mutual Aid, amounting recently to about ÂŁ500 million a year, which we ourselves are according is here treated as part of our own domestic expenditure. From some, but not all, points of view this should be deducted from the above.)

6. This vast, but temporary, assistance allows us for the time being to over-play our own financial hand by just that amount. It means, conversely, that others are under-playing their hands correspondingly. How vividly do Departments and Ministers realise that the gay and successful fashion in which we undertake liabilities all over the world and slop money out to the importunate represents an over-playing of our hand, the possibility of which will come to an end quite suddenly and in the near future unless we obtain a new source of assistance? It may be that we are doing some things which are useless if we have to abandon them shortly after V-J, and that our external policies are very far from being adjusted to impending realities.

7. To sum up, the overseas balance in 1945 is estimated as follows:

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Imports excl. munitions Munitions received under Lend-Lease and Mutual Aid Other Government expenditure overseas

Total expenditure overseas

ÂŁ million 1,250 Exports Net invisible income and sundry 850 repayments, &c.

Government receipts 800 from United States and Dominions for their forces and munitions 2,900

Total income overseas Deficit

350

100

350 800 2,100 2,900

These estimates have been compiled on the assumption of a continuance of the Japanese war and Lend-Lease to the end of 1945. But the early termination of the Japanese war is likely to reduce Lend-Lease aid by more than it reduces our expenditure; so that, apart from some new sources of aid, the financial position is more likely to be worsened than improved in the short run.

8. What happens on the morrow of V-J day? We are led to expect that Lend-Lease and Mutual Aid (amounting this year to £1,350 millions altogether) will cease almost immediately. The Sterling Area arrangements in more or less their present form are, we hope, rather more durable, but they will become increasingly less productive of finance as supplies and shipping become available, and before long will become a burden instead of an aid—for the credits in our favour accrued on account of its being physically impossible for the Sterling Area countries to spend what they have been induced to lend us. I shall assume below that we can continue to expect substantial aid from the Sterling Area for a year after VJ, but no longer. We also have fair assurance of some subsequent assistance from Canada.

9. On the other hand, certain sources of expenditure will also dry up almost immediately, more particularly the munitions which we 90

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are obtaining from North America under Lend-Lease and Mutual Aid. We shall no longer need them and we are entitled to cease taking them. This will save us expenditure which is running currently at the rate of about £850 millions a year.

Nothing else will cease automatically or immediately on the morrow of V-J day. But there will, of course, be a further substantial economy in Government expenditure overseas which can be obtained more slowly, say in the course of a year. There is likely, however, to be a considerable time-lag in reducing such expenditure, for three reasons. In the first place, bills for much of the expenditure are received considerably in arrear, and we are responsible in India and Australia (as we are not in the case of Lend-Lease supplies) for winding up our munition contracts just as at home. In the second place the withdrawal of our forces will be protracted on account both of lack of transport and of the slowness of the administrative machine. In the third place (and above all) a substantial part of our existing Government expenditure overseas has no direct or obvious connection with the Japanese war and will not, therefore, come to an end merely because the Japs have packed up; retrenchment in these other directions will require quite a separate set of Cabinet decisions. Merely as a personal judgment, based on a general knowledge of the break-down of the expenditure in question, I should guess that without any change in policy good and energetic management might bring down the annual rate of £800 millions to (say) £300 millions by the end of 1946, although the cost during that year as a whole may be not much less than £450 millions. Any further substantial reduction will require drastic revisions of policy of a kind which do not automatically ensue on V-J. 10. Unfortunately there are also certain items of income which arise out of the war and will fade away with it. In reckoning the current overseas balance, credit has been taken (see §7) for income of £350 millions a year arising partly out of the personal expenditure of the American forces in this country (£115 millions in 1944 and probably as much as £60 millions in 1945) and mainly out of the contributions made by the Dominions towards the equipment and maintenance of their own divisions which has been provided by us in the first instance. These sources of income will 91

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have disappeared almost entirely within a year of V-J, but, allowing for time-lags in meeting old bills, and for possible repayments from the North-Western European allies, they may amount, on optimistic assumptions, to as much as £150 millions during that year.

11. We must next allow for possible economies after V-J in other overseas expenditure for goods and for increased earnings from our shipping and from the expansion of our exports in 1946. To correct for these factors we have to embark on difficult guesswork, and the range of reasonable estimating is very wide.

12. In the cost of imports of food raw material an increase, rather than a reduction, is in sight, if the public are to be fed reasonably and employed fully and taking account of the fact that stocks are being currently drawn upon. We are budgeting (unless circumstances force us to restrict, as is quite possible) for more rather than less food in 1946 than in 1945. The raw materials required to provide employment, though not always the same in character as those we now import, are unlikely to be reduced in aggregate, since the numbers to be employed in industry will, after demobilisation, be more rather than less. On the other hand, some miscellaneous economies should be possible. One way and another our import programme might be kept down to £1,300 millions.

Even this, assuming prices at double pre-war, means considerable austerity. For our pre-war imports were £850 millions, that is (say) £1,700 millions at the assumed post-war price level. Thus the above figure assumes a reduction of 23 per cent. below the volume of our pre-war imports and therefore presumes strict controls, in the absence of which an appreciably higher figure is to be expected as soon as supplies are available.

13. As for exports there seems a reasonable hope of increasing them from an aggregate of £350 millions in 1945 to £600 millions in 1946. Extreme energy and concentration on this objective should do better still. Net invisible income in 1946, allowing for some recovery in commercial shipping receipts, might be put at £50 millions.

14. On the assumption of an export and import price level double pre-war, and no major changes in present policies, the position in 1946 can, therefore, be summed up as follows: 92

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Imports Government expenditure overseas

£ millions 1,300 Exports Net invisible income 450 Government receipts from Allies and 1,750 Dominions Deficit

600 50

150 800 950 1,750

15. When we come to subsequent years, we are in the realm of pure guesswork. If, to cheer ourselves up, we make bold to assume that by 1949 we have reached the goal of increasing the volume of exports by 50 per cent., the value of exports in that year, at double pre-war prices, would be £1,450 millions. If we suppose further that we can keep the further growth of imports within very moderate limits, if we can steadily curtail Government expenditure overseas, and if we can steadily increase our net invisible income, we can produce the following pipe-dream, showing an eventual equilibrium in the fourth year after V-J, namely 1949: (£ millions) Government Imports Expenditure Overseas 1947 1,400 250 1948 1,400 200 1949 1,450 150

Net Total Exports Invisible Income 1,650 1,000 100 1,600 1,300 100 1,600 1,450 150

Total Deficit 1,100 550 1,400 200 1,600 Nil

It should be emphasised that imports can be kept down to this figure only by strict regulation.

16. Combining the above assumed deficits in 1947 and 1948 with the estimated deficit of £950 millions in 1946, we have a total deficit of £1,700 millions for the three years taken together.

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17. Where, on earth, is all this money to come from? Our gold and dollar reserves at the end of 1945 will stand at about £500 millions. We might, if necessary, draw on this to the tune of £250 millions but certainly not more. In 1946 we might conceivably increase our net borrowing from the Sterling Area by (say) another £300 millions by stipulating that the further expenses in those countries strictly arising out of the war should be added to the War Debts. But there will be chaos in the trade relations of the Sterling Area and a break-down of the whole system unless we are prepared to release at least £75 millions a year to these and our other creditors in each of the years 1947 and 1948, leaving a net gain of £150 millions over the period as a whole. These two sources together bring the cumulative deficit down to £1,250 millions, i.e., $5 billions.

18. The conclusion is inescapable that there is no source from which we can raise sufficient funds to enable us to live and spend on the scale we contemplate except the United States. It is true that there are sundry resources which have not been taken into account in the above. For example, we still have some capital assets which could be gradually realised; and we have an expectation of some further aid from Canada. But the above calculation assumes that we have reached equilibrium by the end of 1948 which we have no convincing reason to expect, and also that we have by that date drawn down our ultimate reserves to the minimum. Moreover, the reader may have noticed that I have almost altogether omitted any reference to the vast debt of between £3,000 and £4,000 millions which we shall be owing to almost every country in the world. In other words, it has been tacitly assumed that we have found some way of dealing with this which allows us to discharge nothing in the three years 1946-1948 taken together, and, in fact, to add £150 millions to it. Moreover, the assumed rate of growth of exports is wildly optimistic, unless our methods change considerably. The conclusion holds, therefore, in so far as any firm conclusion can be based on such precarious material, that there remains a deficit of the order of $5 billions which can be met from no other source but the United States.

19. It is sometimes suggested that we can avoid dependence on the United States by a system of semi-barter arrangements with the 94

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countries from which we buy. This, however, assumes that the limiting factor lies in the willingness of overseas markets to take our goods. Whatever may be the truth a few years hence, this will not be the position in the early post-war period which we have in view here. The limiting factor will be our physical capacity to develop a sufficient supply of export goods. Barter arrangements assume that we have goods to offer in exchange; and that is precisely what we shall lack in the next two years. At present the boot is on, and pinching, the other leg—the countries from which we buy are trying to make their sales to us contingent on our accepting barter terms, under which we supply goods which they want but which we unfortunately are unable to provide.

20. What it does lie in our power to do in mitigation falls under two headings. Even to attain the assumed expansion of exports, and certainly if we are to improve on it, we must stop forthwith making munitions which are not wanted and reconvert industry to peacetime production at a much greater pace than is at present in view.

Hitherto, the assumed continuance of the Japanese war until the end of 1946 has provided a magnificent camouflage for carrying on as though the end of the German war did not make all that difference.

To suggest acting on the assumption that we might beat the Japs before 1947 has been regarded by all the major-generals as a brand of defeatism. Perhaps the time has now come when we can reconvert ruthlessly and with no regard to anything but speed and economy. It is not sensible either to keep men idle at the works or to use up valuable raw materials on producing useless objects merely to avoid statistical unemployment.

21. The second heading probably presents much greater difficulty. We still have a vast number of men in the three Services overseas, and the Government cash expenditure outside this country, which this involves, is still costing more than the value of our total exports. It might be supposed that the defeat of Japan would bring most of this rapidly to an end, subject, of course, to the inevitable time-lags. Unfortunately, that is a long way from the truth. Out of the ÂŁ425 millions cost of the Services overseas in the current year the South-East Asia Command is responsible for only ÂŁ100 millions. We have got into the habit of maintaining large and expensive establishments all over the Mediterranean, Africa and 95

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Asia to cover communications, to provide reserves for unnamed contingencies and to police vast areas eastwards from Tunis to Burma and northwards from East Africa to Germany. None of these establishments will disappear unless and until they are ordered home; and many of them have pretexts for existence which have nothing to do with Japan. Furthermore, we are still making loans to Allies and are incurring very large liabilities for relief out of money we have not got.

22. Broken up broadly between purposes, I believe that the 1945 expenditure outside North America is distributed as follows:

The Services War Supplies and Munitions (mainly India, South Africa and Australia) Reciprocal Aid, Loans to Allies, Relief, Foreign Office, &c.

£ millions 425 300 75 800

Of this total about £450 millions was incurred in the first half of the year before V-E and £350 millions was expected in the second half after V-E. The effect of V-J on the rate of expenditure in the last quarter of 1945 has not yet been estimated.

23. Broken up between areas, the expenditure of £725 millions on the Services and War Supplies is made up broadly as follows: £ millions India, Burma and Ceylon 410 Middle East 110 South Africa, Australia and New Zealand 110 British Western, British Eastern and Central Africa 20 Malta and Cyprus 10 Europe 40 Other 25 725 96

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24. To an innocent observer in the Treasury very early and very drastic economies in this huge cash expenditure overseas seem an absolute condition of maintaining our solvency. There is no possibility of our obtaining from others for more than a brief period the means of maintaining any significant part of these establishments, in addition to what we shall require to meet our running excess of imports over exports and to sustain the financial system of the Sterling Area. These are burdens which there is no reasonable expectation of our being able to carry. Yet there are substantial items within the ÂŁ800 millions which will not be automatically cut out merely as a result of the defeat of Japan.

25. Even assuming a fair measure of success in rapidly expanding exports and curtailing Government expenditure overseas, it still remains that aid of the order of $5 billions is required from the United States. We have reason to believe that those members of the American Administration who are in touch with our financial position are already aware that we shall be in Queer Street without aid of somewhere between $3 and $5 billions and contemplate aid on this scale as not outside practical politics.

But this does not mean that difficult and awkward problems of terms and conditions do not remain to be solved. The chief points likely to arise are the following: (i) They will wish the assistance to be described as a credit. If this means payment of interest and stipulated terms of repayment, it is something we cannot undertake in addition to our existing obligations with any confidence that we can fulfil the obligations.

It would be a repetition of what happened after the last war and a cause of further humiliation and Anglo-American friction, which we should firmly resist. If, however, the term credit is no more than a camouflage for what would be in effect a grant-in-aid, that is another matter. (ii) The Americans will almost certainly insist upon our acceptance of a monetary and commercial foreign policy along the general lines on which they have set their hearts. But it is possible that they will exercise moderation and will not overlook the impropriety of using financial pressure on us to make us submit to what we believe is to our grave disadvantage. In fact the most persuasive argument we can use for obtaining the desired aid is that 97

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only by this means will it lie within our power to enter into international co-operation in the economic field on the general principle of non-discrimination. We should not seek to escape our obligations under Article VII of the Mutual Aid Agreement, but should, rather, ask for the material basis without which it will not lie in our power to fulfil them. In my opinion we need not despair of obtaining an agreement which provides sufficient safeguards and will not seriously hamper the future development of our economy along lines freely determined by our own policies. (iii) Bases, islands, air facilities and the like may conceivably come into the picture.

26. Nor must we build too much on the sympathy and knowledge of the members of the American Administration with whom we are in touch. It will be a tough proposition, perhaps an impossible one, to sell a sufficiently satisfactory plan to Congress and the American people who are unacquainted with, and are never likely to understand, the true force of our case, not only in our own interests but in the interests of the United States and the whole world. For the time being Ministers would do well to assume that no arrangement which we can properly accept is yet in sight; and that, until such an arrangement is in sight, we are, with the imminent cessation of Lend-Lease, virtually bankrupt, and the economic basis for the hopes of the public non-existent.

27. It seems, then, that there are three essential conditions without which we have not a hope of escaping what might be described, without exaggeration and without implying that we should not eventually recover from it, a financial Dunkirk. These conditions are (a) an intense concentration on the expansion of exports, (b) drastic and immediate economies in our overseas expenditure, and (c) substantial aid from the United States on terms which we can accept. They can only be fulfilled by a combination of the greatest enterprise, ruthlessness and tact.

28. What does one mean in this context by ‘a financial Dunkirk’?

What would happen in the event of insufficient success? That is not easily foreseen. Abroad it would require a sudden and humiliating withdrawal from our onerous responsibilities with great loss of prestige and an acceptance for the time being of the position of a second-class Power, rather like the present position of France.

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From the Dominions and elsewhere we should seek what charity we could obtain. At home a greater degree of austerity would be necessary than we have experienced at any time during the war.

And there would have to be an indefinite postponement of the realisation of the best hopes of the new Government. It is probable that after five years the difficulties would have been largely overcome.

29. But in practice one will be surprised if it ever comes to this.

In practice, of course, we shall in the end accept the best terms we can get. And that may be the beginning of later trouble and bitter feelings. That is why it is so important to grasp the reality of our position and to mitigate its potentialities by energy, ingenuity and foresight.

30. Shortage of material goods is not going to be the real problem of the post-war world for more than a brief period. Beyond question we are entering into the age of abundance. All the more reason not to mess things up and endanger the prizes of victory and the fruits of peace whilst crossing the threshold. The time may well come—and sooner than we yet have any right to assume—when the sums which now overwhelm us may seem chicken-feed, and an opportunity to get rid of stuff without payment a positive convenience.

KEYNES

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8 Memorandum by Mr Attlee on the Atomic Bomb1 10, DOWNING STREET A decision on major policy with regard to the atomic bomb is imperative. Until this is taken civil and military departments are unable to plan. It must be recognised that the emergence of this weapon has rendered much of the post-war planning out of date.

For instance a redistribution of industry planned on account of the experience of bombing attacks during the war is quite futile in face of the atomic bomb. Nothing can alter the fact that the geographical situation of Britain offers to a continental Power such targets as London and the other great cities. Dispersal of munition works and airfields cannot alter the facts of geography.

Again it would appear that the provision of bombproof basements in factories and offices and the retention of A.R.P. & Fire Services is just futile waste.

All considerations of strategic bases in the Mediterranean or the East Indies are obsolete. The vulnerability of the heart of the Empire is the one fact that matters. Unless its safety can be secured, it is no use bothering about things on the periphery. It is difficult for people to adjust their minds to an entirely new situation. I noticed at Potsdam that people still talked of the line of the Western Neisse although rivers as strategic frontiers have been obsolete since the advent of air power. It is infinitely harder for people to realise that even the modern conception of war to which in my lifetime we have become accustomed is now completely out of date.

We recognized or some of us did before this war that bombing could only be answered by counter bombing. We were right. Berlin & Magdeburg were the answer to London and Coventry. Both 1

TNA PREM 8/116. Documents on British Policy Overseas, Ser. 1, Vol. 2, No. 192. This memorandum is printed from the Prime Minister’s undated, uninitialled manuscript. It was circulated in a slightly variant text on 28 August 1945 as GEN 75/1 to the Cabinet Advisory Committee on Atomic Energy (ACAE), which had met for the first time on 10 August 1945.

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derive from Guernica. The answer to an atomic bomb on London is an atomic bomb on another great city.

Duelling with swords and inefficient pistols was bearable.

Duelling had to go with the advent of weapons of precision. What is to be done about the atomic bomb? It has been suggested that by a Geneva convention all nations might agree to abstain from its use.

This method is bound to fail as it has failed in the past. Gas was forbidden but used in the First World War. It was not used in World War 2, but the belligerents were armed with it. We should have used it, if the Germans had landed on our beaches. It was not used, because military opinion considered it less effective than explosives and incendiaries.

Further the banning of the atomic bomb would leave us with the other weapons used in the late war which were quite destructive enough.

Scientists agree that we cannot stop the march of discovery. We are assured that any attempt to keep this as a secret in the hands of the USA and UK is useless. Scientists in other countries are certain in time to hit upon the secret.

The most we may have is a few years start.

The question is what use are we to make of that few years start.

We might presumably on the strength of our knowledge and of the advanced [stage] in technical development in the USA seek to set up an Anglo American hegemony in the world using our power to enforce a worldwide rigid inspection of all laboratories and plants.

I do not think this is desirable or practical. We should not be able to penetrate the curtain that conceals the vast area of Russia. To attempt this would be to invite a world war leading to the destruction of civilization in a dozen years or so.

The only course which seems to me to be feasible and to offer a reasonable hope of staving off imminent disaster for the world is joint action by the USA, UK and Russia based upon stark reality.

We should declare that this invention has made it essential to end war. The new World order must start now. The work of the San Francisco Conference must be carried much further.

While steps must be taken to prevent the development of this weapon in any country, this will be futile unless the whole 101

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conception of war is banished from people’s minds and from the calculations of Governments.

This means that every vexed question will have to be settled without the use of force, whether it is Palestine, Venezia Julia, the Ruhr, India. Every nation must submit to the rule of law. The USSR must abandon, if it still holds them, its dreams of revolution by force or intrigue. The UK and the USA must abandon, if they have them any dreams of overturning Left Governments.

All nations must give up their dreams of realising some historic expansion at the expense of their neighbours. They must look to a peaceful future instead of to a warlike past.

This sort of thing has in the past been considered a Utopian dream. It has become today the essential condition of the survival of civilisation & possibly of life on this planet.

No Government has ever been placed in such a position as is ours today. The Governments of the UK and the USA are responsible as never before for the future of the human race.

I can see no other course than that I should on behalf of the Government put the whole of the case to President Truman and propose that he and I and Stalin should forthwith take counsel together.

The time is short.

We must come to a decision before the meeting of the United Nations Organisation.

We cannot plan our future while the major factor is uncertain.

I believe that only a bold course can save civilization.

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9 Despatch from Sir A. Clark Kerr to Mr Bevin1 No. 642

MOSCOW, 6 September 1945

Sir, In my despatch No. 468 of July 10th I attempted to assess the prevailing mood of the Soviet people and of their leaders and to review the state of Anglo-Soviet relations just before the Potsdam Conference met. There was then boundless confidence in the achievements and in the future of the Soviet Union, coupled however with a welcome relaxation of tension in the Soviet attitude towards the outside world. Events have jostled one another since the beginning of July, and it seems appropriate, before the meeting of Foreign Secretaries in London this month, to consider the effect upon the Soviet Union and upon Anglo-Soviet relations of such important events as the Potsdam decisions, the entry of the Soviet Union into the Far Eastern war, the Soviet-Chinese treaty, the capitulation of Japan, the British elections, and finally the atomic bomb.

2. Internally, the mood of confidence among the great masses of the Soviet public has been fully maintained. Although the Soviet entry into the Far Eastern war had been expected and discounted, it was not at first popular and there was considerable anxiety about the possibility of another long struggle and more heavy casualties.

This mood of anxiety was, however, quickly dissipated by early Soviet successes and as the overrunning of Manchuria became a triumphal parade, with negligible losses, the earlier feeling of selfsatisfaction over the power and glory of Soviet arms returned, together with very genuine relief that peace was at last in sight.

There were few marks of the uncertainties and fears about the prospects of continued collaboration between the major allies which had marred the closing stages of the war in Europe, and Stalin’s final proclamation on September 2nd announcing the end of the war, which struck a welcome note of interallied cooperation, 1

TNA FO 371/47883, N12165/165/38. Documents on British Policy Overseas, Ser. 1, Vol. 6, No. 17. Received 14 September.

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has been received without excitement and with deep relief. The preparations for the Soviet entry into the Far Eastern war had no doubt acted as a brake upon the transition from a war to a peace economy, which had begun shortly after the end of the war in Europe. In my despatch under reference I discussed certain signs of an easing in the internal situation, and, in his despatch No. 530 of August 1st, Mr Roberts drew attention to the increasing preoccupation of the Soviet authorities with improving the conditions of life of the Soviet people, although still insisting upon a sustained labour effort. At that time there had been little enough actual change for the better in the life of the ordinary Soviet citizen, who was inclined to think that peace had not yet turned into anything tangible. During the past month there have however been two further important steps towards a return to normal conditions: overtime is being abandoned in factories and there has recently been a substantial lowering of prices in the commercial shops. This reflects an increased flow of consumer goods, and more particularly of food, although there is still anything but plenty in the Soviet Union.

3. The main internal development during the past month has, however, been a call upon the Soviet people for further effort. On August 19th it was announced that a five-year plan was to be worked out for restoring and developing the Soviet national economy between 1946 and 1950, and that a separate five-year plan over the same period was being projected for the restoration and development of railway transport. It was not until August 31st that the Soviet press commented upon this important announcement.

After drawing attention to the vast increase in Soviet industrial and agricultural production under the earlier five-year plans, which had enabled the Soviet Union to survive the war, it was claimed that the foundations of peaceful post-war development had already been laid during the war years, and that the new five-year plan would aim not only at the complete restoration of war damage, but also at greatly increasing the pre-war level of capital and consumer goods.

It is hardly surprising that the announcement of this five-year plan has been coupled with further exhortations to Soviet workers to put as much effort into the work of peaceful reconstruction as into war production. The tenth anniversary of the Stakhanovite movement, 104

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which fell conveniently on August 31st, was used as a further stimulus to hard work, and emphasis continues to be laid upon the principle of socialist emulation. I understand that, although the demobilisation of women from the forces has been proceeding at a good pace, women workers are not yet being released from the war factories, and the United States Embassy are satisfied that, while many factories are being turned over to peace production, military material is still being manufactured on a scale about equal to that of 1940/41, when the Soviet Union was preparing for the inevitable struggle with Germany.

4. British Trade Unionists who recently visited Soviet factories came away with the impression that there was surprisingly little war weariness and that workers were ready to throw themselves with all their energies into peacetime production. There was no sense of a wish to slacken, nor did there seem to be any feeling that the workers deserved an easier time after their tremendous war exertions. On the other hand there is evidence that Soviet soldiers and officials who have been in occupied or liberated countries are now contrasting conditions there with the harder conditions at home. But the public is undoubtedly buoyed up with confidence in its own leaders, who claim that reconstruction on the vast scale now planned can only be achieved under the Soviet system on the basis of a planned socialist economy free from the fear of economic crises and unemployment. By contrast, the newspapers are full of items about the difficulties being experienced in the United States of America over the conversion from a war to a peace economy and about the expectation of large-scale unemployment there. Less has been said about British post-war economic problems, but there is a genuine conviction here that, however vast the work of reconstruction ahead, the Soviet Union alone among the Great Powers can face post-war economic problems with complete confidence.

5. As regards international affairs, interest remained centred upon Europe until the end of the Potsdam Conference early in August. The auguries for this conference were promising, and the decisions reached were greeted with great satisfaction. They were described as the triumph of wise statesmanship and the consolidation of the democratic forces in Europe. From the Soviet 105

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point of view the most important decisions were those concerning Germany and Poland and the exclusion of Franco Spain from the United Nations Organisation. All these decisions were fully in harmony with Russian requirements, and the Potsdam Conference therefore appeared as a major success of Soviet diplomacy, which invited favourable comparison with the earlier conferences at Yalta and Tehran. In so far as the Soviet Government set great store by immediate tangible advantages and are, indeed, in great need of prompt material assistance for their economic reconstruction, the Potsdam decisions regarding reparations and the disposal of the German Fleet must have been particularly welcome. But above all the Soviet people were delighted at the reaffirmation of the unity of the ‘Big Three’ and the consolidation of good relations with the new American administration. Certain aspects of the Potsdam decisions, more particularly those concerning the Balkans, were perhaps less welcome to our Soviet allies, but attention was not at first directed to them, and it was not until a later stage that certain doubts began to appear about the reception of the Potsdam decisions in the United Kingdom and America.

6. I have dealt elsewhere with the Soviet reactions to the British election results, which have greatly influenced the balance of political forces in Europe. I pointed out that in so far as progressive forces throughout Europe could now find in London a rival attraction to Moscow, this new development could hardly be welcome to the Soviet Government. Critical reactions did not, however, begin to show themselves until after your speech on foreign policy on August 20th, and meanwhile the Soviet Union had for the first time for many years become largely absorbed in Far Eastern affairs.

7. I have also discussed in separate despatches the participation of the Soviet Union in the war against Japan and the far reaching Sino-Soviet agreements of August 24th [14th]. It is enough to say here that these developments have marked the re-emergence of Russia as a major power in the Far East. It has hitherto been a traditional feature of Russian policy to concentrate mainly either upon the East or the West. It may be that the Soviet Union now feels herself strong enough to pursue a vigorous policy simultaneously in both spheres, but it is worth noting that the 106

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sudden shift of interest to the Far East in August has been accompanied by a certain relaxation in the Soviet grasp over Eastern and Central Europe, where during the past month we have seen slight easing of the situation to the advantage of Western democratic influence. Already at Potsdam the Soviet Government had agreed to an improvement in the position of the British and American representatives on the Allied Control Commissions in Roumania, Bulgaria and Hungary. The position of the Western democracies has improved in Poland and Czechoslovakia, and agreement has been reached on the entry of journalists from the west into eastern Europe and upon the improvement of transport facilities with the West. The less extreme democratic forces in Eastern Europe who do not look exclusively to Moscow have regained courage, with the result that in recent weeks the Bulgarian Government and their Soviet masters have been compelled to postpone elections which would have been bound to produce an unrepresentative government, and there have even been some slender signs of a reconstitution of the Roumanian Government on a broader basis. The Soviet Government have reacted to these developments with surprising moderation. They have at the same time shown themselves accommodating in the Tangier negotiations in Paris and in their dealings with Switzerland in connexion with the repatriation of liberated Soviet prisoners of war.

8. It is not unnatural that we should look for the causes of this welcome change. A not unimportant one may well have been the atomic bomb. The Soviet rulers understand and appreciate strength.

They must have been quick to see that the Western democracies now had in their hands a weapon with which, for some years at least, they themselves could not compete. Hence perhaps a new respect for their Western, and in particular for their American, allies, and a new mood of compromise and reasonableness in their dealings with us, even in those parts of Eastern Europe where the Soviet writ still runs. The significance which the Soviet Government attach to this new development is shown in the scant and cursory way in which they have hitherto presented it to their own people. It has never been admitted that the atomic bomb had any real influence upon the Japanese capitulation and Stalin did not refer to it in his final victory broadcast. But so revolutionary a 107

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development cannot be entirely hidden, and there must surely be growing understanding among the Russian people and no doubt also among those of the countries within the Soviet sphere in Europe, of the change, however temporary, in the balance of power represented by this invention. Nevertheless, while they may be realistic enough to adjust their policy for the moment to the new balance, the Soviet Government cannot for long be perturbed by the present Anglo-American control of this weapon, for they must tell themselves that sooner or later its secret will be theirs too.

9. The combined effect of the atomic bomb and of the British elections seem to have placed the Soviet Government on the defensive in Europe for the first time since they were taken by surprise by the rapid Anglo-American advance into Germany last spring. It is, I think, an encouraging sign that their reaction to this new situation has thus far been so mild. We have as yet seen no attacks upon ourselves for our failure to impart to them the formula of the atomic bomb which can imply nothing but a lack of confidence in our Soviet allies. Nor has there been any reversion to the display of suspicion, which was so rightly resented last May. 10. There is of course much more in this change than the fugitive influences that I have mentioned, and for it we must, I think, look mainly to the Far East, where it will be prudent to harmonise the interests of the Soviet Union with those of the United States. The Russians are clearly still uncertain and a little anxious about the future of their relations with the Americans, and this probably explains their growing preoccupation with the United States, their unwonted restraint in dealing with the new administration and indeed the present show of something like good humour in somewhat trying circumstances. At the same time it may well be that this is the good humour of repletion. The Soviet Union has now achieved the security for which she was striving in Europe and seems, since Potsdam, to be reassured about the good faith and cooperation of her principal allies in handling Germany. Her ambitions in the Far East have been satisfied. She is full of glory and her material profit has been by no means meagre. She may well afford therefore to relax and to mull a little the sour wine which she serves her allies.

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11. The danger-spots in Anglo-Soviet relations remain in the Near and Middle East. The Soviet Union has not renounced her claims upon Turkey and the Straits and she is embarrassingly active in Persia. Greece remains a stick with which to beat whatever British Government is in office. The return of D[i]mitrov to Bulgaria is proof enough that the Russians, despite their present show of mildness, do not intend to allow the Balkan situation to get out of hand. We must also expect a fresh attempt to fish in troubled political waters in Western Europe, more particularly in France, in the hope of frightening us out of what seems a reasonable and logical policy of strengthening the ties uniting us with the other democratic states of the West. But we are now in a much stronger position than we were before July 26th to give a firm progressive lead in Western Europe, as in the Near East and in occupied Germany. Provided all our policies, however strong and decisive, be kept within the spirit of the Anglo-Soviet alliance and of the Great-Power collaboration, to which the Soviet Government continue to attach the highest importance, we need not allow ourselves to be deflected from them by the gusts and cross-currents which will no doubt come our way from Moscow.

I have, etc, ARCHIBALD CLARK KERR

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10 Note on the Soviet defector Igor Gouzenko, ‘CORBY’ CORBY1 Corby is about 27 years of age, married with one child. He bears the rank of Lieutenant in the Red Army. He is not a member of the Communist party but he had been a Komsomol [member of Soviet youth organisation]. Owing to the manpower shortage during the war years, confidential jobs were thrown open to Komsomols who were not full-fledged members of the Communist party. He received training as a cypher clerk in the Central Code Section of the Intelligence Department of the Red Army and, about October or November 1943, he came to Canada as an assistant to the Military Attaché. In fact he was to act as the personal cypher clerk of the Attaché, and also to help him with his confidential records and papers.

A few months ago, Corby carelessly left drafts of two confidential dispatches lying around where they were found by a charwoman and turned over to one of the Embassy officials. This individual took the matter up with Corby, who realizing the seriousness of the position, implored him not to make a report about it. The man promised to do his best, but a while later, Corby received instructions to return to Moscow and a new cypher clerk was sent out. The latter was supposed to take over Corby’s duties immediately but the Military Attaché did not consider him sufficiently qualified and left the seals in the hands of Corby. The formal transfer was to take place on September 6th.

Originally, Corby apparently intended to comply with his instructions, and purchased suitings to take back with him to the Soviet Union. Then it seems, he began to have doubts. Without question, he was afraid of being liquidated should he return. It may be recalled that, about the middle of 1944, a man by the name of Kravchenko made a much publicised exit from the Soviet Purchasing Commission in Washington. This occasioned much comment in the Embassy in Ottawa and considerable surprise was 1

TNA KV 2/1419. This summary, dated September 1945, was apparently prepared by the Royal Canadian Mounted Police (RCMP).

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expressed that nothing had happened to Kravchenko. Corby felt he had a chance. He himself claims that he was sickened by the evidence of intrigues and espionage directed against Canada after that country had done so much to aid the Soviet Union in her struggle against the Nazis.

Be that as it may, Corby decided that his salvation lay in publicity. At nine o’clock on the evening of September 5th, he went to the Ottawa Journal and spoke to a woman reporter. It did not take the latter very long to decide that this story was too hot to handle and she advised that he go to the Justice Department.

Next day, the 6th, Corby, accompanied by his wife and child, went to the Justice Building and spoke to the Private Secretary to the Minister of Justice. He also showed him documents which he had extracted from the Military Attaché’s safe (to which he and the Attaché alone had the combination) presumably on the previous day.

The Private Secretary asked Corby to wait and spoke to the Undersecretary of State for External Affairs. However, Corby was finally turned away with veiled accusations that he was after all in possession of stolen documents. Again he tried the press, this time the Ottawa Citizen and was referred to the Royal Canadian Mounted Police. He must have become somewhat flustered by this time, because the only thing that emerged clearly was that he wanted to become a Canadian citizen! And consequently he was sent to the Crown Attorney at the Court house. He spoke to the latter’s Secretary who, again sensing the news value angle, called up Le Droit and then the Citizen, but luckily without success.

Wearily, Corby returned to his apartment, and quickly noticed that the place was being watched. Soon after he got in, there was a knock at the door: Corby didn’t answer, but decided that it would be safer to move into a neighbour’s apartment. And the neighbours in question phoned the municipal police.

Meanwhile, the Undersecretary of State for External Affairs had got in touch with the RCMP, and spoke to the Intelligence Officer.

Toward midnight a raiding party led by the NKVD man, Vitali Pavlov, and including the Assistant Military Attaché Rogov and two others, broke into Corby’s apartment with a jemmy and, finding no one at home, hid in the room. The noise attracted the 111

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City police who were rather inclined to take everyone into custody, but the RCMP intervened and Pavlov’s men departed.

The next morning, the City police brought Corby to the Justice Building where he was cursorily interrogated. The importance of his information was immediately evident and he was removed to a place of safety, where he has been reinterrogated on several occasions and at great length.

The Soviet Embassy has presented a note to the Department of External Affairs asking that a search be made for one of their missing employees. They have been informed that the proper machinery would be set in motion and there the matter rests at the time of writing.

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11 Telegrams from Mr Robertson and Mr MacDonald to Sir A. Cadogan1 CXG 251 Top Secret. Most Immediate 9 September 1945 Following Strictly Personal for Sir Alexander Cadogan from N.A. Robertson, Department of External Affairs, Canada.

A. Statement made yesterday to Royal Canadian Mounted Police by clerical officer of Soviet Embassy in Ottawa indicates that Soviet agents have had a certain access within Department of External Affairs and within office of United Kingdom High Commissioner Ottawa, to contents of secret telegrams exchanged between our Governments.2 B. Statement is supported by convincing documentary evidence which indicates extensive political and scientific espionage in Canada. Only material I have seen is set of summaries of recent 1

TNA FO 1093/538/1. The telegrams included in this document were all addressed to Sir Alexander Cadogan by Malcolm MacDonald, HM High Commissioner in Canada, and/or Norman Robertson, Canadian Under Secretary of State for External Affairs, who were handling the CORBY case in Ottawa. All telegraphic traffic on CORBY was restricted to a channel between SIS Headquarters in London, and British Security Coordination (BSC) in New York, whose head, Sir William Stephenson, had gone to Ottawa to participate in CORBY’s interrogation. Telegrams received in SIS were stripped of file and coding details and sent on by the Chief of SIS, Sir Stewart Menzies (‘C’), to Tom Bromley, Private Secretary to Sir A. Cadogan. In SIS, they were numbered in the CXG series, with several telegrams sometimes included in one transmission: the present document represents CXG 251 and 255-60. Copies of some of them can be found, together with extensive MI5 documentation on CORBY, in Security Service files KV 2/1419-29, TNA. (The head of Section IX of SIS, Kim Philby, was responsible for passing CORBY messages on to MI5, giving him both advance notice of developments and the chance to introduce delay.)

2 In CXG 252 of 9 September, Sir M. MacDonald told Sir A. Cadogan that he was taking ‘all necessary discreet steps’ to deal with the person in his office who had been named by CORBY, a Miss Kay Willsher, codenamed ELLI (KV 2/1425/2/109). In CXG 279 of 12 September, Sir W. Stephenson informed C that material obtained from the High Commissioner’s office had included a despatch from the Canadian Ambassador in Moscow, and a note by Lord Keynes on financial relations between Britain, Canada and the US (KV 2/1420/2).

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Dominions Office telegrams received in this Department.

Summaries are amateurish and would not be very enlightening. We have no evidence yet of cryptographic compromisation [sic].

Source of information and a number of original documents are in our custody. Investigation is proceeding in consultation with Stephenson and FBI.3 CXG 255-58 Top Secret. Most Immediate 10 September 1945 Following for Sir Alexander Cadogan from Malcolm MacDonald.

Further to my telegrams of September 8th.4 A. Of first importance is fact that subject is not repeat not diplomatic cypher clerk, but worked under Military Attaché, Colonel ZUBOTIN [sic: ZABOTIN], who heads extensive Soviet espionage network in Canada. He received special training for this work and was employed in HQ in Moscow prior to coming to Canada about two years ago. He is therefore in a position to give information of utmost value.

B. Information so far obtained (including copies of Intelligence despatches from Moscow) comprises large volume of undigested material. Two matters, however, are of immediate significance.

1(a) Agent of Soviet Intelligence Service at present in Canada is A.L. MAY, repeat A.L. MAY, Doctor of Physics from Cambridge University, coded name ALEC repeat ALEC.5 He was sent out from United Kingdom approximately two years ago to work under the Research Council as top flight physicist on ATOMIC mission.

1(b) According to source MAY repeat MAY has for past two years provided ZUBOTIN with ‘useful and valuable information’ in research developments.

1(c) According to source, he provided two samples of URANIUM 235 (presumably in inert form) which were flown by high official to Moscow. Origin of samples not known. National 3

Sir A. Cadogan wrote on the FO copy of this telegram: ‘There is nothing that we can do here—at least without further particulars which we shall, I suppose, receive. But I might mark a copy ‘Personal and Top Secret’ to Sir E. Machtig [Permanent Secretary for the Dominions office] for his info’.

4 CXG 251 and 252 were drafted on 8 September.

5 i.e. Dr Alan Nunn May, a British atomic scientist working with the Canadian Research Council. His Soviet codename was ALEC, but he was given the codename PRIMROSE in the CORBY case.

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Research Council question whether material flown to Moscow was actually U.235.6 1(d) MAY repeat MAY is due leave here by Royal Air Force Ferry Command for United Kingdom on September 15th repeat 15th. September 18th Moscow gives detailed instructions for MAY to contact agent in London. Place of contact, pass-words etc will be subject of later message as soon as translated.

1(e) In view of what has happened in Ottawa it is highly probable MAY will be warned against making this contact, but RCMP, External and ourselves agree he should be allowed proceed on off-chance that he makes contact.7 1(f) So far we have no scientific opinion as to value of information. MAY was in a position to pass most valuable scientific information.

1(g) ROBERTSON draws my attention to fact that vetting of United Kingdom scientists sent to Canada on project was responsibility of British Government and if these leakages on further investigation prove as serious as they appear at moment then HMG will be liable to criticism by United States Government.8 2(a) Informant claims that Fourth Department Soviet Military Attaché abolished. All repeat all foreign espionage and intelligence now centralised under new bureau under military or semi military 6

CXG 299 of 13 September reported that according to CORBY, PRIMROSE gave his Soviet contact a container labelled ‘250’ or ‘2.5’ ‘enriched’. At a subsequent meeting, he is said to have passed on a sample of 1 microgram of U 233 (KV 2/1420/2/73).

7 Considerable discussion followed as to whether, and when, to apprehend Dr Nunn May. In the end he did travel to the UK, but was not arrested until February 1946. He pleaded guilty to violating the Official Secrets Act, and was sentenced to ten years of hard labour, but was released in 1952. He was the first person to be convicted for supplying atomic research secrets to the Soviet Union.

8 In telegram ANCAM 415 transmitted from the Joint Staff Mission in Washington on 12 September, Lord Halifax reported that after discussion with Mr MacDonald, he was arranging for General Leslie Groves, head of the Manhattan (US atomic bomb) project, to be informed of the CORBY case. He added that as a British subject was involved, ‘we shall be held responsible if anything further goes wrong e.g. if he is spirited away. I am afraid this episode may possible have some unhappy consequences on future collaboration on certain aspects of the project and we must do everything we can to reduce the damage’ (FO 1093/538/1).

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control. Informant received training at hands of this new unit.

2(b) ZUBOTIN, whose cover name is GRANT repeat GRANT, is representative in Canada of new bureau and has Embassy staff of 16 members with separate identity and considerable power. Second Secretary, PAVLOV repeat PAVLOV, is representative in Ottawa.

2(c) Informant also stated that new political intelligence unit was recently established here under Third Secretary, GUSAROV, repeat GUSAROV. This is believed to replace old Comintern apparatus.

CXG 259-60 Top Secret. Most Immediate 10 September 1945 Following for Sir Alexander Cadogan from Malcolm MacDonald and N.A. Robertson, A. Investigation is far from complete and it is not possible to assess quality information which may have been passed to Soviet Embassy. You will doubtless have seen telegram from Stephenson to ‘C’ reporting inter alia our present knowledge scientific side of espionage activities.9 B. Two recent messages addressed from Moscow to Military Attaché in his capacity as local head of espionage organisation seem to us disturbing. We are aware undiscriminating character of Soviet curiosity and hesitate to draw any inference from these specific enquiries addressed to Ottawa.

For your information translation of texts follow in my immediately following telegrams.9 C. Circle of persons informed of developments has been kept as narrow as possible and this present channel of communication is the only one we are using. An FBI representative is arriving in Ottawa today and BSC officers are already here. In view of possible political implications in situation revealed in ship [sic] Prime Minister would be grateful if your Prime Minister or Foreign Secretary would inform Mr Byrnes of these developments.10 9

Not printed.

Sir A. Cadogan informed Mr Bevin of the contents of these telegrams in a minute of 11 September, adding that a further message referred to the possibility of experts being sent from Canada to explain the situation. A separate minute indicated that ‘C’ was briefing Mr Attlee on events on 13 September (FO 10

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D. You should know that Soviet Embassy shows signs of alarm at disappearance of official who is source of our information. We have no way of knowing to what degree they suspect that information about their activities has come to our knowledge.11

1093/538). Mr Byrnes was in London to attend the first meeting of the Council of Foreign Ministers, which opened on 11 September.

11 CXG 311 of 14 September reported that in CORBY’s opinion, Col. Zabotin was in a ‘most serious predicament’ in regard to his superiors, and that he was likely to try to cover up the fact that CORBY had removed documents by destroying other papers of the same date. ‘Above taken in conjunction with the fact that none of the agents under surveillance have shown signs of alarm and that as far as we can tell PRIMROSE has not been warned makes it appear that ZABOTIN is trying to minimize incident and has not tipped off his agents’ (KV 2/1420/2/64).

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12 Memorandum by Mr Butler1 FOREIGN OFFICE, 11 September 1945 Atomic Energy: The International Background The purpose of the present paper is to meet the Advisory Committee’s wish (A.C.A.E.(45) 1st Meeting, Para.6(b)) for an outline of the diplomatic background, rather than to suggest a policy, which is outside the scope of the Committee, though it has seemed difficult to examine the subject otherwise than in terms of possible lines of procedure.

2. Our objective. The prime object of our foreign policy is Security for ourselves and for others, with attendant prosperity. The way in which the discovery of the Atomic Bomb was announced to the world may have led other countries (and our own) to believe that we have or will shortly have this weapon at our disposal and have therefore become more formidable. In fact, of course, the new discovery makes the United Kingdom infinitely more vulnerable than ever before, both absolutely and as compared with larger and less centrally placed countries having essential resources within or near their own borders. The quest for security is therefore yet more important and more urgent.

3. The present position. In July 1942 we concluded with Russia the Anglo-Soviet Treaty which confirmed and replaced a war-time Agreement of July 1941. In addition to the provisions directed against Germany during and after the war, the Treaty emphasises the intention of the two countries to collaborate closely during the period of reconstruction, and to unite in due course with other likeminded States in adopting proposals for common action for preserving peace in the post-war period. The Treaty includes an undertaking by each party not to conclude an alliance nor to take part in any coalition directed against the other; the post-war provisions were to continue in force for 20 years. This Treaty is of course of the greatest importance. There was also concluded an 1

TNA PREM 8/117, ACAE(45)11. Documents on British Policy Overseas, Ser. 1, Vol. 2. No. 193. The draft of this paper was initialled by Mr Bevin.

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Agreement of a much less important nature for the exchange of information about military weapons and discoveries during the war.

The Russians never implemented this and it has lapsed with the end of the war. With the United States we have no similar Treaty, but there has been organised, regular and effective co-operation on a number of combined bodies, military, scientific and supply. In 1940 the United States and Canadian Governments created a permanent Joint Defence Board.

4. These arrangements have helped to achieve a co-operation, between the three big Powers, uneasy as between the Russians and the English-speaking countries but very effective in the war. As the war ended signs developed of cracks between Soviet Russia on one side and the United States and ourselves on the other, which have so far been composed. In Europe Soviet Russia practises a spheres of influence policy. One part of it is to acquire complete political predominance in neighbouring States: another is to tolerate her British partner exercising similar domination in States in which the British can reasonably show that their vital interests preponderate.

This, with a large exception in the case of Poland, was a workable war-time basis. At Yalta the United States Government first indicated an intention to have an important say along with her partners in European questions, and obtained their assent to this.

Broadly speaking, it was not until she (and we) began trying to assert this right in Roumania and Bulgaria as well as in Poland, that the Russians started to criticise our own action in Greece. Russia is now asserting, apart from her traditional ambitions as regards the Straits, an increasing interest in the Central and Western Mediterranean.

5. The Anglo-Saxon thesis, which we oppose to spheres of influence, is that of obtaining a fair field for liberal institutions in each of the United Nations. It is difficult to forecast how firmly the United States will uphold this policy. At present they are on the top of the wave, and are conscious of their strength (including the Atomic Bomb) and they have armies on the spot. These latter are likely to have vanished two years from now and American policy may weaken.

6. For the present there is a tendency for the smaller European countries to attach themselves to one or other of the groupings. At 119

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San Francisco the Russians were generally able to count on the support of Yugoslavia and of Czechoslovakia (reluctantly). If this division continued they would also have Bulgaria, Finland and perhaps Austria and Hungary (still more reluctantly). The division might prove very dangerous, but for a variety of reasons, including doubt as to America, we wish to preserve our natural European friendships. The firmest tie between the three partners in Europe is their common determination to prevent the revival of an aggressive Germany.

7. In the Far East a divergence that appeared imminent between Russian and American policies over China, Korea and other territories, seems to have been happily avoided by the recent SinoSoviet Treaty. In the Far East Japan is the unifying equivalent to Germany.

8. The treatment we are applying. The British and Americans, and indeed Marshal Stalin if not all his colleagues, are keenly alive to the dangers of a split between the Big Three. The machinery which we have adopted to prevent it is that of the United Nations Charter, and in particular the Security Council, on which the Three, China and France, with the grudging assent of other States, occupy a more responsible and privileged position than they held on the Council of the old League of Nations. A recognised sine qua non of this new World Organisation is co-operation between the Big Three, and the terms of the Charter exclude any two of them (or of the Big Five) applying sanctions against the remaining one. The machinery of the World Organisation will for a time at least, be supplemented by meetings at regular intervals of the Foreign Secretaries of the Big Five. There is therefore, ample opportunity already provided for the world’s three or five most important powers to clear up suspicions and to reach agreements, even if they be unsatisfactory compromises, among themselves, and to develop a degree of corporate activity in promoting things of peace. This is of primary importance, but the democratic theory on which the organisation is founded and the wide rights of discussion and recommendation allotted to its General Assembly must not be overlooked.

9. The impact of the Atomic Bomb. Military considerations were much in mind at San Francisco. A new feature of the Charter was 120

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the Military Staff Committee to be attached to the Security Council and to be composed of military representatives of the five permanent members only. Probably a factor that contributed to success there was Russia’s conviction that her military strength was as formidable as that of either of her English-speaking partners.

There was no inclination on the Anglo-American side to bring pressure to bear in virtue of their superior combined military strength. It is this unstressed but far from unimportant equilibrium that along with much else, has been upset by the development of the Atomic Bomb by the English-speaking combination. It is difficult to forecast accurately the political effect, but it is certain that Russia will make every effort to acquire the weapon also, and until she has done so, she will be more suspicious and resentful of the pressure that the Americans and we will have to put on her over many other issues. She will perhaps also become more doubtful of the allegiance of her satellite States, as there will be a natural pull towards the Powers possessing the overwhelming weapon. The measure of confidence achieved and achievable between the Big Three will almost inevitably be impaired.

10. Nor is it solely a question of the English-speaking combination possessing exclusive processes and plants. Raw materials add a potentially serious complication. Our measures to assure to ourselves exclusive supplies and control of these raw materials have in fact brought into the English-speaking orbit the countries with whom we have negotiated agreements. If and when these become known to the Soviet Government they will increase their suspicion; and that Government’s probable desire to make similar agreements with e.g. Czechoslovakia, will increase the drift towards those rival spheres of influence which we desire to avoid.

Russia might be less sensitive if she had supplies within her own territories that she regarded as ample. We know that she has made two advances to the Canadian Government for the purchase of large quantities of uranium and that the Canadian Government has stalled. The question of the raw materials for atomic energy, if only for industrial purposes is a live one, and we shall in any case have to reckon with an appeal by the Soviet or some other Government to the fourth Article of the Atlantic Charter which pledges its signatories to further the enjoyment by all States . . . [sic] of access 121

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on equal terms to the raw materials of the world which are needed for their economic prosperity.

11. On the World Organisation. Every nation indeed is affected by the new discovery, and it has been asked whether the political theory and the machinery of San Francisco have been shattered.

Provided that the new World Organisation is not allowed to become a stick with which to beat Russia there seems no reason why this should be so. That at least is the public view of the United States Government as expressed here in London by Mr Stettinius. Apart from the general view that the World Organisation constitutes the world’s last chance, the answer is perhaps two-fold. In the first place, we must expect world peace to be troubled and threatened by disputes and outbreaks of violence, possibly in the Balkans, in the Middle East or in Latin-America or even nearer home, where the threat or use of the Atomic Bomb will be inapplicable and milder measures required. Second-rate weapons will still be required against second-rate nations; and with them some police stations in the shape of strategic bases and all the machinery for conciliation and police action worked out in the Charter. Secondly, for major issues threatening harmony between the Big Three, whether during the time that the atomic weapon remains an English-speaking monopoly or when Russia has got it, or if it were acquired as it might be by a number of highly industrialised smaller states also, the machinery of the Charter, as practised at San Francisco, has an availability and flexibility that will make it of indispensable service if the will to use it exists. The Charter incidentally necessitates an attack on the subject of Control in view of Article 26 which charges the Security Council to work out a plan for the regulation of armaments. It would seem, however, that the secrecy of our agreements about raw materials, as long as it is preserved, would make discussion embarrassing.

12. It would on the other hand be difficult to argue to, say, President Truman, that the Charter lays any legal obligation upon us to place our new weapon at the disposal of the World Organisation. One could contend that implicitly various Articles of the Charter would make this a natural, and perhaps indispensable step; the Organisation is designed under Article 1 as a centre for harmonising the actions of nations in the attainment of their 122

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common ends including Security through collective action. The Security Council is charged, (Article 46) with making plans for the application of armed force, (as well as for a regulation of armaments, Articles 26 and 47) and to this end it should surely possess the strongest up-to-date coercive weapon. But there is no absolute obligation on Members either not to resort to war without the consent of the Security Council, nor to put their newest weapons at the disposal of the Organisation. Indeed the vesting of the sole ownership of the weapon in the United Nations would be a long step towards transforming them from a consultative and coercive body into an organ of world government.

13. While the fundamental question is the use that the United States and United Kingdom Government[s] are to make of their lead in atomic energy, it may be useful to consider the following associated questions: (1) Will other countries accept President Truman’s thesis that the United States and Great Britain should preserve the secret until ‘means to control it’ have been discovered?

(2) If not, will they strive to acquire the weapon themselves?

(3) Will they wish it to be a weapon at the disposal of the Security Council? (We may rule out the possibility of total abolition.)

(4) Can effective control be established?

With this question we are not directly concerned in this paper: control might well have to cover other fields of scientific research.

14. Broadly speaking, the great majority of nations, notably ones important to ourselves in Western Europe and the Middle East, would be so frightened of Russia possessing the weapon that were it possible they would prefer to leave it in Anglo-American hands, denying it to themselves; though those who possess the raw materials might claim certain privileges, commercial or other.

15. France would probably be an exception partly from distrust of the constancy of American interest in Europe, partly on prestige grounds, and partly on account of the strong moral claim to participate that her contribution to the discovery of atomic energy has given her. France would either favour a ‘free-for-all’ system, always provided that Germany was never allowed to manufacture bombs, or perhaps more probably, would wish control to be 123

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invested in the Big Five‒that is the five permanent members of the Security Council.

16. In this last view she would find a good deal of support from States who realise that Russia is bound to get the secret sooner rather than later, and from those who think it more suitable and perhaps consonant with their dignity that the weapon should be held at the disposal of an Organisation to which they belonged rather than by any one or two states. (Dr. Evatt of Australia has already subscribed to this view.)

17. Alternatives. Alternative courses therefore seem to be: (a) That the English-speaking countries should hold on to their secrets and their arrangements for controlling raw materials, realising that Russia and perhaps other States will soon acquire both for themselves, but trusting to their lead in technical achievement and in quantity of production. This monopoly might be tempered by the offer to keep the weapon in trust for and at the disposal of the World Organisation, even so this would be a step backward from San Francisco, both in the application of its machinery and in spirit—unless indeed the San Francisco Charter is to be regarded as essentially an evolution from the ‘equality’ of the old Covenant towards a realistic concentration of authority in the hands of the minority of powerful States. And our exclusive control of raw materials would be difficult to justify without some mandate from the World Organisation, which would be very problematical particularly if we intended to use them for industrial purposes. (b) To make a maximum bid for Russia’s confidence and cooperation by telling Marshal Stalin that we will pool our secrets with Russia or with the Big Five, as soon as the World Organisation is set up, on the understanding that the others pooled their own discoveries, and that we jointly set ourselves to work out an agreement as to the use of the weapon and a scheme of control including inspection. (c) For us and the Americans to inform Russia now of our willingness to pool our assets with the Big Three or the Big Five in trust for the World Organisation as soon as effective schemes had been worked out.

18. Pros and Cons. Of the above, (b) would be a gesture of confidence on such a scale that Stalin on his part might be 124

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decisively impressed by it, abandon traditional Soviet objections to outside inspection, allow us to see how far Russian researches have progressed, be more amenable to our policy of free institutions for all States including neighbours of Russia, and put international water in his Peter the Great Vintage over numerous other questions.

This prize would be so great that it might outweigh the alarm and even sense of betrayal that our action would create among lesser nations to whom we have obligations, and among larger sections of our own public who will recall Stalin’s invasions of Finland and Poland perhaps without remembering that he was even then feeling Russia’s security threatened.

19. However, before deciding on this course it would be essential to bear in mind that although Stalin may personally be a man of his word and capable of seeing and co-operating in a large objective, gratitude to other countries does not enter into the makeup of the Soviet Government, and that no conditions made by the British and United States Governments in disclosing their secrets and no agreements entered into by the Soviet Government would constitute any real safe-guards for us. It has been publicly stated by authoritative Soviet spokesmen, e.g. M. Molotov at the session of the Supreme Soviet in October, 1939, that Soviet policy is based exclusively on the pursuit of the Soviet Union’s own interests, and day-to-day experience both in large matters and small bears testimony to the truth of this statement. It has been the Soviet Government’s practice to conclude any agreements which suit their immediate interests and to break them as soon as it becomes advantageous to them, although they always find specious excuses for doing so in the behaviour of the other party to the agreement.

20. These considerations need not necessarily be overwhelming if, as is believed to be the case, the Soviet Government will in any case be able to produce the weapon in some five years from now; our trust being not so much in safeguards which are always to some degree illusory, as in developing a will towards the things of peace with the destruction of our present civilisation as the alternative.

We may also reflect that Russians are not like Germans on the lunatic fringe. They are realist and would be unlikely to attack country X with the atomic weapon if they thought it possible that country X or Country Y would retaliate.

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21. The voice of the United States. The last word, however, in choosing between different courses will rest more with the United States than with us. President Truman has defined his Government’s position in two public statements. On 7th [6th] August, he said that it had been the practice of United States Governments not to withhold scientific knowledge from others, but that under present circumstances it was not intended to divulge the technical processes of production, pending further study of possible methods of protecting the United States and the rest of the world from the danger of sudden destruction. He intended after further study to make further recommendations to Congress as to how atomic power could be made to serve the maintenance of world peace. Later he said that the atomic bomb was too dangerous to be loose in a lawless world, and that was why Great Britain and the United States, who had the secrets of its production, did not intend to reveal the secret until means had been found to control the bomb.

President Truman therefore, in spite of the powerful swing towards internationalism in American public opinion, has in no way yet committed himself to allowing the problem of control to be studied by the World Organisation or by any international group. He is no doubt fully alive to the crucial fact that one cannot urge international control and at the same time retain one’s own secrets.

Mr Stettinius too in his recent statement to the press referred to the World Organisation and to the atomic bomb but did not link the two. Apart from this we know that the United States Advisory Group on this subject have found it very difficult to foresee a satisfactory arrangement for control and are disposed to leave it to other states to put forward suggestions.

22. This United States attitude inevitably affects our own position. Under the third Article of the Quebec Agreement neither we nor the United States may impart information, to a third party without the consent of the other. In addition, there is a risk, which experience suggests is real, that if we pressed the Americans, and particularly if it became known we were doing so, to impart the secrets to Russia, violent Russophobes who are strong in the United States War Department and outside would say that we were departing from the spirit of the agreement, and would take this as a pretext for thereafter not keeping us fully informed.

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23. Russophobia is very strong in America, among the politically well-disciplined Roman Catholics, the Protestant Churches, the banking and commercial communities who profess to worship free enterprise, the Polish Americans, and in numerous other circles. Moreover, Americans are at present tremendously conscious of their power. Objections to sharing information would rest not only on the advice of Russophobe groups, but also on the fact that the vast majority of Americans consider their country to be easily the most powerful and the most righteous: they do not see therefore why they should automatically give away the source of that power. Particularly if an election were pending it would be terribly difficult for President Truman to give American’s billion dollar trump, secret processes and access to raw materials, to the Bolsheviks. If we pressed him to alternative (b) we should be highly likely to get a refusal from him and a diminution of confidence, and not improbably a strong backwash from public opinion in his country in the event of a leak from the War Department or through Mr Drew Pearson.

24. On the other hand, the United States are proud of the New World Organisation, in which President Roosevelt, Mr Cordell Hull and San Francisco have given them a proprietary interest, and were President Truman believed to be trying to exclude the atomic weapon permanently from its purview he would be criticised by an intelligent and vocal section of his own party whose support he will need in 1946 particularly if the internationalist Stassen is his opponent. Alternative (c), carrying with it an invitation to all Governments and responsible organisations to contribute practical suggestions for an effective control of this new force in civilisation would stand a fair chance of being accepted as national policy by both the American parties, though foreign inspection of United States establishments would be a difficult pill to swallow. This alternative would cause much less alarm than (b) and find a good deal of support among the smaller nations. But unless the Scientific approach to Control can provide a solution to its very real difficulties alternative (c) will be a will-of-the-wisp and will make no great appeal to the Russians.

25. The General Assembly. There is a fourth alternative which would bring the World Organisation more into the picture and be 127

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consistent with our Foreign Secretary’s statement in Parliament that we must postpone the consideration of this question until the World Organisation is established and we can see clearly how matters stand. In the Organisation the five permanent members have a very special place—they may be both a Steering Committee and a Police Executive; but the intention of the founding States at San Francisco was that the Organisation should not be an oligarchy and that the General Assembly should be its peculiarly democratic organ. It is perhaps only right then that in this new matter which profoundly affects the security of all States, and before the United States Government and we take any decision to give our secrets to others, the Assembly should be allowed to exercise the right of discussion and making recommendations that is conferred upon it by Article 11 of the Charter. It was indicated in an earlier paragraph that certain West European and Middle Eastern States would have strong opinions. France, Belgium and the Netherlands would all have special reasons for claiming to be consulted before we gave this weapon to another Power, and these are all countries whose confidence and co-operation we require not only in day-to-day questions but on larger grounds affecting our own security.

26. The Middle Eastern countries, including Greece, are hardly less important. We have Treaty obligations touching the defence of Egypt, Palestine and Iraq. Most of these arrangements are coming up for revision and some form of renewal. They involve our communications with India and the Southern Dominions. Apart from this, and if oil becomes comparatively obsolete, these States will be of less importance to us and to the Americans, but they would certainly feel that they had a legitimate grievance if, without consulting them, we gave Russia a weapon against which we were powerless to protect them, and we should find them more difficult in forthcoming negotiations. The United States are in a similar position as regards the Latin-American States in general and Brazil in particular. We should enable these States at least to vent their opinions if we adopted a fourth alternative, a variation on (c), by which we sounded the United States Government as to telling the Russians jointly that we proposed to bring the future use of the atomic weapon before the General Assembly under Article 11 of the Charter as soon as the World Organisation was set up; and that 128

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our recommendation would be in favour of a pooling of atomic secrets with the permanent members of the Security Council in trust for the World Organisation, together with some arrangement covering raw materials, as soon as an agreed scheme as to use and control had been worked out. All States would be invited to pool their scientific researches and their suggestions, which would presumably permit of participation of scientists irrespective of their nationality.

27. Whatever procedure we may decide to adopt we ought to be sure before approaching the Americans that we shall if necessary be able to get the Dominions behind it.

28. The Economic Aspect. Apart from the Security aspect, the commercial possibilities of atomic energy have of course an important place in the diplomatic background. Hitherto among the powerful arms of our diplomacy have been our financial strength and our position as a trader. The first is temporarily much impaired and the latter much restricted. Our lead in atomic research entitles and should enable us to exploit the atomic field and thereby recover ground lost in older industries. Therefore in considering methods of control every effort should be made not to hamper our developments of commercial possibilities more than these are for the time being restricted by the fourth Article of the Quebec Agreement.

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13 Telegram from Sir W. Stephenson (New York) to ‘C’1 CXG 379 Top Secret.

Most Immediate 24 September 1945 Following for CSS only personal decipher yourself from 48000.2 A. CORBY has stated during interrogation that consistent attitude of officials in Soviet Embassy in Ottawa is that USSR is preparing already for war against western democracies. World War 3 is continually referred to in Embassy circles.

B. CORBY considers that type of information requested by [sic: from] GRANT by Moscow (atomic bomb, troop movements, coastal maps, tank production etc) is confirmation enough of Soviet attitude. Of course he is not in a position to state whether this attitude is occasioned by fear of an aggression by democracies but he nevertheless maintains that it exists.

C. He has stated that he believes that production in USSR is not to be re-converted to peacetime requirements but is to continue in full war production behind scenes.

D. According to CORBY Soviet officials expressed themselves as regarding San Francisco Conference as nothing more than a talk fest and as of no serious significance. They did however consider it useful public platform for propaganda designed to lull Western Powers into false views as to Soviet intention.

E. As an example of Soviet manipulation of conference to their own ends CORBY cited fact that on one occasion [the] Ukrainian delegation voted against USSR and exerted publicly their autonomy. According to CORBY this was manoeuvre arranged in advance to illustrate suppressed liberty of a Soviet Republic and formed the basis of an amusing report written to Moscow by Zaroubin, Soviet Ambassador to Ottawa.

F. It should be emphasized that above are CORBY’s own views.3 1

TNA KV 2/1421. This telegram was passed to Mr Bromley. i.e. for the Chief of SIS from Sir W. Stephenson, whose SIS designation was 48000.

3 On the day this telegram was received, Mr Bevin sent a telegram to HM Representatives overseas commenting on the proceedings of the Council of 2

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Foreign Ministers since it opened on 11 September. He noted that the Council had immediately ‘run into heavy weather due to the uncompromising attitude of the Soviet delegation who have shown even less readiness than usual to make the necessary concessions to reach agreed solutions of controversial matters’: see DBPO, Ser 1. Vol. 2, No. 115.

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14 Memorandum by Mr Boyd Shannon1 Secret

DOMINIONS OFFICE, 2 October 1945

Council of Foreign Ministers: 11th September-2nd October, 1945 You may like to have the following personal notes on the session which has just ended, as seen by a ‘backbencher’ on the fringe of the Conference.

2. The Conference has sharply illumined an antagonism between United States and Soviet policy. This showed up especially over such items as (1) the future disposal of the Italian colonies; (2) recognition of the Roumanian and Bulgarian Governments; (3) the United States refusal to discuss control machinery in Japan.

The Japanese question was raised by M. Molotov as a result of the publication of the President’s directive to General MacArthur. I doubt whether it would have come up otherwise. Apart from this, the challenge was usually thrown down by Mr Byrnes, sometimes in a very provocative way. There was no trace, from beginning to end, of the United States adopting or even seeking an intermediate position between the Soviet Union and United Kingdom, such as was illustrated by Mr Hopkins’ visit to Moscow which led to the solution of the Polish Government problem. At the very end of the Conference, when days and nights of firm opposition with us to the unbending attitude of the Soviet Delegation seemed on the point of eliciting a concession from the Soviet Government, it was Mr Byrnes who preferred to bring the Conference to an end.

3. M. Molotov, of whom one can say without any disrespect to the Foreign Secretary, that he was outstanding for his mastery of negotiation procedure, was stubborn and unyielding to an almost incredible degree. He was in a strong position. In Eastern Europe he had the advantage of being ‘in possession’. The only occasion 1

TNA DO 35/2020, WR334/40. Documents on British Policy Overseas, Ser. 1, Vol. 2, No. 164. The memorandum was addressed to Sir John Stephenson.

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on which he had to venture far from his ‘native heath’ was in preferring a Soviet claim to Tripolitania, 4. The French Delegation did not take a prominent part and M. Bidault admitted that he was inexperienced. They were glad to be invited to the same table with the Great Powers, but suffering from an acute self-consciousness and inferiority complex. As M. Bidault at one point said ‘It is hard for a country which has played a part in history to go out of history’. There was no evidence of any sympathy or understanding between the French and Soviet Delegations and M. Bidault generally opposed M. Molotov. This was particularly true in the latter part of the Conference when M. Molotov made an issue of the participation of France and China in the preparation of peace treaties. Towards the end M. Bidault was very much afraid that he might find himself in the dilemma either of accepting the Russian thesis, which would have been a sharp blow to General de Gaulle and might even, I think, [have] involved M. Bidault’s resignation, or of refusing to sign the protocol of the Conference, which would probably have meant that the Great Powers would have gone their own way, ignoring France. In the event, I think that M. Bidault was not sorry that the Conference broke down. He was certainly glad that he was not the occasion of it breaking down.

5. The Chinese Delegation have taken rather a back seat. When they have spoken, it has generally been in the direction of supporting the United States and/or the United Kingdom and as ‘honest brokers’ seeking an impartial solution.

6. The United Kingdom Delegation took a more prominent part in the early stages of the Conference viz. in the discussion of the peace treaty with Italy, the Italian colonies, the rights of smaller countries and Balkan and Finnish peace treaties. In the latter half of the Conference, when the peace treaties had ceased to be a subject of discussion, the Foreign Secretary was forced more and more into a silent role, whilst controversy raged between Mr Byrnes and M. Molotov. This was understandable, when to break silence was likely to lead to the choice between supporting the United States against Russia or Russia against the United States. But throughout Mr Bevin did his best to seek compromise solutions which would prevent a break-down, though inevitably, in the face of M. 133

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Molotov’s intransigence, aligning himself more and more with Mr Byrnes.

7. We are too near to the Conference to assess its results. It may be that, in the face of our firmness and solidarity with the United States, the Russians will see reason and become more co-operative.

This Conference was the first test of Russia’s willingness to cooperate with Britain and the United States in the peace. It may prove to have shown that she is unwilling to do so. It may be the first open manifestation of a cleavage between the Great Powers which will lead to far-reaching consequences. If so, there seems ground for hoping that we shall not find France in the Russian camp.

8. But in any case, the failure of the Conference is bound to increase the difficulties of our foreign policy in the short term. The Council of Foreign Ministers is, I think, a thing of the past and London is not likely to be the venue of the peace settlement, if there is one. We are likely to go back to the system of ad hoc Three Power meetings, supplemented by United Nations Conferences.

9. The reactions of the Dominions are likely to vary. Canada will not welcome the growing conflict between the United States and Russia. Dr. Evatt will probably welcome the break down of a system which gave France and China a privileged position in the counsels of the Great Powers. The Labour Governments in Australia and New Zealand will probably be puzzled at the inability of the Labour Government in London to agree with the Soviet Government. General Smuts’ suspicions of Russia will receive a new impetus, but he will welcome a situation which postpones a decision on the disposal of the Italian colonies.

10. In conclusion I should like to reiterate that these impressions are purely personal, have no authority whatever and [have] not been discussed with the rest of the Delegation. They are therefore intended solely for information within the Dominions Office G.E.B.S.

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15 Minute from Mr Bevin to Mr Attlee1 PM/45/24 Top Secret

11 October 1945

PRIME MINISTER I had some talk last night with Mr Mackenzie King about the next step in the Primrose case.2 You will be aware that there were no developments on October 7th3 and the question is what our two Governments should do as regards those implicated in Canada and the individual implicated here.

2. Mr King showed that he still retains a preference for the line of which Malcolm MacDonald informed us on September 26th. I reproduce the latter’s definition of it, which is substantially what Mr King repeated last night.

3. The political heads of the United States and the United Kingdom should inform Stalin and Molotov secretly that they knew of what was going on and give them the evidence. The Russian leaders would then be asked to undertake to abandon all these activities in which case His Majesty’s Government and the United States Government would keep the story secret. The principal agents would be detained and examined and the Canadian authorities would ask for the recall of the Russian Ambassador or at least of the Military Attaché and other members of the Embassy actively involved in as discreet a manner as possible in an attempt to avoid publicity.

4. The hope admittedly was that the Soviet Government would turn over a new leaf, and Malcolm MacDonald at least felt that it might be necessary to link the procedure with some indication of a wish to collaborate with the Russians in the matter of the secrets of the atomic bomb.

5. It is not difficult to imagine what sort of reply the Russians would give to an invitation to abandon their espionage system, or indeed what reply we ourselves would give in like case. You will 1

TNA FO 1093/538/2.

See No. 11.

3 There had been some discussion of a possible arrest of Dr Nunn May. 2

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remember that we discussed this Canadian proposal at the time and rejected it in favour of what is the straightforward course in these cases, namely that any network uncovered should be broken by ordinary legal means and that we should not be afraid of diplomatic repercussions—in fact that any resultant publicity would do the Russians good.

6. Now that no arrest was effected last Sunday, and in the absence at present either here or in Canada of evidence that makes arrests of more than a very few possible, the normal procedure, which is favoured by our police authorities is that on an agreed date, possibly October 18th, the day after the next possible meeting between Primrose and a Russian agent, the police authorities in both countries should question those implicated in the hope that some might turn King’s Evidence or give other information that would help us in our prime objective of running to earth and breaking up the espionage system.

7. This questioning here would not take place in a police station, and would not necessarily result in a charge being made and the suspected person being detained. It is therefore difficult to foresee what publicity would result, e.g. what Primrose would do if he were questioned and then released, but this seems a risk that must be faced here and in Canada in the major interest of breaking up the network.

8. After hearing Mr King, I still feel that his procedure is unrealistic, even if we were able to invite the Russians in the near future to collaborate over atomic energy, which is not being made easier by President Truman’s recent statement.4 But as you are handling the general question and I do not wish to cut across you in any way, I did not take this particular case very far with Mr King.

9. I attach a note of a talk at the Dominions Office in which Norman Robertson developed in greater detail the apprehensions 4

On 8 October, at a press conference, President Truman stated that there could be no question of imparting technical know-how on atomic matters to other countries. Mr Butler commented that this ‘knocks the bottom out of the Canadian idea’ of collaboration with the Soviet Union, and in a memorandum for Mr Bevin of 12 October, printed in DBPO, Ser. 1, Vol. 2, No. 200, he reported that in the view of HM Consul-General in New York, ‘if the President tried to give the secrets to Russia he would be impeached by Congress’.

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that the Canadians and some of the Americans have in mind.5 The telegrams have shown that the Canadians have got a bit excited over an issue of a kind very unfamiliar to them, and I think they exaggerate the fuss that would follow the adoption of the ordinary procedure we favour, but their point about public opinion is clearly one we have got to consider.

10. If you feel, after discussion with Mr King, that we should follow the procedure we have hitherto favoured and can reconcile him to it, the next step would be to get the American consent and if you want my help in this I would be very glad to give it. In any case I would be glad to know what you decide.6 11. I have not stressed the urgency of the matter, but the police make the point that if there is much further delay the scent will get very cold and the results to be obtained from questioning will be adversely affected.

ERNEST BEVIN

5

Not printed (FO 1093/538/1). At this meeting on 8 October in Sir J. Stephenson’s room, which was attended by Mr Butler, Mr Bromley and representatives of MI5, Mr Robertson expressed concern that the arrests of suspects might have a bad effect both on relations between governments, and on public opinion. He feared that the public ‘would be so stirred by the story of this Russian network stealing our secrets that prejudice would inevitably be brought both to the possibility of sharing with the Soviet Government on terms some of our atomic secrets, and to the general prospects of financial and economic cooperation with Soviet Russia’.

6 In response to this minute, Mr Rowan sent to Mr Dixon on 12 October a note dictated by the Prime Minister following a discussion that day with Mr Mackenzie King, to whom he had given a copy of the letter he had sent to President Truman on atomic matters on 25 September (DBPO, Ser. 1, Vol. 2, No. 196). They had agreed no further action on the PRIMROSE case should be taken until a reply was received, and that ‘this matter should be handled with the greatest care, that it would be inadvisable to break it prematurely and that it would perhaps be best handled if there was agreement to make an approach to the Soviet Government on the main topic’ (FO 1093/538/2). President Truman replied on 5 October that he would be pleased to discuss the issue at a mutually convenient time, and Mr Attlee responded that he though it important that they should meet, together with Mr King, as soon as possible; ibid., Nos. 202-3.

Preparations were put in train for Mr Attlee to visit Washington in November.

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16 NABOB Telegram No. 177 from British Missions to Cabinet Offices1 Top Secret. Immediate WASHINGTON, 18 October 1945 For Chancellor of Exchequer from Keynes.

1. After five meetings on form of financial aid between Vinson and Clayton on their side and Ambassador and myself on ours, it may be useful to take stock. This telegram is after consultation with Ambassador, Brand, Self, Liesching, Robbins and Hall Patch and represents our collective opinion.

2. We came here in hope that we could persuade the US to accept a broad and generous solution which took account of our financial sacrifices before US entered the war and of President Roosevelt’s principle of equality of sacrifice as well as of the post-war advantages to the US of a settlement with us which would enable us to share world responsibilities with them free from undue financial pre-occupation and to join them in shaping the pattern of world commerce and currency on lines which would favour expansion and general prosperity.

3. We thought of such aid as being at the best a free grant, failing that a partial grant, and at the worst an interest free loan. A settlement on any of these lines would be intelligible to the British public as being free from commercial considerations and a grand gesture of unforgetting regard to us from a partner with whom our comradeship in the war has been of a very special intimacy. The difference between a settlement on any of these lines and one which tries to imitate however feebly, a normal banker’s investment is much greater than is represented by any increase in our future financial burden.

4. If we are to believe what we are told by Vinson and Clayton repeatedly and with great emphasis the American administration 1

TNA FO 371/45704, UE4920/1094/53. Documents on British Policy Overseas, Ser. 1, Vol. 3, No. 74. Received 18 October, 6.35 a.m. A special telegraphic series was established for Lord Keynes’s mission in Washington, with the prefix BABOON for outward telegrams from London, and NABOB for inward telegrams.

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has rejected any such settlement. They have done this not because they themselves would resist but because of their honest and considered judgement that Congress and the public are not in the mood to stand for it. No one pretends that public opinion is well informed about the real issues. But public opinion with the usual exceptions is not hostile. There is widespread goodwill and a desire to help. But in this business country where it is a moral duty and not merely a self-regarding act to make any money which the traffic will bear and the law allow, some imitation of a normal banking transaction is necessary if the moral principles of the country are not be affronted. If the elements of a trade are present, the American way of life requires that at least the appearance of a trade should emerge. Thus precisely those elements which will spoil the flavour to us are necessary to make the result palatable here. At the moment, moreover, there is a phase of withdrawal from the largescale assistance all-round which was under discussion only a short time ago. Retrenchment is in the air. Congress is also occupied with Vinson’s proposals for tax reduction and, as it happens, the total cost of the relief to the general tax-payer now under discussion, namely five billions, is the same size as the aid for which we ask, so that the latter seems much larger than it would in other contexts.

5. There is so much goodwill in most quarters and such wide appreciation of the larger issues in all responsible quarters that it is difficult to believe they do not under-rate what bold and eloquent leadership could do. But you must understand that such leadership is just what is lacking in this present administration from the President downwards. Their policy is to keep in close touch with the opinion and desires of Congress, following rather than leading, and flavouring to taste any pill which it is indispensable to administer.

6. We cannot demand what they tell us it does not lie within their power to give. It may be that the type of settlement which the late President would have delighted to invent and to put through is altogether out of character with the general lines which the present administration feels compelled to follow. We must not be misled by hopes which only the gay, generous and brilliant spirit could have realised for us.

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7. If this diagnosis is correct we must think again substituting prose for poetry. Our disappointment does not justify us in doing perhaps irreparable injury to our own body politic and economic or in shattering the basis of day-to-day Anglo-American co-operation.

We must do the best we can.

8. Before turning to the possibilities of prose, it may be well to break off to insert a necessary qualification to all the foregoing. In this country nothing is certain until the very last moment. We know that Clayton and Vinson and other leaders of the Administration are determined to bring these negotiations to a successful conclusion.

The public is being deliberately fed through the press with the expectation of success. Even a delay in settlement would seriously disturb their time-table and upset the Treasury Department policy of Bretton Woods and the State Department policy of a commercial conference on which each has set its heart. To satisfy us may lay them open to criticism. But if they fail to satisfy us they may encounter even more criticism. If we stand our ground to the last, [it] is not impossible that we may not [sic] yet get an offer which at present does not appear to be in sight. Do not, therefore, suppose that there is any defeatism in your mission here. But we have to be prepared for either alternative. Time is now running short and all is set for a conclusion within about a fortnight. It will be useless and injurious to drag on much longer than that. It is, therefore, important that we should have your early guidance on whether prose will be acceptable in the last resort.

9. Clayton frankly admits the force of our case. His point is that he must dress the thing up to look as ordinary as possible, to escape notice wearing a business suit. Subject to this necessity he appeals to us to help him in finding a way which is as acceptable to us as possible. When we remark as we are constantly forced to do, that nothing will induce us to repeat the experience of last time’s War debts and sign an obligation we have no confidence we can meet, he accepts our position and offers us any escape clause in reason to provide against this risk.

10. When we try to make precise the burden we think we can support we find ourselves on treacherous ground. We have been again pressed recently to explain exactly how we arrive at five billions as the measure of what we need and what sort of balance 140

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of trade we expect to emerge with at the end of five years or whenever it is that the transitional period terminates. An outline of our answer is given in my next following telegram. It will be seen from this that an eventual balance requires that our external income from exports and net invisibles shall be of the order of nearly seven billion dollars or say six and a half billion at the very lowest. We say that we are able to assume a debt liability of 100 millions which is 1½ per cent of this but see no reasonable hope of being able to meet 150 millions which would require a further expansion of our overseas income or curtailment of our overseas expenditure by less than another 1 per cent. This obviously lays us open to the accusation of possessing extensive and peculiar information about the future.

11. Our best answer is, of course, that what really scares us is the possibility of owing to the US an amount of money which is enormous in relation to our prospective exports to them in conditions where, for all we know now, multilateral clearings may have broken down, Very well, says Clayton, draft a clause to protect yourselves against this possibility. We admit that commerce in the post-war world either goes all right from our point of view or it does not. In the first case 150 millions may be practicable and in the second case 100 millions may be scarcely possible.

Nevertheless failing the solution of a free grant one has to draw the line somewhere and they must not try to involve us in the fallacy of sorites. Very well says Clayton, draft a clause under which your liability will be related to your capacity. We do not want to embarrass you, he adds, but we want to be able to say that we have reached an elastic arrangement which duly protects the interests of both sides.

12. You will be aware how reluctant I have been to enter on the slippery path of escape clauses. But we all think that the time has come when we cannot reasonably excuse ourselves from making some response to Clayton’s generous and not unreasonable suggestions. In refusing to do so we are in truth still grasping at the ineluctable poetry and refusing to come to earth in well-reasoned prose. Yet from his own point of view and from ours too when once we have accepted the inevitability of prose, Clayton is generous and is not unreasonable. If you had sat as many hours as the 141

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Ambassador and I have sat declaiming all our best poetry before an audience, not indeed unresponsive to those strains in their own hearts, but never deviating from the rejoinder that Congress, they feel quite sure, will be deaf to the[m], you would see our difficulty in persisting with a refusal to come down to earth.

13. Against the risk of a breakdown in multilateral arrangements and the scarcity of dollars, I have already sent a suggestion in paragraph 2 of telegram 6772 which for convenience of reference I repeat in the next paragraph.

14. The Government of the United Kingdom shall be entitled to approach the Government of the United States for a deferment of the annual instalment of payment due in any year in any of the following circumstances. In the event of deferment the amount due in respect of amortisation shall be postponed so as not to increase the amount due in the years immediately following but by an appropriate extension of the period of repayment. (a) A breakdown of multilateral clearing.

In the event of less than 75% of the foreign currencies earned by British trade being freely convertible into dollars. (b) An international depression of trade.

In the event of general and prolonged depression of world trade acknowledged by the International Monetary Fund as constituting a serious disturbance of the equilibrium of international payments. (c) Scarcity of dollars.

In the event of the International Monetary Fund having notified under Article VII(I) of the International Monetary Fund that a general scarcity of dollars is developing.

15. As a measure of our capacity to pay more than 100 millions I can think of nothing better than some version of what I have already suggested in paragraph 7 of telegram 6733. The terms might then be as in the next paragraph. I should add that Clayton has not yet seen this suggestion but we could offer it in response to his request that we should propose a suitable safe-guard.

16. A loan of five billions of which the capital and interest would be repaid in 50 instalments of 150 millions a year commencing five years hence of which 100 millions in each year would be attributed to capital repayment and 50 millions to interest. Assuming that all 142

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fifty instalments of interest are paid this would work out actuarially at the equivalent of about 1.7 per cent interest per annum. But in addition we should receive the advantage of a waiver clause by which the 50 millions representing an instalment of interest would be finally waived in any year in which the volume of our visible home-produced exports did not reach a level of 750 million pounds in terms of pre-war prices. Alternatively and much better if they would accept it, the contract might say that the 50 millions for interest would only become payable in years when the critical figure had been reached.

17. Since we could in this case almost certainly afford the extra 50 millions, the plan is on the face of it reasonable as well as generous. When our exports did not reach the critical figure the loan would become interest-free. Moreover the criterion is definite and is not really open to the criticism of paragraph 13 of your telegram 10274. Can anyone honestly argue that the difference between this and a loan which is interest free in all circumstances is so material that even in the last resort we should prefer a breakdown of the present discussions with all that means to our standard of life, to our hopes of recovery, to our position in the world and to AngloAmerican friendship?

18. The only alternatives which may still be worth considering are mentioned in the next two paragraphs. The first of these is before the Americans and has probably been finally rejected but we are not quite sure that it has been. The second is a new idea, not yet put forward.

19. A grant of 2 billions and a credit up to 3 billions at 2 per cent. interest, instalments of capital repayment and of interest beginning five years hence.

20. A loan of 4 billions repayable by fifty five annual instalments of 100 millions beginning five years hence which would cost, allowing for deferment, the equivalent of about 1 per cent. interest, supplemented by a ten years’ option on a banking credit of a further 1 (or 2) billion at 2 per cent. interest.

21. The ball now lies with the Americans and they may make a counter-proposal shortly. We do not look forward to it with much hope. We fear that it may take the form of a reduction in the amount of the aid whilst keeping the annual service at 100 millions. But it 143

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is just possible that we shall be agreeably disappointed. We repeat that the American side are just as keen as we are to reach a satisfactory conclusion and are as depressed as we are at the deadlock.

22. In conclusion we have naturally given some thought to the question whether there is a way out for us by obtaining a moderate amount here and now to meet our immediate necessities on commercial terms without any commitment about Bretton Woods, commercial policy and sterling area. I have little to add on this to what I have said in my telegram 6610. Those of us here who in recent weeks have been studying intensively our balance of trade prospects believe: (a) That we cannot reduce our cumulative balance of trade deficit below 3 or 4 billions at the very lowest without great and almost insupportable sacrifices at home and abroad. (b) That it is an illusion to suppose that the sterling area can carry on as in time of war. (c) That we cannot hope, therefore, to get a net contribution on capital account much exceeding, say, 1 billion dollars at the utmost from all other outside sources put together. (d) That our prospects are poor of even a small Government loan here without any commitment about Bretton Woods, commercial policy or the sterling area. (e) That we should soon have involved ourselves in as heavy a debt charge as what we are now boggling at. (f) That the measure of disruption of our economic life at home and of our external relations, which would be inevitable if a comprehensive settlement with America fails, can hardly be exaggerated.

23. An agreement for 5 billions would not in fact involve us in any excessive future burden if in practice we can get on with much less. For we should be under no compulsion to draw it all. Yet it would have given us the confidence and security which is indispensable if we are to restore our position in the world.

24. If our present friendly and intimate relations with the American side are brought to an end and we announce that we are tired of being pushed about and would prefer to stand by ourselves without the entanglements of Anglo-American partnership or 144

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agreement in the economic field, so much will be disastrously changed over so wide a field and for a period to which no-one can set a term, that we cannot bring ourselves to contemplate it. It may be as difficult to convey to you the complex atmosphere of Washington as it is to make vivid to the administration here the disappointment of London. But the Americans would remain convinced that they had offered us aid on a scale and on terms which they would not dream of offering to anyone else, and which was only possible in remembrance of past comradeship and common sacrifice and in hope of furthering common aims in future.

Our rejection of it would undoubtedly be felt here as just one more reason for yielding to the temptation to withdraw into themselves with all the incalculable consequences of that to the future of the world.

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17 Telegram from Sir W. Stephenson (New York) to ‘C’1 Top Secret 18 October 1945 A. Have those concerned in highest quarters realised how substantially HMG might be advantaged in Keynes-Halifax negotiations here at this time by widest public disclosure of CORBY case. Whatever agreement may be preliminarily arrived at between negotiators, our real hurdle will be Congress.

B. It is perhaps unnecessary to enlarge on above, but I am beginning to wonder whether due consideration has been given to effect which would accrue in this country by sudden and authenticated evidence that a third power was so actively engrossed in our joint affairs, including American military dispositions particularly.2

1

TNA FO 1093/538/2. This telegram was sent to Mr Bromley on 19 October.

Opinion in the Foreign Office among the small circle privy to this message was not convinced by Sir W. Stephenson’s argument. Mr Bromley commented to Mr Butler on 20 October that it would be ‘difficult to reconcile with Canadian & US view that publicity would prejudice any decision which might be reached by the Heads of Govts on control of the atomic weapon, and I do not feel that we could use the case to assist the Keynes negotiations, important though these are’. Mr Butler agreed. In a letter of 20 October Mr Bromley asked C if a reply could be sent to New York saying merely that ‘we will bear the point in mind’.

2

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18 Report by the Joint Intelligence Sub-Committee1 Top Secret

CABINET OFFICES, 18 October 1945

Relations with the Russians 1. In May, 1945, we gave you our recommendations on the attitude which our Service Authorities, Commanders and Missions should adopt in any negotiations with the Russian Service Authorities. In this report we have revised the views expressed in our former report so as to conform to the change in circumstances which has taken place since it was written.

2. We exclude any discussion of questions of high policy. We consider mainly the type of negotiation hitherto carried on—i.e. the exchange of military intelligence, technical information and the grant of facilities. Our recommendations do not apply primarily to the diplomatic and administrative matters which represent much of the liaison work of members of the Control Commissions: nevertheless the analysis below and our recommendations provide a background against which such matters may be reviewed.

3. We assume that the policy of His Majesty’s Government is to achieve the maximum collaboration with Russia, compatible with our own vital interests. Our relations with the Russians in military, naval and air matters must be governed by this overriding consideration, in view of the importance of achieving the greatest collaboration with the Russians in the political organisation of Europe, in the work of the Allied Control Commission and, in our relations with Russia in the Far East.

4. Our relations with Russia during the war were governed by the necessity for maintaining Russia’s war effort against Germany at the highest possible level. In addition to sending Russia vast supplies, our policy was to volunteer intelligence and facilities of every kind which could help Russia to defeat the common enemy.

This won us very little co-operation from the Russians: the existing 1

TNA FO 371/47851, N14166/2/38 JIC(45)299(0)(Final). Documents on British Policy Overseas, Ser. 1, Vol. 6, No. 41. The JIC was a sub-committee of the Chiefs of Staff Committee.

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policy did not allow us to bargain for a quid pro quo and the main result of our generosity was that our prestige suffered.

5. With the end of the war, conciliation is no longer essential and we can afford to be more tough.

Characteristics of the Russians as negotiators 6. Suspicion. The Russians throughout the war showed the utmost suspicion in their dealings with us on the Staff Mission level. The causes of this suspicion are complex. It is rooted in the traditional suspicion of Russian Governments for all foreigners.

There still exists a strong isolationist and anti-foreign clique inside the Political Bureau of the Communist Party. The Russians have not forgotten Britain’s intervention in Russia after the last war, nor the general anti-Bolshevik propaganda and many Government statements over the last twenty years before Russia became our ally in this war. They have an exaggerated fear of the British Intelligence Service and this fear is increased by the large numbers of people we have sent to Moscow and elsewhere in Russia and Russian-occupied areas. They are aware of the existence of a good deal of anti-Russian talk and feeling in certain British circles and particularly among our Allies. For a long time the Russians suspected the good faith of our intentions to open a second front; and when this suspicion was dispelled, a new suspicion was soon born, under the influence of German propaganda, that the AngloAmericans would negotiate a separate peace with Germany in the West. Against this background the Russians regard with suspicion many of the requests we make of them. This applies particularly to requests made for facilities in technical matters, where owing to the fact that there may be no immediate counterpart in Russia to the purposes for which we require such facilities, they are unwilling to credit our explanations, and proceed to search for some sinister motive.

7. Centralisation of Control. The organisation of the Soviet State, the historical development of present-day Russia and the very limited number of high grade administrators available, have resulted in the centralisation in Moscow of the control of all matters affecting relations with the outside world, and this extends to questions which to our eyes would appear far too trivial for such central control. There is no prospect of this situation changing in 148

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the near future. The result is either that our requests are never put up to a level capable of granting them or, if they are so referred, to increase the degree of irritation in high quarters in Moscow caused by constant reference to them of matters which appear to be only of subordinate interest.

8. Security. The level of security in military matters, and especially in all questions where contact with foreigners is involved, has always been extremely high in the Soviet Union. The strict discipline imposed on Russian negotiators, the virtually complete absence of latitude allowed them by their standing orders and the universal supervision of the N.K.V.D. make them take a uniformly negative attitude in all discussions, except when expressly authorised from Moscow. Moreover, the Russians were obviously prepared to take us into their confidence only so far as their immediate war effort would benefit: they are probably more reluctant than any other foreign power to disclose even to their Allies the secrets of their armed forces. In addition, Russian security is designed to prevent the political and social infection of their armed forces and people which they consider might result from widespread collaboration in detailed matters at low levels.

9. Hard Bargaining. The Russians’ method of negotiation is to drive in every way the hardest possible bargain. They take up at the outset a completely uncompromising attitude, and even go so far at times as to create an artificial attitude of sullenness hoping that their opponents will lose the first round in an effort to buy good-will.

They gradually bargain concession against counter-concession, often without regard to the very different nature or implications of the questions involved. By and large they only meet our requests if they are satisfied that it is to their own interest to do so, or if it is only by doing so that they can secure for themselves something which they regard as being of still greater importance to them. It is most unlikely that the Russians will change their methods in this respect. In pursuing this policy, the Russians were greatly assisted by the fact that, throughout the war, we volunteered much for which they would otherwise have had to ask. This generosity is something so novel to them that it has probably given them further cause for suspicion and has increased their intransigence by accustoming them to receiving advantages without having to give a quid pro quo.

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Moreover, the Russians’ ability to co-ordinate their bargaining is strengthened by the discipline of their officials, who are not given either to loose talk or to taking decisions on their own responsibility even on minor matters.

10. The Multiple or Indirect Approach. The Russians are likely to continue their tactics of asking for the same thing at different levels, in different quarters and through other foreign governments and intermediaries should they fail to obtain their requirements by direct negotiations.

11. Prestige. The Russians are proud of their achievements, and feel that they bore the brunt of the fighting and suffered the heaviest casualties. At the same time they are self-conscious about their lack of experience in dealing with foreigners and are sensitive to their shortcomings in such respects as the organisation and discipline of the Red Army after over four years of war. Moreover, they are naturally anxious to maintain abroad an impression of the greatest possible strength. Their sensitivity has applied both to requests for such things as technical facilities—which they are not always sufficiently organised to grant—and for travelling facilities in Russian-controlled territory. They build up any official visits by foreign missions or representatives into ceremonial affairs on the most lavish scale. They would refuse to permit such a visit altogether, purely on prestige grounds, rather than allow one to be conducted on what they would consider an inadequate scale. They expect their own visits to be conducted on the same scale and are offended at any failure to accord them the exaggerated courtesy which they consider due to their rank and importance.

Recent Developments 12. With the end of the war, political factors have an even greater effect upon the attitude of the Russian military authorities.

13. Relations between the Russians and the British and Americans have recently deteriorated at all levels for the following major reasons: (a) Russian insistence, in the face of British and American opposition, on treating Eastern Europe as their exclusive sphere of influence regardless of the interests of their Allies. (b) Disagreement over the interpretation of the Crimea and Potsdam agreements.

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(c) Russian sense of inferiority engendered by the AngloAmerican development of the atomic bomb. (d) Russian resentment at finding the British and Americans coordinating their policy in matters in dispute with the USSR (e) Great Britain’s refusal and American reluctance to afford on terms satisfactory to Russia large long term credits to assist her rehabilitation, when she feels that they are still deeply indebted to her.

14. These developments, whose influence have been most plainly discernible in connection with the Polish question and the questions of facilities for Allied Commissions in S.E. Europe, have been accompanied by a deliberate tightening of party discipline and a greater intransigence in all negotiations.

Our Present Bargaining Position 15. Our own bargaining position with Russia has been strengthened as a result of the following factors: (a) We alone share with Canada and the USA the secrets of the use of atomic energy for war purposes. (b) Whereas Russia may now be expected to show greater interest in obtaining from us technical information in order to approach more closely the technical level of the USA and ourselves, there is little information in this category that we require from her. (c) We can afford to withhold information and facilities which she requires until we receive reciprocal treatment. (d) Russia still hopes to satisfy a large proportion of her requirements for machinery and capital equipment for reconstruction and development from Germany, from the British and US zones of occupation in Germany. (e) Moreover, Russia wants large long-term credits from America and ourselves to speed up further her reconstruction and development.

16. On the other hand, the whole strategic and political basis of our relations with Russia suffers from three fundamental weaknesses: (a) Strategically the Soviet Union is relatively invulnerable, whereas we are vulnerable in areas, such as the Middle East.

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(b) Russia can embarrass us by hostile propaganda in the Middle East, India and elsewhere throughout the world and by intransigent action in Eastern Europe. She is also in a position to disturb our relations with China by action in Manchuria and Korea. (c) Internal political factors probably give Russia an initial advantage over the Democracies whose Governments cannot ignore parliamentary and press criticism, or the force of public opinion.

Principle of Reciprocity 17. Since we are likely to find ourselves confronted with a continued refusal to make concessions in technical matters at least until the general political atmosphere improves, effective pressure can only be applied on the strict principle of reciprocity. This is likely to be specially effective in questions in which the connection is sufficiently direct for the application of this principle to be clear.

18. At the same time little advantage can be expected from a policy of retaliation when this takes the form of withholding concessions already promised and thus casting doubt upon our good faith as negotiators. It is far better, since one of our main purposes is to remove the causes of Soviet suspicion, never to make a concession at all, rather than to appear to make it first and later to withhold it. The only effective means of using reciprocity is by driving as hard a bargain as possible when requests are first received from the Russians.

Recommendations 19. The following recommendations are designed to increase our strength in negotiations with the Russians about Service matters and derive from the foregoing analysis of the characteristics of the Russians as negotiators, of recent developments in Anglo-Russian relations and of our present bargaining position. They apply mainly to the type of negotiations hitherto carried on, i.e. the exchange of military intelligence, technical information, and the grant of facilities. It is not within our province to say to what extent they apply to the more diplomatic and administrative type of matters: (a) Nothing should be given to the Russians gratuitously. No Russian request should normally be granted unless some request of ours to which we attach importance is granted in connection with 152

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it. Conversely we should not continue to press minor requests of our own unless we are prepared ourselves to grant a quid pro quo. (b) This policy can only be implemented if, in cases where reciprocity cannot be obtained locally, all our own and all Russian requests are coordinated in London and a system is developed here for deciding the priority of our own requests in relation to the number and type of Russian requests available at any one time for exploitation. We should accept the delay inherent in this system, which in any case will be no greater than the delay we encounter on the Russian side owing to their centralisation of control. (c) The reply of all British officers to Russian requests should be so far as possible standardised, to the effect that the matter must be referred to higher authority. (d) It should be our aim to let the Russians know exactly where they stand in their dealings with us. This means that we should take longer to make up our minds but should always hold to our decision once we have given it unless completely new circumstances supervene. We should make it plain that we are taking a leaf out of the Russian book and should insist on strict reciprocity. Thus by our firmness we would increase their respect for us as negotiators. (e) The issues on which we are prepared to be really tough should be very carefully selected. When taking up such a stand, we should make certain that it is about something on which, given the Russian set-up, it is reasonable for them to give way; that we attach great importance to the issue, and are prepared to explain why, with some hope of our motive being understood. We should always base our requests on considerations of vital interest. This applies particularly to technical matters which the Russians may not at first understand. (f) We should where possible avoid making requests which would put the Russians in the position of having to expose any short-comings of their own. (g) In dealing with the Russian officers and officials it is important to treat them with strict formality, even more than friendliness. (h) It is also extremely important that officers who have to deal with the Russians, should be very carefully selected. They should also be of at least equal rank to the Soviet officers with whom they 153

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will have to deal. For specific subjects of major importance a special visit by a high ranking officer would be likely to achieve more than an attachĂŠ.

20. If the above recommendations are approved by the Chiefs of Staff it is further recommended that copies of this report should be sent to C.-in-C., B.A.O.R., Officer Commanding British Troops in Austria, C.-in-C., B.P.F., British Staff Section, Tokyo, C.-in-C., Middle East, C.-in-C., Mediterranean, Heads of Military Missions in Roumania, Bulgaria, Greece, Finland, Hungary, Italy and all Service attachĂŠs in countries where Russia is also diplomatically represented.

F.W. DE GUINGAND T.W. ELMHIRST I.M.R. CAMPBELL (FOR D.N.I.) R. ALLEN

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19 Despatch from Sir H. Seymour to Mr Bevin1 No. 1098 Confidential

CHUNGKING, 25 October 1945

Sir, I have the honour to acknowledge the receipt of your despatch No. 553 of the 13th September calling for information regarding certain aspects of Communist activities and organisation with special reference to their relationship with Moscow.

2. The extent to which the so-called Communist party in China is inspired by or associated with Moscow or other political headquarters in the USSR is a matter of frequent discussion. It would probably be safe to say that it is at present a movement sui generis, having sprung from orthodox Soviet Communist seeds, and aiming eventually at orthodox ends, but having in its present phase matured into a hardy Chinese product, unreceptive to outside, and particularly foreign, interference. Thus, while the philosophy upon which the whole Communist system of Mao Tze-tung and his henchmen is based is alien, its application is native and independent. The Communists in China may therefore be classified rather in the light of an opposition or rebel element in the internal life of China than as a subordinate or associated group in a wider field under the captaincy of a nominee from Moscow.

3. How long this state of affairs will last is, of course, another question, for recent history has shown the insidious effect of Soviet influences in Turkestan and Mongolia, and there are indications that a similar policy of infiltration by propaganda is being already actively initiated in Korea and Manchuria. It is, therefore, within the realms of possibility that at some later, and maybe not so far distant, date an attempt may be made to link up the communist organisation of Yenan with the operations of the Soviet Communist machine. The assurances in the recent Sino-Soviet agreement that material assistance will only be given to the Central Government does not, of course, preclude a Soviet-Chinese Communist entente 1

TNA FO 371/46216, F12049/186/10. Documents on British Policy Overseas, Ser. 1, Vol. 8, No. 4. Received 5 November.

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when this may seem desirable to the rulers of the USSR. Such a development would naturally be fostered if, as seems quite likely, serious fighting between the Central Government and the Communists should break out in North-East China.

4. Though not perhaps pertinent to the present enquiry, it is an interesting fact as illustrating how the Chinese seem to succeed in shaking off, if not actually remaining impervious to, foreign influence while retaining and modifying for their own purposes the forms and philosophies learnt from abroad, that the constitution of the Central Government with its system of Kuomintang party control in the administration is as much an outcrop of Soviet political theory as that of the Communists of Yenan.

5. Besides the actual Communists there are other Socialist or Liberal groups with political ambitions, who have recently combined with the Communists to the extent of bringing pressure to bear on the Generalissimo through the People’s Political Council and by other means to agree to popular representation as opposed to the single party methods of government, but they are not closely associated with each other and there is no apparent evidence of Moscow direction or influence.

I have, etc, H.J. SEYMOUR

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20 Minute from Mr Bevin to Mr Attlee PM/45/29 Top Secret

27 October 1945

PRIME MINISTER The CORBY Case Would you please refer to my minute PM/03/45/2 of the 16th October on this case.1 2. I understand that after a discussion with ‘C’ on the desirability of taking action against the suspects in Canada and the United Kingdom at an early date you had a talk with Mr Mackenzie King as a result of which you both agreed that these suspects might be interrogated, but not arrested, provided that no publicity ensued.

3. A meeting was held at which Mr Norman Robertson and representatives of the Security Service, the Dominions Office and Foreign Office were present, to discuss what steps should be taken to implement this.2 4. This discussion showed that owing to the small resources available for interrogation to the Canadian police authorities, the simultaneous interrogation of the eighteen or twenty suspects in Canada would necessitate their detention for a week or more. This would inevitably cause considerable comment and anxiety among their families and co-workers and publicity could hardly be avoided.

5. An alternative would be to interrogate only the number which 1

TNA FO 1093/538/2. This minute, signed by Sir O. Sargent, referred to No. 15, and said that decisions on the future of PRIMROSE were urgent and needed before Mr Attlee received a reply form President Truman to his letter of 25 September. It referred to a possible meeting between PRIMROSE and a Soviet agent on 17 October, and asked if the security authorities could keep watch, and make an arrest if PRIMROSE were caught ‘red-handed’ handing over documents.

2 In a note on Mr Bromley’s record of this meeting on 23 October, Mr Butler said Mr Robertson felt that if PRIMROSE were interrogated but then released for lack of evidence, he might feel his professional prospects in the UK had been damaged, ‘and therefore “escape” to the USSR with secrets in his head that wd be useful to the Russians and damaging to ourselves and the Americans’. Mr Bevin, however, wrote: ‘I really feel we are dealing with this too tenderly’.

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could be dealt with in one day—say two or three. This would have the disadvantage that these would subsequently inform the head of the Communist Party in Canada who would warn the other suspects and cause them to destroy any remaining evidence and they would then be useless to the police. Evidence received since the meeting suggests that such a warning has already been issued; nevertheless the security authorities feel strongly that if an interrogation is to be carried out, all the suspects must be interrogated at the same time, and held until the interrogation is complete.

6. The conclusion seems therefore to be that in view of your ruling that there should be no publicity, and of the risk that publicity about this case might prejudice discussions of an approach to Russia at your forthcoming meeting, no further action could be taken as regards the suspects until after the meeting has taken place.

This will of course mean that Primrose will remain free for the present. We know that he has contact with one top scientist working for the Government on atomic research: probably only Sir John Anderson3 can assess the risk.

7. I feel myself that we are dealing too tenderly with these people and I would prefer that a term should be put to their activities as soon as possible. I do not however see what action can be taken before your meeting which would not involve some risk of publicity.

8. If you still feel therefore that in view of paragraph 4 and 6 above this risk must not be taken, I take it that action must be deferred.4 3

Chairman of the Advisory Committee on Atomic Energy.

Mr Attlee minuted on 29 October in response to Mr Bevin: ‘I spoke to Mackenzie King on this tonight. He wishes for no publicity and therefore agrees that nothing should be done until after my visit to Washington.’ In telegrams CXG 619-21 of 31 October, Mr MacDonald informed Sir A. Cadogan that information had been received indicating that Soviet agents in Canada, Switzerland and the US had been alerted as a result of CORBY’s disappearance and instructed to destroy incriminating material. In the circumstances, he agreed that postponing a decision until the Canadian and UK Prime Ministers had been able to discuss the matter with President Truman would not prejudice the effectiveness of any police action. He hoped ‘strongly’, however, that the heads of government would reach a decision to take action. The Russians, he said, would ‘think us weak and afraid if we do not take definite diplomatic as well as police action’ (FO 1093/538/2).

4

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21 Memorandum by Mr Bevin1 Top Secret

FOREIGN OFFICE, 8 November 1945

I think it desirable to circulate an appreciation of the foreign situation and the developments that are taking place as a whole.

2. We are committed to the World Organisation and I have been trying to shape the whole policy of the Foreign Office to work in with this Organisation when it is established, on the assumption that such an Organisation would provide equality of treatment, impartial judgment, and lead to the establishment of a much greater measure of liberty for the people throughout the world.

3. Many organisations are being created, those dealing with food, labour, economics, health, education, &c., and each organisation that is established under this World Organisation must have the right conditions created in the political and territorial field if they are to grow in strength and usefulness and to be able to accomplish the purpose for which they have been established.

4. The whole question of the Security Council is designed by its creation to give relief from fear and aggression or war, or any kind of incidents which would wreck the efforts I have referred to above, and thereby lead to a long period of the progressive raising of the standard of life and liberty. If, of course, the Powers were really committed to it and meant what they are saying, other problems, such as territorial adjustment, could be approached with an entirely different attitude of mind.

5. On the top of this, of course, has come the effect of atomic energy, which has made in many cases territorial adjustment and frontier arrangements of less importance than they used to be, provided you can remove from the different States and people any sense of domination by others. As long as the conception of national sovereignty exists, frontiers will continue to be essential 1

TNA FO 800/478. Documents on British Policy Overseas, Ser. I, Vol. 3, No. 99. This memorandum (known as the ‘Three Monroes’) was given a strictly limited distribution and does not appear to have been circulated formally to the Cabinet.

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from the ethnic point of view as well as the economic; and very often even these two principles are in violent conflict. But from the point of view of peace the right use of atomic energy both militarily and commercially does in fact minimise the old conceptions of strategy.

6. I should be willing to pursue this policy of working in with the United Nations Organisation on the ground that it gives the best hope for the world, if the facts of the situation allowed us to do it.

But my colleagues must be made aware of the situation that has arisen and is developing with great rapidity. Instead of world cooperation we are rapidly drifting into spheres of influence or what can be better described as three great Monroes.

7. The United States have long held, with our support, to the Monroe Doctrine for the western hemisphere, and there is no doubt now that notwithstanding all the protestations that have been made they are attempting to extend this principle financially and economically to the Far East to include China and Japan, while the Russians seem to me to have made up their mind that their sphere is going to be from Lubeck to the Adriatic in the west and to Port Arthur in the east. Britain therefore stands between the two with the western world all divided up, with the French and British colonial empire[s] separated and with a very weak position in what is called the western group, and notably the position of Franco is embarrassing. If Spain was settled the western area would be improved, and I do not believe that it is entirely love of democracy that causes Russia to want to keep the Spanish pot boiling. If this sphere of influence business does develop it will leave us and France on the outer circle of Europe with our friends, such as Italy, Greece, Turkey, the Middle East, our Dominions and India, and our colonial empire in Africa: a tremendous area to defend and a responsibility that, if it does develop, would make our position extremely difficult. It will be realised that the continental side of this western sphere would also be influenced and to a very large extent dominated by the colossal military power of Russia and by her political power which she can bring to bear through the Communist parties in the various countries. Meanwhile, France would stand in a kind of intermediate position, balancing herself against the east and out of sheer necessity resting upon us. The 160

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future too of the German people is going to be a constant source of insecurity, and every sort of political trick will be resorted to in order to control or eliminate this eventual reservoir of power. The French demands on the Ruhr and the Rhineland, and Russia’s action in transferring Eastern Germany to Poland are already examples of this tendency, and when the German people recover consciousness we may be sure they themselves will soon be playing an active part in these highly dangerous manoeuvres.

8. But there is another great difference in these spheres of influence from anything that has existed hitherto. If they merely represented three security areas for which the three great Powers took responsibility when any territorial adjustment or claims made one upon another were referred to the international Security Organisation, then they would merely represent three, as it were, police areas for which each of us would accept responsibility for keeping order and preventing the outbreak of aggression. But it is going a great deal further than that. The naked fact is that, whereas under the old Monroe system economic institutions and the system of government afforded liberty of trade and intercourse to other countries of the world, present tendencies are quite different. If you take Russia, for instance, all the argument and pressure that is going on indicates that in the whole life of the communities concerned there is an attempt to incorporate it into the Russian complete economy, while the United States, notwithstanding their claim to establish multilateral agreements with trade, appear to me to be taking similar steps so far as the Far East and South America are concerned by financial and economic methods. In fact, in all the efforts I have been associated with since I have taken office, in this field it seems to me that we are dealing with power politics naked and unashamed; and that either we have got to confront the world with it and ask if that is their intention or whether the United Nations Organisation and its effectiveness is to be the real goal of international relationship. A favourable opportunity will arise in dealing with problems that arise out of the great secrets developed in the war. Should we share them? On what basis should we share them? Has there got to be a real stand-up challenge for nations to declare whether World Organisation and co-operation is to be their policy with complete liberty of the States to form their own 161

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governments so that the peoples may rest on the basis of a real democracy; or is it to be power politics with the sure and certain knowledge that the predominating note is the division of the world into these three great spheres of influence, any one of which could be aggressor at any moment on the other two or vice versa? I cannot believe that foreign affairs can be brought on to a level in which the discussion will be honest and straightforward unless this issue is clearly faced. It seems vital to me not to deceive the peoples of the world by leading them to believe that we are creating a United Nations Organisation which is to protect them from future world wars, in which we share our knowledge, our secrets, and which they will regard as a beneficent protection against war, while at the same time we know, in fact, that nothing of the kind is happening. There are at least two mighty countries in the world which, by the very nature of things, are following the present policy which is bound to see them line up against each other, while we in Great Britain who have had the brunt of two great wars will be left to take sides either with one or the other. Just as there may be a clash between France and Russia over who is to get control of the German people, so there are all the makings of a still more dangerous conflict between the United States and Russia over the body and soul of China. The prospect at the moment is not healthy and not encouraging, and I cannot believe we shall make any real progress until the three of us bluntly and unequivocally ask each other to put on the table clearly and straightforwardly what our real policy is and which road we propose to travel.

9. Finally, there is no more striking illustration of the difficulty that arises from the present position than the terrible situation in Central Europe in which millions of lives could be saved and prosperity brought back to the territory under peaceful conditions comparatively quickly, certainly within a decade, if the policy of all of us was adjusted in a manner that would assist us in grappling with this terrific problem.

10. I have reviewed the whole position in the light of the above and have reached the conclusion that, with the present deadlock between the Big Three, we shall not accomplish very much.

Therefore, I propose, in dealing with all these problems, to proceed in the light of the obligations which will be assumed by all under 162

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the United Nations Organisation and to assure myself that the decisions I reach will ultimately fit in with the pr[o]cedure, constitution and obligations of that body. I consider this course essential, having regard to what I deduce to be Stalin’s present position: namely, to create a vast area under Russian control from Lubeck to Port Arthur, and to obtain a position equal with that of the United States in Japan. This interpretation of the Soviet position is reinforced by the speech made by Molotov on the 6th November.

In my view, therefore, the only safe course for this country is to stand firm behind the United Nations Organisation and, in carrying out our policy there, to rely on our right to maintain the security of the British Commonwealth on the same terms as other countries are maintaining theirs, and to develop, within the conception of the United Nations, good relations with our near neighbours in the same way as the United States have developed their relations on the continent of America.

E.B.

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22 Atomic Energy Agreed Declaration by the President of the United States, the Prime Minister of the United Kingdom, and the Prime Minister of Canada1 The President of the United States, the Prime Minister of the United Kingdom, and the Prime Minister of Canada, have issued the following statement.

1. We recognize that the application of recent scientific discoveries to the methods and practice of war has placed at the disposal of mankind means of destruction hitherto unknown, against which there can be no adequate military defence, and in the employment of which no single nation can in fact have a monopoly.

2. We desire to emphasize that the responsibility for devising means to ensure that the new discoveries shall be used for the benefit of mankind, instead of as a means of destruction, rests not on our nations alone, but upon the whole civilized world.

Nevertheless, the progress that we have made in the development and use of atomic energy demands that we take an initiative in the matter, and we have accordingly met together to consider the possibility of international action: (a) To prevent the use of atomic energy for destructive purposes (b) To promote the use of recent and future advances in scientific knowledge, particularly in the utilization of atomic energy, for peaceful and humanitarian ends.

3. We are aware that the only complete protection for the civilized world from the destructive use of scientific knowledge lies in the prevention of war. No system of safeguards that can be devised will of itself provide an effective guarantee against production of atomic weapons by a nation bent on aggression. Nor can we ignore the possibility of the development of other weapons, or of new methods of warfare, which may constitute as great a threat to civilization as the military use of atomic energy.

1

TNA PREM 8/117. Documents on British Policy Overseas, Ser. 1, Vol. 2, No. 233. Mr Attlee arrived in Washington on 10 November 1945, and the Declaration was signed on 15 November.

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4. Representing as we do, the three countries which possess the knowledge essential to the use of atomic energy, we declare at the outset our willingness, as a first contribution, to proceed with the exchange of fundamental scientific information and the interchange of scientists and scientific literature for peaceful ends with any nation that will fully reciprocate.

5. We believe that the fruits of scientific research should be made available to all nations, and that freedom of investigation and free interchange of ideas are essential to the progress of knowledge.

In pursuance of this policy, the basic scientific information essential to the development of atomic energy for peaceful purposes has already been made available to the world. It is our intention that all further information of this character that may become available from time to time shall be similarly treated. We trust that other nations will adopt the same policy, thereby creating an atmosphere of reciprocal confidence in which political agreement and cooperation will flourish.

6. We have considered the question of the disclosure of detailed information concerning the practical industrial application of atomic energy. The military exploitation of atomic energy depends, in large part, upon the same methods and processes as would be required for industrial uses.

We are not convinced that the spreading of the specialized information regarding the practical application of atomic energy, before it is possible to devise effective, reciprocal and enforceable safeguards acceptable to all nations, would contribute to a constructive solution of the problem of the atomic bomb. On the contrary we think it might have the opposite effect. We are, however, prepared to share, on a reciprocal basis with others of the United Nations, detailed information concerning the practical industrial application of atomic energy just as soon as effective enforceable safeguards against its use for destructive purposes can be devised.

7. In order to attain the most effective means of entirely eliminating the use of atomic energy for destructive purposes and promoting its widest use for industrial and humanitarian purposes, we are of the opinion that at the earliest practicable date a Commission should be set up under the United Nations 165

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Organization to prepare recommendations for submission to the Organization.

The Commission should be instructed to proceed with the utmost dispatch and should be authorized to submit recommendations from time to time dealing with separate phases of its work. In particular the Commission should make specific proposals: (a) For extending between all nations the exchange of basic scientific information for peaceful ends, (b) For control of atomic energy to the extent necessary to ensure its use only for peaceful purposes, (c) For the elimination from national armaments of atomic weapons and of all other major weapons adaptable to mass destruction, (d) For effective safeguards by way of inspection and other means to protect complying states against the hazards of violations and evasions.

8. The work of the Commission should proceed by separate stages, the successful completion of each one of which will develop the necessary confidence of the world before the next stage is undertaken. Specifically it is considered that the Commission might well devote its attention first to the wide exchange of scientists and scientific information, and as a second stage to the development of full knowledge concerning natural resources of raw materials.

9. Faced with the terrible realities of the application of science to destruction, every nation will realize more urgently than before the overwhelming need to maintain the rule of law among nations and to banish the scourge of war from the earth. This can only be brought about by giving wholehearted support to the United Nations Organization, and by consolidating and extending its authority, thus creating conditions of mutual trust in which all peoples will be free to devote themselves to the arts of peace. It is our firm resolve to work without reservation to achieve these ends.

THE CITY OF WASHINGTON THE WHITE HOUSE November 15, 1945 166

23 Minute from Mr Butler to Sir A. Cadogan1 Top Secret

21 November 1945 CORBY Case My instructions before leaving for Washington2 were to endeavour to get President Truman and the two Prime Ministers to agree that, as soon as possible after the Washington conversations were concluded: (a) Action should be taken in all three countries to question those implicated, on an agreed date; and (b) The Soviet Government should be informed of the action that was being taken, together perhaps with the demand for the recall of some Soviet personnel, and possibly also with some explanation why action had hitherto been deferred.

Of the above (a) devolved mainly and (b) almost entirely upon the Canadian Government.

After discussions with the Canadians, I put up the attached note3 to the Prime Minister: Mr Norman Robertson primed Mr Mackenzie King rather more fully and the question was discussed with President Truman. The President’s attitude was affected by the fact that the FBI had got on to the track of another widespread Soviet network in the United States,4 and he said that he could not commit himself to action on the date proposed, i.e. a day in the week beginning November 26th, until he had consulted his own officials.

1

TNA FO 1093/538 Part II. Mr Butler had travelled to Washington with Mr Attlee, having prepared a number of briefs on the CORBY case. No formal record was kept of the discussions on that topic, though Mr Butler reported on progress in a letter to Mr Bromley of 14 October (FO 1093/538/2).

3 Not printed.

4 On 7 November Elizabeth Bentley, who had contacted the FBI, began revealing details of Soviet espionage in the US, and on the following day Hoover sent to the President a list of fourteen suspects, including Assistant Secretary of the Treasury Harry Dexter White; see Christopher Andrew and Vasili Mitrokhin, The Mitrokhin Archive, Vo. I, The KGB in Europe and the West (London: Allen Lane, 1999), p. 187.

2

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We heard nothing further from the President before leaving Washington, but in Ottawa we heard two things: first, that the President wanted a fortnight’s further delay—Mr Norman Robertson was not able to say whether this meant merely another week or so beyond the week beginning November 26th, or whether the President wanted a fortnight’s moratorium from November 17th before considering the matter again; secondly, C’s representatives were assured by Mr Edgar Hoover of the FBI that as far as he and the tracking down of the newly discovered network in the United States were concerned, he would favour action in the CORBY case as soon as possible. It is not quite clear whether Mr Hoover spoke in good faith, and in any case it was doubtful whether the Americans had enough evidence to question the one, and not very important, American implicated in the CORBY case.

In these circumstances, it seemed possible that the obstacle to action was Mr Byrnes who was believed to be extremely reluctant to throw any pebble that would disturb United States-Russian relations; and that the essential thing was to get a definite indication of his intentions out of President Truman. Therefore, after further discussion with Mr Norman Robertson and Mr Malcolm MacDonald, and with the concurrence of the Prime Minister’s Private Secretary, I sent the attached telegram3 to Lord Halifax suggesting that he and the Canadian Ambassador in Washington should approach the State Department with a view to getting something definite out of the President. We have not yet had a reply to this telegram.5

5

Sir A. Cadogan noted at foot of this minute the receipt of New York telegram 774 on 22 November, reporting that Mr Byrnes and Mr Mackenzie King had agreed ‘that no action should be taken for a period of 14 days from Friday November 16th’. Mr Bevin wrote: ‘It makes me despair.’ A separate note by Mr Butler for Mr Bromley of 24 November read: ‘This will shake the confidence of C’s rep in N. York in Edgar Hoover who gave Hollis [MI5] to understand that he & the FBI wanted action taken in the CORBY case without delay.’

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24 Minute by Mr Galsworthy1 FOREIGN OFFICE, 28 November 1945 The reports brought back by British officers who have accompanied Soviet repatriates on their way home, as well as incidental information from other sources, leave no room for doubt that the picture painted in the article within is far from the truth.

These repatriates, for whom no conditions offered by the Allied Authorities have been accepted by the Soviet authorities as adequate, are received by the Motherland in a callous and often brutal manner: they are tainted by outside contacts and therefore highly suspect.

The Chancery suggest that the primary motive behind the insistent Soviet demand that every single Soviet citizen be returned home, regardless of his wishes, is the desire to increase the labour forces of the Soviet Union. This no doubt explains official Soviet interest in the mass of Soviet displaced persons (who total millions), but not, surely, the passion with which the very last single individual is pursued and ferreted out. The chance that a few hundreds escape the net cannot seriously worry the Russians on labour grounds. Considerations of prestige are more likely to be behind this policy: it is axiomatic that every Soviet citizen (and everyone who now has the chance of becoming one) wishes to return to the fold, and no exceptions which would tend to weaken the force of this assertion can be tolerated.

I submit that another, and important, reason why the Russians make such a fuss about a single lost sheep is because the making of the fuss provides them with an admirable excuse for keeping in the field large numbers of ‘repatriation’ officers and missions, who may well have many less reputable tasks to perform (as political agents, contact men and reporting officers, etc.). For as long as even 1

TNA FO 371/47925, N16223/627/38. Documents on British Policy Overseas, Ser. 1, Vol. 6, No. 64. The minute referred to a translated article from Komsomolskaya Pravda of 12 September 1945, sent to the Foreign Office by Moscow Chancery, on the Soviet treatment of repatriated citizens.

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one soul is unaccounted for, these missions have a fairly legitimate excuse for remaining in situ. I feel sure that these are their tactics in Italy, for example, where they are trying hard to set up their own ‘collecting centres’, ostensibly for the succour of large numbers of so far undiscovered or unrepatriated Soviet citizens. We are, of course, endeavouring to counter such schemes, since we know from the military authorities that itinerant Soviet repatriation officers in Italy have been in contact with local communist cells. I suggest that Mr Bromley might consider this aspect of the question JOHN E. GALSWORTHY

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25 Note by Mr Pink1 Some Impressions of the Nuremberg Trial The International Military Tribunal, set up to try the major war criminals of the European Axis, held its first session, as arranged, on 20th November 1945. Up to the last moment it was uncertain whether the trial would open on the appointed day. Indeed, most of November 19th was spent in agitated discussions between the Chief Prosecutors and their staffs and the Tribunal. The Russians pressed strongly for a postponement, alleging that their Chief Prosecutor, Gen. Rudenko, had malaria and that they could not start without him. The French also urged that the opening of the trial be postponed to enable the younger Krupp to be substituted for his father, who was too ill to stand his trial. They even went so far as to say that if the Russians did not attend on November 20th they too would stay away ‘out of courtesy’. As it was generally known that Gen. Rudenko’s malaria was of the diplomatic variety, and that the only reason why both parties wanted a postponement was that neither was ready, these manoeuvres made a deplorable impression.

That they were finally defeated, after several hours of discussion, was due largely to the energy of the Attorney-General, who challenged the Russians to state publicly that Gen. Rudenko’s illness was their sole reason for seeking a postponement.

2. At 10 a.m. on November 20th the four members and their alternates, who together form the International Military Tribunal, filed into the Court Room and the trial began. The President, Lord Justice Lawrence, opened the proceedings with a short and dignified statement in which he explained how and by what authority the Tribunal had been set up. The indictment was then read, together with its appendices, by members of the four prosecuting teams. It was laid down in the Charter of the Tribunal that this lengthy document should be read in court, and though it was already familiar to all those taking part in the trial and the 1

TNA FO 371/51003, U9934/16/73. Documents on British Policy Overseas, Ser. 1, Vol. 5, No. 88. This undated and unsigned note was transmitted to the Foreign Office in Berlin despatch No. 23 of 29 November.

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reading of it took up the rest of the day, this procedure had certain advantages. To those who had not previously read it, the mounting crescendo of conspiracy and crime which it presented was at once impressive and convincing. It also gave the spectators an opportunity of considering the conspirators in the dock, their number reduced to 20 by the last moment illnesses of Kaltenbrunner and the elder Krupp.

3. Goering, who sits in the front row in the position occupied by Kramer at the LĂźneburg trial, is clearly the leading personality in the gang. His dove-grey uniform with its brass buttons hangs in folds around him, but it is obvious that prison diet and the resultant loss of several stone have done him good. He looks surprisingly young, takes a lively interest in the proceedings and clearly enjoys being the centre of attention whenever there is a pause in the proceedings. He will give the prosecution some trouble before they are through with him. Hess, next along the line, looks shrunken, sallow and mad. After spending the first few hours looking around the court as if searching for a familiar face, he has settled down to read a novel and appears to take no more interest in the proceedings.

Ribbentrop, his neighbour, looks a broken man, grey, drawn and haggard. Keitel, in a plain uniform without decoration, is stiff and sour, fuming behind his moustache. Rosenberg looks ill and worried; his eyes are as pouchy as Ribbentrop’s. Frank is a noticeably evil man, even in such a gathering, though there seems little to choose between him and his neighbours, Frick and Streicher. At the end of the row are Funk and Schacht. The latter started off with an air of jaunty unconcern which is already wearing thin, as the prosecution disprove his thesis that he really never had anything to do with Hitler and his misdeeds.

4. In the second row the two Admirals, DĂśnitz and Raeder, sit impassive and silent. Von Schirach looks relatively civilised in comparison with his neighbour Sauckel, a repulsive specimen of the worst kind of petty Nazi tyrant and clearly the ideal man for his job of exploiting slave labour. Jodl seems more the military historian than the soldier, while the diplomatists, Papen and Neurath, sit calm and unmoved, observing the proceedings with professional detachment. Seyss-Inquart has the air of an unsuccessful schoolmaster, while Speer, like Schirach, is an 172

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improvement on his neighbours. Last of all is Hans Fritsche, the relatively unknown Editor of the D[eutsches] N[achrichten] B[Ăźro], who only appears as understudy for his dead master Goebbels and is obviously alarmed at finding himself in such company.

5. The accused sit along one side of the court facing the Tribunal, with their defending counsel in front of them. On their right are tables for the various prosecuting teams, while the fourth wall is reserved for charts, plans and a screen on which will ultimately appear a choice selection from films showing the horrors of the concentration camps. The visitors are seated in a gallery above the prosecuting teams. Great credit is due to the American authorities for the efficiency with which they have organised the trial. In particular, the interpreting arrangements are most effective.

Everyone taking part in the trial speaks into a microphone in his own language and everything he says is simultaneously interpreted into the other three languages. A pair of earphones is fitted to each seat, and by turning a knob on a small dial one can listen to the proceedings in English, French, Russian or German. The fact that many of the speakers are reading from briefs available to the interpreters reduces the technical difficulty of this simultaneous interpretation: nevertheless it remains a difficult job and has so far been performed with considerable success. Above all, it saves a vast deal of time.

6. The problem of accommodating the members of the Tribunal and the large numbers of lawyers, journalists and visitors in a town most of which has been as effectively devastated as the centre of Berlin must have caused the American authorities some headaches.

They have solved it by installing the judges, the prosecuting teams and the press in villas on the outskirts of the town and putting the visitors into the partly restored Grand Hotel which serves as a meeting place for the varied and international crowd which the trial has brought to Nuremberg. It is not an impressive crowd: indeed one’s first impression of the Grand Hotel is that one has suddenly been transported to Jaffa or Tel Aviv. It is perhaps natural that the Jews should congregate at the trial of those who did their best to wipe out their race from the face of Europe. But it is a regrettable fact that the Jews who throng the corridors of the Grand Hotel neither inspire confidence nor command respect, least of all from 173

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the German staff. Many of them, though in American uniform, are either refugee Germans or first-generation immigrants.

7. There has been a good deal of criticism—some of it rather exaggerated—of the cabaret and dance-band arranged by the Americans for the benefit of the visitors. The cabaret is not more than usually vulgar and it is not unreasonable that those who will have to spend most of the winter in this devastated city should have some form of entertainment provided for them. On the other hand, the casual visitor is liable to get the impression that many of the people who should have come to Nuremberg with the stern light of justice in their eyes are in fact primarily concerned with having a good time.

8. So much for the setting on which this historic trial is staged.

The proceedings have been fully reported in the press, but there are one or two points which may deserve special mention. Firstly, the decision of the Tribunal that Lord Justice Lawrence should act as President has done much to ensure that the trial is conducted with calm and dignity. He has already made it clear that he intends to stand no nonsense from the accused, while ensuring that they and their counsel shall have every facility needed for their defence, and his handling of the trial has been the subject of favourable comment in the press.

9. Secondly, Justice Jackson’s opening speech was such a masterly performance that it at once lifted the trial on to a high moral and intellectual level. Nevertheless, at least one observer felt that the moral effect of his condemnation of arbitrary arrests and concentration camps was somewhat weakened by the presence of an N.K.V.D. man, Nikitchenko, as the Soviet member of the Tribunal. When one is dealing with moral issues it is a little hard to understand why the representative of a regime which maintains concentration camps in Siberia or the Urals should sit in judgement on those who maintained similar establishments in Germany.

10. On balance the trial has made an impressive start. No doubt it will have its difficult moments; indeed with four different judicial systems represented on the Tribunal this could hardly be otherwise.

But it is most important that it should be brought to a successful conclusion, as the eyes of the world are on those now assembled in Nuremberg and the results may have a far-reaching effect upon 174

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public confidence in our determination as well as our ability to ensure that although judicial action always comes after the event, an example shall be made of this group of unscrupulous men who believed that they were above the law. The purpose and justification of the trial can perhaps best be described in the words used by Justice Jackson: ‘The ultimate step in avoiding periodic wars . . . is to make statesmen responsible to law . . . This trial represents mankind’s desperate effort to apply the discipline of the law to statesmen who have used their power of state to attack the foundations of the world’s peace and to commit aggressions against the rights of their neighbours.’

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26 Telegram from Mr MacDonald to Sir A. Cadogan1 Nos. 860/861 Top Secret. Most Immediate 4 December 1945 Following for Sir Alexander Cadogan from Malcolm MacDonald repeated Washington for Lord Halifax.

855 to 857.2 1. Further examination of position has led Mackenzie King to abandon plan he contemplated, which was reported in my telegram under reference. He has done this largely on strong advice of RCMP and other authorities here who emphasised its grave defects from security point of view.

2. Decision now is to take no diplomatic or police action for the present. Trend of thought amongst all Canadian authorities concerned is to wait until Americans are ready to take action on their own case. This might conceivably happen at any time in near future, but is more likely not to materialise for several weeks, if not months.

3. In the meantime departmental action will be taken to extent of further neutralising power of various agents in Government employ to do damage. These agents will all now be transferred to work where they will be harmless. In this connection I am considering what [?line] is best to take with member of my office concerned and will report further on this.

4. Mackenzie King had his interview with Russian Ambassador this afternoon, instead of tomorrow. Ambassador explained that he is proceeding to Moscow in accordance with Soviet Government’s 1

TNA FO 1093/538 Part II. These telegrams were sent to Mr Bromley by ‘C’ on 4 December.

2 In these telegrams of 3 December, Mr MacDonald informed Sir A. Cadogan that Mr Mackenzie King was contemplating early action on CORBY, including an approach to the Soviet Ambassador in Ottawa to express the Canadian Government’s views on Soviet espionage, and to request the recall of GRANT (Col. Zabotin) and his colleagues. At the same time, the RCMP would interrogate the agents named by CORBY, avoiding publicity if possible. However, Mr King was taking legal advice, and ‘police and security representatives in particular are pointing out immense difficulties and risks of line proposed’. Action was proposed in about a week’s time (FO 1093/538/2).

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policy of having consultations with various of their Ambassadors on termination of war. He spoke in terms of cordial friendship for Canadian Government and people and expressed desire of his Government for closer political, economic and cultural relations.

Mackenzie King reciprocated these sentiments.

5. Ambassador leaves Montreal by aircraft tomorrow afternoon en route for Moscow via Britain.

6. Position will be kept under constant review by Canadian authorities. I shall await any further developments.3

3

Mr Butler minuted on 6 December: ‘This is pathetic. A few weeks ago the Canadians were talking of asking for the withdrawal of the Soviet Ambassador.

Now Mr King sees him and gives him kind words. The serious points from our point of view are (i) that the Russians know that we have known for months about their brilliant espionage work and have (apparently) not dared to do anything about it. They will not ascribe this to ‘tact’ or goodwill on our part, for in our handlings of atomic energy we shall have seemed to show little regard for them.

The harm is done. (ii) PRIMROSE will continue untackled for many more weeks.’ No further action was taken until February 1946, when the Canadian Government appointed a Royal Commission into the CORBY case: see DBPO, Ser. 1, Vol. 11, pp. 26-8. Nunn May, and a number of Soviet agents were also arrested in February.

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27 Despatch from Lord Halifax to Mr Bevin1 No. 1588 Top Secret

WASHINGTON, 12 December 1945

Sir, At a time when American foreign policy is forming the subject of anxious debate both in this country and elsewhere I have thought it well to arrange for a review of the present attitude of the United States Government towards world affairs.

2. His Majesty’s Minister has accordingly drawn up at my request the enclosed memorandum on this subject. It surveys the foreign policy of the United States Government in the light of the broad lines of American policy as defined under the Roosevelt Administration and with particular reference to the United States attitude towards the Soviet Union.

3. I find myself in general agreement with Mr Balfour’s analysis and with his main theme that America, having been impelled by the logic of events and the genius of Mr Roosevelt into a position of world leadership, is still somewhat troubled and uncertain when it comes to the choice of policies best calculated to enable her to exercise her unaccustomed power. In spite, however, of continued leanings towards isolationism in the old sense, the prevailing trend, as the memorandum points out, is at present resolutely set in the direction of giving wholehearted support to the United Nations Organisation. At the same time it is evident, as the paper shows, that the elements in public life which gave vigour to isolationism are now being transmuted into the active exponents of a somewhat truculent new brand of ‘America first’ .

4. It is, I submit, altogether to our advantage if, in the process of groping towards the responsibilities that have now fallen to her lot, America sees fit, as she has done in the case of Palestine, to assume a share in the solution of vexed international questions. If, moreover, when expressed in international action, the ‘America first’ outlook mentioned above is calculated to multiply the causes 1

TNA FO 371/44574, AN3853/35/45. Documents on British Policy Overseas, Ser. 1, Vol. 4, No. 1. Received 21 December.

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of disagreement with Great Britain we can at least console ourselves with the thought that, from the point of view of the ultimate welfare of mankind, a stimulated United States interest in other countries, however callowly expressed, is infinitely preferable to no interest at all.

5. I conclude that, in the state of the world as it is to-day, it should be a major task of His Majesty’s Government to encourage America to shoulder the burden of wider responsibility that is now hers and, insofar as it lies in our power, to strengthen her allegiance to the World Organisation.

I have, etc, HALIFAX Memorandum by Mr Balfour, 28 November 1945 Analysis of the present attitude of the United States towards world affairs Seen in terms of comparative power, the Soviet Union is to-day viewed by all thoughtful minded Americans as the only country comparable in stature to the United States and capable of constituting a major threat to its security. The intransigent attitude of Soviet Russia in Europe, her ambiguous policies in the Middle East, and her emergence as a leading Pacific power, are the cause of deep misgiving, greatly accentuated by her unwillingness to remove the iron veil of secrecy which she interposes between herself and the outside world.

2. Great Britain by contrast appears in an altogether more favourable light. Whilst responsible Americans find it difficult to rid themselves of disapproval of everything connoted by the word colonial and sometimes entertain the belief that the policies of Great Britain as a much harassed and weakened imperial power may lead her into courses calculated to endanger international peace, they do not in any sense view us as a possible enemy of the United States. The prevailing tendency is rather to regard Britain as the junior partner in an American orbit of world power whose survival as a strong and prosperous country is essential to America both from the point of view of preserving Western democratic 179

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values and the security of the United States itself. At the same time, unlike the Soviet Union which so far at any rate has no comparable points of friction, Great Britain is exposed to constant difficulties with the United States resulting from the outward thrust of American business interests which see in the advent of peace an opportunity for acquiring a predominant position for themselves not merely in the Western Hemisphere but in other continents.

3. Against the foregoing background the United States Government are to-day confronted in the first instance in the field of foreign affairs with the problem of discovering the means to adjust American-Soviet relations in a manner which will ensure the perpetuation of world peace. The urge to discover the means of adjustment has been immeasurably stimulated by the realisation that the knowledge of how to manufacture the atomic bomb cannot long remain an American monopoly.

4. In what respects, if any, are the United States Government approaching this problem and the field of foreign affairs as a whole in ways which differ from the broad lines of American policy as defined under the Roosevelt Administration?

5. The late President Roosevelt dreamed of, and strove for the ideal of one world in which the Big Three partnership, forged during the war, would be merged in a United Nations Organisation.

On the economic side his policy was complemented by the aim of Mr Hull to build up a system of commercial agreements with other countries which would remove trade barriers and foster the flow of goods on a multilateral basis.

6. In pursuing his ideal, which was constantly directed towards the goal of international collaboration between peace loving and democratic powers, Mr Roosevelt as a good patriot and far-seeing strategist, did not neglect opportunities to strengthen America’s security and promote her interests. Apart from the negotiation of the Atlantic Bases Agreement with Great Britain in 1940-41, he had arranged before the United States became involved in the war to establish an American base in Iceland and had proclaimed the strategic importance of the Azores from the point of view of United States defence. Primarily with an eye to establishing American civil aviation in a paramount position in the Southern Pacific, the Roosevelt Administration in the months immediately preceding the 180

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European war had shown an increasing interest in British and New Zealand owned islands in that area, and in August 1939 had tabled claims to the sovereign possession of sixteen of them. After the entry of the United States into the war it became clear that, by reason of the leading share she was taking in hostilities in the Pacific, America would expect to have a paramount voice in an eventual Far Eastern settlement. She was at the same time at pains to encourage the admission of China to the Councils of the major powers.

7. In furthering the good neighbour policy in Latin America, both before and after Pearl Harbour, the Roosevelt Administration constantly sought first to align the Latin-American countries in a Pan-American policy of regional defence, and secondly to ensure as far as possible that they collaborated together under United States aegis for the defeat of the Axis.

8. In his dealings with Soviet Russia Mr Roosevelt was primarily concerned to cement her partnership with Britain and the United States with the supreme object of winning the war. At the same time his Administration exerted itself to prevent a unilateral Soviet solution of the Polish problem. It also intervened at Moscow during the Persian crisis in January [sic November] 1944, in order to remind the Soviet Government of its obligations under the Three Power Teheran Declaration. It was moreover the author of the Yalta Declaration on liberated and ex-satellite countries designed to enable the former satellites of Germany to work out their destinies in accordance with the wishes of their peoples. When in the earlier stages of the discussion of the World Organisation the Soviet Government first enunciated its standpoint on the veto question, the United States Government devised a formula which corresponded to that ultimately adopted at San Francisco. In thus assuming vis-à vis the Soviet Union the responsibilities devolving upon America as a leading world power wedded to the idea of international collaboration the United States Government were at all times anxious, both on account of possible Kremlin reactions and more especially for the sake of avoiding adverse criticism at home, to avoid the appearance of ganging up with His Majesty’s Government against the Russians.

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9. The present Administration lacks the inspired leadership which marked the regime of Mr Roosevelt. Whereas the late President, with an admirable sense of timing and of how far he could guide American public opinion in any given direction, would point the way for the country to follow, Mr Truman and his associates are disposed to chart their course in the manner best calculated to propitiate what they conceive to be the prevailing sentiments of Congress and of important pressure groups. An unhappy instance in point has been the handling of the AngloAmerican financial talks where, in their anxiety to arrive at an outcome palatable to Congress, the American negotiators have on various occasions sought to secure acceptance of proposals which were not compatible with the above mentioned American desire to ensure the existence of a strong and prosperous Britain. It is also regrettable that, although there is good reason to suppose that they realise the attendant disadvantages, the United States Government are unwilling, from fear of offending the various American cities eager to be chosen as the site, to oppose the movement for the establishment of the headquarters of the United Nations Organisation in the United States. Taken in conjunction with the partisan handling of the Pearl Harbour episode, these occurrences illustrate the risk to which the conduct of American foreign policy is always liable of becoming the shuttlecock of domestic controversy.

10. Notwithstanding its above mentioned shortcomings, the present Administration has broadly speaking reproduced the essential features of its predecessor’s foreign policy. Both in word and deed it has given its support to the San Francisco Charter which, following upon the campaign of public enlightenment conducted both before and during the Conference, was approved at the end of July by the almost unanimous vote of the Senate. The realisation that there can be little hope of permanent peace in a divided world was the keynote of official speeches on V.J. Day. Mr Byrnes was reflecting the view prevalently expressed in authoritative quarters and shared by the enlightened sections of the public when he declared in an address before the Herald Tribune Forum on the 29th October: ‘To-day the world must take its choice.

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There must be one world for all of us or there will be no world for any of us.’

11. Although at first unwilling to envisage the idea of sharing the secret of the bomb’s manufacture with other countries, the United States Government, no doubt under the pressure of their own public, and particularly scientific opinion, took the initiative this month in proposing the constitution under the United Nations Organisation of a commission on atomic energy with very wide terms of reference.

12. Following upon a most intensive campaign of enlightenment, the Bretton Woods monetary proposals were adopted by Congress by a large majority. During the AngloAmerican financial talks Mr Clayton and his fellow negotiators have made it abundantly plain that they sincerely desire to make a success of Mr Hull’s liberal economic policies.

13. The actions of the Truman Administration have also conformed to the pattern of extending the outlying defences of the United States already traced by its predecessor. Thus Iceland has been confronted with a demand for a permanent military base and His Majesty’s Government have been asked for their views on other extensive American base facilities. Judging from the attitude adopted in Congress and by the Service Departments it is also clear that the United States Government will establish bases in a number of islands which it has conquered from Japan.

14. The wish to create outlying bulwarks of security, if the concept of one world breaks down, is no doubt primarily responsible for the fact that the Administration is thus seeking to formalise United States base requirements in advance of the system of security which it will devolve upon the United Nations Organisation to devise. Whilst the Army and Navy Departments are giving the official impulsion to this policy, they are also strongly supported by influential sections of opinion and notably by those which were formerly isolationist. There is thus seen to be a duality of motive in the movement which is propelling the United States away from the tradition of hemisphere isolation into wider fields.

15. The co-existence of loyalty to the United Nations Organisation with a desire to reinsure the United States strategically against all possible contingencies has its counterpart 183

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in the economic sphere. Side by side with the devotion of Administration leaders to the principles of Mr Hull which have met with wide public acceptance, there are to be found the aspirations of those special interests and particular industries which aim at staking out exclusive positions for themselves, not merely in LatinAmerican countries but in more far flung regions of the globe. The extent to which official support can be accorded to these aspirations is illustrated by the fact that in furtherance of the policy, already manifested before the war, of securing possession of civil aviation staging points in the Southern Pacific Mr Byrnes has recently informed Mr Bevin that the United States Government expect His Majesty’s Government and the New Zealand Government to waive their claims to twenty-five Pacific islands, including the sixteen already listed in 1939.

16. The duality of motive in the United States Government’s approach to world affairs, and the accompanying tendency to pursue contradictory courses, is revealed in the handling of the crucial problem of American-Soviet relations. In the wish to acquire credit with their own public and the Russians the present Administration, exaggerating the practice of its predecessor, has at times indulged in the substance as well as the appearance of an independent American line vis-à-vis the Kremlin. Instances in point are the unannounced decision to send Mr Hopkins to Moscow at the end of May; the omission of President Truman to visit Britain when en route for Potsdam; and now again an invitation to the Soviet Government without our previous knowledge to resume the discussions of the Foreign Secretaries of the Big Three with the venue at Moscow. It should incidentally be noted that Walter Lippmann and other publicists show a recurring disposition to oversimplify the Russian issue by representing it as a clash between the rival imperialist interests of Great Britain and the Soviet Union in which it behoves the United States Government to occupy the position of a mediator or conciliator, as President Roosevelt is alleged to have done during the war.

17. At the same time the United States Government, as a rule in consultation with His Majesty’s Government, have shown a praiseworthy disposition to continue the efforts of the preceding Administration to abate Soviet intransigeance and unilateral 184

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pressure. Thus they have striven, at times even somewhat impetuously, to ensure the fulfilment of the Yalta Declaration regarding liberated and ex-satellite countries. At the London meeting of the Council of Foreign Ministers in October [September] the United States Delegation submitted a scheme for multiple trusteeships in contradistinction to Mr Molotov’s demand for independent trusteeships over former Italian colonies. The United States Ambassador at Moscow has now addressed representations to the Soviet Government designed to mitigate the crisis in Persian Azerbaijan.

18. The attitude of the United States Government towards the question of admitting America’s associates in the Pacific war to a share in shaping the destinies of Japan has been dominated by the determination to prevent the Soviet Union from reproducing there the difficulties that have arisen in the Allied Control of Germany.

It is true that they were willing from the outset to allow the right of other Allied belligerents to advise upon the directives issued to General MacArthur and were subsequently prepared to give policymaking authority to the Far Eastern Commission and to accept the idea of a Control Council in Japan itself. The United States Government have nevertheless so far firmly refused to allow any other power to impede by veto the execution of policy by the Supreme Commander. That the Administration, but for the Soviet aspect of the problem, might have gone further towards countenancing arrangements for the joint inter-Allied control of Japan is perhaps shown by the fact that they are evincing a willingness for His Majesty’s Government to take a share in the responsibility of settling the future of Korea. As one official frankly admitted in a recent talk with a member of the Embassy staff, the United States Government hope in this manner to shift from themselves a part at any rate of the odium which those entrusted with the discharge of this ungrateful task must inevitably incur.

19. In relation to China United States policy has been characterised by extreme confusion of purpose. Whilst, in the absence of any serious foreign competition, American business interests are at the moment well placed to exploit to the full such opportunities as offer themselves for financial and trade expansion, the overriding impression is one of acute uncertainty as to the long 185

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term role which the United States of America should play in this area. During the months leading up to the collapse of Japan there was a widespread, if largely unspoken, fear that the end of the Pacific war would find America involved, against her will, in faction strife between Chungking and the Yenan Communists, with the attendant danger that support of the Nationalists as the legitimate Government of China would bring her into collision with the Soviet Union. All shades of public opinion consequently hailed the terms of the Sino-Soviet Treaty in late August with immense relief as seeming to pave the way for the unification of China without outside interference. When, however, it became clear that the hope of a settlement between the rival factions was not to be realised, America’s latent sense of inferiority reasserted itself in anxious searchings of heart, accompanied in liberal and left wing circles by bitter complaints against the mishandling of United States interests in China by diplomatic and military representatives on the spot. The blistering charges of ineptitude levelled against State Department officials by Mr Hurley in his public statement of the 27th November announcing his resignation of the post of Ambassador to China have injected a further note of acerbity into the current confused debate which now calls for a long overdue authoritative statement of Administration policy in order to clear the air.

20. Whatever may be the contents of such a pronouncement the United States Government, who have until now expressly pledged themselves to the abolition of all foreign spheres of influence in China, are very far on present showing from pursuing a policy deliberately designed to apply Monroe principles of exclusive predominance to that war ravaged and divided country. Rather they find themselves anxiously confronted with the dilemma that, whereas a hasty withdrawal of American troops from China and the cessation of financial aid to Chungking would spell the negation of all that the United States has stood and fought for, America is not lending a helping hand to Chinese Nationalists in order to take sides in a civil war. As it is, the United States dilemma in China offers, mutatis mutandis, a certain analogy to that of His Majesty’s Government in Java resulting from the landing of British troops there to disarm the Japanese. It may here moreover be noted that, 186

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taking a long term view, not the least disturbing impediment to the constructive evolution of United States foreign policy, whether in the Far East or elsewhere, lies in the fact that America is now demobilising at a rate which already threatens to prejudice the possibility of her effectively sustaining her onerous international commitments overseas.

21. United States policy towards Latin America at present also suffers from a lack of stable purpose and a diversity of motives. The sedulous attempts to brow-beat Argentina into conformity with American wishes have been countered by the nervous realisation that Argentine resistance to United States pressure is the rallying point for Latin American accusations of Yankee domination. It is a measure of the weakness of the United States position in Argentina that they have until now been constrained to invite British assistance in dealing with the Peron regime. As it is, divided counsels obtain concerning the courses to be pursued in order to ensure the continuance of the good neighbour policy as an essential adjunct to hemisphere defence, the provision for which is itself jealously regarded as a United States prerogative.

22. As against a tendency to build up Latin-America as an exclusive United States financial and economic preserve must be set the avowed desire of the Administration to apply the Hull principles of multilateral trade to the Western Hemisphere. The trend towards hegemony is moreover mitigated by the misgivings of an influential section of the United States business community with regard to the wisdom of large scale investment in the nascent industries of nationalist minded Latin American countries. In addition to these factors, which militate against the incorporation of South America into a complete American economy, is the reluctance of the Latin Americans themselves to see their countries monopolised by American big business.

23. To conclude this analysis where it began—on the theme of American-Soviet relations. Like its predecessor the present Administration, albeit in a situation rendered far more difficult by reason of the end of the wartime fighting partnership and the advent of the atomic bomb, is doing its utmost according to its lights to arrive at a durable modus vivendi between the Soviet orbit of power and the rest of the world within which the United States of America 187

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sees itself called upon to play the role of leadership.

Notwithstanding the existing duality of motive described in earlier paragraphs, the prevailing trend, whether in the Administration circles or elsewhere, is resolutely set in the direction of achieving this vital objective within the broad framework of the United Nations Organisation.

24. All in all, therefore, and in spite of accumulating evidence of Soviet intransigeance, there is a stubborn determination in responsible quarters to rationalise the actions of the Soviet Union wherever possible and to make conciliatory moves as and when the opportunity presents itself. It was in this spirit that Mr Byrnes went so far in his recent address before the Herald Tribune Forum as to declare that the United States of America was fully aware of and sympathised with the special security interests of the Soviet Union in Central and Eastern Europe. But, in thus coming near to committing himself to the acknowledgment of a Soviet sphere of influence in Europe, Mr Byrnes was also at pains to use the evolution of United States policy towards Latin-America under the Monroe doctrine as the text for a homily on the wisdom of cultivating good neighbour relations with other countries and of eschewing any system of exclusive influence and special privilege.

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28 Control Commission for Germany (British Element) Intelligence Review No. 11 INTELLIGENCE BUREAU, CCG(BE), 12 December 1945 Uneasy Interlude When the Allied Armies were about to overrun Germany in the Spring, it was commonly expected that we should have to contend with far more hostile acts committed by Germans against the occupying forces than have in fact occurred. We were ready to be stoned or perhaps sniped at, and even wondered whether it would be wise for Generals to continue to make their cars conspicuous with flags and stars: and when the Germans collapsed we were accordingly surprised at the almost complete calm prevailing among them (though not among the Displaced Persons)—a degree of calm which soon permitted British troops normally to go unarmed. This absence of any subversive activity has allowed Field Security to go on with its programme of planned arrests and investigations unpreoccupied; and we now have over 50,000 Germans interned, of whom far the greatest part is held under automatic categories; out of a total arrest programme estimated in last winter’s plans at about 75,000. But there has always been the expectation that in the winter things would turn worse; and that we should have to face agitation and possibly violence. In May the population was stupefied by the suddenness of the collapse, and deprived of most of its active menfolk. By winter we reckoned that the stupefaction could have worn off, and the men would generally have returned to their homes. By then, in spite of any relief they might still feel at the end of the war (which in itself does not imply gratitude to us), or at the end of National-Socialism (which does), we could not expect the Germans to be so devoid of national feeling as to accept being occupied with complacency or even with TNA FO 371/46975, C9822/4831/18. Documents on British Policy Overseas, Ser. 1, Vol. 5, No. 95. Section 1, describing the formation of a single CCG(BE) Intelligence Bureau, and the final section, ‘Public Life in the American Zone’, reproduced from a US Weekly Intelligence Summary, are here omitted.

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resignation. Besides, national feeling apart, it was not to be expected that most Germans would welcome our complicated mission of destroying with one hand their economic power for war, which means in practice impoverishing them; and with the other hand imposing liberalism by authority.

It is true that the anomaly of imposing liberalism by authority at present embarrasses us rather than the Germans. The Germans assume that the beaten side will be ousted and indeed persecuted.

This seems normal to them—indeed far too normal. As the American appreciation reprinted later in this Review points out, the danger is that the Nazis now being eradicated may appear in German eyes as an ordinary political party undergoing the ordinary penalty of defeat. We shall not have made real progress in reforming them until they think that both the Nazi Party and the means we use to eradicate it are abnormal; but it will be a long time before that happens. But though outraged German Liberalism can hardly be expected to trouble us this winter, it seemed reasonable to expect that other symptoms of resurgence might do so. National resentment, hitherto so curiously quiet; national-socialist feeling, proscribed but so natural to the Germans and so widely diffused; and the sense of economic self-preservation— all these, as the Germans felt the sharp draught of winter, might have been expected, if not to blaze, at least to give off sparks.

Yet so far scarcely a spark has appeared. The American authorities at the end of October felt indeed that the public tone in their area was turning nasty. Resentment of the occupation has here and there been expressed, sometimes even in minor demonstrations. Resentment has also been more responsibly expressed, they say, against what is felt to be a wrecking policy on the part of the American Military Government. But it is significant that this resentment is apparently not so much against the rigours of Law Number 8 and its drastic measures of denazification as against the withdrawal of United States Military Government Detachments, a withdrawal interpreted to mean that the Americans are leaving Germany to its ruin. This is a very ill-developed kind of national resentment; and such as it was the sinister turn observed in October has turned no further. Attention lately seems to have switched to the disorderliness of Displaced Persons in the 190

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American Zone: though a quoted new week’s high in crime in the Western Military District which includes only one murder strikes some of our more distressful areas as fairly peaceful.

We never observed any marked turn in the Autumn in our own Zone. The people are less stupefied than they were, more vocal, here and there a shade truculent sometimes, and even show a little more disposition to take an interest in politics; but they are not troublesome. And though we are still prepared for a certain worsening of tone, it does not seem likely to be grave, unless under the strain of winter there is some breakdown in the administration.

The accelerated release of the remaining ex-soldiers will slightly increase our security problem. Of some 500,000 members of the German armed forces still held undischarged in the Zone or on the Line of Communication, nearly half will now be discharged in the next month. These releases add not much more than a tithe to the number already discharged; but they are mostly men whose homes are in the Russian or Polish Zones, not many of whom can expect soon to return there; and they do therefore constitute a potential source of trouble and discontent out of proportion to their numbers.

On the other hand the threat of uncontrolled westward movement of refugees swamping our eastward parts is dwindling. The movement, though large, is more or less under control; and is governed by Quadripartite Agreement. And though it is still possible that the situation may get out of hand, the weather is rapidly making it harder for refugees to get far on foot. In fact our main troubles this winter seem likely to be with the hard facts of economics—how to sustain the Zone with the minimum of starvation and disease. Our conflicts with the Germans lie still ahead; but they will come.

Recent Trade Union Activity The growing pains of the German trade unions continue. On the highest level, the Allied Control Council in Berlin has been forced to admit disagreement among its members about the future of the German Trade Union Movement, and has referred the matter to the four Allied Governments. In Berlin, too, the deadlock arising out of the Union elections remains, though it is reported that union membership is increasing. In the British Zone, the development of unions continues to be tentative, while the delegation of the British 191

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TUC which recently visited the British Zone and Berlin was highly critical of the German unions.

It was concerning the ‘Law relative to the formation, control, and functions of trade unions’ that the Allied Control Council for the first time publicly admitted disagreement among its members.

‘Decision could not be reached’, it was stated in the communiqué issued to the press, ‘in view of the position taken by the French delegation’. It goes without saying that the disagreement concerns not the principle of trade union liberties and the reconstruction of German trade unions—which are clearly admitted by the French delegation—but solely the question of unification and central direction of trade unions for the whole of Germany.

While the formation of a unified German trade union organisation is now being discussed by the four Allied Governments, the trade unions themselves continue to present a rather confused picture. In Berlin, there is no evidence that the problem of the trade union elections is near to a solution. The divergent views within the Kommandantura [sic] regarding the conception of democracy have recently been emphasised in the election of delegates at the railway workshops in Grunewald. In a part of the works where a ballot was organised, the Communists, who had previously held all the seats, found themselves represented by only two out of seven; in another part where voting was by ‘unanimous consent’ at an open meeting, the seven Communists were re-elected. In an attempt to solve this controversy it has been proposed that the Unions should answer a questionnaire concerning past elections. The questionnaire is at present being considered by the Russians.

The election question appears to worry the union officials much more than the members. This is because they feel that their hope of making trade unionism attractive to the workers lies in their becoming the recognised representatives of labour, and they can only hope to receive recognition as a properly elected body of officials. Among the workers themselves a cautious attitude seems to be [the] rule. In the Siemens works, for example, about half the workers are union members, and it is claimed that no pressure is used to make them join. Those who have not joined seem to be waiting to see what positive advantages the unions can offer.

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Nevertheless, there is no doubt that trade union membership in Greater Berlin is growing, and estimates as high as 300,000 members have been made. In the British sector the membership approximately doubled between the beginning of October and the middle of November, though progress seems to vary considerably between one Bezirk and another.

In the British Zone the chief event recently has been the visit of the delegation from the British TUC, led by Mr Will Lawther, President of the National Union of Mineworkers. On 23 November the British delegation met representatives of the German workers, including Hans Boeckler, who had been the leader in the attempt to form a single union of all trades for the whole of the North Rhine Province. The British delegation did not consider that a trade union structure of this kind would give satisfactory results, and confirmed the Military Government policy of encouraging local industrial unions to develop in a democratic process from the workers themselves. As a result of this meeting, there is a strong possibility that Boeckler will take the advice of the British trade unionists, and that the deadlock which has held up trade union development in the Ruhr and Rhineland for so long will shortly disappear. Mr Lawther also suggested to the German representatives that leaders of trade unions in the British Zone should get together and work out their problems in a uniform fashion.

Hamburg is still the leading centre of trade union activity in the British Zone; and OsnabrĂźck, Hanover, Meppen and Hamburg are still the only places where unions have passed beyond the first preliminary phase of development. Elsewhere activity is almost negligible. It has been suggested that one reason for this is the tendency for the pre-Nazi Union leaders (who were usually also political leaders) to take more interest at present in political parties than in the revival of trade unions. However this may be, it remains true that a great deal of the initiative in union development is being shown by men who are also active politically, and it is evident that the SPD retains its traditional influence within the unions, in spite of Communist attempts to infiltrate in order to increase the influence of the KPD, especially in elections of works councils in individual factories. On the whole, however, it must be stated that 193

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there is still little indication that the German trade unions are becoming a decisive feature of industrial or political life.

The Arrests of 30 November The case against the eighty leaders of Ruhr heavy industry who were arrested by Field Security of 1 Corps District on the night of 30 November was not, as some of the Sunday papers announced, that they were held to be eligible for trial as war criminals (although, incidentally, some of them had that qualification). They were interned as persons who, in the words of the Potsdam Declaration ‘constituted a danger to the Allied occupation and its interests’.

The first move in the operation was a recommendation made by the Deputy Chief of Staff (Exec) to the Standing Committee on Denazification that the German steel industry should be made the subject of a study such as that initiated in the case of the coal industry (which resulted in the arrest on 6 [5] September of the board of the Rhenish-Westphalian Coal Syndicate). As a result of consultation between the Intelligence Bureau, the Economic Division of the Control Commission and GSI, 1 Corps District (who had anticipated the request and had already set their own enquiry in motion), a first list of leaders of the steel industry was produced, and an examination of the past record and present situation of each subject was initiated.

An early requirement was background material upon the various concerns, trusts and cartels which the men in question had controlled, together with such historical information upon their personal and professional conduct up to the end of the war as would enable a judgement to be formed in general terms of the significance of individuals. This was supplied by the intelligence staff of the Economic Division, and was a basis for the more detailed personal enquiry, which was carried out by Field Security sections on the ground, under the direction of 1 Corps District.

These sections examined each man’s formal statement upon his Fragebogen [questionnaire] and compared it with the facts obtained by questioning the man himself, his neighbours, codirectors and employees, and by looking into his financial position and his archives. In this way a personal file was prepared on each individual, which was then sent to the Intelligence Bureau for a 194

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final estimate in consultation with the Economic Division, who could represent the viewpoint of Branches who might be interested in the employment of any one individual on technical grounds.

It was decided that to limit the enquiry narrowly to the steel industry as such would be to make an artificial distinction, since the German steel interests were so closely integrated with heavy industry as a whole that the majority of important men were deeply involved in other products, particularly coal, synthetic fuel, nonferrous metals and heavy engineering. For this reason the proposed purge was extended to include names not primarily concerned with steel.

The picture of German industrial intrigue, of mergers, subsidiaries, trusts and cartels leading up to the situation at the end of the war, is extremely complex, too much so to be outlined in this short article. It is sufficient to say that the organisations in which the enquiry was particularly interested included: (a) The components of the United Steels Trust (particularly Gelsenkirchener Mines, and the Phoenix and August Thyssen interests). (b) The Mannesmann Tube Works (a combine with very wide ramifications, particularly in Germany and Czechoslovakia). (c) Krupps. (d) KlĂścknerwerke AG (one of the most strongly entrenched private groups up to 1942, after which the State exercised close control). (e) The Haniel concern (a very old private interest with enormous coal holdings). (f) Hermann GĂśringwerke (the largest state-owned complex in the world). (g) Hoesch AG (a very large trust). (h) The Stinnes trust (built up by the son of Hugo Stinnes). (j) The Flick trust (built up by the financier Friedrich Flick within the last thirty years). (k) The Otto Wolff group (which includes a large proportion of the German zinc interests).

From well over three hundred names included in the main and subsidiary lists, eighty-four were finally selected for arrest. The first consideration was the subject’s Party history; in many cases, 195

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however, the formal contacts with the Party were not strong, and it frequently occurred that an influential industrialist held, for instance, only minor SA rank. After that his background history and that of his firm were jointly examined, then his reputation among the workers, his family connections, his financial history, his political colour before the Nazi Party came into the field.

A good example to quote is that of Karl Hermann Kauth, a director of Ruhrstahl AG, who joined the Party in April 1939 holding no Party rank, but who carried out all party ordinances within Ruhrstahl, saw to it that party badges were worn, made strongly Nazi speeches to the workers, with whom he had a bad reputation, and was reported to have maltreated foreign workers.

He was well connected in heavy industry, his father-in-law being chairman of the Bochumer Verein (a component of the United Steels Trust), and had close connections with Albert Vögler, who was an industrial backer of the Nazi Party before it gained power.

His income rocketed from 3,000 RM per annum in 1933 to 21,600 RM in 1944. On such grounds, as a man deeply implicated in and profiting from the Party’s warmongering, he was held to be essentially unreliable and hostile to Allied aims, and eligible for internment.

Kauth’s is by no means the most impressive case, but is selected as fairly representative. His income, for instance, does not compare with that of Hermann Wenzel, deputy chairman of United Steels, which rose from 300,000 RM in 1933 to just short of two millions in 1944, or Adolf Klinkenberg, chairman of the Dortmund-Hörder Hüttenverein, which reached a similar figure from 120,000 RM ten years earlier. His Party association and the part he played in turning Nazism to his private gain are more open than in the case of such a man as Heinz Gehm, chairman of Deutsche Edelstahlwerke, who took great advantage of the aryanisation of industry.

There was a plea for the omission from the final arrest list of eight individuals, on behalf of the North German Coal Control, and these cases were finally decided upon by the Standing Committee for Denazification, which functions as a court of appeal on such occasions. As a result six men (including WENZEL, mentioned above) were removed from the list for review in six months time, and two were retained on the list. Instructions were then given for 196

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the arrests to be made on the night 30 November/1 December, and arrangements made for the release of the news to the press, with special exploitation in greater detail for the German papers, particularly in the Ruhr. Of the original eighty-four on the arrest list, seventy-six were picked up on the night of the main operation, and five have been arrested subsequently, leaving three outstanding, of whom one is seriously ill and two are out of the Zone.

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29 Record of Meeting in Moscow, 18 December 19451 Present: M. Molotov, M. Vyshinski, M. Pavlov.

Mr Bevin, Sir A. Clark Kerr, Mr McAfee.

The Foreign Secretary began by asking M. Molotov why he had raised the question of Greece. In London it had been left to us. M. Molotov said that events in Greece had developed feverishly, and that we had been unable to emerge from a sustained crisis. The Foreign Secretary said that this state of things was not unusual. To this M. Molotov said that these conditions could not exist elsewhere.

The Foreign Secretary said that conditions in Greece were different from those in other countries. Greece had been invaded by both the Italians and the Germans. The whole civil service had been destroyed as had been also the fleet and the army. There was nothing left. Molotov said that the Germans and Italians had gone out of Greece a long time ago. To this the Foreign Secretary replied that it was open to him to do one of two things; either to force a dictatorship on the country or to find democratic legs for it to stand upon. He thought the latter better. To this Molotov agreed. The Foreign Secretary went on to explain that there had been a civil war caused on the one hand by Left extremists and on the other by Right extremists. He was taking steps to see that the Greek people would have proper elections as soon as possible and when a stable Government was set up there would be no more reason for the presence of British troops. Molotov claimed that there were many people in Greece who were displeased with the present Government, and that there had been far too many reprisals. The Foreign Secretary asked whom reprisals had been taken against.

Molotov said that they had been taken against people who had fought the Germans. The Foreign Secretary said that this was not 1

TNA FO 371/50758, U1374/20/70. Documents on British Policy Overseas, Ser. 1, Vol. 2, No. 300. This meeting took place in the margins of the Council of Foreign Ministers meeting held in Moscow, 16-26 December 1945.

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so. He was not encouraging reprisals. The British army had nothing to do with them. They were the work of the Greek Government. He was all in favour of a speedy amnesty.

Molotov said that the Greeks were not masters in Greece. The Foreign Secretary asked who was. Molotov said that the British were. To this the Foreign Secretary replied that the conditions in Greece were the same as in Bulgaria where the Russians were masters. Molotov said there had at least been elections in Bulgaria.

The Foreign Secretary said that nevertheless the Russians were the real masters.

Molotov replied that he could not deny that Russian influence in Bulgaria was ‘not weak’. Twice the Russians had delivered Bulgaria from foreign rule.

The Foreign Secretary said that he was sorry he could not consider the withdrawal of British troops in Greece for the present.

Nevertheless he would like to see the whole question of armies of occupation cleared up.

Molotov said that Greece was an ally. But Bulgaria was not. The Russians had an understanding with the Bulgarians about their occupying troops. In Greece, on the other hand, no one knew what sort of a Government was in office. If there had been any agreement between His Majesty’s Government and the Greek Government nothing was known about it, for it had never been published.

The Foreign Secretary said that there was no written agreement between ourselves and the Greeks.

Molotov said what about Varkiza? The Soviet Government had not been a party to this agreement which had not been carried out.

The Foreign Secretary said that he would like to explain the whole story. He too had not been a party to the Varkiza agreement. He had recently been asked about the plebiscite and the elections, which must come first. The Varkiza agreement had provided for a plebiscite before the elections. All those who had been parties to the Varkiza agreement, including the E.A.M., had wanted to change this, and had said that otherwise there would be trouble. He had therefore agreed to the elections being put ahead of the plebiscite.

All he had done was to agree to what all parties had wanted.

Molotov claimed that the Varkiza agreement had foreseen procedure which would lead to the setting up of the Greek 199

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Government. The agreement had been violated in that the parties had not been consulted and that Governments had been set up and put down by the British. The Foreign Secretary said that his intervention had been restricted to the question of the plebiscite, and that he had always refused to influence the formation of the Government. Molotov continued to insist that our influence in Greece was quite strong enough to produce any kind of Government we liked. In reply to this the Foreign Secretary asked Molotov whether he wished him to side with the various parties. So far he hadn’t done so. Molotov explained that what he meant was that events had not fulfilled the terms of the Varkiza agreement.

There had been no amnesty. Thousands of people were in prison and had been in prison ever since the liberation. All the world was saying that. The Foreign Secretary said that he was urging a wide measure of amnesty. There would soon be few left in prison who were not guilty of murder, both of the party of the Right and of the party of the Left.

Molotov claimed that the present Government was persecuting those who had fought against the Germans and accusing them of all kinds of crimes. In addition to this there were in the Government some men who were known to have helped the Germans. The Greek Government’s justification of itself did not correspond with the facts.

The Foreign Secretary said that all that he wanted was to see the setting up of a stable Government and then to clear out of Greece.

Molotov interjected ‘stable and democratic’. The Foreign Secretary said ‘certainly’. Greece must have a democratic Government established by free elections and then she could be left alone.

Molotov said that it was high time to leave her alone to settle her own affairs.

The Foreign Secretary explained that the elections would not now take place until the end of March, having been put off until then on account of the snow in the mountainous districts. The Greek Government had suggested April as a month in which it was easier for the voters to travel, but he (Mr Bevin) would not admit any pretext for further delays beyond that date. Molotov suggested that many people had no faith in the Greek elections. The Foreign Secretary said that there was a widespread distrust of elections in 200

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all the Balkan countries. Molotov said that the Balkan countries had been enemies while Greece had been an ally. The Foreign Secretary said that there had been a lot of loose talk about Greece. He had chosen a band of good men to go to Greece to get the elections straight. Here Molotov reverted to his claim that the prisons were too full of people who had fought the Germans. The Foreign Secretary said that he was looking into that. Meanwhile he would be glad to see the whole question of the Balkans cleared up.

At this Molotov showed interest and asked Mr Bevin what he suggested. The Foreign Secretary replied that he would like, for instance, to see the Bulgarian army demobilised. Its present size only served to create fear in Bulgaria. It was important that the element of fear should be removed in all these little countries. No one wanted to see the troubles of these little States disturb relations between ourselves and the Soviet Union. (To this Molotov agreed.)

He would like to see the withdrawal of all troops from the Balkans.

Molotov asked: What else? The Foreign Secretary reminded him that we had recently approached the Soviet and American Governments about the reduction of the numbers of Allied troops in Austria. He said that there still remained, according to his information, some 340,000 foreign troops in Austria. Their presence was an intolerable economic burden upon Austria which would be eased. There was no need for so many foreign troops now that the elections were over.

Molotov asked: What else? The Foreign Secretary said that there were far too many troops in Hungary and in Poland, and that a general easing of this situation by common consent amongst the Allies would create confidence. He then turned to Iran and reminded Molotov that, in accordance with our plan to withdraw, the number of our troops had now dwindled to about 6,000 in the extreme South of Persia. His information showed that the Russians still had about 30,000 troops in Northern Persia. There had been difficulties in Iran which called for a frank exchange of views.

These difficulties might be removed if they were discussed in a friendly way.

The Foreign Secretary went on to say that there were parts of the world where Soviet interests and British interests touched, for instance in Greece, Turkey and Persia. There would be no 201

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misunderstanding if we and the Russians fully appreciated each other’s motives. The last thing he wanted was to see ourselves in conflict with the Soviet Union.

Molotov asked: What else? The Foreign Secretary said that there remained the question of peace treaties, but this would be better discussed in the company of Mr Byrnes. Reverting to Iran, the Foreign Secretary said that he was not making any concrete proposals, but he would like Molotov to understand that for many reasons there was deep sympathy and feeling in the United Kingdom for Iran, and that constant questions about that country were put in Parliament. He had been at special pains in his replies to say nothing that could be provocative to the Soviet Union.

The Foreign Secretary then turned to Indonesia, and explained that our position there was quite simple. Holland had declared war on Japan. The Japanese had attacked and occupied her islands.

When the arrangements had been made for the division of commands in the Far East the duty of taking the surrender of the Japanese and of the restoration of the civil government in the Dutch islands had fallen to us. We had not expected any trouble in carrying this out. Our duty had been to remove some hundreds of thousands of Japanese and between 300,000 and 400,000 internees, Dutch, Europeans and Eurasians. We had set aside quite a small force to do this. Then the Indonesians had attacked us. We had been confronted by nationalist claims, now for a commonwealth and now for independence. First difficulties had been created by Soekarno, who was said to have collaborated with the Japanese.

Nevertheless, we had advised the Dutch to negotiate with them and to send a plenipotentiary to settle the question. We in our turn had sent General Mallaby to meet the Indonesians and he had been murdered. That did not make things any easier. Our activities had been restricted to trying to rescue the internees and to gather up all the Japanese in the islands. We had advised the Dutch, and were still doing so, to negotiate with a man called Sjahrir in order to settle the constitutional question. Sjahrir had himself confessed that he could not control the situation. The Dutch representative, van Mook, had now gone home to confer with his government and the Prime Minister would probably see him. All we wanted was an early settlement, whatever it might be. Molotov might rest assured 202

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that we were not expanding the British Empire. When we had completed the task allotted to us we would clear out and leave the rest to the Dutch and the Indonesians. He didn’t know how it would work out and he didn’t much care.

The Foreign Secretary then turned to India, and explained the difficulty of our task there. We were hoping for elections in March in spite of religious and communal difficulties. And after the elections our intention was to call upon the Indians to frame a Constitution.

The Foreign Secretary said that he had now covered all his ground and he hoped that Molotov would tell him what the Soviet Government were up to. Molotov thanked the Foreign Secretary for his ‘extensive report’. The Foreign Secretary said that he had put all his cards on the table. Molotov said that it was essential that both sides should put their cards on the table. Their relations as allies demanded the utmost frankness; and here he made a little speech giving the reasons, in war and in peace, which made such frankness essential. The two countries had to work together. They had to keep each other fully informed. The Soviet Union, he liked to think, had not lagged behind Great Britain in the matter of frankness. Now he would reply to Mr Bevin’s ‘report’.

Molotov began with the Balkans, and claimed that the conditions in Greece were completely different from those in Roumania and Bulgaria. Greece had been an ally. Bulgaria and Roumania were defeated enemies. In the first instance the presence of foreign troops in Greece had been justified by the necessity for military operations, but when the military situation had been stabilised there was no further need for foreign troops. The Foreign Secretary might claim that Poland was also an ally and that there was no need for Soviet troops there. But the difference between Greece and Poland was obvious. The presence of the Red Army in Poland had been discussed at Berlin and the Soviet Government had faithfully fulfilled their promise to reduce the numbers of their troops to a figure needed to safeguard the lines of communication to Germany which had to pass through Poland, for there was no other road. Most of the Soviet troops in Poland were in the former German territories which were now in Polish hands. This could not be said for Greece, which did not lie on the lines of communication 203

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to a defeated country. Here he reminded the Foreign Secretary that the Red Army had withdrawn from Czechoslovakia because no lines of communication lay through that country. The withdrawal had taken place on Soviet initiative because the Soviet Government had felt that it was no longer necessary to keep troops in an allied country. It was wrong to jumble all the Balkans together. In the course of the present discussion mention had been made of Bulgaria, Roumania and Hungary, which were occupied in virtue of armistices which had been signed with these countries. At the London Conference in connexion with the peace treaties, the Americans had even suggested that the Red Army should remain in Roumania in order to ensure the line of communications with Austria. This had been agreed to. As to Austria, the proposal for the reduction of the Allied armies was now being studied by the Soviet military authorities.

Molotov then turned to Iran and reminded the Foreign Secretary that the question of the withdrawal of troops had been discussed twice within recent months, in Berlin and in London. On both occasions it had been agreed to abide by the treaties. There had been no disagreements. The Soviet Government had recognised the treaties as binding and did not see why the matter should be taken up again. The events which had occurred in Azerbaijan had been a completely natural phenomenon of post-war conditions. Far from helping this movement, the Red Army had been careful not to involve itself in any way. The whole matter was one of ‘local national aspirations’. It was a purely internal matter for Iran. Of course, if the movement had been hostile to the Russians, the Soviet Government could not have played the part of impassive onlookers, because of the proximity of Azerbaijan to the frontiers of the Soviet Union. But, in fact, the whole thing had been a national democratic movement directed neither against the Persian Government nor the Soviet Government. The Russians were determined not to intervene, although the troubles were occurring on their frontiers.

Here Molotov said that he wished to call the Foreign Secretary’s attention to the situation in the various countries occupied by the Red Army. It would be seen that the presence of the Red Army in these countries in no way hampered the expression of prevailing popular opinion. This had been true of Iran as it had also been true 204

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of Austria. The aloofness of the Red Army from the internal affairs in both these countries had been proved by the results of the elections. This had also been true in respect of Bulgaria and Hungary where elections had been held without any pressure from the Red Army. The results in these two countries had been entirely different. The elections had expressed the wishes of the respective local populations. It had also been so in Finland, where there had been no kind of intervention, although Finland had been a conquered country. The Russians had made no attempt to intervene because the policy of the Finnish Government had been friendly.

To sum up, in Bulgaria, Hungary, Austria, Finland and Persia the people had been left to settle their own affairs.

Molotov then touched very briefly on Indonesia and explained that he had been impelled to raise this question because events tended to point to an entirely new war on top of the old one which, Thank God, was over.

Molotov went on to say that, as the Foreign Secretary had referred to India, he would like to say a few words. The Soviet Union had displayed extreme discretion about India during the whole war, realising that India had been a problem of the highest importance for the British Empire. He then switched suddenly to Germany and the Far East and remarked that there would be questions in regard to these two regions which it would be wise to talk over.

The Foreign Secretary said that he would keep Molotov currently informed about events in India because that country was an important arc on the map so far as the Far East was concerned and that it would have to be carefully handled. He hoped to see the question settled as soon as possible. The Foreign Secretary went on to say that a general exchange of views which had taken place this afternoon could do nothing but good. We and the Soviet Union should keep each other constantly informed. He and Molotov had agreed that there must be complete frankness. On the British side there were certain places in which we were vitally interested and in which we must be careful not to clash with each other. Mosul, for instance, and all it implied was of the highest interest to us. We must be extra careful not to clash in such places as this. Molotov replied that unfortunately, at least in certain places, we did not seem 205

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to take Soviet interests into consideration; for instance, in the States bordering on the USSR. The Foreign Secretary quickly asked which. Molotov replied, Roumania for instance. Roumania had attacked the Soviet Union. It was still occupied. No peace treaty had been signed. The Soviet Government could not tolerate in Roumania a Government hostile to them or a Government which did not enjoy the overwhelming support of the Roumanians. His Majesty’s Government had disapproved of this government when it was set up. The Foreign Secretary reminded Molotov that he had often said that we would never support any government hostile to the Soviet Union. We were not yet convinced that the elections had been right. But this matter could not be discussed without Mr Byrnes. Molotov reminded the Foreign Secretary that there had been no elections as yet in Roumania and the Foreign Secretary said that he had been thinking of Bulgaria. He hoped that all this Balkan business would soon be settled. Molotov said that he hoped a settlement would be reached which did not ignore the facts of life.

To this the Foreign Secretary replied by recalling the story of what the man said when he was put into his coffin. Molotov then said that he would ponder upon what the Foreign Secretary had said, and the conversation, which had been friendly throughout, came to an end.

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30 Letter from Sir W. Eady to Mr R.H. Brand (Washington)1 TREASURY CHAMBERS, 22 December 1945 My dear Brand, I know you will forgive me for not having written to you during the last few weeks. The strain here, and particularly upon Alec [Grant] and me, has been very heavy, as it has been on all of you, and I hope you are all going to take a bit of a rest.

As you will have gathered from the press cables, the Agreement had a very critical Press and House of Commons. As far as the House of Commons was concerned there were confused reasons for that. In the first place they were asked in two days to debate not only the Loan Agreement, but Bretton Woods, and the enormous length of the paper on Commercial Policy.

Also there was a certain emotional anti-American attitude. This, I think, was more a reflex of disappointment about conditions over here, especially as the newspapers have been carrying glowing accounts of the speed of demobilisation in the US, the rate of reconversion, and particularly the fullness of the shops. Here, queues have been almost worse than usual, and the shops more empty. Demobilisation has been rather patchy, and reconversion, for a whole variety of reasons, has been slow. This, as I say, produced a certain amount of emotion, and it is a good thing that it has now been discharged.

The more serious criticism was based on two considerations, that the Agreement, Bretton Woods, and the commercial stuff did not seem to be based upon an understanding of the realities of our position, and all the grave dislocation in the countries which have been ravaged by the war. Free enterprise looks a thing that people can afford when they are economically in better health.

There was a good deal of disappointment also at the terms of the loan itself, largely because earlier messages had led some people to hope that we would get very much better terms. But the greater anxiety was upon the strings. Bretton Woods is not to the taste of a 1

Oxford University, Bodleian Library: Brand MSS/197. Documents on British Policy Overseas, Ser. 1, Vol. 4, No. 2.

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good many people, but we had always been able to say that we had a transitional period, and that we would move progressively towards the multilateralism which is inherent in Bretton Woods and in the approach to commercial policy. The formal rescinding of our rights under Article XIV came as a shock, and especially to people like John Anderson who, on balance, regarded the whole business as one that could be accepted.

My personal views do not now matter very much. I was not shocked at the terms of the Loan itself. If one stands back a little I think it must be admitted that a loan of this size at 2 per cent with nothing for 5 years and a waiver clause, is, as things go, generous.

My general feeling about the loan is that when it became clear about the middle of October that the best we could hope for was a loan not fully adequate for our needs as Keynes saw them, and at 2 per cent, we ought to have had a fuller consultation before going on to the other parts of the negotiation. Obligations which are very reasonable on a loan free of interest or on a grant in aid look rather different against a loan at 2 per cent, especially if the amount of the loan is cut rather fine, though on this last point I think several of us differ from Keynes. We think we have probably got enough.

On the strings, and particularly the Sterling Area, I have never waivered [sic] from the policy that it was a necessity for us, in our own interests, to liberalise the Sterling Area as soon as possible.

But as you will know from the various telegrams that have been sent we would have much preferred that obligation to be less precisely defined, and to have rested more upon our good faith and the clear need for us to take the matter very seriously. We could not expect to borrow from the Sterling Area much longer without some releases of Sterling.

As I think you may remember I personally doubted whether we ought to accept Bretton Woods convertibility under two years, even with a grant-in-aid, and I sent a note to Maynard in the summer on that.

When we saw that we would clearly have to accept some convertibility, at any rate for the United States, and in respect of current earnings, we were then concerned with the negotiating position with the Sterling Area. But I confess that the formal abrogation of Article XIV was a bit of a shock. It is true that in 208

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other sections of the Agreement we were signing away a large part of convertibility, but there is a difference between that and the formal and absolute abrogation of our rights, especially as the convertibility obligations under Bretton Woods are wider than those under the Agreement. This, however, raises an old controversy which we might allow to sleep.

But once the shape of the Agreement was inevitable, we turned to look at it constructively. It is clear that we must make a special effort in 1946 to ensure a sufficient volume of exports to reassure our Sterling creditors. I do not think they will rush to convert Sterling into Dollars very rapidly, especially if, as may be expected, US prices rise. But of course they are interested now in goods and not money. It is here that the Agreement can be made into a really valuable tonic, even if its taste is rather bitter. The country is tired and dissipirited [sic]. Ministers, who have taken on an enormous job, are also tired, and rallying the popular mood for hard work would not be easy. Now with the benefits and obligations of the Agreement we have a good talking point and I hope that in January you will see a real effort being made to pull the economic situation together over here.

Therefore you must not think that we are despondent over the results of the negotiations, or defeatist for the future. Maynard is right in saying that we should look to the future and not to the past, and also that by the terms of this Agreement we have bought considerable freedom from interference by the United States in our economic affairs.

Maynard’s own speech in the House of Lords was brilliant, especially as he had to adapt his general approach to the views that Ministers had expressed in the Commons. He could not seek to praise the Agreement or even to defend it. What he did was even more valuable. He explained it from the American standpoint, and had a remarkable effect in bringing us to a recollection of our better selves. I gave him last night a set of the Manchester Guardian leaders since the loan was published. The M.G. had been the most bitter of the daily newspapers about the whole agreement, but after Maynard’s speech they rather apologised to their readers for a lack of generosity in their previous writings, and while they still make a wry face they have contributed to restoring the emotional balance.

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There were other irrelevancies which made the mood here difficult. The American attitude to Palestine had really got under our skins, and their flow of sanctimonious advice to us about Java etc. was also rather stinging.

However, here we are. We are deeply grateful to all of you for your patience and pertinacity, and it may be that after a week’s holiday (all senior people in the Service have been ordered by the Cabinet to take a full week at Christmas) we shall feel better about everything.

We are now preparing for the Canadian talks. Maynard’s present intention is not to go himself. He is obviously tired and apart from that there may be other reasons why his present view is right, though of course there really is no substitute for him in the exposition of a case of this kind.

It may be therefore that I shall have to go. If I do I hope to be accompanied by Cobbold and of course either to be joined by you, or to work very closely under your guidance. We are rather inclined at the moment to handle the matter from here and not through you personally, because we believe it would be wise, on political grounds, and possibly also in its financial results, to distinguish between the nature of our approach to Canada, which is after all one of the family, and our approach to a ‘foreign’ country like the United States. But I should welcome any advice you can give us upon the handling of the Canadian position.

I gather from Edward that you are agreeing to stay on for a short time longer. That is a great comfort, for there is still a certain amount of tidying up to be done in North America and we shall all miss horribly your ripe and calm wisdom.

I think we are going to have some lively negotiations with the Sterling Area countries, and also with some of our Payment Agreement countries. Portugal already has become inquisitive about what is going to happen to the Sterling she accumulates during 1946. But as Portugal is rather small we have been rough and two days ago I got a whispered message that their nerve had cracked. This cracking of the nerve may possibly lead to a judicious importation of good quality port. No Treasury man can go into any of the Clubs without somebody coming across and saying—‘When can we replenish our cellars?’.

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The Argentine are also making some tactical noises. But I do not expect that will come to much. We have a very entertaining project for the Argentine in the late Spring. It should produce a very satisfactory deal about the Argentine railways. Of course it depends upon the result of the Argentine Elections and the appearance of a Government of enough stability to be able to sign its name. Keep this very much under your own hat, for leakage would be damaging.

As for India we will not, I think, get any out and out cancellation, not even of 1 rupee. At any rate that is Archie Rowlands’ judgment at the moment. But he thinks we can sell to them at a good price miscellaneous stores which are in India, including military equipment, possibly getting some retrospective payment for military equipment which hitherto we have regarded as our own liability, and take over the annual obligation of the Sterling pensions in return for a substantial capital payment. This might bring the ‘cancellation’ by India up to about £400 million, rather more than half being the pensions deal. We have got to remember that 1946 is a difficult political year in India and Pethwick [sic] Lawrence will certainly not be willing to turn on the heat.

Egypt also may prove disappointing. 1946 is the year of negotiating the Anglo-Egyptian Treaty, and there are other complications—the Suez Canal, and the future of the Sudan, etc., so that the Foreign Office may ask us not to spoil the game by our ugly insistence upon money.

I cannot, however, lose any sleep (I have had none to lose for six weeks) on the subject of the total cancellations. The crucial thing is the amount of accumulated balances that we have to release forthwith and by instalments, and Maynard says that there is no doubt that we have a completely free hand on that to do no more than we think justified. I admit to you that I am rather surprised at this. Before the negotiations began I had always understood that the Americans were really excited about the accumulated balances which they regarded as giving us a strangle-hold over markets.

Current earnings may or may not prove difficult for us. But of course any large and premature release of accumulated sterling might put a very heavy strain on our reserves in 1947.

This is a horribly technical letter to be writing to you at Christmas time and after all the heavy time you have had, but I 211

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thought you might be interested in a gossipy letter about the way we are thinking.

We have just cleared up the Franc rate at a figure which we think a reasonable one.

We shall be continuing our Payments Agreements with the necessary modifications. We are rather scared lest 1946 should become an era of considerable instability in the exchanges of Western Europe, and the Payments Agreements are certainly a big contribution to stability. It is for that reason also that we were very keen that the French should devalue, but not grossly under-value, for a serious under-valuation would probably have shaken the other exchanges, like the Belgian, Dutch, etc. When you get a chance you might explain to Harry White that the Payments Agreements are a big contribution to stability in a part of the world where instability would soon spread like an infection. They are not bilateral in the sense of trade, and of course one result of the Agreement will be to introduce some progressive convertibility into them.

Now with that I end. I shall wait for your reply to my telegram of yesterday about the organisation of Bretton Woods before writing to you on that dreary subject.

My personal thanks to you and all for what you have done and all good wishes for the New Year.

Yours ever, W.E.

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31 Report of the Meeting of the Foreign Secretaries of the Union of Soviet Socialist Republics, the United States of America and the United Kingdom1 MOSCOW, 27 December 1945 At the Conference which took place in Moscow from the 16th December to the 26th December, 1945, of the Ministers of Foreign Affairs of the Union of Soviet Socialist Republics, the United States of America and the United Kingdom, agreement was reached on the following questions: I. Preparation of Peace Treaties with Italy, Roumania, Bulgaria, Hungary and Finland As announced on the 24th December, 1945, the Governments of the Soviet Union, the United Kingdom, and the United States have agreed and have requested the adherence of the Governments of France and China to the following procedure with respect to the preparation of peace treaties.

1. In the drawing up by the Council of Foreign Ministers of treaties of peace with Italy, Roumania, Bulgaria, Hungary and Finland, only members of the Council who are, or under the terms of the Agreement establishing the Council of Foreign Ministers adopted at the Berlin Conference are deemed to be, signatory of the Surrender Terms, will participate, unless and until the Council takes further action under the Agreement to invite other members of the Council to participate on questions directly concerning them.

That is to say: (a) The terms of the peace treaty with Italy will be drafted by the Foreign Ministers of the United Kingdom, the United States, the Soviet Union and France; (b) The terms of the peace treaties with Roumania, Bulgaria and Hungary by the Foreign Ministers of the Soviet Union, the United States and the United Kingdom; 1

TNA FO 371/50758, U1374/20/70. Documents on British Policy Overseas, Ser. 1, Vol. 2, No. 356.

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(c) The terms of the peace treaty with Finland by the Foreign Ministers of the Soviet Union and the United Kingdom.

The deputies of the Foreign Ministers will immediately resume their work in London on the basis of understandings reached on the questions discussed at the first plenary session of the Council of Foreign Ministers in London.

2. When the preparation of all these drafts has been completed, the Council of Foreign Ministers will convoke a conference for the purpose of considering treaties of peace with Italy, Roumania, Bulgaria, Hungary and Finland. The conference will consist of the five members of the Council of Foreign Ministers, together with all members of the United Nations which actively waged war with substantial military force against European enemy States, namely: Union of Soviet Socialist Republics, United Kingdom, United States of America, China, France, Australia, Belgium, Belorussian Soviet Socialist Republic, Brazil, Canada, Czechoslovakia, Ethiopia, Greece, India, the Netherlands, New Zealand, Norway, Poland, Union of South Africa, Yugoslavia and Ukrainian Soviet Socialist Republic.

The conference will be held not later than the 1st May, 1946.

3. After the conclusion of the deliberations of the conference and upon consideration of its recommendations the States signatory to the terms of armistice with Italy, Roumania, Bulgaria, Hungary and Finland—France being regarded as such for the purposes of the peace treaty with Italy—will draw up final texts of peace treaties.

4. The final texts of the respective peace treaties as so drawn up will be signed by representatives of the States represented at the conference which are at war with the enemy States in question. The texts of the respective peace treaties will then be submitted to the other United Nations which are at war with the enemy States in question.

5. The peace treaties will come into force immediately after they have been ratified by the Allied States signatory to the respective armistices, France being regarded as such in the case of the peace treaty with Italy. These treaties are subject to ratification by the enemy States in question.

II. Far Eastern Commission and Allied Council for Japan A. Far Eastern Commission 214

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Agreement was reached, with the concurrence of China, for the establishment of a Far Eastern Commission to take the place of the Far Eastern Advisory Commission. The Terms of Reference for the Far Eastern Commission are as follows: I. Establishment of the Commission A Far Eastern Commission is hereby established, composed of the representatives of the Union of Soviet Socialist Republics, United Kingdom, United States, China, France, the Netherlands, Canada, Australia, New Zealand, India, and the Philippine Commonwealth.

II. Functions A. The functions of the Far Eastern Commission shall be: 1. To formulate the policies, principles, and standards in conformity with which the fulfilment by Japan of its obligations under the Terms of Surrender may be accomplished.

2. To review, on the request of any member, any directive issued to the Supreme Commander for the Allied Powers or any action taken by the Supreme Commander involving policy decisions within the jurisdiction of the Commission.

3. To consider such other matters as may be assigned to it by agreement among the participating Governments reached in accordance with the voting procedure provided for in Article V-2 hereunder.

B. The Commission shall not make recommendations with regard to the conduct of military operations nor with regard to territorial adjustments.

C. The Commission in its activities will proceed from the fact that there has been formed an Allied Council for Japan and will respect existing control machinery in Japan, including the chain of command from the United States Government to the Supreme Commander and the Supreme Commander’s command of occupation forces.

III. Functions of the United States Government 1. The United States Government shall prepare directives in accordance with policy decisions of the Commission and shall transmit them to the Supreme Commander through the appropriate United States Government agency. The Supreme Commander shall 215

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be charged with the implementation of the directives which express the policy decisions of the Commission.

2. If the Commission decides that any directive or action reviewed in accordance with Article II-A-2 should be modified, its decision shall be regarded as a policy decision.

3. The United States Government may issue interim directives to the Supreme Commander pending action by the Commission whenever urgent matters arise not covered by policies already formulated by the Commission; provided that any directives dealing with fundamental changes in the Japanese constitutional structure or in the rĂŠgime of control, or dealing with a change in the Japanese Government as a whole will be issued only following consultation and following the attainment of agreement in the Far Eastern Commission.

4. All directives issued shall be filed with the Commission.

IV. Other Methods of Consultation The establishment of the Commission shall not preclude the use of other methods of consultation on Far Eastern issues by the participating Governments.

V. Composition 1. The Far Eastern Commission shall consist of one representative of each of the States party to this agreement. The membership of the Commission may be increased by agreement among the participating Powers as conditions warrant by the addition of representatives of other United Nations in the Far East or having territories therein. The Commission shall provide for full and adequate consultations, as occasion may require, with representatives of the United Nations not members of the Commission in regard to matters before the Commission which are of particular concern to such nations.

2. The Commission may take action by less than unanimous vote provided that action shall have the concurrence of at least a majority of all the representatives, including the representatives of the four following Powers: United States, United Kingdom, Union of Soviet Socialist Republics, and China.

VI. Location and Organisation 1. The Far Eastern Commission shall have its headquarters in Washington. It may meet at other places as occasion requires, 216

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including Tokyo, if and when it deems it desirable to do so. It may make such arrangements through the Chairman as may be practicable for consultation with the Supreme Commander for the Allied Powers.

2. Each representative on the Commission may be accompanied by an appropriate staff comprising both civilian and military representation.

3. The Commission shall organise its secretariat, appoint such committees as may be deemed advisable, and otherwise perfect its organisation and procedure.

VII. Termination The Far Eastern Commission shall cease to function when a decision to that effect is taken by the concurrence of at least a majority of all the representatives including the representatives of the four following Powers: United States, United Kingdom, Union of Soviet Socialist Republics, and China. Prior to the termination of its functions the Commission shall transfer to any interim or permanent security organisation of which the participating Governments are members those functions which may appropriately be transferred.

It was agreed that the Government of the United States on behalf of the four Powers should present the Terms of Reference to the other Governments specified in Article I and invite them to participate in the Commission on the revised basis.

B. Allied Council for Japan The following agreement was also reached, with the concurrence of China, for the establishment of an Allied Council for Japan: 1. There shall be established an Allied Council with its seat in Tokyo under the chairmanship of the Supreme Commander for the Allied Powers (or his Deputy) for the purpose of consulting with and advising the Supreme Commander in regard to the implementation of the Terms of Surrender, the occupation and control of Japan, and of directives supplementary thereto; and for the purpose of exercising the control authority herein granted.

2. The membership of the Allied Council shall consist of the Supreme Commander (or his Deputy) who shall be Chairman and United States member; a Union of Soviet Socialist Republics 217

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member; a Chinese member; and a member representing jointly the United Kingdom, Australia, New Zealand, and India.

3. Each member shall be entitled to have an appropriate staff consisting of military and civilian advisers.

4. The Allied Council shall meet not less often than once every two weeks.

5. The Supreme Commander shall issue all orders for the implementation of the Terms of Surrender, the occupation and control of Japan, and directives supplementary thereto. In all cases action will be carried out under and through the Supreme Commander who is the sole executive authority for the Allied Powers in Japan. He will consult and advise with the Council in advance of the issuance of orders on matters of substance, the exigencies of the situation permitting. His decisions upon these matters shall be controlling.

6. If, regarding the implementation of policy decisions of the Far Eastern Commission on questions concerning a change in the rĂŠgime of control, fundamental changes in the Japanese constitutional structure, and a change in the Japanese Government as a whole, a member of the Council disagrees with the Supreme Commander (or his Deputy), the Supreme Commander will withhold the issuance of orders on these questions pending agreement thereon in the Far Eastern Commission.

7. In cases of necessity the Supreme Commander may take decisions concerning the change of individual ministers of the Japanese Government, or concerning the filling of vacancies created by the resignation of individual cabinet members, after appropriate preliminary consultation with the representatives of the other Allied Powers on the Allied Council.

III. Korea 1. With a view to the re-establishment of Korea as an independent State, the creation of conditions for developing the country on democratic principles and the earliest possible liquidation of the disastrous results of the protracted Japanese domination in Korea, there shall be set up a provisional Korean democratic Government which shall take all the necessary steps for developing the industry, transport and agriculture of Korea and the National culture of the Korean people.

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2. In order to assist the formation of a provisional Korean Government and with a view to the preliminary elaboration of the appropriate measures, there shall be established a Joint Commission consisting of representatives of the United States command in Southern Korea and the Soviet command in Northern Korea. In preparing their proposals the Commission shall consult with the Korean democratic parties and social organisations. The recommendations worked out by the Commission shall be presented for the consideration of the Governments of the Union of Soviet Socialist Republics, China, the United Kingdom and the United States prior to final decision by the two Governments represented on the Joint Commission.

3. It shall be the task of the Joint Commission, with the participation of the provisional Korean democratic Government and of the Korean democratic organisations to work out measures also for helping and assisting (trusteeship) the political, economic and social progress of the Korean people, the development of democratic self-government and the establishment of the national independence of Korea.

The proposals of the Joint Commission shall be submitted, following consultation with the provisional Korean Government, for the joint consideration of the Governments of the United States, Union of Soviet Socialist Republics, United Kingdom and China for the working out of an agreement concerning a four-Power trusteeship of Korea for a period of up to five years.

4. For the consideration of urgent problems affecting both Southern and Northern Korea, and for the elaboration of measures establishing permanent co-ordination in administrative-economic matters between the United States command in Southern Korea and the Soviet command in Northern Korea, a conference of the representatives of the United States and Soviet commands in Korea shall be convened within a period of two weeks.

IV. China The three Foreign Secretaries exchanged views with regard to the situation in China. They were in agreement as to the need for a unified and democratic China under the National Government for broad participation by democratic elements in all branches of the National Government and for a cessation of civil strife. They 219

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reaffirmed their adherence to the policy of non-interference in the internal affairs of China.

M. Molotov and Mr Byrnes had several conversations concerning Soviet and American armed forces in China.

M. Molotov stated that the Soviet forces had disarmed and deported Japanese troops in Manchuria, but that withdrawal of Soviet forces had been postponed until the 1st February at the request of the Chinese Government.

Mr Byrnes pointed out that American forces were in North China, at the request of the Chinese Government, and referred also to the primary responsibility of the United States in the implementation of the Terms of Surrender with respect to the disarming and deportation of Japanese troops. He stated that American forces would be withdrawn just as soon as this responsibility was discharged or the Chinese Government was in a position to discharge the responsibility without the assistance of American forces.

The two Foreign Secretaries were in complete accord as to the desirability of withdrawal of Soviet and American forces from China at the earliest practicable moment consistent with the discharge of their obligations and responsibilities.

V. Roumania The three Governments are prepared to give King Michael the advice for which he has asked in his letter of the 21st August, 1945, on the broadening of the Roumanian Government.

The King should be advised that one member of the National Peasant Party and one member of the Liberal Party should be included in the Government. The Commission referred to below shall satisfy itself that (a) they are truly representative members of the groups of parties not represented in the Government; (b) they are suitable and will work loyally with the Government.

The three Governments take note that the Roumanian Government, thus reorganised, should declare that free and unfettered elections will be held as soon as possible on the basis of universal and secret ballot. All democratic and anti-Fascist parties should have the right to take part in these elections and to put forward candidates. The reorganised Government should give 220

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assurances concerning the grant of freedom of the press, speech, religion and association.

A. Y. Vyshinski, Mr Harriman and Sir A. Clark Kerr are authorised as a Commission to proceed to Bucharest immediately to consult with King Michael and members of the present Government, with a view to the execution of the above-mentioned tasks.

As soon as these tasks are accomplished and the required assurances have been received, the Government of Roumania, with which the Soviet Government maintains diplomatic relations, will be recognised by the Government of the United States and by the Government of the United Kingdom.

VI. Bulgaria It is understood by the three Governments that the Soviet Government takes upon itself the mission of giving friendly advice to the Bulgarian Government with regard to the desirability of the inclusion in the Bulgarian Government of the Fatherland Front, now being formed, of an additional two representatives of other democratic groups, who (a) are truly representative of the groups of the parties which are not participating in the Government, and (b) are really suitable and will work loyally with the Government.

As soon as the Governments of the United States and the United Kingdom are convinced that this friendly advice has been accepted by the Bulgarian Government and the said additional representatives have been included in its body, the Government of the United States and the Government of the United Kingdom will recognise the Bulgarian Government, with which the Government of the Soviet Union already has diplomatic relations.

VII. The Establishment by the United Nations of a Commission for the Control of Atomic Energy Discussion of the subject of atomic energy related to the question of the establishment of a commission by the General Assembly of the United Nations. The Ministers for Foreign Affairs of the Union of Soviet Socialist Republics, the United States, and the United Kingdom, have agreed to recommend, for the consideration of the General Assembly of the United Nations, the establishment by the United Nations of a commission to consider problems arising from the discovery of atomic energy and related 221

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matters. They have agreed to invite the other permanent members of the Security Council, France and China, together with Canada, to join with them in assuming the initiative in sponsoring the following resolution at the first session of the General Assembly of the United Nations in January 1946: ‘Resolved by the General Assembly of the United Nations to establish a commission, with the composition and competence set out hereunder, to deal with the problems raised by the discovery of atomic energy and other related matters.’

I. Establishment of the Commission A Commission is hereby established by the General Assembly with the terms of reference set out under Section V below.

II. Relations of the Commission with the Organs of the United Nations (a) The Commission shall submit its reports and recommendations to the Security Council, and such reports and recommendations shall be made public unless the Security Council, in the interest of peace and security, otherwise directs. In the appropriate cases the Security Council should transmit these Reports to the General Assembly and the members of the United Nations, as well as to the Economic and Social Council and other Organs within the framework of the United Nations. (b) In view of the Security Council’s primary responsibility under the Charter of the United Nations for the maintenance of international peace and security, the Security Council shall issue directions to the Commission in matters affecting security. On these matters the Commission shall be accountable for its work to the Security Council.

III. Composition of the Commission The Commission shall be composed of one representative from each of those States, represented on the Security Council, and Canada when that State is not a member of the Security Council.

Each representative on the Commission may have such assistants as he may desire.

IV. Rules of Procedure The Commission shall have whatever staff it may deem necessary, and shall make recommendations for its rules of 222

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procedure to the Security Council, which shall approve them as a procedural matter.

V. Terms of Reference of the Commission The Commission shall proceed with the utmost despatch and enquire into all phases of the problem, and make such recommendations from time to time with respect to them as it finds possible. In particular the Commission shall make specific proposals: (a) For extending between all nations the exchange of basic scientific information for peaceful ends; (b) For control of atomic energy to the extent necessary to ensure its use only for peaceful purposes; (c) For the elimination from national armaments of atomic weapons and of all other major weapons adaptable to mass destruction; (d) For effective safeguards by way of inspection and other means to protect complying States against the hazards of violations and evasions.

The work of the Commission should proceed by separate stages, the successful completion of each of which will develop the necessary confidence of the world before the next stage is undertaken.

The Commission shall not infringe upon the responsibilities of any Organ of the United Nations, but should present recommendations for the consideration of those Organs in the performance of their tasks under the terms of the United Nations Charter.

ERNEST BEVIN JAMES F. BYRNES V. M. MOLOTOV

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32 Editorial Note THE UNITED NATIONS PREPARATORY COMMISSION, 19451 Volume VII does not contain any documents on the establishment of the United Nations, or on HMG’s policy towards it in its formative stages during the proceedings of the Preparatory Commission’s Executive Committee and the Preparatory Commission itself. The main subjects of these bodies’ deliberations that are pertinent to the material published in this volume were the Security Council, the General Assembly, the Economic and Social Council, Trusteeship, and the permanent site of the UN. This editorial note outlines British policy towards these matters, and identifies the file locations of the key documents.

Following the signing of the UN Charter at San Francisco, the delegates established a Preparatory Commission representing all who had signed the Charter. Mr Stettinius followed this on 24 May by suggesting to Mr Eden that this body hold its meetings in London, a proposal which was warmly welcomed by the Foreign Office because of the opportunity it offered HMG to ‘exercise considerable influence on the formative stages of the new organisation’. The Preparatory Commission held its first meeting in San Francisco on 27 June when it appointed an Executive Committee to do much of the preparatory work. This Committee, which was composed of the same fourteen states which had formed the Executive Committee at San Francisco, convened at Church House in London on 16 August under the chairmanship of Mr Gladwyn Jebb, and completed its work on 27 October. Its work was divided amongst ten Committees (General Assembly, Security Council, Economic and Social Council, Trusteeship Council, Court and Legal Problems, Arrangements for the Secretariat, Financial Arrangements, Relations with Specialised Agencies, League of Nations, and General).

Documents on British Policy Overseas, Ser. 1, Vol. 7, Editorial Note, Appendix 1.

1

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The Preparatory Commission received its Executive Committee’s Report when the former reconvened on 24 November.

The Commission itself worked through eight technical committees (General Assembly, Security Council, Economic and Social Council, Trusteeship Council, Administrative and Budgetary, Legal, League of Nations, and General) as well as Steering and Coordination committees, and reported on 23 December at the end of its conference.

HMG’s policy towards the Preparatory Commission was coordinated by an inter-departmental committee established by Mr Noel-Baker, and known as the Minister of State’s Advisory Committee on the United Nations Organisation, which met frequently throughout the proceedings of both bodies.

Recommendations I. The General Assembly The Executive Committee recommended that the first General Assembly should be convened as soon as possible so that it could establish its machinery and quickly begin its work. To this end, it called for the first session of the General Assembly to be divided into two parts: the first to be ‘primarily organisational’ and discuss only urgent issues; the second to give full consideration to all items on the agenda. The Preparatory Commission accepted this recommendation. Mr Jebb set out the merits of this approach and the alternative of waiting longer but having a ‘full’ first Assembly that could discuss all of the international issues on its agenda. On the whole he favoured the former which could run on from the Preparatory Commission and maintain public and political interest in the new organisation. Encountering resistance to this from Mr Noel-Baker, who preferred to wait until the Executive Committee had considered the matter, he explained that his aim was to ‘see to it that, when it [the General Assembly] does meet to consider the immense problems with which we are beset, it should be in a position to do so adequately and should not incur the criticism which might attend any half-baked efforts in this direction’.

The Foreign Office resisted American pressure to call the General Assembly in November on the grounds that this would not give the Preparatory Commission enough time to complete its work and at the same time argued successfully the case for the ‘constituent’ assembly to have some latitude to discuss matters 225

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other than the procedural. The timetable was revised so that the first meeting of the General Assembly would not take place until January.

II. Security Council The Security Council was designed to be the organ of the UN with the chief responsibility for maintaining international peace and security. The Executive Committee included in its report a provisional agenda and provisional rules of procedure but it was the question of voting which proved the most problematic. The UN Charter stated that each member was to have one vote, procedural matters had to be voted for by seven members, and decisions on all other matters had to be voted for by seven members including all of the permanent members (i.e. the great power veto), with parties to disputes abstaining. During the course of discussions in London, it became clear that not all delegations saw these provisions as sufficient. The debate begun at San Francisco over the definition of ‘procedural’ in this article continued at London, with some of the small powers holding out against the great power veto. The debate this occasioned within the Foreign Office was equally inconclusive and Professor Webster of the Research Department felt moved to minute his suggestion that: ‘The less that is said about these hypothetical questions the better. It is quite likely that nothing more will be heard of them once the Security Council is set up.’ The problem was reiterated on 25 November in Mr Ward’s summary of the Executive Committee’s recommendations about the Security Council for Sir A. Cadogan: he noted that the ‘vocal small Powers’ had objected to the voting rules outlined in the Charter, but that the sub-committee had retained those rules, agreeing that ‘it was not for this committee to try to interpret or gloss the Charter formula’.

Other Security Council matters dealt with by the interdepartmental committee and the Reconstruction Department included the establishment of the Military Staff Committee and its relationship with the Security Council, the election of new members to the Security Council, and the Council’s working languages.

III. Economic and Social Council The Executive Committee had recommended an early meeting of the Economic and Social Council (ECOSOC), drafted a provisional agenda, and called for the creation of six commissions, 226

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covering such issues as human rights, transport and employment.

Their recommendations were substantially incorporated in the Preparatory Commission’s Report. As with the General Assembly, there was some pressure from the American delegates to have a predominantly administrative first meeting for the ECOSOC, but partly as a result of British pressure, early opportunity was given for discussion of urgent problems, and the scope of ECOSOC broadened to include social questions, such as the control of opium and other dangerous drugs, which were perceived by the Home Office in particular as a crucial part of the work of the League of Nations’ that should be continued.

IV. Trusteeship The Charter provided for the establishment of a Trusteeship Council for the international administration of territories administered as League of Nations mandates, territories detached from Italy and Japan as a result of the war, and other areas voluntarily placed under the system.

In order to overcome the difficulty provided by Article 86 of the Charter, which could be interpreted to mean that the Council could not be established until some territories were placed in trust, the Executive Committee’s report called for the establishment of a Temporary Trusteeship Council and recommended an interim arrangement whereby the countries which intended to place territories into the trusteeship system should report their intentions to the Secretary General before the second session of the General Assembly, after which the Trusteeship Council could be formed.

Another technical problem arose over the definition of a key phrase in Article 79 of the Charter, which laid it down that the terms of trusteeship for each territory should be agreed upon by the ‘states directly concerned’. This clause had been included at the suggestion of the United States Delegation at San Francisco, evidently as a means of keeping the Soviet Union out of the trusteeship machinery. A Colonial Office paper recommended that this matter should be approached on a policy basis rather than a purely legal one, with the problem being highlighted in a letter from Mr Poynton to Mr Ward: ‘We do not now, after twenty-five years, wish to find ourselves in the position that the trusteeship agreement for e.g. Tanganyika is held from, or on behalf of, a group of states 227

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claiming a direct concern. Clearly, we should hold it from, or on behalf of, the United Nations Organisation’.

A working party composed of representatives of the Foreign Office, the Dominions Office and the Colonial Office was established to consider this problem and the position was clarified in a new version of the Colonial Office’s paper ‘Interpretation of Article 79’, sent to the Foreign Office on 11 December. This analysed the application of the ‘states directly concerned’ clause in relation to the United Kingdom’s own mandates, and recommended that any general formula adopted by the UN ‘should make possible the inclusion in the “states directly concerned” of Powers other than the Big Five’. By this time, the situation at the Preparatory Commission had been complicated by a Yugoslav attempt to have the Soviet Union included in the Trusteeship Council. The committee agreed that the best policy was to leave this ‘thorny problem’ of what constituted the ‘states directly concerned’ for the General Assembly: ‘If pressed we should frankly say that we did not know what it meant.’ The phrase remained in the Preparatory Commission’s report, which also formalised the Executive Committee’s recommendation for a temporary body by suggesting that all states administering mandates should collectively ‘undertake practical steps’ towards implementing Article 79 before the second session.

V. Permanent Site of the UN HMG found particularly problematic the question of a permanent site for the UN. For various reasons, including ease of travel, language, the desire to avoid the UN’s being housed by a Great Power, and the need for the new organisation to be in touch with European problems, the Foreign Office favoured a European site. But on 3 October the Executive Committee voted nine to three (with the USA and Canada abstaining) in favour of the USA. Mr Noel-Baker went back to the Cabinet for authority to continue lobbying for Europe in private conversations with delegates to the Preparatory Commission, but Mr Bevin refused this on procedural grounds, pointing out that this was only a vote on a recommendation; the Preparatory Commission would not necessarily accept it.

The Foreign Office returned to the charge later in the month, when Mr Noel-Baker reviewed the matter, pointing out that, had 228

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Czechoslovakia, Yugoslavia and Iran been able to vote freely and not under Soviet direction or intimidation, Europe would have won.

He concluded that it would be a mistake to abandon Europe’s claim: ‘If we tamely acquiesce, the influence of the United States and the Soviet Union on the United Nations will be considered by all so clearly to outweigh that of Britain and France that other States will cease to look to us for leadership.’ On 8 November, the Cabinet accepted this, and concluded that HM representatives should be encouraged to ‘press the arguments in favour’ of Europe.

The Preparatory Commission’s General Committee voted on the matter on 15 December, and, after the failure of an attempt to secure a secret ballot, and the last-minute rejection of a pro-European amendment, the Committee voted for the Executive Committee’s recommendation to site the UN in the USA by thirty to fourteen with six abstentions.

The proceedings of the Preparatory Commission and its Executive Commission were published by the UN.

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