A solution of the problems involved in the character and location of the Polish-German frontier must be sought. While it will require precise and informed investigation, the main limits to this investigation can be stated now. It will be accepted, I think, that southern East Prussia should become Polish territory, German Upper Silesia and its industrial complex should also become Polish; but there should be provisions to assure that its coal and other resources will be available to help sustain the economy of Europe. The division of the remaining territory, which is largely agricultural land, requires consideration of the needs of the Polish and German peoples and of Europe as a whole. Accordingly, I propose that the following be agreed here at Moscow:

"The Council of Foreign Ministers establishes a special boundary commission to function under the direction of the deputies. It will be composed of representatives of the U. S. S. R., U. K., U. S. A., France, Poland, and a convenient number of other Allied states to be designated by the Council of Foreign Ministers. The Council of Foreign Ministers will invite Poland and each of the designated countries to appoint a member.

"The function of the commission shall be to consider and recommend to the Council of Foreign Ministers:

"(a) A revision of pre-war Polish-German boundaries which will fairly compensate Poland for the cession of the territory east of the Curzon Line to the Soviet Union;

"(b) The economic arrangements appropriate to assure that such raw materials and heavy industrial resources of the area in question as are vital to European economy shall fairly serve that need, including particularly the need of Poland.

"In making its recommendation the commission shall inquire into and report upon Polish resettlement and German settlement in the areas in question and the best means to assure the effective utilization of such areas for the economic well-being of the Polish and German peoples and of Europe as a whole."

(d) The Ruhr, April 10, 1947 1

The United States Delegation believes the concentration of basic economic resources in the Ruhr area raises two distinct problems. One is the question of security against the militant use of Ruhr resources by a revived Germany. The other is the question of how to assure that the concentration of coal, steel, and other resources in the Ruhr area will be equitably employed in the interests of the countries of Europe including Germany.

We are convinced that no attempt should be made finally to solve either of these two problems until the Council has examined the other aspects of security, including the United States proposal for a fourpower disarmament treaty. We are ready, however, to consider the economic aspects of the problem on the understanding that no overall commitment can be reached until the Council has discussed the security question.

1 Department of State Bulletin, April 20, 1947, pp. 694–695.

While the Ruhr area contains a greater concentration of basic industrial resources than is to be found elsewhere in Europe, it is not the only concentration. An area of less-but still substantialimportance is Upper Silesia. Since no part of this area is now under German control, it is unnecessary to consider it from the point of view of security. The economic questions raised by the Ruhr concentration, however, are equally relevant to the Silesian concentration and, indeed, to others.

These questions may be put as follows: (1) How, during periods of acute shortages, are basic commodities, such as coal and steel, to be equitably shared? (2) How are countries within whose boundaries concentrations of basic resources are to be found to be prevented from imposing restrictions which limit the access of other countries to these resources? Both of these questions apply not only to the Ruhr but to other areas. However, in discussing them now I shall limit myself to the problem of the use of Ruhr resources.

The United States Delegation has already stated its position that, during the period of military occupation, no special regime for the Ruhr is necessary. When Allied military government in Germany is terminated and a German government is functioning under a constitution, however, some special provision for the overseeing of Ruhr resources may be advisable. The United States Delegation is of the opinion that whatever provision is made should not interfere with German responsibility for the management and operation of Germany's resources. In the first instance, Germany must have responsibility not only for the production but the marketing of the products of her own industries. It is only if the Germans take action contrary to the just interests of other countries that the attention of an international agency may have to be called to the question.

The United States Delegation believes that the ultimate solution to such conflicts as may arise on questions of this sort must be resolved on a European-wide basis and that for this purpose the Economic Commission for Europe will prove useful. We do not consider it necessary here and now to discuss questions of procedure. It is much more important to agree among ourselves on two principles which the United States Delegation thinks should govern the allocation of essential commodities, not only from the Ruhr but from other areas. These principles are (1) equitable distribution of essential commodities in short supply; and (2) access to essential commodities on a nondiscriminatory basis.

With respect to the Ruhr the United States Delegation considers that the principle of equitable distribution means that, in the allocation between domestic consumption and export of coal and other essential commodities in short supply, the legitimate interests of European countries must be met while leaving to Germany the possibility of achieving, without outside assistance, a tolerable standard of living.

The United States Delegation means by the principle of equal access that there shall be no discrimination either by Germany or against Germany in the use of basic resources of the Ruhr. Narrowly this requires that Germany shall not impose export taxes, quotas, or embargoes which result in discrimination. More broadly, it involves insurance against the possibility that Germany, through her possession

of coal and steel, will again attempt to dominate European industry and limit the development of heavy industry outside of Germany through the absolute control of metallurgical coal.

The basic economic problem is created by the fact that the coal mines and the steel industry of the Ruhr are located in Germany and needed by much of Europe. That Europe requires coal and steel, however, should not blind us to the fact that they are in Germany, and that they are also needed by the German economy. No solution will work which denies equal access to these resources to the Germans. It would be impossible to expect a country to develop along peaceful democratic lines with a group of deeply interested foreign countries in indefinite control of its príme resources and of local consumption.

What is required, in the view of the United States Delegation, is a mechanism which permits the various interests to be resolved when they come in conflict, rather than to have one dominated by the other. What is required, in other words, is a European solution in a Europe which includes Germany.

(e) The Saar Territory, April 10, 1947 1

The economic resources of the Saar and Lorraine are complementary. The coal mines and iron and steel facilities of the Saar are adjacent to the great iron-ore deposit and the steel facilities of Lorraine. When pre-war production levels are regained, the coal production of the Saar will be relatively unimportant to the internal German economy but will be of the greatest importance to France.

At Stuttgart, last September, Secretary Byrnes stated that the United States does not feel that it can deny to France, which has been invaded three times by Germany in 70 years, its claim to the Saar territory, whose economy has long been closely linked with France.

For these reasons the United States supports the claims of France to have the Saar territory detached politically from Germany and to have it integrated with the economic and financial system of France by a customs and financial union, and possibly by means of other economic arrangements.

We understand that France does not ask the political incorporation of the Saar into France. While France should be entrusted with the right to defend Saar territory from attack, the political autonomy of the Saar and the right of its people to manage their local affairs should be carefully safeguarded.

In referring to the Saar territory, the United States Delegation has in mind the area covered by the Saar plebiscite. While minor rectifications of the Saar boundaries may be considered, clear justification for such rectification should be required.

The incorporation of the Saar resources into the economy of France will make necessary some modification of the level of industry allowed to Germany and some readjustment of reparation removals and the retention in the Saar territory of some plants which were to be removed for reparations. French claims for reparations will have to be subject to adjustment in light of the changed situation.

The French Government is anxious to incorporate the Saar in its economic and financial system as soon as possible. The United

1 Department of State Bulletin, April 20, 1947, pp. 695-696.

States Delegation sees no reason for delay and certain advantages to be gained by making this decision now in so far as it is within our competence.

We suggest therefore that we agree now to the detachment of the Saar with its pre-war boundaries from the jurisdiction of the Allied Control Council and its administration solely by France, subject to the appropriate adjustment of the French reparation claims. I suggest that we appoint a committee of experts to prepare a proposal on such reparation adjustments as may be required.

The definitive detachment of the Saar from Germany and the definitive determination of its boundaries will have to be decided by the German peace settlement, which will also have to decide many details relating to the ownership of property, debt, and other matters. I suggest that we direct our deputies, upon conclusion of the present session of the Council of Foreign Ministers, to study all these matters and to make appropriate recommendations for inclusion in the peace settlement.

(f) Reiteration of Position on Disarmament and Demilitarization of Germany, April 23, 1947 1

The United States proposal for a Four Power treaty for the disarmament and demilitarization of Germany which we discussed here is not mentioned in the Deputies' report. I am not suggesting that it be included. The principle involved is in my opinion too fundamental to be referred to any subordinate body. I do not intend to repeat all the various considerations which led the Government of the United States to propose this treaty, nor the reasons why it attaches the greatest importance to this subject. I will only state that the United States Government regards very seriously what in effect is the virtual rejection of this treaty by the Soviet Government. I say rejection because the redraft proposed by Mr. Molotov introduces into the treaty nearly every important difference which exists between the Four Powers on the subject of Germany, and thus renders obviously impossible any hope of concluding such a treaty at this time.

An agreement in principle here along the lines proposed by the United States would have been indication to the world that despite the character and extent of our disagreements on other aspects of the German problem, the Four Powers represented at this table were at least united in their determination to prevent the revival of Germany's capacity to make war. The advantages of such a clear demonstration of Allied intentions, not only on the future solution of other problems connected with Germany but on the whole international situation, appear so obvious that the United States finds it difficult to understand the reasons which account for the Soviet Government's declining to agree. Although we must face the fact that because of this attitude there is no prospect of an agreement on this treaty at this conference, the United States is not withdrawing its proposal for such a treaty.

1 Department of State Bulletin, May 4, 1947, p. 793. The draft treaty on the disarmament and demilitarization of Germany was proposed by the United States on April 29, 1946, at the Council of Foreign Ministers meeting in Paris. The draft was rejected by the Soviet Union but the proposal remained open.

93. DIRECTIVE TO COMMANDER-IN-CHIEF OF THE UNITED STATES FORCES OF OCCUPATION, JULY 11, 1947, SUPERSEDING I. C. S. 106716 OF APRIL 19451

1. Purpose of this Directive

I

This directive, issued to you as Commanding General of the United States forces of occupation and as Military Governor in Germany, constitutes a statement of the objectives of your Government in Germany and of the basic policies to which your Government wishes you to give effect from the present time forward. It supersedes JCS 1067/62 and its amendments.

2. Authority of Military Government

a. Your authority as Military Governor will be broadly construed and empowers you to take action consistent with relevant international agreements, general foreign policies of this Government and with this directive, appropriate or desirable to attain your Government's objectives in Germany or to meet military exigencies.

6. Pending arrangements for the effective treatment of Germany as an economic and political unit, you will exert every effort to achieve economic unity with other zones.

II

3. United States Policy Toward Germany

The basic interest of the United States throughout the world is just and lasting peace. Such a peace can be achieved only if conditions of public order and prosperity are created in Europe as a whole. An orderly and prosperous Europe requires the economic contributions of a stable and productive Germany as well as the necessary restraints to insure that Germany is not allowed to revive its destructive militarism.

To accomplish the latter purpose the United States Government has proposed to the other Occupying Powers a treaty for the continuing disarmament and demilitarization of Germany and it has committed itself to maintaining a United States army of occupation as long as foreign occupation of Germany continues.

As a positive program requiring urgent action the United States Government seeks the creation of those political, economic and moral conditions in Germany which will contribute most effectively to a stable and prosperous Europe.

4. Demilitarization

III

There should be no relaxation of effort to complete and effectively to maintain the disarmament and the demilitarization of Germany.

IV

5. United States Political Objectives in Germany

It is an objective of the United States Government that there should arise in Germany as rapidly as possible a form of political organization

1 Department of State Bulletin, July 27, 1947, pp. 186-193; also Department of State publication 2913, European Scries 27.

Department of State Bulletin, October 21, 1945, p. 596.