Reflections on the Moscow Conference
Author(s): Edward S. Mason
Source: International Organization, Vol. 1, No. 3 (Sep., 1947), pp. 475-487
Published by: University of Wisconsin Press
Stable URL: https://www.jstor.org/stable/2704246
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REFLECTIONS ON THE MOSCOW CONFERENCE
EDWARD S. MASON
It is a mistake to underestimate the extent and the significance of the
failure at Moscow. With respect to Germany the conference ended with
the participants further apart than they had been at Potsdam. Nor can
a modicum of comfort be salvaged by asserting that Moscow achieved a
clearer understanding of the aims and ambitions of the four powers now
occupying Germany. While the discussion contributed something in detail
to a clarification of points of agreement and disagreement, on major issues
the initial positions of the participants were known before the conference
assembled. And at Moscow no power receded from its initial position on
any major issue. The pertinent question is, why did the Moscow conference
fail?
There are two possible answers to this question, in both of which some
truth is, probably, to be found. The first runs in terms of what has come
to be standard negotiating technique at meetings of the Conference of
Foreign Ministers. Following the practice favored by Soviet negotiators,
no country is willing to make a concession until convinced by protracted
and exhausting debate that the positions of others are firm. If one accepts
this interpretation a certain measure of optimism is possible even after
Moscow. One can refer to the experience of the satellite treaties in the
negotiation of which the powers came to final agreement only after some
fifteen months of what seemed at times hopeless disagreement.' If it took
four meetings of the Council of Foreign Ministers to obtain agreement on
the much less difficult questions involved in the satellite treaties, it can be
argued that to write off the possibility of agreement on Germany after
only one meeting is, at least, premature.
A certain measure of support for this view may be gleaned from the
interview of ex-Governor Stassen with Stalin in which, according to the
Stassen report, Stalin appeared confident that divergent views could be
successfully compromised. Secretary Marshall, in his address following the
DR. EDWARD S. MASON, Dean of the Graduate School of Public Administration at Harvard
University, was recently appointed to the President's National Inventory Committee, created
to study United States resources available for economic assistance to foreign countries. While
he attended the Moscow meeting of the Council of Foreign Ministers as an adviser to Secretary
of State George C. Marshall, the views here expressed are strictly his own and not necessarily
those of the United States Government.
1 Cf. a recent article in this journal by Philip E. Mosely, "Peace-Making, 1946," International
Organization, I, p. 22.
475
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476 INTERNATIONAL ORGANIZATION
Moscow conference, also referred to the Generalissimo's view, as expressed
in an interview with him:
"He said with reference to the Conference, that these were only the
first skirmishes and brushes of reconnaisance forces on this question.
Differences had occurred in the past on other questions, and as a
rule, after people had exhausted themselves in dispute, they then
recognized the necessity of compromise. It was possible that no great
success would be achieved at this session, but he thought that compromises
were possible on all the main questions, including demilitarization,
political structure of Germany, reparations and economic
unity. It was necessary to have patience and not become pessimistic."
2
Secretary Marshall's comment, "I sincerely hope that the Generalissimo
is correct in the view he expressed and that it imples a greater spirit
of cooperation by the Soviet delegation in future conferences," may,
however, be interpreted to indicate that he regards Stalin's prediction
somewhat dyspeptically.
The other possible interpretation of failure at Moscow leaves no ground
for optimism. According to this interpretation Moscow represents, in a
sense, the culmination of a trend away from Yalta; away from the position
held, at least by American representatives at Yalta, that a sufficient
community of interest existed between east and west to permit agreement
on certain basic principles of international organization, and toward the
position that such a community of interest is lacking. The London Economist
advances this view in its usual pithy fashion. Moscow "ended the
phase of post-war history in which the victors clung to the belief that they
could work out agreed policies. . . . Willy-nilly, world politics moves
back towards the balance of power, and issues now tend to be determined
by the relative strength or influence of the two groups." I
It would be a mistake to draw too sharp a distinction between what the
Economist calls " agreed policies " and " balance of power " politics. Even
at Yalta, which represented the high point of western optimism, there
was no disposition to deny the strength or relevance of power relationships.
Both Britain and the United States were willing to concede a priority
of Soviet interest in eastern Europe though they hoped for - and
thought they had attained - Soviet agreement to tripartite action in the
establishment of popular governments. On the other hand balance of
power considerations do not preclude "agreed policies" if the balance is
relatively stable.
However, although sensible devotees of international organization do
not overlook the importance of power relationships, there is a differenceand
a large one - between the conception of European order envisaged
2 Department of State, Bulletin, May 11,
1947, p. 924.
3 "Great Britain Finished," The Economist
May 10, 1947.
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THE MOSCOW CONFERENCE 477
by the west at Yalta, and the realities apparently revealed at Moscow.
The policy of agreement is practical only on the basis of the reconstruction
in Europe of a number of independent states free of dominance from
either east or west. A Soviet area of influence in eastern Europe is not
precluded by this policy, but the influence must be exercised within
limits established by mutual agreement and changed only with mutual
consent. Obviously the same considerations apply to British and American
influence in western and southern Europe. With respect to Germany,
the crux of the European settlement, what the policy of agreement implies,
is a united and independent Germany eventually free of domination by
either east or xvest.
Secretary Byrnes, in his Stuttgart speech of September, 1946,4 spoke
of a Germany which was to be neither "a pawn or a partner." The principal
basis, in fact, for the American view that a united Germany is necessary
to the policy of agreement in Europe is the realization that the separate
parts of a partitioned Germany must inevitably drift into the orbit
of neighboring great powers.
Moscow made absolutely no progress toward economic or political unification
in Germany. Taken in conjunction with Soviet actions in eastern
Europe, of which the demarche in Hungary is only the latest, a strong case
can be made for the view that failure at Moscow was not merely, or importantly,
the result of negotiating difficulties but the culmination of a
trend away from Yalta toward quite a different conception of international
organization.,
Even if this second view is accepted it does not follow that agreement
becomes, in the course of time, impossible. What does follow, however, is
that agreement will be produced not by the process of negotiation but by
the course of events. If the course of events favors the spread of Soviet
influence in Europe agreement may still be possible, but on quite different
terms from those envisaged at Yalta or even at Potsdam. The same thing
might be said for developments that favored the growth of western influence
in Europe. It is even conceivable that the course of events will on
balance favor neither east nor west and that agreement may be achieved
at some future date on the basis of something like the present alignment
of forces in Europe. The point is that if one accepts the second interpretation
of failure at Moscow, he will not expect agreement to be achieved
by the mere process of negotiation. Nor will he view with favor the possibility
that, by appropriate concessions, the process of negotiation may be
facilitated.
The Moscow Conference was the first meeting of the Council of For-
4 For text of this speech see Departmenit of
State, Bulletin, XV, p. 496.
5 The recent failure in Paris of the Three
Power Conference adds strong support to
this interpretation.
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478 INTERNATIONAL ORGANIZATION
eign Ministers devoted to Germany. Two previous meetings of Heads of
State, however, had been concerned with the problem of Germany: Yalta
in January, 1945, and Potsdam in July and August, 1945. Reference to
these previous meetings by participants at Moscow was in itself interesting
and characteristic. The Soviet delegation never referred to Potsdam
without coupling it with Yalta. The British and American delegations
avoided mention of Yalta as they would avoid the plague. With Gallic
irony M. Bidault observed that the principal defect both of Yalta and of
Potsdam was the absence of France.
The Soviet predilection for Yalta stems, of course, from the reparations
decisions of the Crimean conference made public for the first time by
Molotov at Moscow. President Roosevelt agreed at Yalta to accept the
Soviet figure of 20 billion dollars reparations as a basis of study and also
agreed to direct the Reparations Commission there established to consider
as possible sources of reparations, capital removals, current output
and various services including labor services. The British delegation refused
to commit itself on the proposed figure even as a basis for study.
Although the British were uncommitted and the United States agreed
only to study the question, the Soviet delegation at Moscow chose to
interpret the Yalta protocol as meaning that the three powers had agreed
that 20 billion in reparations was the proper sum for Germany to pay. It
also chose to interpret the Potsdam agreement as confirming the Yalta
decisions, quoting in support the preamble to the fourth section of the
Joint Report released at Potsdam which reads as follows:
"In accord-ance with the Crimea decision that Germany be compelled
to compensate to the greatest extent for the loss and suffering
that she has caused to the United Nations and for which the German
people cannot escape responsibility, the following agreement on
reparations was reached: . .
The British and American representatives at Moscow considered the
Soviet contention to be wholly untenable. Not only was the agreement at
Yalta merely an agreement to study the problem but even this arrangement
had been superseded. At Potsdam the Soviet government had again
put forward its reparations claims in the Economic Committee and these
claims had been debated and rejected in favor of a reparations program
limited to capital removals. These capital removals furthermore were
designed to leave Germany with productive capacity just sufficient to
maintain a minimum standard of living without provision for reparations
payments. Finally the Potsdam protocol provided that the proceeds from
German exports should be used in the first place to pay for imports necessary
to the maintenance of the German standard of living. Only after such
payment had been provided might German export capacity be considered
to be available for reparations deliveries. But if capital removals conThis
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THE MOSCOW CONFERENCE 479
formed to the Potsdam agreement, German export capacity would be
sufficient only to permit payment for necessary imports. Although Potsdam
made no reference to reparations from current output, such reparations,
by the logic of Potsdam, were excluded.
It will be worth while examining the reparations debate at Moscow
somewhat further since this was the principal economic issue discussed at
the conference. Maximum reparation is, in fact, one of the two principal,
but somewhat incompatible, Soviet aims in Germany. The other, of course,
is political control. Since political control in the German context will
mainly be brought about, if at all, by the rise to power of indigenous political
forces favorable to the Soviet Union, and since large reparations
claims are not very encouraging to these forces, the Soviet delegation at
Moscow was in somewhat of a dilemma. It made political capital on the
one hand by espousing positions favorable to at least a large fraction of
the German people, but, on the other hand, inevitably lost political capital
through its reparations demands.
As we have seen, the formal side of the reparations debate at Moscow
turned around the status of the 20 billion reparations figure advanced at
Yalta, of which the Soviet government was to receive half. In combating
this figure the British and American delegations argued mainly from the
text of Potsdam.
It is fashionable these days in certain circles to condemn the Potsdam
agreement as one of the most senseless and vicious international arrangements
ever concluded. The opinion of the writer is wholly contrary to this
view. If the Potsdam agreement could be effectively implemented, economic
recovery in Germany and in Europe and the peace of the world
would be more effectively served than they are likely to be under any
practicable alternative. This is not to argue that the Potsdam agreement
was an ideal settlement; in fact, it was a confused and vindictive settlement.
But, on paper at least, it did accomplish two things: the treatment
of Germany as an economic unit, and a limitation, in amount and in time,
of reparations claims. If the Moscow conference had succeeded in implementing
these provisions of Potsdam it would have been a magnificent
achievement.
Both the United States and the United Kingdom stood ready at Moscow
to put into effect the reparations decisions of Potsdam, on condition
that the Soviet government was prepared to treat Germany as an economic
unit. The Soviet delegation, however, not only reiterated her Yalta
reparations claims but announced that the Soviet government made the
satisfaction of these claims an absolute condition to agreement on other
matters concerning Germany.
Faced with this impasse the United States delegation offered a limited
concession. To understand the nature of this concession and the economic
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480 INTERNATIONAL ORGANIZATION
issues involved it is necessary to refer to the level-of-industry agreement
of March, 1946, which was a determination by the four occupying Powers
of the output and industrial capacity to be permitted Germany under the
provisions of Potsdam. This agreement had been subject to certain conditions
among which were the following: that the actual population of Germany
would turn out to be approximately equal to the estimate of March,
1946, and that the territory of Germany would be the territory recognized
as German at Potsdam.
By the time of the Moscow conference, however, it was clear that the
German population was, in fact, some four million larger than the estimate.
To provide for this population additional productive resources
would have to be left to Germany. The United States and the United
Kingdom had, furthermore, agreed to the detachment of the Saar territory
in favor of France. Since the resources of this territory would thereby
be withdrawn from Germany some revision of capacity to be left would
have to be undertaken.
Implicit in the level-of-industry agreement, moreover, was the principle
that if subsequent investigation should make it clear that the production
facilities to be left to Germany were inadequate to support the permitted
standard of living, the level-of-industry figures would have to be revised.
By the time of the Moscow conference it had become abundantly clear
that there were serious inconsistencies in the level-of-industry plan. For
example, the planned allowance of electric generation capacity was inadequate;
permitted heavy chemicals capacity was too low, as was the
permitted capacity for iron and steel.
Correction of the level-of-industry agreement to take account of population
and territorial differences and inconsistencies in planned industrial
outputs required a substantial upward revision of the capacity of German
industry. Such a revision was necessary to attain the objectives envisioned
at Potsdam. American officials, moreover, had at the time of the Moscow
conference come to the conclusion that if Germany were to make a contribution
to economic recovery in Europe she would have to be allowed to
produce at a rate substantially above that envisioned at Potsdam. They
were, therefore, anxious to see an upward revision of the level-of-industry
agreement not only sufficient to bring output in line with the Potsdam
objectives but to contribute, through normal foreign trade channels, to
the economic recovery of Europe.
Since an upward revision would reduce the plant and equipment available
for reparations transfers, the United States proposed to compensate
prospective reparations recipients by commuting the value of capital
equipment which would have been available for reparations transfer but
which, by reason of an upward revision of capacity permitted to GerThis
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THE MOSCOW CONFERENCE 481
many, was no longer available, into reparations from current output.6 At
the same time the United States was anxious to hold, so far as possible, to
the Potsdam limitation on the volume and value of reparation transfers.
The American proposal departed from Potsdam, however, in two
respects. The permitted level of German industry was to be raised to an
extent more than sufficient to produce the Potsdam standard of living.
The economic recovery of Germany was considered to be necessary to the
economic recovery of Europe. Secondly, reparations from current output
were to be substituted for capital transfers with no diminution in the
value of reparations deliveries below that contemplated in the level-ofindustry
agreement.
This proposal was never seriously discussed at Moscow. Apart from a
press conference statement by Vishinsky that the Soviet delegation welcomed
the recognition by the United States of the validity of the principle
of reparations from current output, it met with no response.
At Potsdam the signatory powers agreed to the treatment of Germany
as an economic unit and to a reparations program limited to a removal of
capital equipment. At Moscow the Soviet Government in effect repudiated
Potsdam and took the position that the treatment of Germany as an
economic unit was conditioned on the acceptance by the other powers of a
quite different reparations program.
There can be little doubt that if the treatment of Germany as an economic
unit were to be followed in the course of time by the emergence of a
politically united Germany, economically self-supporting and subservient
neither to east nor west, a Germany from which occupation forces could
be withdrawn to be replaced by a system of inspection and controls of the
sort proposed in the American twenty-five year treaty, the result would be
worth large concessions. As emphasized earlier in this paper the success
of a policy of agreement is dependent, among other things, on the reconstruction
in Europe of a series of independent states dominated neither by
east nor west. The most important of these states is Germany.
The alternative to an independent Germany is a partitioned Germany.
For the United States this means not only a much more serious economic
problem, i.e., the reconstruction of a self-supporting western Germany,
but it means the maintenance of troops in western Germany for an in-
6 This proposal was, however, subject to a
number of qualifications designed, among
other objectives, to postpone the meeting of
a reparations obligation until Germnany was,
in fact, self-supporting. Cf. Statement by the
U. S. Delegation, April 3, 1947: "Any plan
for providing such compensation must not
increase the cost of occuipation, retard the
payment of allied advances to Germany, retard
the establishment of a self-supporting
Germany, nor could it be permitted to prevent
the equitable distribution of coal and
other raw material in short supply among
the countries dependent upon these resources.
It could not become operative until economic
and political unity as well as the other related
dbjectives have been attained."
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482 INTERNATIONAL ORGANIZATION
definite period of time. Furthermore the longer Germany remains partitioned
the more difficult does eventual union become. Certainly the
partition of Germany is not a solution to be. faced lightly.
It is nevertheless a solution that will have to be faced unless there is
good reason to believe that an independent Germany free of foreign
dominance can be brought into being at the expense of concessions that
are not excessive. It is much easier to estimate the probable cost of the
concessions that would have to be made to secure Russian agreement than
it is to estimate whether the kind of agreement which would thereby be
secured would lead to the emergence of a Germany unsubservient to Russian
influence. The answer to the latter question depends not only on
Soviet policy and behavior in Germany but on the trend of local political
development. It may be taken for granted that, if this trend led to the
victory in Germany of the Communist Party or of communist dominated
parties, a government subservient to Soviet influence would exist in fact,
whether or not it had been brought to power by Soviet intervention in
Germany.
This possibility illustrates the dilemma confronting United States
policy not only in Germany but elsewhere in Europe. In holding Soviet
penetration within the limits required for the functioning of democratic
forces, is it necessary to pursue a deliberately anti-communist policy?
While there is no doubt that local communist parties throughout Europe
and the world follow closely a line established in Moscow, there can also
be little doubt that they represent one segment of a socialist revolutionary
movement indigenous to the countries in which these parties are domiciled.
It is one thing to oppose Soviet penetration in central and western Europe,
but quite another thing to attempt to sweep back local political
forces which are determinedly on the march. Yet, in dealing with parties
which represent not only domestic revolutionary forces but the foreign
policy of the Soviet government it is difficult to grapple with the one
without grappling with the other.
Despite the difficulty there appears to be only one practicable course of
action and that is the course we have been following in Germany. Both in
the American zone and in the Reich we are committed to a policy of holding
the ring within which the struggle of local political parties, including
the Communist Party, takes place. In a united Germany this admits of
the possibility that the Communist Party or a communist-dominated
group of parties might come to power by democratic means. This, however,
is a danger that will have to be risked. The alternative, which lies in
the direction of suppression of communist political activity in our zone
and the construction and support of an anti-communist party or group of
parties, is a game the United States is simply not equipped to play.
What the United States can do in its own zone, and what it can require
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THE MOSCOW CONFERENCE 483
for Germany as a whole as a condition of unification, is to assure freedom
of action for all political parties and the maintenance of civil liberties for
all citizens. Assuming that the reparations question was settled in its
favor, would the Soviet government agree to a political solution in Germany.
along liberal democratic lines? It is difficult from the discussion a
Moscow to derive a clear-cut answer to this question. The Soviet delegation
opposed certain of the conditioins necessary to this solution but it is
quite possible that a large concession of reparations from current output
might have brought about their agreement.
The Soviet representatives, for example, wished to limit the freedom of
movement of personnel between the zones in ways which would have been
quite incompatible with a liberal democratic organization of Germany.
On the other hand, they were willing to see written into the all-German
constitution and the Land constitutions " the democratic freedoms, including
freedom of speech and press, religious worship, assembly and
association."
The Soviet delegation continued to insist in various ways on the de facto
maintenance of the veto power of zone commanders over policies of the
central administrative agencies. Such a power would be, of course, quite
incompatible with the treatment of Germany as an economic unit. However,
it is possible that the Soviet government would yield this point
granted a favorable settlement of the reparations question.
With respect to the structure of a provisional German government,
important differences arose in Moscow concerning both the composition
of such a government and its powers. In general the Soviet delegation
argued that central German governing bodies should be composed not
only of duly elected representatives but should include "representatives
of free trade unions and other anti-Nazi organizations." We may assume
that "anti-Nazi" is to be interpreted as meaning "pro-communist."
While the United States, the United Kingdom and the French delegations
favored a central government of limited powers with residual
powers belonging to the Lander, the Soviet delegation argued for more
power for the central government and made a good deal of political capital
in Germany by defending the rights of Germans to determine such questions
for themselves. A similar question arose in connection with the structure
of trade unions. The French wanted to limit unions to the area of the
Land. The United States and the United Kingdom favored national
unions but the United States, in particular, fearful of communist domination
of a centralized trade union movement, favored the financial and
organizational autonomy of the individual unions. The Russians again
took the position, popular in Germany, that this was a matter for the
Germans themselves to work out.
These are but a few of the numerous disagreements on issues concerning
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484 INTERNATIONAL ORGANIZATION
the political structure of Germany that were discussed at Moscow. Returning
to the question whether, granted a reparations determination
favorable to the Soviet Union, these differences could be reconciled in
ways consistent with a liberal democratic regime in Germany, the author's
answer would be a qualified "yes." It would have to be recognized, however,
that the distance between a paper agreement and the effective implementation
of such an agreement is considerable. As evidence for this
statement one has only to look to the Potsdam experience.
It should be taken for granted that even if agreement were reached on
all questions concerning the short- and long-run political structure of
Germany formidable difficulties would be faced in putting this agreement
into effect. In part these difficulties would arise from the great divergencies
in the development of the various zones in Germany since the end of
the war; in part they would result from the very great negotiating difficulties
which adhere to any four-power administration, particularly when
one of those powers is the Soviet Union. It should also be taken for
granted that agreement on the principles of a liberal democratic regime in
Germany would not prevent the Russians, through all the clandestine
and undercover channels known to them, from working for the political
victory of their friends in Germany. No doubt the other three powers
would attempt to do the same thing, but, if experience is any teacher,
much less effectively.
If the author is correct in his estimate of the situation, agreement could
probably be reached with the Soviet Union on questions concerning the
political structure of Germany, subject to the limitations mentioned
above, if Soviet demands for reparations were satisfied. It would be well to
recognize, however, that a reparations settlement involves more than a
mere agreement to divert a certain proportion of German resources to
production for reparations account. It also involves agreement on the
sharing of the German foreign trade deficit, the covering of occupation
costs, and the treatment of Soviet property acquisitions in Germany.
Since the beginning of the occupation of Germany, the United States
and the United Kingdom have been forced, in order to prevent starvation
in their zones, to import substantially more than German exports from
these zones could pay for. The excess of imports over exports for the two
zones is currently running at the rate of about 700 million dollars per
year. The Soviet delegation made it very clear at Moscow that past
deficits were no concern of theirs and, as for the future, there should be no
deficits. How such deficits are to be avoided, however, is not immediately
obvious. Under the most optomistic assumptions British and American
experts do not, even with unification, foresee a balancing of German
exports and imports before the year 1950.
As to occupation costs, the Russian, and to a smaller extent the French,
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THE MOSCOW CONFERENCE 485
forces live mainly off the land while British and American occupation
troops depend to a very small extent on German production. A reparations
settlement would clearly necessitate fairly stringent limitations on
the amount of German production allocated to the suppoIt of occupation
forces. It is probable, however, that a solution to this question could be
found without much difficulty.
Much more serious is the question of Soviet acquisition of property in
Germany. To date the Soviet government has taken title to some 200 of
the best industrial facilities in its zone in Germany. Neither extraterritoriality
rights nor ownership by a foreign power of so large a bloc of
industrial property can be countenanced in a Germany which is expected
to be independent of foreign dominance. It is, moreover, directly contrary
to the Potsdam agreement which provided that plants available on
reparations account should either be removed from Germany or
destroyed.
Assuming, however, that all these issues were satisfactorily settled
there remains the question of reparations from current output. Concerning
this question it must be said that 1) there seems to be no way of collecting
reparations from current output except at the expense of the United
States; 2) the division of German output between reparations and other
purposes is likely to prove a continual source of disagreement among the
occupying powers; and 3) in case of German default the possibility is
raised of unilateral action by one of the powers which may jeopardize
whatever settlement may be achieved in Germany.
At the present time, it has been pointed out, the excess of imports into
the British and American zones above exports from the zones is running
at approximately 700 million dollars per annum. The Soviet and French
zones have yielded an excess of exports but only at the expense of exhaustion
of stocks of materials and serious depreciation of equipment. If the
four zones were put together the immediate effect would probably be to
increase the trade deficit since these zones would have to be restocked.
Over a longer period, however, German output and export capacity would
certainly benefit from the unification of Germany.
A program of reparations from current output would, moreover, inevitably
increase the trade deficit in other ways and postpone the attainment
of an import-export balance. Such a program would require additional
quantities of imported raw materials on the one hand and, on the
other, would hamper the sale of German commercial exports. The reparations
recipients would normally be Germany's chief customers. However,
they certainly would prefer to receive Germany's exports free as reparations
rather than purchase them at commercial prices, which would yield
foreign exchange to pay for necessary imports. Consequently reparations
from current output could not fail to increase the magnitude of the GerThis
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486 INTERNATIONAL ORGANIZATION
man trade deficit and to postpone the attainment of trade balance.
But who would pay for this deficit? Both France and Russia indicated
clearly at Moscow that they had no intention of sharing a German trade
deficit. Britain currently shares the export deficit for the bi-zonal area.
But, in so far as this deficit has to be met in dollars, which is largely the
case, it is indirectly financed by American loans to the United Kingdom.
The conclusion is inescapable that any action, such as a program of reparations
from current output, that would increase the size of the German
trade deficit, would inevitably be at the expense of the United States.
To secure a settlement in Germany conducive to the peace of Europe
and of the world, however, would be worth substantial sacrifices by the
United States. Unfortunately a program of reparations from current output
involves other than purely monetary costs. The administration of a
program of reparations from current output would have to be the responsibility
either of the occupation authorities or of a German government
still to be established. The difficulties of four-power administration in
Germany have been adequately revealed in matters much less complex
than the management of a reparations program. It seems more than
likely that such a program would lead to continual friction among the
occupying powers. Nor would these difficulties be removed by placing
responsibility on a German government. The experience after the last
war indicated that there are innumerable ways by which a German government
can sabotage a reparations program. How would this difficulty,
if it arose, be handled? There appear to be clear and unbridgeable differences
between the courses of action toward a recalcitrant government and
its population deemed appropriate by the Soviet government and those
courses of action which would appear appropriate to the western powers.
It may therefore be surmised that however a program of reparations from
current output is devised the administration of such a program, which,
of necessity, must extend over several years, would probably be a constant
source of disagreement among the occupying powers.
Finally it should not be overlooked that the imposition of a substantial
and continuing reparations obligation would be likely to create on the
part of the reparations recipients, or, at least, some of them, a disposition
to take unilateral action against Germany in case of default. We have
only to look at the French occupation of the Ruhr in 1923 to realize the
possible occasion and consequences of such unilateral action. Unless we
are willing to undertake, along with a reparations program, the maintenance
of occupation troops on a four-power basis in Germany until the
program has been fulfilled, the possibility of a unilateral re-occupation of
Germany must be recognized.
Reflection on these considerations leads the author to the view that if
it is deemed wise to purchase agreement on a German settlement by conThis
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THE MOSCOW CONFERENCE 487
cessions which increase American expenditures it would probably be
better to make these expenditures directly, in the form of a loan or a
grant, than indirectly by way of a program of reparations from cutrrent
output.
This paper has paid what may appear to be undue attention to the
reparations problem largely because of the author's opinion that, at the
next meeting of the Council of Foreign Ministers in November, if in fact
the meeting is held, this will be the main question facing American negotiators
in their search for a German settlement. How sizeable a concession
would have to be made to secure agreement, what the nature of that
agreement would be, and how firmly such an agreement should be implemented,
are questions that will be answered differently depending on
one's view of the current status of great power relationships as revealed at
Moscow and since. If failure at Moscow is to be interpreted as a typical
impasse to be expected in the initial stages of a difficult negotiation there
may be reason to believe that subsequent conferences will work out a
settlement for Germany acceptable to all four powers.
If, on the other hand, Moscow represents a definite drawing of lines
between east and west it seems probable that, at the next conference,
impossible concessions will be asked with little assurance that these concessions,
if made, would purchase a firm and satisfactory agreement. In
such an event the settlement in Germany would have to wait, not on
future negotiations, but on the course of events.
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