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The Paris Peace Conference — 1946

At the Paris Peace Conference, which lasted from July to October 1946, negotiators from the United States, Soviet Union, United Kingdom, France, and other Allied powers agreed upon the provisions of the Paris Peace Treaties, signed in February 1947 with Italy, Romania, Hungary, Bulgaria, and Finland. These agreements included monetary reparations, territorial adjustments, and political commitments intended to promote democracy and peace. Jacques J. Reinstein, interviewed by Thomas Dunnigan beginning in February 2001, served as an economic advisor and negotiator in the State Department throughout the postwar peace negotiations. After developing American proposals for the peace treaties in London, Reinstein represented the United States in reparations discussions in Paris both prior to and during the Paris Peace Conference and discusses the difficulties he had dealing with the Soviets, the shock experts felt over the Potsdam Agreement and the role of Madeleine Albright’s father.  

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“My British opposite number was famous British historian Arnold Toynbee, who knew absolutely nothing about shipping or ports”

REINSTEIN: We went to Paris on Easter Monday. We didn’t really finish the drafts of the treaties until about Good Friday or something like that. It was an extraordinarily wearing experience. I can tell you on Good Friday night we came out of the office and I was so exhausted that I sat down on the curb and cried. I was just so worn out by the process of trying to go through and make the right decisions and come up with a sensible language for these drafts.

We were flown down to Paris on Easter Monday in a military plane, maybe there was more than one flight. I remember I was on a military flight, on a C-47, and the pilot flew us over the Normandy beachheads and we were able to look below and the areas were still completely cluttered up with the damaged material of what had been destroyed in the landings on the beaches and inland; as a matter of fact, even some years later, when I was in the embassy in the ‘60s, they hadn’t removed everything but there were some things gone and you’d find a German tank in somebody’s farmyard because he hadn’t been able to persuade the French authorities to tow it away and it just stayed there. But we had an extraordinary view of the landing sites.

Then we landed in Paris and the French were very decent to us…. We met at the Palais de Luxembourg, which is usually the seat of the French senate but at that time they only had a provisional national assembly which met in the chamber of deputies. It turned out to be very helpful because it had a big room in which you could have major meetings, which had been the throne room of Louis Philippe. We only met at one end of the enormous room [laughs] and then there was a small adjoining room which I think was called the Salle Victory and that’s where we had the smaller ministerial meetings which had restricted attendance. As a matter of fact, we met in both. The restricted meetings were always held in the Salle Victory room and other meetings, at which you could have as many advisors as you wanted, were held at one end of the larger room.

We used the committee rooms of the French senate for committee meetings. As a matter of fact, [laughs] one day I was sitting in one of those rooms and somehow my fingers fell under the table – I’m not quite sure why – and I found a slip of paper. It was a little loose and so I pulled it out and looked at it and it was German. The Germans had used that and you know how the Germans keep track of everything in great detail, and this was their identification of a particular piece of furniture, I guess. [laughs] Very often we sat in the seat of the Germans….

Q: What happened to those treaties you had worked on so hard in London?

REINSTEIN: They were put forward as the American proposals and there were counterproposals to various articles which were put forward by the Soviets and also by the British and French. What happened was that the various economic provisions were referred to commissions. There was an economic commission for Italy and an economic commission for the Balkans. I was the American representative on both commissions. I was the American representative on every committee that had an economic function. As a matter of fact, thinking back, we had a committee in our discussions on how to deal with Trieste. It was supposed to set up a free port and there was a committee set up to draw up a statute regulating the status of the free port. I was the American representative on that. I knew a little bit about shipping. My British opposite number was a famous British historian, Arnold D. Toynbee. Who knew absolutely nothing about shipping or ports or anything else.

We worked on trying to draw up a statute for the free port of Trieste. Then in Paris they decided to set up a commission on Italian reparation and I was the American representative on that. This was the first round of the ministerial meetings in Paris and I was the American representative on that. The British representative was Sir David Whaley, I think. I’m not sure who the French representative was; it may have been Jacques Rueff; and the Soviet representative was the second deputy foreign minister, Dekanozov, the thug who was sent down to overthrow the government of Romania after Romania was liberated and they set up their own government….

“A major sticking point for the Soviets”

The Soviets were asking for $300 million in reparations from Italy. 300 million U.S. dollars was the way in which they formulated their demand. This seemed to be a standard amount that they wanted…. This was an extraordinarily distasteful proposal to us because we were giving financial aid to Italy and what this meant was that we would be putting things in and the Soviets would be taking things out. And this was just politically impossible for us to live with in relations with the Congress. If we agreed to anything like that the Congress would just cut off the money for our civilian supplies to keep Italy going and to rehabilitate it. This was an issue on which we could see no resolution with the Soviets.

My superiors, and again I may emphasize that there were no delegation meetings, that the top people apparently met with the Secretary [James Byrnes, at right, before leaving for the Conference] and made decisions which were handed down to us, but I was never present at any meeting with the Secretary, a delegation meeting, at which policies were discussed. At any rate, a decision was made to agree with them that there should be an Italian reparation commission and I was appointed as the U.S. representative, as far as I can recall, without any instructions.

The Soviets put forward their arguments that the Italians had divisions on the eastern front and they had participated significantly in the war and had created damage. The result of the discussion of the reparations commission was that we reached an agreement, and this was a major sticking point for the Soviets….

“I’ve always wondered whether the Soviets got anything much out of this”

At the second ministerial meetings the discussions continued to drag on without results, but it did emerge that there were two key issues. One was the Soviet demands for Italian reparations and the other was the peace conference. The original idea had been that the Four Powers would work out agreed texts and they would submit those to the peace conference. Well, it was clear at this point that there would be no agreed text.

On the Fourth of July we had a restricted meeting which began at four o’clock in the afternoon and Mr. Byrnes said, “I suggest that we sit here until we reach agreement on two subjects. One is Italian reparations, and the second is the beginning date of a peace conference.” The second proposal clearly, by that time, meant that we would go to the peace conference without agreed drafts. Since the peace conference would be made up more of countries who were friendly to the West than to the Soviets, the Soviets would be outnumbered in this way. And publicly. At any rate, we had this meeting which went on from four o’clock in the afternoon until one o’clock in the morning, with occasional breaks at which the French served champagne and small sandwiches. [laughs]…

At any rate, I don’t know where this idea originated, but between Byrnes and me, we came up with a formula which was that the Italian reparations should be paid by goods for which the raw materials were furnished by the Soviets and processed by the Italians. In other words, the Italians would do the work but there would be no direct link between American aid to Italy and the product which the Soviets got. There was no direct visible connection, whether it was the U.S. putting something in or the Soviets taking it out. Somehow Byrnes and I hit on this – maybe in this meeting – and we began exchanging drafts in longhand while the discussions were going on and at some point he would hand me a draft and I would work on it and hand it back to him.

Finally I remember him handing me a handbook with all these scraps of paper and he finally handed me this scrap of paper, turning as he did, you know, as I was saying, and he said, “Jacques, what about this?” I looked at it and I went over it very carefully with an eye on the Congressional reactions and I finally handed it back to him and I said, “Mr. Secretary, I think we can agree to that.” I guess that proposal had been on the table or something. Anyhow, he turned to [at right, Soviet Foreign Minister] Molotov and he said, “The United States agrees,” and that was it. And that was the formula which went into the treaty.

I’ve always wondered whether the Soviets got anything much out of this. They attached great importance to having words in the treaty and they said Soviet public opinion would not understand it if they didn’t get reparations. Well, you kind of snicker about that, “Soviet public opinion,” but you had to recognize they had a point. They had a point and it was important to them, I think, to get language into the treaty which had some recognition. Whether they ever actually in fact got anything out of it, I don’t know. After the treaty I got moved on to work on Germany and Austria and that and never found out what happened. They may not have gotten anything except a document which they could use domestically. At any rate, they then, having made that agreement, which sort of unlocked the issue, it was simply a matter of the date and they fixed the date, I think, of July the 28th….

“The experts in the Department were all shocked by the Potsdam Agreement”

The French finally managed to get the ministers to agree to talk on Germany. It was a one-day discussion – I think in July; if it wasn’t in July it had to have been in probably late June – which was the first discussion, in the council, of Germany. At that point de Gaulle had resigned earlier as president of the French republic, and George Bidault, who was the foreign minister, had been elected president. He had the dual job. He of course represented France.

The French had been told in the discussions through diplomatic channels in the end of 1945 that the other three powers would not support chopping Germany up. But the degree of control that would be imposed on Germany was less vague and in particular, the French ideas of having special controls on the Ruhr and maybe other areas that hadn’t been explored. The other three powers had said we’re not going to break up Germany. The general idea and policy toward Germany had really not come up. All you had was what were discussions on policy that went on in the Control Council in Berlin. So this was, I guess, the first substantive discussion of Germany.

A subject which did come up very much later in Byrnes’ proposal was the treaty for the disarmament of Germany that he made during the peace conference when it had become apparent that things were not going to work out in Berlin. At any rate, it was a kind of brutal meeting in a way because Molotov, it seemed to me, who was just sitting there, went out of his way to be about as nasty as he could be to Bidault (at right). I’ve been to a great many international meetings and normally they aren’t really nasty to each other, but Molotov, for whatever reason – French internal politics, the position of the Communist Party or what – went out of his way to be particularly nasty to Bidault, who was pushed into the position of his governmental jobs as head of one of the major political parties, the Catholic Party [MRP]….

It really brought the German ghost into the meeting. Nobody ever talked about Germany. Nobody had ever suggested that Germany had any relationship to anything that was going on here. But the German ghost really appeared for the first time and Germany then began to be a factor in the discussions….

We really had not worked out our policies with respect to Germany. As I mentioned earlier, the experts in the Department were all shocked by the Potsdam Agreement, which we felt de facto divided Germany. The determination of what you were going to do was something that was really for the future. The Stuttgart speech [given by Byrnes in September in Germany] was presumably inspired by Washington, and I imagine by people like [Assistant Secretary of State for Economic Affairs] Will Clayton….

As I said, we had no information, no inkling. The main thing, as I recall, in the Stuttgart speech was the statement that – and this was very important – the levels of industry which had been fixed by a general agreement with the Soviets were only for the purpose, as I recall, of determining what plants were available for removal from Germany as reparations. The level of industry was to fix that minimum amount that was necessary for the function of the German economy, and that plant material above that was available for removal as reparations in kind. The Stuttgart speech in effect said that these levels were not continuing levels, but that Germany would be allowed to grow and add additional plants, that the German economy was not to be fixed at this low level; and that was, I think, the major thrust of the Stuttgart speech. But it in effect indicated that the industrial resuscitation of Germany was part of our policy.

Germany came up very directly in Paris in another way, which was a recognition by Byrnes that you could not evade the German question. The theory at Potsdam, as it was explained to me, was that Germany and Japan were very difficult and therefore you put them off and you made peace treaties with the Italians and the Balkans, which would be easier, and you put these other questions aside. It took about a year for recognition to sink in that you couldn’t evade the German issue in dealing with Europe, and that without some understanding on Germany – of a limited kind, at any rate – you would probably never get agreement on the Italian treaty or these other treaties. Nothing would ever get started.

So Byrnes put forward in September the idea of a treaty for the disarmament and demilitarization of Germany and that it would be agreed on for a period of twenty-five years, when Molotov, in his usual negotiating manner, began stuttering about that. Molotov was a great stutterer. Byrnes said, “All right, make it forty years,” and thought that if we could get an understanding on that then we would not allow Germany to be a military threat. I think the concept was that we’d be in full control to implement that. That could then allow you to get forward in resolving other issues. It didn’t sail. It was continued as an American proposal for a while and at some point it died. I can’t remember when….

Getting bloodied on Finnish reparations

At any rate, the idea didn’t seem to illicit any great support from the Soviets. What happened was that at the peace conference they had subordinate committees for Italy and for the Balkans and the major topics were dealt with by the ministers themselves. The sessions didn’t illicit any progress. Eventually they finally had to wind up the process.

What happened was that the first meeting of the General Assembly was scheduled to take place in New York at Lake Success, and the peace conference was still ambling along without result and the four powers asked the General Assembly to postpone its opening meeting so as to permit the conference to continue.

It was postponed and the discussions continued to go on without result in Paris, and it got to the point where they couldn’t ask the UN to put off the meeting of the General Assembly again because the thing was becoming a scandal. I mean the inability of the countries to conduct their business. So they decided to transfer the work on the peace treaties to New York and continue it there at the same time as the meeting of the General Assembly; and so we all went to New York….

Q: The foreign ministers were meeting in New York City at the time. Continuing their meeting…

REINSTEIN: Well, what happened was they decided that they had to wind up the peace conference. They gave instructions to speed up the questions that hadn’t been dealt with; what it really amounted to was sort of rattling through the text and taking votes without really much in the way of discussion. Just to go through the mechanics of having some text which would then come back to the Four Powers to be worked on further in the Council of Foreign Ministers. We got through most of this stuff very fast, mechanically; we were in a hurry and everybody knew what everybody’s position was after that.

I had a real difficulty on one point, which was that I had a division of work with [fellow American adviser] Willard Thorpe. We had an Italian economic commission and we had a Balkan economic commission and we divided by subject matter. He dealt with reparations and compensation for damaged allied property and I dealt with everything else.

We got to the end of this thing late one afternoon and we were going through the laws mechanically, and we came onto the Finland treaty. Now the United States was simply an observer at this. We were not a participant. We just were like all the rest of the allied countries, able to make comments but not allowed to participate in the treaty because we had not been at war with Finland. Well, at one of these meetings, which I didn’t want to attend, it was decided that the United States would not support the Soviet proposal for reparations from Finland.

So we got through all of the Balkan treaties and we came up to the first treaty and this was the first issue and Thorpe was sitting in another room in the Italian commission and I sent a handwritten note to him telling him to take my place. We had gotten to Finnish reparations. And I got a note back saying, “I can’t come. We’re in a reparation discussion on Italy.” I don’t know what the devil they were talking about there – I never did find out – because we had settled the Italian issue. But I was left in the position of defending American opposition to the proposed reparations from Finland without any background, without knowing anything about Finland, without having been present at discussions at which this was decided.

I sat there and I raised questions about the ability of the Finnish economy to carry that level of reparations and urged the commission to not make a recommendation; that this argument didn’t mean that we were opposed to reparations at all, it simply meant that we hadn’t had an opportunity to consider whether the level of reparations proposed was correct. Well, the Soviets wheeled an expert in and proceeded to give a detailed analysis of the Finnish economy and they just bloodied my hand.

Q: No support from the British or others for our position?

REINSTEIN: No. The British had apparently agreed to this and nobody else was really involved. They were all bystanders. I continued and I got kicked around royally and finally Thorpe came in took over, having been successful in his own meeting and flushed with success. I went down and found a car and went back to the hotel….

They were going to keep this meeting going until Madeleine Albright’s father collapsed

I met somebody in the hotel and I said, “I don’t know what time those people finished up. I left there about three o’clock,” and she said, “They’re still going.” So I got a car and I rushed to the palace and walked into the meeting. The Soviets had apparently decided to try to prevent a vote from taking place on some issue in the Finnish treaty in which they would get voted down. They were conducting a filibuster. The chairman was Josef Korbel, who became known later as the head of the school of foreign affairs in Denver, after he came to the United States with our assistance. I think Willard Thorpe was the fellow who got him to the United States. He was the father of Madeleine Albright. He was in the chair and the Soviets were filibustering and trying to prevent the issue from coming to a vote. [Note: Korbel returned to Czechoslovakia as the Foreign Ministry Chef de Cabinet after being exiled with President Benes in London during World War II. He served on the Czech delegation to the Paris Conference before becoming Ambassador to Yugoslavia but was forced to flee again during the Communist coup in 1948.]

At the very beginning of the conference the British and the Soviets had gotten together and the Americans didn’t want to be involved in it. So the British and the Soviets divided up all the chairmanships and the vice chairmanships of the various commissions and what happened was the chairman was the fellow who conducted the business and the vice chairman never appeared.

But in this case the vice chairman was a South African and the British rounded him up and put him in a chair next to Korbel and told Korbel that they decided they were going to keep this meeting going until he collapsed, at which point they would move their man into the chair. This was extremely unpleasant.

Q: Korbel, meanwhile, apparently did not want to call for a vote on the Soviets’ filibuster.

REINSTEIN: Oh no. He didn’t want to offend the Soviets. So what happened finally is I got there and I found this thing was going on and so [laughs] I got into the act by just rushing around and here I was good and fresh and I would go and I would pretend to talk to somebody and then talk to somebody else, and give the impression that we were on top of things.

Anyhow, they finally got the Secretary General of the conference to come in and he ruled that the issue should be put to a vote and Korbel got off the hook. But it was an extremely unpleasant position for him. Well, that wound up our deliberations in Paris.

We then took off for New York, where the discussions took place in the Waldorf-Astoria… simultaneously with the United Nations meetings at Lake Success…. The head of the Waldorf-Astoria, Lucius Beaumont, graciously made his apartment at the top of the towers available for meetings, a beautiful place. We had all of our commission meetings there, the Americans all lived there; we had our offices in the Waldorf. The only time we ever emerged from the Waldorf was to go out and get something to eat because you couldn’t afford to eat at the Waldorf.

The discussions proceeded. At that point Byrnes apparently got fed up with this proceeding and he told Molotov that he was sick and tired of this and it really wasn’t necessary to have peace treaties after all. He was prepared to close things up and forget about the peace treaties, at which point the Soviets said, “Well, let’s have peace treaties.”

So we settled down and at the very end we worked on the treaties, and we had a series of very serious meetings; and every once in a while the Soviets would try some trick or other. They tried to slip in something past me on Italians resident in Trieste. I slapped them down on that.

Finally we wound up and agreed on the text. A handful of us were supposed to stay in New York and put the treaties into shape for final signatures. The text had to be gone through, verified, translations worked on, and the rest. So I was told that I would have to go back to London to work on Germany and Austria and so that was the end of my participation.