In considering a suitable subject for this occasion, I naturally supposed that the newspaper publishers of the nation would expect me to choose a topic having some news value. I, therefore, decided that it might be timely for me to speak on United States policy with respect to Germany. But I must confess that I did not then foresee just how prominently Germany would figure in the news at this precise time.

The conversations between Ambassador Jessup and Mr. Malik, which were reported in the statement issued a few days ago, constitute the latest development in a long and involved series of developments affecting Germany since the beginning of the occupation. I think you may be interested in the relation of these developments to the broad aspects of the German problem and the efforts of the United States Government to deal with it.

Early this month I met with the Foreign Ministers of France and the United Kingdom for talks on Germany, the outcome of which we all regarded as momentous. It was not by mere coincidence that these agreements were initialed during the week the North Atlantic Treaty was signed. That historic instrument marks a decisive step toward the creation of a community of democratic nations dedicated to the attainment of peace and determined to insure its preservation by all the material and moral means at their disposal.

The German problem cannot be disassociated from the general problem of assuring security for the free nations. No approach to German problems can be adequate which deals only with Germany itself and ignores the question of its relationship to the other nations of Europe. The objectives of United States policy toward the German people are interwoven with our interest in, and our policies toward, the other people of Europe. Here the basic considerations are the same whether they can extend to all of Germany or must be limited to Western Germany.

We have made clear our desire to aid the free peoples of Europe in their efforts toward recovery and reconstruction. We have made clear our policy to aid them in their efforts to establish a common structure of new economic and political relationships. To these ends, we are providing temporary economic assistant through the European Recovery Program and are proposing to participate with them in our common defense through the North Atlantic Pact.

In this setting, it is the ultimate objective of the United States that the German people, or as large a part of them as possible, be integrated into n new common structure of the free peoples of Europe. We hope that the Germans will share in due time as equals in the obligations, the economic benefits, and the security of the structure which has been begun by free peoples of Europe.

We recognize that the form and pace of development are predominantly matters for determination by the Europeans themselves. We also recognize that effective integration of the German people will depend upon reciprocal willingness and upon their belief in the Iong range economic benefits and the greater security for all, which will accrue from a joint effort.

The maintenance of restrictions and controls over the German economy and a German state even for a protracted period, cannot alone guarantee the West against the possible revival German threat to the peace. In the long run security can be insured only if there are set in motion in Germany those forces, which create a governmental system dedicated to upholding the basic human freedoms through democratic procedures.

These constructive forces can derive their strength only from the renewed vitality of the finer elements of the German cultural tradition. They can flourish only if the German economy can provide sustenance and hope for the German people. They can attain their greatest effectiveness only through a radically new reciprocal approach by the German people and the other peoples of Europe. This approach must be based on common understanding of the mutual benefits to be derived from the voluntary cooperative effort of the European community as a whole.

Through all of this effort, our basic aim with respect to the Germans themselves has been to help them make the indispensable adjustment to which I have just referred. We have tried to help them to find the way toward a reorganization of their national life which would permit them to make the great contribution to world progress which they are unquestionably capable of making. But it is important for us all to remember that no one but the Germans themselves can make this adjustment. Even the wisest occupation policy could not make it for them. It must stem from them. It must be a product of their own will and their own spirit. All that others can do is to help to provide the framework in which it may be made.

These are the conditions we consider essential for the long-term solution of the German problem. The purpose of the Washington agreements, and of the other decisions taken by the Western Powers, is to bring about these required conditions at the earliest practicable time. This has been the consistent purpose of the United States Government.

This Government made earnest efforts for two and a half years after the war to resolve the major issues arising from the defeat of Germany and to achieve a general settlement. During that period we participated in the fourpower machinery for control of Germany established by international agreement in 1945.

By the end of 1947 it appeared that the Soviet Union was seeking to thwart any settlement which did not concede virtual Soviet control over German economic and political life. This was confirmed in two futile meetings of the Council of Foreign Ministers in Moscow and London. It was emphasized in the Allied Control Authority in Berlin, where the Soviet veto power was exercised three times as often as by the three Western Powers combined.

The resultant paralysis of interallied policy and control created an intolerable situation. Germany became divided into disconnected administrative areas and was rapidly being reduced to a state of economic chaos, distress, and despair. Disaster was averted primarily by American economic aid.

The German stalemate heightened the general European crisis. The European Recovery Program could not succeed without the raw materials and finished products, which only a revived German economy could contribute. By 1948 it became clear that the Western Powers could no longer tolerate an impasse, which made it impossible for them to discharge their responsibilities for the organization of German administration and for the degree of German economic recovery that was essential for the welfare of Europe as a whole. These powers determined to concert their policies for the area of Germany under their control, which embraced about two thirds of the territory and three fourths of the population of occupied Germany.

These common policies were embodied in the London agreements, announced on June 1, 1948. This joint program, I wish to emphasize, is in no sense a repudiation of our international commitments on Germany, embodied in the Potsdam protocol and other agreements. It represents a sincere effort to deal with existing realities in the spirit of the original Allied covenants pertaining to Germany.

The London agreements constitute a set of arrangements for the coordinated administration of Germany pending a definitive peace settlement. The execution of this program, now in progress, should restore stability and confidence in Western Germany while protecting the vital interests of Germany's neighbors. It seeks to insure cooperation among the Western nations in the evolution of a policy, which can and should lead to a peaceful and fruitful association of Germany with Western Europe. It is a provisional settlement, which in no way excludes the eventual achievement of arrangements applicable to all of Germany.

The London agreements established a basic pattern for future action in the West. The bizonal area, formed by economic merger of the American and British zones in 1947, and the French zone were to be coordinated and eventually merged. The Western zones were to participate fully in the European Recovery Program. An International Authority for the Ruhr was to be created to regulate the allocation of coal, coke, and steel between home and foreign consumption, to insure equitable international access to Ruhr resources, and safeguard against remilitarization of Ruhr industry.

The Germans were authorized to establish a provisional government, democratic and federal in character, based upon a constitution of German inception. It would be subject, in accordance with an occupation statute, to minimum supervision by the occupation authorities in the interest of the general security and of broad Allied purposes for Germany. Coordinated three-power control was to be established, with the virtual abolition of the zonal boundaries.

Of exceptional importance were the guarantees of security against a German military revival, a point, sometimes overlooked in present-day talk about the hazards inherent, in rebuilding German economic and political life. The London agreements provide that there is to be consultation among the three occupying powers in the event of any threat of German military resurgence; that their armed forces are to remain in Germany until the peace of Europe is secure; that a joint Military Security Board should be created with powers of inspection to insure against both military and industrial rearrangement; that all agreed disarmament and demilitarization measures should be maintained in force; and that long-term demilitarization measures should be agreed upon prior to the end of the occupation. It should be observed that these far reaching safeguards are to accompany the more constructive aspects of the program and assure that the new powers and responsibilities assumed by the Germans may not be abused.

During the last 10 months notable progress has been made in Western Germany, which is apparent to all the world. An entirely new atmosphere of hope and creative activity has replaced the lethargy and despair of a year ago. Much of the London program is well on the way to realization. An agreement establishing the International Authority for the Ruhr has been drafted and approved. The Military Security Board has been established. The bizone and French zone are participating fully in the European Recovery Program. Agreements have been reached with respect to such difficult and controverted issues as the protection of foreign property rights in Germany, the revision of lists of plants scheduled for dismantling on reparations account, and determination of restricted and prohibited industries.

A short time ago we all felt that we should have a fresh look at the German problem. This was done in Washington while Mr. Bevin and Mr. Schuman were there earlier this month. The genuine readiness of the participating governments to sacrifice special points of view to the common good has made it possible to reach a degree of accord far exceeding what could have been hoped for only a month or two ago.

There were three particularly important features about the agreements on German policy which resulted from these conversations. The first, was the striking harmony in essential outlook. The second, was the removal of the obstacles to the fulfillment of the constructive London program which had developed through diverse Allied disagreements. Thirdly, the three Governments acknowledged the need for the termination of Military Government and its replacement by a civilian Allied Commission at the time of the establishment of the German Federal Republic. This last is a great step forward toward peace, in my opinion.

With respect to my first point, the harmony of view reached by the three Governments on a common policy for Germany, you all know that matters of German policy have been, in the past, issues of great controversy. I suppose that it is a result of the depth of the historical background, the emotions and passions that have been aroused as a result of Germany's aggressive wars, and the inevitable importance attached to the course of German developments. It is therefore not strange that there should be distinct American, British, and French views on Germany.

But I see in the successful outcome of our recent Washington talks the prospect that France, Great Britain, and the United States are developing a common policy toward Germany based on mutual understanding and reasonableness. The continuation of this development of a common policy, which I am convinced, will occur, and toward which I shall lend every effort, is an essential element in an enduring peace in Central Europe.

The agreement in Washington on the text of an occupation statute has removed one of the major obstacles to the establishment of the German Federal Republic. The Parliamentary Council met at Bonn on September I, and has been working diligently to draft a basic law or provisional constitution for a Federal German Government. Since last December its leaders have requested the text of the occupation statute which had been promised to the Parliamentary Council before completion of its work.

The three occupying powers have been discussing the occupation statute since last August. In the course of these many months the draft occupation statute had become a very heavy, complicated, and legalistic document. The three Foreign Ministers approved the text of an occupation statute in a new and simpler form, which was then transmitted to the German Parliamentary Council at Bonn. According to latest reports, all the controversial issues with respect to the basic law have been settled, all differences between the occupying powers and the Germans and among the Germans themselves have been resolved, and a constitution is expected to be approved by the Parliamentary Council by May 15.

The establishment of a German Government does not, and cannot at this time, mean the end of the occupation of Germany. If democratic self-government is to be introduced in Germany it must be given a chance to live. It cannot thrive if its powers are in question, or if it is subject to arbitrary intervention. The occupation statute defines the powers to be retained by the occupying authorities upon the establishment of the German Federal Republic and sets forth the basic procedures for the operation of Allied supervision.

The reserved powers have been retained in such fields as disarmament and demilitarization; controls in regard to the Ruhr, reparations, and decartelization; foreign affairs; displaced persons; security of Allied forces and representatives; control over foreign trade. The key issue for the future will be the manner and extent to which the Allied authorities exercise their powers. A practicable basis for cooperation between the Western Allies and the future federal Western government will have to be sought, through which the German people may exercise democratic self-government under the statute.

Provision is made in the occupation statute for a review of its terms after a year in force. In accordance with the statute, the action of the German Government authorities generally does not require affirmative Allied approval. This means that the day-to-day operations of the German Government cannot be thwarted by the veto of one occupying power or by Allied disagreement. German Government authorities will be at liberty to take administrative and legislative action, and such action will be valid if not disapproved by Allied authorities. There is one important element in the Washington agreements on the economic side that I want to stress because it is a good indication of our intent. As you know, this Government has expended in Germany since the cessation of hostilities large sums of appropriated funds in order to feed the German people and support the German economy. These sums were carried in the Army budget. Since the commencement of economic cooperation aid, the bizonal area and the French zone have been receiving ECA funds and the Military Governors of the bizonal and the French zone concluded bilateral ECA agreements with the United States Government.

It has now been agreed that with the establishment of the German Federal Republic, funds provided by the United States Government to the German economy will be made available through the Economic Cooperation Administration. The German Federal Republic would itself execute a bilateral ECA agreement with the United States Government, and would likewise become a party to the Convention for European Economic Cooperation and participate as a full member in the Organization for European Economic Cooperation.

The German economy has responded energetically to the currency reform of last June and to the recovery assistance already received. The German workshop is beginning again to produce, for itself, for it Western European neighbors, and for other cooperating countries. The Germans now, under the foreseen arrangements, will have an opportunity through their own government to become a responsible partner in the European Recovery Program. The Washington agreements envisage at the time of the establishment of the German Federal Republic the termination of Military Government and its replacement by an Allied High Commission of civilian character. Military functions will continue to be exercised by military commanders, but each of the Allied establishments in Germany, aside from occupation forces, will come under the direction of a High Commissioner. The functions of the Allied authorities are to become mainly supervisory. The three Foreign Ministers on April 8 sent a joint message of appreciation to their Military Governors for the pioneer work they had done in Germany. This action was based upon moving tributes paid during our discussions to the devoted efforts of the Military Governors.

We Americans take just and special pride in our own Military Governor, General Clay. I believe firmly that history will record that the United States has been well served by him. It is in accordance with his views and the views of the National Military Establishment that we are looking forward to the transfer of the control agencies in Germany to civilian hands. This change is an interim measure, to be sure, but in the right direction, the direction of peace.

I know that this thought must be arising in your minds, at this stage. How long must we be satisfied with interim measures when the people of all countries desperately desire a genuine and lasting peace? Will the moves we are making in Western Germany contribute to a permanent settlement of the German problem? What are the possibilities of renewed four-power talks on Germany ? Has the possibility of such talks or the success of their outcome been prejudiced?

In the communiqué announcing the London agreements, released June 6, 1948, it was emphasized that the agreed recommendations in no way precluded, and on the contrary would facilitate, eventual four-power agreement on the German problem. They were designed, it was stated, to solve the urgent political and economic problems arising out of the present situation in Germany.

When this Government embarked, together with its Western Allies, on the discussion of new arrangements for Western Germany, it did not mean that we had abandoned hope of a solution which would be applicable to Germany as a whole or that we were barring a resumption of discussions looking toward such a solution whenever it might appear that there was any chance of success. It did mean that this Government was not prepared to wait indefinitely for four-power agreement before endeavoring to restore healthy and hopeful conditions in those areas of Germany in which its influence could be exerted.

Should it prove possible to arrange for renewed four-power discussions, this Government will do its utmost, as it has in the past, to arrive at a settlement of what is plainly one of the most crucial problems in world affairs. There are certain principles, however, the observance of which is essential, in our view, any satisfactory solution of the German problem and which we shall have to keep firmly in mind in whatever the future may bring. The people of Western Germany may rest assured that this Government will agree to no general solution for Germany into which basic safeguards and benefits of the existing Western German arrangements would not be absorbed. They may rest assured that until such a solution can be achieved, this Government will continue to lend vigorous support to the development of the Western German program.

The people of Europe may rest assured that this Government will agree to no arrangements concerning Germany which do not protect the security interests of the European community.

The people of the United States may rest assured that in any discussions relating to the future of Germany, this Government will have foremost in mind their deep desire for a peaceful and orderly solution of these weighty problems which have been the heart of so many of our difficulties in the postwar period.

Source: Germany 1947 - 1949. The Story in Documents. Department of State, 1950