Notes from Czechoslovak Government Meeting Detailing Discussion from a Previous Meeting with Stalin

SECRET

SUA Prague, CC CPC, fond 83,
Selection of Czechoslovak government meeting records

Record

8th /special/ meeting of the third government, which occurred on Friday, July 26th,1946,at 18 o'clock in the building of the office of the government presidium.

Present and excused according to list of persons present.

Prime Minister K. Gottwald inaugurates this meeting at 18:10 and states that he considered it necessary to call this special meeting, because the government will certainly want the governmental delegation to submit a report about its negotiations in Moscow, and since the minister of foreign affairs and the state secretary in the Ministry of Foreign Affairs (MFA) must leave Prague tomorrow to attend the Peace Conference in Paris, there was no other possible solution to the matter. The Prime Minister declares the meeting as secret and reads first the proposal of the communique which was settled with Soviet functionaries before the departure of the delegation, and which will be made public today at 11 :30 Moscow time. The Prime Minister adds to the contents of this communique that the Soviet government is also willing to sign a trade agreement with us and provide us with trade credit. He poses for consideration whether the minister of foreign affairs should give an account of the details, or whether the task should fall to the state secretary Dr. VI. Clementis.

Minister J. Masaryk considers is advantageous for him to first inform about the latest political conversation which the delegation had with generalissimo Stalin and the minister of foreign affairs Molotov prior to its departure. During this conversation the generalissimo promised the delegation the full support of the Soviet Union in the Hungarian matters, i.e.,support in the basic affairs as well as the more detailed ones. The situation is now such that we have secured in the corresponding committee of the peace conference 6 of the necessary 8 votes,and there is a certain hope that we will gain the remaining two votes as well. The minister is counting on the vote of India in particular, for general Smuts, who represents South Africa, will probably be against us, which could result in India deciding in our favor, since it is in conflict with South Africa over the ill treatment of its citizens. As for Canada, it is not ruled out that it will also support us. Prime Minister K. Gottwald recalls that the British minister of foreign affairs Bevin also declared that Great Britain will not be against us.

Touching on the questions of Czechoslovakia attitude toward Poland, minister Masaryk mentions that according to the conversation, the Soviets would welcome the settling of mutual relations between the two Slavic nations. This was discussed and generalissimo Stalin announced that he would be glad if an agreement could be reached soon. He said that it is actually the last point of contention between two Slavic nations. He is for at least a partial agreement and an improvement of mutual attitudes. The members of the delegation informed the generalissimo about all the efforts which Czechoslovakia undertook with respect to Poland with this intention, and the minister had the opportunity to demonstrate during these conversations several details of the excessively difficult negotiations with the Poles. He inquired about who should now take the initiative, whether the Poles or the Czechoslovaks. He underlined that Czechoslovakia certainly did not turn this into a prestigious question. The Generalissimo answered that the Soviet Union would eventually take the initiative itself. This should result in the negotiations in question eventually taking place during the stay of the minister of foreign affairs and the state secretary in the MFA and Polish functionaries in Paris. The Tesm question was also discussed. The Czechoslovak delegation of course defended the position that this question cannot be discussed with the Poles, and the generalissimo reacted to this position in a very pleasant way. He said that Poles have "claims" and the Czechoslovaks have Tesm. The minister considers this to be the success of the latest political conversation which the delegation had with the generalissimo yesterday before dinner.

The state secretary Dr. VI. Clementis adds that the generalissimo discussed very concretely the question of our attitude toward Poland. He pointed to the protocol of the allied agreement between the Soviet Union and Czechoslovakia from December 12th, 1943,according to which Poland's approach to these allied terms was counted upon. The Soviet Union intends to turn to both countries, i.e., to Czechoslovakia and Poland, with an inquiry as to their willingness to thus fulfill the allied terms according to the supplemental protocol. The governmental delegation expressed itself immediately affirmatively and informed the generalissimo that Czechoslovakia has worked out a whole series of proposals for agreements with Poland, i.e., trade, cultural, financial, transportation and other agreements, that the Poles, however, during their delegation's visit this February refused to negotiate these matters as long as political questions would not be dismissed. The state secretary explained to the generalissimo, that the Poles were mainly concerned about Tesm. Stalin answered to this that it was impossible to negotiate this way, that it is necessary for Poland and Czechoslovakia to agree upon trade, cultural and transportation matters, for the current status without a treaty in these important questions is hurting both states. Therefore, a challenge will come from the Soviet Union's side. Prime Minister K. Gottwald adds to this that generalissimo Stalin said in a conversation, that the countries (illegible) to hear the convincing argument, which would speak for their claims on Tesinsko. The state secretary Dr. VI. Clementis thinks that the government could today agree that the minister of foreign affairs and the state secretary would eventually initiate dialogs with the Polish minister of foreign affairs and his deputy in Paris, if the challenge from the Soviet Union should occur in the meantime. Minister J. Masaryk remarks that this would mean that all contentious political points would be set aside and that with the signing of trade, cultural and transportation agreements there would be positive contact between both Slavic states. The contact would in this way be based on a treaty. The generalissimo recommends that the political questions remain unsolved, for it is possible that Poles would have a better understanding of the situation in one year's time. In this connection the minister especially stresses what sort of a facilitation of the negotiations the visit of the delegation meant, and he also illustrates the difference between such a direct negotiation and a negotiation which must be undertaken in the presence of diplomats in Prague and the ministry of foreign affairs in Moscow. In order to demonstrate in what spirit the negotiations took place, the minister mentions that the generalissimo also agreed that the embassy in Moscow should get a suitable building. He asked the delegation how many buildings the Czechoslovak embassy has in Moscow, because he saw himself that the one building, which he was in, is not enough. When he heard that Czechoslovaks have only one building, whereas the Soviet embassy in Prague has 17 buildings, he energetically expressed his disagreement with this state of affairs.

The state secretary Dr. VI. Clementis afterward returned to the Hungarian question. He states that the delegation formulated three concrete demands: evacuation, a small rectification of the borders and a change of the concept of the peace accord, which does not correspond at all to Czechoslovakia's position, especially as regards its compensatory rights stemming from the Vienna arbitration. In all these matters the generalissimo promised full support for Czechoslovakia. Premier K. Gottwald adds to this that foreign minister Molotov recommends that the Czechoslovak delegation energetically and emphatically defend its position at the conference. It can then depend on full support from the Soviet delegation.

State secretary Dr. VI. Clementis afterward concerns himself with the problems connected to the liquidation of the war. He recalls that the delegation brought with it a greater number of specific memorial records which concerned these matters, especially the questions of the trophy treaty, the questions of the treaty of mutual support during the war, the problem of Stalin's (illegible), the problem of4 German banks in Slovakia and 2 German banks in Prague, further the gold in the National Bank, trunks stored in several banks, checks etc. During the first political negotiations on these matters it was discovered that it was impossible for them to be discussed politically independently and therefore they were transferred to a committee of experts. During the discussions of the experts is was shown that new problems were constantly appearing, and that this was not a way to develop a positive outcome. The matter was then resolved politically. Prime Minister K. Gottwald characterizes the method of this solution in the words of Vyshinsky, who said that the agreement was made despite the work of the experts. The state secretary Dr. VI. Clementis provides afterward more detailed information about the negotiations, and points especially to the fact that the Czechoslovak delegates could operate on the basis of their prepared work with concrete and real figures. As to the foreign currency and valuable papers, shares etc., the Soviet functionaries declared that they would destroy them or return them and that they will not make any claims because of their holdings. After long negotiations it was finally demanded that Czechoslovakia pay from all trophy cases of claim 25 million dollars. The Czechoslovak delegation considered whether this negotiation is supposed to be joined with the negotiation on the claims which Czechoslovakia will have against the Soviet Union by virtue of the annexation of Ruthenia, i.e., by virtue of the Soviet Union's contribution to the internal and foreign debt. Since the relevant reports were not yet properly examined, this problem was discussed only in general terms. During further conversations, especially during the conversation between generalissimo Stalin and Prime Minister Gottwald, the principle that the mutual claims in matters of plunder will be crossed out was finally brought to bear, and thus the whole collection of questions will be dismissed. The Czechoslovak delegates then came to the reception with the relevant proposal of the communique, which was presented as a definitive decision, maybe the experts have not yet reached an agreement and have not finished their discussion.Generalissimo Stalin agreed with the proposal and had only one condition. He demands that Czechoslovakia donate to the Soviet Union the equivalent of half of the objects which the Soviets are now making use of in Karlovy Vary. The political delegation agreed immediately with this request, but also the experts consider such a solution to be advantageous. Deputy Zd.Fierlinger states that this basically means that we will give the Russians one big hotel. State secretary Dr. Vl. Clementis supports this, adding that there will also be several smaller objects involved, and expresses the opinion that the result of this negotiation is very good and that this solution, with which the mutual claims will be dismissed, can be considered a success from a purely economic viewpoint. Apart from this, the Czechoslovak delegation received an even more important declaration and acknowledgment from the side of the Soviets as to the property of Czechoslovak physical and legal individuals in Germany, i.e., the Soviet sector of Germany. The Soviets acknowledge that this property is the property of Czechoslovakia and that this will not be liable to confiscation by the Soviets, but on the contrary belongs where there are cases of Czech or Slovak owners, to those Czech or Slovak owners, otherwise it is confiscated for the Czech Republic according to our internal legal regulations. The Postupimska accord on confiscation does not apply to this property. This is an acknowledgment which we have thus far not put through even in the West. The speaker emphasizes that this will considerably facilitate other negotiations with the West. The Western powers were until now only willing for certain specific concessions, and not for some sort of general acknowledgment of principles. The decision of the Soviets will mean significant support during further negotiations.

As for Czechoslovak businesses and participation in Romania, we mainly have an interest in the companies Nitrometal and Explosia. The Soviets, however, also have a great interest in these objects, and a basic agreement was finally reached, according to which the Soviets are willing to grant us 20% participation in both companies which they would either pay in cash or give us equivalent participation in their companies, or eventually entirely different businesses which are liable to confiscation according to the Postupimska accord, respectively according to the decision of the international allied commission. The Czechoslovak delegation expressed basic agreement with this solution, but did not give a definite answer for it will be necessary to examine the details from an expert viewpoint and in individual sections.

The trade agreement was negotiated in the presence of the minister of international trade Mikoyan. The Soviets wrote in certain rebukes, that the mutual trade relations are blocked by technical insufficiencies on the Czechoslovak side. There was discussion of the Soviets' providing us with a loan in gold. The top director Dr. Chmela announced, however, that it did not have any meaning for us, because the Americans would never agree on payments with Soviet gold. The conversations then concentrated on a two to three year trade credit, but an agreement was not reached, only a binding statement by minister Mikoyan, saying that the Soviet Union is willing to connect us in a convenient way into their five-year plan and meet us halfway in all areas. He wanted to specifically know, however, what we need ...(illegible next few words)...ready. This will be a task for the ministry of foreign trade and also for the ministry of industry. Minister V. Majer calls attention to the fact that the delegation knew the demands of the ministry of alimentation, which were submitted to Mr. Dr. Augenthaler.

Afterward the state secretary Dr. VI. Clementis talks about the question of the crop yield in the Soviet Union, which is not good. Minister J. Masaryk explains that he spoke about this with minister Molotov, who confirmed that the yield is bad in some places, but on the whole the alimentation situation is not dangerous. In this connection the minister informs the government that according to the memorandum of the American ambassador in Moscow the yield in North America will be above expectations and it is possible to count on great surpluses, which will mean relief for the Soviet supply situation.

The state secretary Dr. VI. Clementis afterward yet says that in the communique there is no mention in detail of military loans, the countries of which also reached an agreement. This agreement is crucial as well, for the Soviet functionaries wanted to know what the cost would be and the delegation did not have precise information because the ministry of national defense did not give calculations. Minister Gen.L. Svoboda explains that the military staff intends to accept from the Soviets only that which they will not charge for. The state secretary Dr. VI. Clementis doubts that the Soviets would agree to this. Minister Gen. L. Svoboda insists that this would correspond with our agreement with the Soviet Union on gratuitous armament and gear for 10 divisions. Prime Minister K. Gottwald polemicizes with the minister of national defense and introduces concrete reasons why the governmental delegation could not defend this position after the great willingness in the other economic questions. He points out that the Soviets gave Czechoslovakia armament and gear on the basis of oral negotiations and mere exchanges of letters in a very significant value. Minister Gen. Svoboda insists, however, upon his position and introduces particulars on individual types of materials, especially on artillery materials (handwritten: which the Soviets ...illegible...). He defends the position that Czechoslovakia can accept from the Soviet Union that which it wants to give for free, (handwritten: or take out a loan), otherwise Czechoslovakia must help itself with trophy material (handwritten: or a material ...illegible...). He is convinced, however, that we can count on full support from the Soviet main staff, which promised this support once again. The minister of national defense answers the question put by minister V. Kopecky, saying that the Soviets have already donated us military material worth several billion Kes.

Minister J. Masaryk wants to add that the experts of the governmental delegation
worked very hard for days and nights and therefore deserve mention. (Marginal note: Note: completed upon the wish of Dr. (illegible name) and mister minister Gen. L. Svoboda!)

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...negotiators, that despite the opposite position of the experts a definite agreement was negotiated in the sense that the common claims will be dismissed without payment of an equivalent sum. The only equivalent value is the hotel property in Karlovj Vary, for an agreement was already reached on the houses for the Soviet embassy in Prague. The question of our claims by virtue of Soviet participation in the domestic and foreign debt, falling to Ruthenia, remains open and Prime Minister K. Gottwald confirms that the Czechoslovak delegation loyally pointed out this circumstance during the last negotiations and it was fully acknowledged from the Soviets' side.

Dr. Eng. E. Outrata afterward concerns himself with the demands of Czechoslovakia, which are being fulfilled in connection with the Red Army's stay on Czechoslovak soil. Because of this, the delegation came up with a demand for 3 to 5 billion Kes, while being aware of the fact that this will be a contentious demand. Prime Minister K. Gottwald adds to this that it was necessary to settle these claims with a global agreement on mutual compensation, in order for us to have a clean slate. Dr. Eng. E. Outrata then explains that the Soviet functionaries promised that they will cancel checks and valuable papers, such as shares etc., as long as they apply to those Czechoslovak businesses which were in the said safes in Czechoslovak banks, in such a way that the Czechoslovak economy is not threatened by further claims from this side. On the other hand, the Soviets set aside for themselves the right to keep the marks,pengo and crowns, which in this way have gotten into their possession. They presented us with old crowns for exchange and they have already been used up. Deputy Zd. Fierlinger asks whether is was possible to find out what the sum was. Dr. Eng. E. Outrata answers that it was not possible and that the Soviets apparently were not willing to provide this information. They said that they did not know, and confessed that they are using this money to keep up their offices and military missions in Czechoslovakia. It is not possible to pursue this issue. The Soviets defend the position that the Red Army divisions were getting their pay from this money and checks, that they did not have the possibility of spending this money on their stay and that it is only fair when money accumulated such as this was changed and can now be used for purchases. It is not possible to argue with this opinion. Deputy Zd. Fierlinger points out that the sum was limited. Dr. Eng. E. Outrata adds that the limit was also held up and that the delegation requested the Soviet functionaries to not put this money into circulation as soon as goods goon the market in Czechoslovakia Deputy J. Ursiny thinks that it should be known exactly how much money was in the banks. Prime Minister K. Gottwald contrary to this shares the opinion of the general secretary of the HR, in that it will not be possible to obtain this information. Dr. Eng. E. Outrata adds that the Red Army was supposed to have checks totaling 8 billion crowns, but it was later shown that checks were printed for 9 billion crowns. That the Soviets did not tell us this represents, however, only a technical slip. They were otherwise ever justified in doing this. This circumstance will not also have a further effect on our economy, because the buying power of these checks was already used up. The speaker only mentions this matter so that the government would know that the delegation vented this question as well.

Prime Minister K. Gottwald then says that the Soviet functionaries promised us full support during maximal territorial demands against Germany. They fully agree that we should get down from the hills and into the valley. In response to the question posed by minister V.Kopecky whether Zitava was also discussed, minister J. Masaryk answers that he alluded to it.This negotiation, however, only concerned the territory which is still in Germany, and not the territory which is under the control of the Poles.

Dr. Eng. E. Outrata notes that a railway treaty was also discussed and that the delegation brought with it its proposal. In this connection deputy Zd. Fierlinger provides information upon request on various Czechoslovak delegations which are in the Soviet Union and of their activity. As to our navy, the Soviets agree that it will be returned to us. We must, however, tell them where individual boats are located. Minister Dr. I. Pietor is interested in air transportation across Soviet territory and across Soviet zones. State secretary Dr. V. Clementis says that the Soviets do not agree with Czechoslovak airplanes providing transportation across Soviet territory, but they approved us for flights across Soviet zones.

Dr. Eng. E. Outrata afterward sums up concisely all the individual economic benefits for Czechoslovakia which stem from the result of the negotiations. He considers it especially important that we now know of a whole series of problems,we know what we are dealing with, that we do not have to count on many moments of uncertainty anymore and that we will save numerous other negotiations and the work of many committees, which also means financial savings.

Deputy Prime Minister Dr. P. Zenkl inquires whether we will be able to count on the reduced price of fuel, supplied by Stalin's factories. Dr. Eng. E. Outrata thinks that the dismissal of compensatory demands will not have a substantial effect on the production expenses of this enterprise. Deputy J. Ursiny considers the state responsible for first of all thanking the delegation for their good work and the positive results of this work. These thanks in the first place go to the Prime Minister, but also to the other members of the delegation. It is inquired upon what was the position of the Soviets on several territorial demands in Kladsko, Ratibofsko and Hlubcicko. The Prime Minister K. Gottwald answers that the Soviets consider it to be a big mistake that we went to the Western power and by extension to the peace conference with this question. Generalissimo Stalin energetically and unequivocally emphasized that the Postupim agreement, upon which the Soviet Union fully insists, must be in effect here. That is why it considers the said territories to be Polish territories and this cannot be changed at the peace conference. Any sort of change could only happen by an agreement of both sides, that is, Czechoslovakia and Poland. Whoever disturbs the current western Polish border will have to deal with the Soviet Union.

Deputy Dr. P. Zenkl notes that this practically means a refusal of the Czechoslovak demands on Kladsko and a recognition of the position of Poland that these territories definitively belong to it, that it can pursue the removal of the Germans from them, but also resettlement and settlement in them. Minister J. Masaryk has the impression that generalissimo Stalin had in mind only a peace conference of vassal states and not a peace conference about Germany, which should take place in November of this year. Prime Minister K. Gottwald and the state secretary Dr. V. Clementis explain that it is not so and that it is about this coming and any other peace conference.

Minister Gen. L. Svoboda asserts that according to the Postupim agreement the said
territories were given to the Poles only to maintain. Prime Minister K. Gottwald repeats the memorandum on the Soviet Union's position that the Soviets recommend us to now sign a treaty of alliance with Poland and wait with the territorial demands until tempers somewhat cool down.As for Tesinsko, it depends upon us whether we want to reach an agreement with Poland. If we do not reach an agreement, no one will force us into one. On the other hand, the Soviet Union will also not force the Poles to compromise with us. Minister Gen. L. Svoboda considers it to be a big mistake that such is the situation. Prime Minister K. Gottwald explains that this position of the Soviet Union is related to the question of Poland's western borders, which the Soviets defend very emphatically. He repeats that according to generalissimo Stalin, the one who disturbs these borders will have to deal with the Soviet Union. Minister V. Kopecky believes that the fundamental mistake occurred in 1945, when the London government in negotiations with Moscow decided to offer if need be the division of the fronts and not make any territorial demands of Germany, whereas the Poles already then requested that the border be at the Oder and the Vistula. Herein lies the crux of the present situation. All later Czechoslovak measures were delayed. But this was the position of the London government which, according to the speaker's opinion, committed a rude mistake. Our Moscow emigration reciprocally defended on principle the territorial demands and the minister remembers numerous articles which in particular prof. Dr. Zd. Nejedly. It was certainly a mistake that we left the Slavic area with our demands toward the Poles. Deputy Zd. Fierlinger does not share these views and believes that the developments in Poland have not yet ended and that this is not the last word on the matter. Prime Minister K. Gottwald adds that generalissimo Stalin recommends an agreement with the Poles, make them commit, because according to his opinion we do not know what will happen in Poland. Deputy Zd. Fierlinger declares that this only supports his opinion.

Deputy dr. P. Zenkl points out that in its discussion before the departure of the delegation to Moscow, the government started from different assumptions. At that time it charged the delegation with continuing the defense of the position that our demands on Kladsko etc. are demands against defeated Germany, even though it instructed the delegation to if need be to content itself with minimal demands. Not long ago the Polish ambassador visited the speaker, wanting to initiate a discussion on Tesinsko and territorial demands in general. The deputy refused this, saying he was not competent and referred him to the ministry of foreign affairs, the state secretary in the MFA or the Prime Minister. When the ambassador spoke about compensating the Tesm territory with the Kladsko territory, the minister defended the opinion that there can be no talk of this because Czechoslovak territory cannot be compensated by German territory. But the ambassador considered Kladsko, Hlubicsko and Ratibofsko to be Polish territories, where Poles have full sovereignty. Now the government is finding out that this is also the position of the Soviet Union. Prime Minister K. Gottwald indicates that Dr. P. Zenkl is pointing to the conflict between minister Masaryk's opinion on the one hand, and that of the Prime Minister and the state secretary dr. Clementis on the other hand, about the position of the Soviets, as to whether the peace conference could solve matters. The two above-mentioned members of the government insist on the opinion that this is impossible and minister J. Masaryk admits that his impression may be incorrect.

Deputy Prime Minister Zdenek Fierlinger fully comprehends Stalin's position and the whole problem. The Soviet Union has in interest in the consolidation of conditions in Poland.There is to this day a civil war there. Poland had to cede a significant part of its eastern provinces and the Soviets are anxious to make peace in Poland. Soviet politics are not static, but dynamic.Our politics must be such that we are for a treaty of alliance, which would guarantee us trade, cultural, transportation and economic relations in general. Otherwise we will insist upon our territorial demands, which will not be discussed. The speaker is convinced that it will eventually be proven that it was not a mistake when we registered our territorial demands with notes even to the western allies. This of course did not suit Moscow's program, but it may one day benefit us that we went to the world forum with our demands. We must continue to assert these demands.Poland will for sure put through many changes. It will have problems and we will be left to our own resources.Our politics must be realistic but we must not surrender anything.

Minister gen. L. Svoboda admits that it was a mistake if the London government in 1945 did not fulfill the territorial demands against Germany. It would have been the same mistake if we would not have announced these demands to the whole world. It was also not a mistake that we propounded these demands as demands against defeated Germany, for this interpretation corresponds to the wording of the Postupim agreement. If the Soviet Union now wishes that we not go to the peace conference with this matter, and if it does not even want to promise to help us during the negotiations with the Poles, we must work to change this position, for our demands are fair and objectively justified. We have good reasons on our side and therefore we have a good outlook that we will at last seek the support of the Soviet Union. This problem the most important for us and against it are all the other insignificant and meaningless questions which were negotiated in Moscow. Prime Minister K. Gottwald protests against such a statement. We ask the minister, whether the presumably promised support in the matter with Hungary means nothing. Minister prof. Dr. Zd. Nejedly is under the impression that this entire debate is unnecessary. There can be no doubt that the delegation was very successful. Czechoslovakia is probably looking at the problem too regionally. The Soviet Union is looking at it from an internationally political perspective. It is not concerned about whether it should be for Poland or for Czechoslovakia. For the Soviet Union it is first and foremost a question of Slavic politics. It does not want any Slavic state to abandon the line of common Slavic politics. If we were to go to the peace conference with our demands, we would be breaking the concept of united Slavic politics and we would open the door for other influences. The interest of the Soviet Union in the Postupim agreement consists mainly of also the western Polish border established by it being the definitive western border of the Slavic world. The Soviet Union expects that we will recognize its position, that we will not undertake anything that could threaten them. In those cases where these western borders are not at stake, as for example in Tesinsko, the Soviet Union holds a position positive for us. The speaker is for a treaty of alliance with Poland, which would secure cultural, transportation and economic relations and would have a great significance for us. The political demands would be set aside for a different situation and a different climate. The Soviet Union's politics in this case are not only good, but also wise, and that is altogether the outstanding attribute of its politics, that it remains wise when others have hot tempers. This has been seen very often. The Soviet functionaries are not hotheaded while other politicians are.Today the Soviet Union is advising us to wait with our territorial demands and we must heed this advice. The Soviet Union is concerned with the matter of a significant range for Slavic politics in Europe. Therefore it cannot please it that we have turned to another forum.

The Prime Minister K. Gottwald wants to again mention a small detail. When he was with the President of the Republic with minister Masaryk the day before the departure, ambassador Zorin telephoned from state secretary dr. Clementis' that the list of things that the delegation wished to negotiate and which was sent by telegraph to Moscow, is such that it is recommended...[illegible sentences]..... As for Stalin's factories, the Soviets made a claim for 2 ~ to 3 ~ billion crowns. Stalin's factories themselves expected to have to provide a compensation of400 million crowns, and the governmental delegation was willing to go slightly below this amount. Another big problem was the equivalent value of the machinery and works which we kept from the trophy goods. The Soviets here demanded an amount of 7 ~ million dollars, which was more or less agreed. Then there was the machinery of the Siemens-Schuckert factory. The delegation was deliberating even after the flight to Moscow on the course of action in all these important and sensitive points. It was considered that Czechoslovakia if need be would give up their demands for the contribution of the Soviet Union to the domestic and foreign debt by virtue of the annexation of Ruthenia. The problem of our participation and the businesses in Romania was also very much considered. We had to in particular count on that according to the decision of the mixed committee everything that physically or legally belonged to individuals of German nationality will be considered as a Soviet trophy. In this matter, however, we fought out recognition of Czechoslovakia's position, as the state secretary in the MFA has already recounted. We naturally had to make concessions, especially with the companies Nitrometal and Explosia, but on the other hand it is true that these enterprises grew considerably during the war, so that their range is now up to five times more than it was in 1938. We have, however, the opportunity to seek other contributions and businesses in Rumania, and at that either businesses which used to belong to us, or which we had an interest in, or even other businesses. The Soviets are furthermore willing to provide monetary compensation as well. This question has remained open. We must first examine the necessary preconditions. The speaker, however, has the impression that we will have to change our trade policy in Romania to the extent that we will have to cross over to contribution to peace time industry from the current contribution to armament and war industry.

The general secretary then informs the government about the individual phases of the negotiations on trophy matters and on other economic questions, especially what concerns the gold in the National Bank and the content of the safes in several banks...[illegible and missing sentences]...

...defend the position that they will be negotiating with us about Kladsko, if we should negotiate with them about Tesinsko. We cannot, however, recognize this position.

Minister prof. dr. Zd. Nejedly wants to emphasize with the example of Macedonia, how Slavic politics are done in modem times. As long as Bulgaria and Yugoslavia could not reach an agreement and turned to the international forum, all the participants paid for it: South Slavs, Bulgarians and Macedonians themselves. It led only to the actual balkanization of the Balkans.Now this problem was solved in the spirit of Slavic politics without the participation of the English and Americans and there is peace and quiet. The question is solved, no one lost anything,there were no sacrifices and the Macedonians are now rejoicing from their autonomy, more than they could ever have gained under an international regime.

Prime Minister K. Gottwald indicates that the Soviet functionaries are not harboring any illusions about our attitude toward Poland, which stems from the statements by generalissimo Stalin, that they will give us military material under condition that we not use it for battle against the Poles.

Deputy Zd. Fierlinger is also convinced that it would not be right if Slavic politics only meant losses for us and if it did not bring us anything positive. But this cannot be alleged, for the Soviets want to support us in our claims against Hungary and Germany. The speaker then repeats his thoughts for the formulation of Czechoslovak policy toward Poland for the future and emphasizes in particular the economic benefits, which would flow from this policy. Minister dr. I. Pietor recalls that the Slovaks were in a similar situation as now with regard to the Orava and Spis in 1945, when the president of the republic advised them not to insist on a change of the pre-Munich borders, because it would endanger our borders in Tesinsko. At that time the Slovaks with heavy heart gave up their claims on Orava and Spis. Now we are in an analogous situation with regard to Kladsko. It was merely necessary to examine the reasons for this situation, in particular whether we should not have foreseen that this territory would be discussed in Postupim and whether we could not have undertaken some measures.

State secretary dr. VI. Clementis considers the promised support of the Soviet Union against Hungary and Germany....

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...treaty. This applies to the questions of restitution and the question of the rectification of the borders near Bratislava. The promised support in economic matters is also extremely important. The Soviets were willing to negotiate with us immediately, but the delegation was not prepared for such material negotiations. The speaker thinks that we can be happy with the success that was reached. He is not,however, an expert in negotiations on matters of foreign policy, but the minister and the state secretary can presumably judge whether a lot or a little was obtained in a relatively short time.

Deputy J. Ursiny is convinced that we have good prospects for the negotiations with the Poles on Kladsko and Ratibofsko only if the Soviet Union will support us. Otherwise, from experience with direct negotiations with the Poles, he does not expect anything. They have not changed in any way. The speaker fully agrees with the opinion that we have to respect the wishes of the Soviets and that we must not make our territorial claims at the peace conference or at the international forum period. Even if he does not harbor any illusions about the direct dialog with the Poles, he fully identifies with the position of the ministers prof. dr. Nejedly and V. Kopecky,and considers the result of the delegation's trip to be a great success.

Deputy Zd. Fierlinger thinks that the government could end the debate and decide that it takes into account with satisfaction the report of the delegation, that it thanks the Prime Minister, the minister of foreign affairs and the state secretary and the other participants and that it charges the Prime Minister with sending in its name special grateful telegrams to generalissimo Stalin and minister Molotov.

State secretary dr. VI. Clementis wants to inform the government of the content of the prepared proposals for a peace agreement with Hungary, which exists in several versions. They are unfavorable, for in one of them it is even proposed to cross out the reparations. We will then to a certain extent be dependent on close cooperation with the Soviet Union. It is extremely important that it is expressly stated in the communique that the proposals of the Czechoslovak governmental delegation about the negotiations of a peace treaty with Hungary met with the understanding and agreement of the Soviet government. The Prime Minister K. Gottwald is convinced that the Hungarians will "sputter" when they will read it. State secretary dr. VI. Clementis then provides information on the concessions of the Soviets as to Czechoslovak property in Romania and gives expression to the conviction, that the plan which the Soviet Union intends to defend with respect to our treaty of alliance with Poland, will also be a bitter pill for the Poles. Once they did not want to negotiate with us economic, cultural and transportation matters if we did not agree politically first. Now the Soviet Union is recommending them the exact opposite. The state secretary demands again that the government decide to commission the minister of foreign affairs and the state secretary to submit the prepared proposals for twelve economic, cultural, transportation and other treaties to the Polish functionaries, as soon as the Soviet Union issues a favorable call to start negotiations. Territorial demands would not be mentioned yet. Minister V. Kopecky advocates that the Czechoslovak delegation go to the peace conference in the spirit of united Slavic politics. It is clear from the changed tone of the Katovice broadcast and their recent course of action period that the Poles themselves arrived at the conclusion that such a plan would be felicitous. State secretary dr. VI.Clementis adds that the release of Czechoslovak citizens, who were until now imprisoned in the Soviet Union, was also discussed and that after several phases of discussion the Soviet functionaries approved the release of all of our citizens.

The Government afterward does this resolution: the government, having listened to the detailed reports of the Prime Minister, the minister of foreign affairs and the state secretary in the ministry of foreign affairs about the results of the governmental delegation's trip to Moscow,has decided upon the proposal of the deputy prime minister J. Ursiny and Zd. Fierlinger, that

a) it acknowledges this report as satisfactory and thanks the prime minister, the minister of foreign affairs, that state secretary in the ministry of foreign affairs and all the experts of the delegation for their far-reaching and successful work;

b) it commissions the prime minister to thank in its name generalissimo Stalin for the generosity of this meeting in which the Czechoslovak delegation met at his place, and commissions the minister of foreign affairs to thank minister Molotov for the understanding he had for the position of the delegation;

c) it authorizes the minister of foreign affairs and the state secretary in the ministry of foreign affairs, in the event that the Soviet Union calls for a treaty of alliance between Czechoslovakia and Poland during their stay at the peace conference in Paris, to submit to the Polish minister of foreign affairs and his deputy the prepared proposals for economic, cultural, transportation and other agreements as the purpose of the negotiations, and the negotiations would not include the territorial demands;

d) it charges all the present members of the government, namely the ministers of foreign trade, industry, national defense and transportation, with hastily implementing all the measures and performing all the tasks necessary for the realization of the agreements which were reached during the delegation's stay in Moscow, or which were negotiated and reached in a binding agreement.

To be executed by: the prime minister, the minister of foreign affairs, the state secretary in the ministry of foreign affairs, the ministers of foreign trade and transportation, and if need be the other present members of the government. The Prime Minister then ends the secret phase of the meeting at 10 hours and 45 minutes.

Written by:
Dr. P. Korbel
[his signature]

The Minister ofNational Defense
# 2097 taj/Pkml1946

[handwritten:] contents of the agreements...[illegible]...

Prague, August 2nd, 1946.

Office of the Cabinet of the Government
Prague

For the implementation of the resolution of the secret phase of the 8th (special) meeting of the third government on July 26th, I request that the corresponding protocol from the meeting with an attachment with all the agreements negotiated in Moscow, be sent out for personal use.

The Minister of National Defense
[His signature]

Pro domo: one carbon copy of the report on the 8th (special) meeting of the third government on July 26th, 1946, was accepted for the use of the minister of national defense,

army gen. L.Svoboda by
[his signature]
the senior office administrator
August 5th, 1946

[handwritten:] the carbon copy of the report was [?] for the minister of national defense on August 14th, 1946, [?] of the government.