761.93/8–845: Telegram
The Ambassador in the Soviet Union (Harriman) to the Secretary of State
081341. Soong told me this morning of his talk with Stalin and Molotov last night. Agreement was reached regarding the arrangements for the use of Port Arthur as a Soviet Naval Base. In order to save face there is to be set up a Chinese-Soviet Military Commission to supervise the Port and the Chinese Navy is to have the right to use the base but the administration is to be by the Soviet Military Command. The military zone will include Port Arthur and extend up the Kwantung Peninsula north of Dairen but Stalin agreed that the Port of Dairen and the connecting railway should be excluded from the Military Command. Civil administration would remain with the Chinese in consultation with the Soviet Military Command in so far as security is affected. Stalin rejected Soong’s offer that Dairen should be a free port under Chinese management with a commercial lease of piers and storage facilities for Soviet transit traffic. He insisted that a Soviet-Chinese Commission equally representative should be set up to administer the Port and City of Dairen with a Soviet official in charge of the operations of the Port. Soong however did not deviate from his proposal.
Stalin raised no objection to Soong’s proposal for the operation of the railroads by a joint company with equal representation on the Board of Directors with a Soviet manager and Chinese assistant manager for the Chinese Eastern and a Chinese manager and Soviet assistant manager for the South Manchurian Railway connecting with the Port. The discussion of these matters ended with agreement. Stalin requested Soong to put his proposals in writing.
Stalin then raised the question of “war trophies” and indicated that some of the Japanese properties including the shares of some [Page 959] Japanese enterprises should be considered as Soviet war trophies in areas occupied by the Red Army. Soong inquired exactly what Stalin had in mind but Stalin was evasive and left the matter for future discussion. This was the first time this subject has been mentioned to Soong and it has never been raised with us. If the Soviets define war trophies as they did in connection with Germany including also shares of Japanese enterprises it would be possible for the Soviets to strip Manchuria of certain of its industries and to obtain permanently complete industrial domination of Manchuria. I understand the Japanese have taken possession of and developed most of the heavy and light industries in Manchuria. I request urgent instructions as to our position on this question particularly if Stalin should raise the matter with me. This is another case where Stalin has increased his appetite and I recommend that we resist his demands for shares of stock of Japanese enterprises and restrict the definition of war booty to matériel that has been historically so regarded in accordance with the United States’ definition submitted at Potsdam.13
As to reparations, I recommend that our position should be that all Japanese property whether in Manchuria or elsewhere should be available to all countries who have suffered damage by Japanese aggression to be allocated by agreement between the Powers. As this subject has not been raised I am fearful that unless we make our position plain at this time the Soviets will contend that they have the right to define unilaterally war trophies within the areas occupied by the Red Army. I have consulted Ambassador Pauley14 and he concurs in these recommendations.
Soong is much discouraged by his talk but is preparing his proposals for submission to Stalin. I am [8 garbled groups] him the draft of the protocol reaffirming Stalin’s verbal assurances to observe the “open door” policy in accordance with paragraph 3 of my instructions contained in White House message No. 316. The draft of the protocol appears to require both Soviet and Chinese concurrence. I will therefore suggest to Stalin that this be an identic communication addressed to the United States by both the Soviet and Chinese Governments. If Stalin discusses his negotiations with Soong I will state our position as directed by paragraphs 1 and 2.
- See Foreign Relations, 1945, The Conference of Berlin (The Potsdam Conference), vol. i, p. 543, vol. ii, pp. 833, 834.↩
- Edwin W. Pauley, Personal Representative of President Truman in matters pertaining to reparations.↩