Foreign Relations of the United States, 1952–1954, Eastern Europe; Soviet Union; Eastern Mediterranean, Volume VIII

PPS files, lot 64 D 563, “Regional Conferences”

No. 44
Summary Minutes of the Chiefs of Mission Meeting at Vienna, September 22–24, 1953¹

top secret

[Vienna,?] September 29, 1953.

Participants:

• Department:
  • Assistant Secretary Merchant
  • Mr. Mose L. Harvey
  • Mr. John Y. Millar
• HICOG Bonn:
  • Ambassador Conant
  • Mr. Walter C. Dowling
• Berlin:
  • Mr. Cecil B. Lyon
• Embassy Moscow:
  • Ambassador Bohlen
• Embassy Prague:
  • Ambassador Wadsworth
  • Mr. Nat B. King
• Embassy Vienna:
  • Ambassador Thompson
  • Mr. Charles W. Yost
• Embassy Warsaw:
  • Ambassador Flack
• Legation Bucharest:
  • Minister Ravndal
• Legation Budapest:
  • Minister Shantz

Session of September 22nd—Morning

Mr. Merchant opened the meeting with a brief outline of recent developments since Stalin’s death which he thought on balance had been favorable to the United States. He also covered the high points of the Chief of Mission Meeting in Luxembourg, mentioning such topics as the outlook for EDC, Trieste, and the political situation in France and Italy.

Austria—Ambassador Thompson

At the present time political and economic conditions in Austria are good. In the election in February 1953 the Communist vote amounted to only 5.3% and they obtained just four seats in Parliament. Austria may have some serious economic problems, however, if a State Treaty is concluded. For example, it is estimated that the cost of raising an Austrian army would amount to as much as one hundred million dollars, constituting a completely new budgetary obligation.

The Soviets have made a number of concessions in Austria since the new look in overall Soviet policy, such as the abolition of check points in interzonal travel and the cessation of occupation costs. They have really gone further than circumstances required and it would be difficult for them to reverse their field. There appear to be three further important steps that the Soviets might take. They might offer to return some of the German external assets, particularly the ones that are uneconomic. It is known that the Soviets have had to buy very considerable amounts of local currency to finance the operation of some of these former German properties. A second possibility would be a token withdrawal of occupation troops. Complete withdrawal of all occupational forces would leave the Soviet forces much closer to eastern Austria than the Allied troops could be. Thirdly, the Soviets might propose to negotiate a separate treaty with Austria. Although the Austrians think that a treaty is worth almost any sacrifice and feel that the United States somehow would bail them out of any serious economic difficulties that might result, it does not seem likely that the Soviets will agree at present to an Austrian Treaty, either unilaterally or multilaterally. (Mr. Bohlen agreed). Instead, it seems that their policy is to make concessions which will render the occupation more tolerable for the Austrian people and thereby permit the present situation to continue. In this connection, while the Austrians would almost certainly accept Article 35 in order to conclude a treaty, they have a firmer view against accepting neutralization as a price for a treaty. Leading Austrian officials have indicated that they would not accept such a principle, although they probably would agree that Austria would not become a member of NATO or permit NATO use of Austrian territory.

The biggest problem confronting the United States at the present time is our military position in Austria. The British withdrawal of troops has placed the United States and France in a difficult position. In so far as the relations between United States troops and the Austrian public are concerned, the main problem is that of housing. The requisitioning of buildings intensifies the housing shortage in a given area and provides the property owners with a much smaller rental income than they would receive from private tenants.

East-West trade is also a major difficulty for us. In trying to turn Austrian trade from the East we are trying to divert it from an area where it had practically no competition toward the much more competitive markets in the West. As far as Austria is concerned, East-West trade should be resolved ultimately on the basis of voluntary controls. Otherwise our efforts might very well be self-defeating due to friction and ineffectiveness.

If we do not succeed in obtaining an Austrian Treaty we might be able to improve the situation somewhat by modification of the occupation controls.

Western Germany—Dr. Conant

In considering the recent elections it is significant that Chancellor Adenauer has a marked sense of responsibility as a consequence of his striking victory. Adenauer never waivered during the campaign from his platform of European unity, a European Army and the EDC. It is expected that he will go far to meet the French in order to promote the ratification of EDC. He will probably be disposed to make considerable concessions with respect to the Saar, even to the point of Europeanization, despite considerable feeling in Germany that the Saar should be a part of Germany. One curious aspect of the election campaign was the emphasis that Adenauer put on his own identification with the United States. One of his campaign devices was a moving picture of his trip to the United States, showing him on a United States Air Force plane, on board the SSUnited States, greeting the President at the White House and touring to Chicago and San Francisco. He felt that the German people were so sold on the idea of association with the United States that it was good politics to present himself as the person who could deal effectively with the United States and who had succeeded in raising Germany to the level of an equal.

In connection with the often-expressed opinion that the United States is putting all its eggs in one basket by relying so heavily on Chancellor Adenauer, it is interesting to note that with the absolute majority of the Christian Democratic Party in the German Parliament, the CDU could select another Chancellor without holding an election in the event that anything should happen to Adenauer.

Berlin—Mr. Lyon

Before Stalin’s death and the June 17th riots, the Sovietization of East Germany was in full swing with emphasis on such measures as the creation of a national army and agricultural collectivization. Following Stalin’s death there was a period of confusion for about six weeks. On June 11 the new course was finally announced and it contrasted very sharply with earlier policies. The pace of industrialization was slowed down. The East German Government offered to return property to refugees who might return to East Germany (although few did). The rapid build-up of East German armed forces was curtailed. In brief, the whole tempo of socialization of East Germany was slowed down, apparently on the theory that it had been building up pressures which might cause trouble. A ten percent increase in workers’ norms was not removed, however, perhaps because greater production would be required to realize the program of increased consumers goods and higher living standards which was also part of the new look package. This was the issue which subsequently triggered the demonstrations in East Berlin on June 16–17.

On June 16th some of the workers in Stalin–Allee began to march to lodge a protest with GDR officials against the increased norms. Surprisingly, they were not restricted by the police and this may have encouraged them to carry their protest further. It was clear that on the following day there would be larger demonstrations. By the morning of June 17th the Soviets had moved three armored divisions into East Berlin, with three hundred tanks. They put an end to the uprising during the course of the day. Nevertheless, there is general agreement that there could be another mass protest on some future occasion, since this was a perfectly spontaneous development arising from deep-seated dissatisfaction—and the dissatisfaction is not likely to be dissipated soon. In many ways the uprising grew out of a mass loss of temper. At any rate the events of these two days destroyed the myth of the workers paradise under Communist rule and exposed the failure of the puppet regime to gain the allegiance of its captive subjects.

In hindsight, it seems that the Germans interpreted the relaxations of June 11th as a sign of weakness on the part of the Soviets and this may have helped to unleash the antagonisms that had been pent up for so long.

While RIAS played a role by broadcasting the facts, the revolt itself was caused by the pressure of events and not by outside instigation. It appears the Soviet Army was not prepared psychologically to cope with such a development, since on the morning of June 17th their troops started out waving to the crowds and seemed surprised that the population was hostile and in fact revolting against them. Nonetheless the Soviet Army reacted quickly, showed great restraint in not firing on the crowds and showed no hesitation whatever in coping militarily with the situation.

Session of September 22nd—Afternoon

Berlin—Mr. Lyon

Continuing his report on Berlin, Mr. Lyon said that the Soviet position in East Germany appears to be weaker now than even before in the opinion of the three Allied commandants. The Soviets require about the number of divisions presently stationed in East Germany (33) to keep order. In order to undertake an offensive operation against West Germany they would probably need another 33 divisions. It is unlikely that a build-up of such magnitude would go undetected.

The Soviets appear to be confused since the events of June 17th. They are obviously on the horns of what for them must be a terrible dilemma. If they relax further, the Germans may interpret it as a sign of weakness, and thus be encouraged to push the Soviets further; on the other hand, a harsher policy might precipitate another crisis. The new course is still in effect in East Germany, perhaps to afford a breathing spell in which to rebuild the Soviet apparatus which was so severely damaged. (Even the East Berlin police proved to be unreliable during the riots.) The Stalinist policies of collectivization and East German militarism are being relaxed, but at the same time the Soviets are attempting to increase the Communist control over the individual citizens in East Germany. It is clear that for the time being at least they have lost the initiative.

We should now re-examine our own policy and determine whether it is wise to keep the pot boiling by psychological warfare measures. Whatever the advantages to be gained, they may provide a pretext for repressive measures and thus serve to tighten Communist control. There is a possibility that if we push too hard in Berlin the Soviets might decide to take further measures to neutralize us. As long as we remain in Berlin we will be impeding the satellitization of East Germany.

The East Berliners are in a defiant mood, although they have acquired respect for the Soviet armed forces. There is some inclination to believe that we let them down by failing to support the riots, but they realize now that they are on their own.

Czechoslovakia—Ambassador Wadsworth

Ambassador Wadsworth began his review of developments in Czechoslovakia by stating this year had begun with the closer integration of the Communist Party and the Government with the formation of a Soviet-style Presidium. This trend was subsequently reversed somewhat when Novotny was removed as a Deputy Prime Minister and installed as First Secretary of the Communist Party. Despite its Communist nature, the Government has retained a Western format, with four political parties, a good deal of ostensible criticism, and other trappings of the democratic process. Following President Gottwald’s death, Zapotocky, a Communist, but a man with a good deal of appeal for the average citizen, took over the Presidency. For a short time the people seemed to hope that things might be different but their hopes soon glimmered out and resignation set in.

It appears that in December Czechoslovakia will successfully fulfill the fifth year of its Five Year Plan. It has the biggest budget in its history this year. Ten percent is allocated for military purposes and sixty percent for economic development, although undoubtedly a substantial proportion of the economic funds will have a military aspect. The Army is presently estimated at 185,000 and is showing regular progress. The Air Force recently staged an air show consisting of 135 MIG 15’s, probably every one of which was built in Czechoslovakia in the last year. Their aircraft production is expanding continuously. Three new airfields near the German border have recently been completed.

There have been two important economic developments since the death of Stalin. First is the monetary reform which was announced on June 1st in a very detailed manner.² All prices and wages were reduced to one-fifth of their former level, as was the value of the currency. However, conversion of funds in banks to the new currency was carried out at the rate of only 1/50 of the former amounts, thus eliminating all savings and virtually wiping out the kulak class, which was apparently the intention. The demonstrations that followed this monetary reform were relatively insignificant, but perhaps they would have been of a different magnitude if the East Berlin riots had taken place first.

The other significant economic development was the 62 page speech by the Prime Minister on September 15.³ This definitely laid out a new economic policy for Czechoslovakia and for the first time set forth a phrase which seems to be the policy’s catchword: “The law of proportionate development of the national economy”. It follows the pattern of other recent economic policy developments in Soviet-controlled areas. Investment in heavy industries is greatly reduced with a proportionate increase in consumer items such as food, clothing, and housing. This is to be accompanied by a reduction of prices. The new policy appears to be an attempt to gain greater public acceptance of the regime through the attainment of better living conditions. The people of Czechoslovakia have been brought down to the point where they may think that the Government has presented them with an unparalleled opportunity for improvement.

Although the Churches and schools are completely controlled by the Communists, more people are attending than ever before, and there is an intense religious fervor in Czechoslovakia.

In about two weeks the Czechoslovak Government may be ready to receive specific United States proposals regarding settlement of outstanding economic difficulties. Our principal interest is in receiving compensation for nationalized properties which may have a value of 30 to 40 million dollars. It is difficult to see how a really satisfactory arrangement can be reached since the Czechoslovaks will probably offer to pay compensation at the rate of 8 percent of annual US–Czechoslovak foreign trade. As trade has dwindled to a level of about 1 million dollars a year, this would be an extremely slow process. One of their main economic interests is to re-establish overflights of Germany by Czechoslovak civil aircraft. Since the Dutch hope that we will agree, in order to protect their own civil air route to Czechoslovakia, this is something of a problem for us.

Our fundamental objective at the present time should be to keep hope alive among the people of Czechoslovakia, who are about 80 percent on our side. The country is being assimilated into the Soviet pattern, yet they hope that somehow events will eventually make it possible for them to rejoin the free world. We must do whatever is possible to keep alive this hope. There is a latent Titoism in Czechoslovakia which might bear watching, since the country is headed by a popular national figure and the regime has a nationalistic character.

Ambassador Wadsworth concluded by saying that a phrase in a recent book by Hugh Seton-Watson was particularly descriptive of Czechoslovakia: “The public and private lives of a hundred million people in Eastern Europe are being changed at break-neck speed.”

Poland—Ambassador Flack

Ambassador Flack began his description of the situation in Poland by saying that despite the new collective leadership line being preached in the Soviet Union and in other Soviet-controlled countries, the Polish chief of state is being built up as an individual in the Stalin pattern. Soviet control of Poland is more obvious than in some of the other satellites since the three Polish armed services are headed by Soviet officers and a Soviet marshal commands the entire armed forces. Poland is distinctive also in that there are 40,000 Soviet troops in the country to maintain the line of communication between East Germany and the Soviet Union. There has been a marked construction of fields for jet aircraft, particularly to the east of the former German territories, along the Baltic and in central Poland. Presumably they are to be available in case the Soviet armed forces pull out of East Germany. While it is extremely difficult to make any more than a guess about Soviet intentions with respect to East Germany, it may be a straw in the wind that there has been little rebuilding of war damage in the former German territories of East Prussia and Silesia. In many towns, buildings have been deserted which only needed minor repairs such as new window panes. Entire villages have been abandoned which could have been rehabilitated with relatively minor effort. This suggests that the Communists may not be thinking in terms of the long-range integration of these territories with Poland, but of their possible reversion to Germany at some future time.

Despite reports about disturbances in Poland following the East Berlin riots, there was no confirmation whatever that tanks had been destroyed, troops disciplined or that any such events had occurred. Allied officials had travelled extensively through Poland for about a week after these alleged events and had found no evidence whatever.

One of the greatest problems of the Communists in Poland is the Catholic Church, which has the loyal support of 95 percent of the people. It is the only organization in opposition to the Communist Party. It is impossible to foresee how the struggle between the Communists and the Church will come out, but it seems as though the power of the Church is gradually being curbed and that it will not be able to survive more than another decade or so under present conditions. While some of the priests have sworn allegiance to the regime, there is some doubt whether they are sincere or merely going along because of prevailing conditions.

Economically, Poland is the only one of the European satellites where the new look has not developed. Collectivization is still going forward. In fact during the last year there has been a one hundred percent increase in the number of collective farms which now total 7,000. The only new aspect is that certain facilities have been made available to small farmers who are having trouble with tax payments, but this is a minor point in comparison with the changes which have taken place in the other satellites and in the Soviet Union itself. Incidentally, as a general rule the collective farms are populated with shiftless farmers or those who are so badly off financially that this is their last recourse. Meanwhile, the industrial development program is continuing to go forward without any cutback. One of the main projects is the construction of a new steel mill for which the Soviets are supplying the equipment.

There have been no extensive measures to increase the supply of consumers goods or to make life more bearable for the population. It is difficult to find an explanation for this exception to the new look, but perhaps the Soviets consider that since Poland is geographically so close and since it is occupied and controlled by the Red Army, measures for relaxation are neither necessary nor desirable. Furthermore, the Soviets hate and distrust the Poles so intensely that they may be particularly reluctant to improve conditions in Poland.

Incidentally, in the first part of the year there were several executions of alleged US agents and of Poles who were accused of complicity. The purpose was probably to discourage contacts with US personnel and to intimidate the population.

There has been a problem in recent months about the relatives or dependents of American citizens who have received permission to leave Poland. The US Department of Justice is unable to authorize visas to applicants in countries which will not agree to accept deportees from the US. Poland is in this category. Consequently the only recourse for the applicant is to go to a third country and await a US visa there. Unfortunately this is not practical in most cases because of lack of funds. There are 4 to 6 cases involving close relatives of US citizens now pending. It is hoped that some solution can be worked out in Washington.

Hungary—Minister Ravndal

Mr. Ravndal began his summary of the situation in Hungary with the observation that apparently the Soviet plan for Hungary after World War II was incorporation into the Soviet Union, with a consequent very rapid Sovietization, including industrial development at all costs and intensive collectivization of agriculture. By 1952 there had allegedly been an increase in industrial production of 145 percent and the gross national product had risen 25 percent above the 1938 level. Soon after Stalin’s death the new political campaign was reflected in Hungary, but the new economic look did not develop. In fact, as late as May 10 Premier Rakosi declared that industrialization and collectivization would continue to be pushed at the same rapid rate. Between May 10 and July 4th it seems that a basic decision was made in the Kremlin reversing this policy, since on July 4 Premier Nagy, who had replaced Rakosi, dramatically announced the new economic look in his inaugural speech.⁴ Among other things he announced a cutback in industrial development, a program to provide more consumers goods, the dissolution of concentration camps, the right to withdraw from collective farms under certain conditions, and greater protection of individual rights. Curiously, the people received even more than what was promised, since on September 6th an unannounced price reduction gave them 66 percent more purchasing power.

It is difficult indeed to explain why this new policy was adopted. Perhaps the intention is to provide time to rebuild the Communist Party, improve the state farms, develop a more efficient bureaucracy, and improve the training and effectiveness of the Army. Yet it seems likely that the softer policy will alienate many hard-core Communists since it precludes such orthodox features as the anti-kulak campaign and the anti-Titoist effort, and should prove unsatisfactory to them because it inhibits an intensive prosecution of the traditional Communist line. There are several possible explanations for the new policy, however. Perhaps with the absence of Stalin, who had been the great rallying point of the whole Soviet orbit, time is required to make internal readjustments and to develop a wider basis of support for the regime. Possibly, also, it seemed that in the present situation this was the tactic most likely to encourage neutralism and thus best calculated to promote the Soviet objective of disrupting NATO and preventing the incorporation of Germany in the Western alliance. Another possibility is that the Chinese forced the Soviets to undertake considerable industrial development in China, thus reducing the total industrial resources and obliging the Soviets to curtail the development of heavy industry in Hungary. Perhaps Hungary seemed too exposed to the West for further development of heavy industry there. It is also conceivable that the Soviets needed to increase food production and so shifted the emphasis from industrial development.

In any case, the change seems favorable to our cause. In this connection, it seems that concessions tend to lead to further concessions and make a reversal of policy ever more difficult. On the other hand, if the new look gains a posture of respectability for the Soviets in the course of the next few years, they may be more dangerous than when their outrageous behavior made them the object of world opprobrium.

Finally, it is to be hoped that we can be as resilient in dealing with the new Soviet line as they have been in developing it.

Rumania—Minister Shantz

Mr. Shantz said that Rumania had been assimilated in the Soviet system so completely that Stalin’s death and the June 17th riots hardly caused an outward ripple, although the people were glad in their hearts. Basically, however, they feel completely cowed and are just waiting for the United States to come in some day to rescue them. The Church is completely controlled in Rumania although the people still respect the Church.

While there was no new look politically or in the treatment of US officials, a major change in economic policy occurred on August 23 with the initiation of a program to increase food production and the supply of consumers goods. There was also a parallel reduction in industrial development amounting to 25 percent, and work was stopped on the biggest industrial projects such as the Danube–Black Sea Canal and the Bucharest subway. The regime then began to encourage private retail trade in food and consumer goods in an apparent effort to improve conditions and make the regime tolerable. At the same time it was of interest to note that there has been no let-up in the drive for collective farms.

Session of September 23rd—Morning

Soviet Union—Ambassador Bohlen

Ambassador Bohlen opened his remarks regarding the Soviet Union by saying that it continues to be a totalitarian police state where every aspect of life is controlled by a very few men. The developments following Stalin’s death have not changed this basic outline in any way nor has Soviet foreign policy undergone any fundamental change, although the USSR appears to have entered a new phase with unforeseeable results. The Soviet Union continues to be a threat to the United States and the free world because it regards all countries not under its control as hostile, to be destroyed or weakened, and because it has the capacity of maintaining huge military forces. In this context there is no acceptable alternative to our present policy of developing a position of strength and concerting closely with our allies.

Fundamentally, the present Soviet rulers appear to be seeking to avoid war and to reduce tensions somewhat, without at the same time being willing to relinquish control over any of the Soviet imposed satellites or to make any other substantial concessions. The purpose is to obtain time for the far-reaching domestic readjustments required by Stalin’s death. His absence from the scene left a great vacuum because he personally controlled every aspect of Soviet life and his influence and personality were intimately woven into the institutions and policies of the Soviet Union. All of Soviet Russia was subject to his will and whim. In his later years he apparently had a sort of paranoic attitude which led to increased rigidities and illogicalities of the Soviet system since he brooked no criticism and apparently foreclosed reexamination of policies or institutions. He had the characteristics of an oriental despot, whose predilection was to operate by conspiratorial and terroristic methods, with the result that the people were kept in perpetual insecurity.

Apparently Malenkov and his associates decided soon after Stalin’s death that it was either impractical or undesirable to try to maintain Stalinism without Stalin. In any case the new regime has a somewhat different complexion from the previous one-man rule of Stalin. There has been a conscious destruction of the cult of personality and a corresponding emphasis on collective rule. The new regime apparently adopted two general policies to modify the Stalinist system and indeed to gain control over the void that he had left. The first was to build up the Communist Party as the controlling mechanism and to place it above and outside of the Government. This was a change from the Stalin era since he had downgraded the Party to an instrumentality of his own will. The collective principle was also applied to the Party with the consequent destruction of a number of little Stalins that had been allowed to develop in the person of the secretaries of various Party committees. Secondly, the new regime clipped the wings of the secret police, with the apparent intention of bringing the secret police back under the control of the Communist Party rather than leaving it as a kind of law unto itself. Incidentally, Beria may have gotten into trouble in connection with this process, since as a Stalinist, and as head of the secret police, he would probably have opposed its subordination to any group.

From the start it seems as though Malenkov was squarely in control. While no doubt there was some jockeying for position among the top personnel, it seems that there was no fullblown internecine struggle for power as has been widely conjectured. Basically, Malenkov appears to be an administrative type with outstanding executive ability. He seems to be trying mainly to make things run. He does not appear to be the type of leader that is motivated primarily by ideological considerations. Instead, he seems to be trying to normalize the Soviet system and to broaden the base of power by getting away from the highly personalized characteristics of one-man rule.

One of the first domestic objectives of the new government seems to be to create the impression of greater personal security for individual citizens; that is, to move away from the reign of terror characteristic of Stalinism. The impression is building up that the average citizen will not be subject to arbitrary persecution by the secret police as long as he minds his own business and stays on the right side of the law. Related to this development and in consonance with the policy of broadening the acceptance of the regime, the Government is emphasizing its concern for improving the standard of living. This has been most strikingly demonstrated in connection with the better treatment of the private peasant holdings on collective farms. The substantial change in policy from opposition to encouragement perhaps reflects both the desire to make the regime more palatable to the peasants and an attempt to increase agricultural production and thus improve the living standard.

In the future we might be confronted with more difficulties if a more contented Soviet population should emerge from the present phase, since international Communism might then have more attraction. In the past, the terrorist aspects of Stalinism had helped to disillusion Communists in other countries, and the threat of Stalinism had helped to unite the West.

The present phase in the USSR might work out in one of three foreseeable ways. First, they might be successful in the complicated transition from one-man rule to a regime that is more widely based. Secondly, the attempt might end in crisis, perhaps induced by a relaxation of controls, and concluding in a return to one-man rule. If there were such a return to Stalinism, especially after a period of easement in internal affairs, enormous strains would be placed on the Soviet structure. Finally, there might be a military coup d’état, although there is no apparent prospect of such a development at this time.

Turning to foreign affairs, the fundamental objective is apparently to obtain a breathing period in which the necessary internal adjustments can be made. In this connection it is worth noting that Soviet foreign policy seems to be determined largely by domestic considerations, and especially by the implications of the decision in 1928 to industrialize the USSR, a backward agricultural country, by its own resources. The speed and magnitude of this enterprise go far to explain the terrible measures that were taken to force its achievement. This project was literally extracted from the hides of the people and it is still a major determinate of Soviet foreign policy. The Soviets probably do not seek to achieve normal relations in our sense of the word “normality”, but rather to avoid the stresses which make war an immediate and ever-present possibility. A certain amount of tension is a sine qua non of the Soviet system, since it serves as a pretext for the internal policies that are required to hold the apparatus together. While the Soviets are believed to favor an easing of tensions within this limited context, they are not willing to let go of anything they have gained, particularly any of the countries in which they have installed puppet regimes. The fear of war is very real, however, and extremely widespread throughout the country, according to foreign officials who have travelled recently through many parts of the Soviet Union. In the interest of normalizing foreign relations and of eliminating untidy situations of the Stalinist era, the Soviets have made a number of minor adjustments with such countries as Turkey, Yugoslavia and Greece. Rather than indicating a prospective rapprochement between the Soviet Union and Yugoslavia, however, the recent exchange of ambassadors is more likely to mean that the Soviets have accepted the deletion of Yugoslavia from the orbit and that they wish to set up the kind of relations with Yugoslavia that they have with other non-Communist countries.

In Europe, Germany is clearly the prime Soviet objective. The events since June 17 indicate that they have decided to hang on to East Germany at all costs. Probably they realize that as a consequence West Germany is likely to be rearmed and be brought into the Western Alliance. While they probably do appreciate the seesaw relationship between East and West Germany, that is, if they hold East Germany, West Germany will go to the Allies, the Communist Party will probably stage a big propaganda campaign in France against ratification of the EDC. The Soviets will probably not come to Lugano on October 15th,⁵ because if they hold on to East Germany the unification of Germany is not possible. If they should agree to come to Lugano, it would probably mean that they had reexamined their German policy following the Adenauer victory. Berlin will probably be subject to increasing pressures from the Soviets. It is a potentially volatile area and may become more so, since military action might start there at almost any time, and particularly if there should be another event like June 17.

With respect to the satellites, the Soviets seem to be apprehensive lest a chain reaction start in one, such as East Germany, and run into the others. One possible explanation for relaxation of industrial development programs in the satellites may be a reluctance of the new Soviet regime to subject them to the same violent strains that rapid industrialization caused in the Soviet Union. Thus they may be undoing the Stalinist program for the satellites which Stalin had forced through in the USSR by his ruthless methods, and in this way they may hope to avoid jeopardizing their own position in the satellites by not risking the violent consequences of rapid industrialization.

In connection with Soviet policy in general, it seems that they do not subordinate policy to propaganda objectives; that is, they act primarily in response to their interpretation of what would advance the interests of the Soviet State. They also react pragmatically to Western actions, but it is important to note that propaganda or psychological warfare is used to support their policy, rather than determining it.

It seems that events behind the Iron Curtain are definitely running in our favor. We should stand firm and go forward with our present policies. It is preferable not to interfere behind the Iron Curtain in such a way that the Communists would have an opportunity to deflect on us the consequences of their own crimes and errors. Nevertheless, we should be ready to take advantage of any opportunities that events might provide. We should be careful not to delude ourselves with a false impression of the Soviets’ wisdom, foresight and negotiating ability. We tend now to put too much credence in such a legend. Actually, they are beset by difficulties and confronted by many serious dilemmas. Far from having a master plan for Europe, it seems likely that they are confused as to what policy to follow, as for example in the cases of East Germany and the satellites. The rigidities of their positions are such that we have nothing to fear from sitting down to negotiate with them. In fact, we are now in such a strong position that we should seek out occasions to confer with them when it would serve our purposes. The chances are that the outcome would be clearly in our favor.

Session of September 23rd—Afternoon

General Discussion: Bulgaria, Albania, Psychological Warfare

Mr. Merchant opened the discussion by asking for views regarding the desirability of reopening the legation at Sofia. There was a difference of opinion as to the advisability, but it was generally agreed that careful consideration should be given to the timing of such a move so that it would not appear to have any unwarranted significance when and if it ever came about. Several of the conferees thought that it would be advantageous to assign one Chief of Mission to both Sofia and another post at the same time.

. . . . . . .

Several points of interest were made in connection with psychological warfare. Mr. Bohlen said that the withdrawal of the Red Army from the satellites is a pre-condition of liberation. Thus the touchstone in psychological warfare should be whether a given project would lead the Kremlin to decide to pull the Red Army back towards the Soviet Union. Speaking specifically of balloon operations, he said that one of the dangers was that the Soviet military would think of them not in terms of carrying food or leaflets, but of possible conveyors of bombs or other weapons and thus that they might provoke an unexpected military reaction from the Soviets.

Mr. Bohlen said that one of the most effective psychological devices at our disposal at the present time is the freedom and prosperity of West Berlin and that we should do everything possible to acquaint the East Berliners with conditions of the Western Sector.

Session of September 24th—Morning

Psychological Warfare

From the general discussion it was clear that the conferees thought US policy toward the individual satellite countries should be more clearly defined. Without such a broad outline of policy, it was difficult to develop or recommend specific courses of action. It was agreed that the discussions had shown that conditions in the individual satellite countries vary considerably and thus that we should consider each country individually rather than lumping them together more or less indiscriminately.

Mr. Ravndal suggested it would be helpful, for example, to know whether we were favorably disposed toward the new look behind the Iron Curtain, whether we continued to vilify the satellite governments notwithstanding, or whether we were prepared to react in a favorable way to measures taken by a given satellite government to relax tensions.

Mr. Bohlen thought that the touchstone should be the question of subservience of a given satellite country to the Soviet Union. We should recognize a distinction between total control of a given satellite by the USSR and the more or less legitimate interest of the Soviet Union in having a non-hostile regime in a bordering country. Finland fitted roughly into the latter category, as a country which had an acceptable relationship both to the Soviet Union and to the free world. It would be unwise and unrealistic to theorize that a satellite must oppose the USSR before we could improve relations. Possibly it would be to our advantage to be resilient in dealing with the satellites and to respond to possible opportunities to place an entering wedge between a satellite and the USSR. Czechoslovakia, which is not occupied by the Red Army, is a case in point, where we might consider conducting psychological warfare by offering a serious foreign trade opportunity.

East-West Trade

Mr. Merchant referred briefly to the new policy on East-West Trade (NSC 152/2⁶) with which the Missions were already familiar.

Mr. Bohlen said that in his opinion there should be just one list of articles to be completely embargoed. Information could then be exchanged with respect to other items which might be included in the embargo list or which might be deleted from it. The secondary quantitative list of articles which are not considered of sufficient strategic value to be totally embargoed is the one that causes the friction between the Allies. Furthermore it is very difficult to administer. It was generally agreed that the new policy on East-West trade is sound.

1. The summary minutes were divided into six major sections: the five printed here, arranged according to the five sessions held during the three-day meeting, and a summary, entitled “Principal Conclusions,” not printed, which served as an introduction to the minutes. According to a memorandum by Secretary Dulles to President Eisenhower, Oct. 8, the Principal Conclusions, along with the psychological warfare memorandum prepared at the Luxembourg Chiefs of Mission meeting, supra, were transmitted to the White House on Oct. 8. (Secretary’s Letters, lot 56 D 459, “Memos for the President, June–December 1953”) For the responses of C. D. Jackson, Oct. 12, and President Eisenhower, Oct. 24, to the contents of these two papers, see infra and Document 49.
2. Regarding the currency reform and its effects, see Document 31.
3. Široký’s speech was summarized in telegram 102 from Praha, Sept. 16. (749.21/9–1653)
4. Nagy’s speech of July 4 was summarized in telegram 11 from Budapest, July 4. (764.13/7–453)
5. For documentation concerning the proposed Lugano meeting, subsequently held at Berlin, Jan. 25–Feb. 18, 1954, see vol. vii, Part 1, pp. 601 ff.
6. For text of NSC 152/2, “Economic Defense,” July 31, 1953, see vol. i, Part 2, p. 1009.