Memorandum, State Department Summary of Telegrams

DEPARTMENT OF STATE OFFICE OF THE SECRETARY WASHINGTON December 16, 1946 SUMMARY OF TELEGRAMS AUSTRALIA We are informing Australian Foreign Secretary Evatt that we hope and desire that Australia will participate on a full and equal basis in the formulation of the peace treaty with Japan and that the negotiations and drafting will take place outside the Far Eastern Commis- sion. However, it seems natural to expect that the USSR will insist upon a far more limited group for these treaty negotiations (as exemplified by the Soviet attitude on the German treaty) and it is of course impossible for us to predict what final arrangements will be made for negotiating the Japanese treaty. AUSTRIA Erhardt recommends that we encourage the Austrians in negoti- ating a settlement of the German assets problem directly wi. th the USSR, if only to test the present Soviet position on this question. Previously, Erhardt reported that the most recent Allied Council meeting in Vienna took place in a cordial atmosphere but that it was not yet appar- ent what was behind the changed Soviet attitude. GREECE Ambassador MacVeagh reports that the Greek foreign exchange position is becoming daily more acute and has already reached the point of foreshadowing a financial breakdown unless adequate assistance is provided within a few weeks. INDIA Nehru has told our Charge in New Delhi that he believes the Moslem League will eventually join in establishing the Indian Federal Union but that Jinnah and the Moslem League do not want democratic government and that prominent League members being landholders prefer to continue under antiquated land laws. POLAND Peasant Party leader Mikolajczyk predicts that civil war will take place in Poland in April or May due to the following reasons : (1) fraudulent elections, which are scheduled to be held in Jan- uary; (2) an economic crisis affecting the peasants; and (3) dissolution of the Polish Peasant Party. He estimates there are 150,000 persons now under arrest in Poland for political reasons. USSR Ambassador Smith points out that the Soviet public has been led to believe that the recent decisions of the Council of Foreign Ministers and of the General Assembly grew out of the consistent observance by the USSR of "democratic principles" which forced the US and UK to make concessions. Smith says that while a few remarks have been made DECLASSIFIED E.O. 12065, Sec. 3-402 State Dept. Guideline, June 12, 1979 By NLT- HC NARG, Date 11-12:fe