Berlin Conference.

Apart from the question of participation in Far Eastern war dealt
with in most secret Prime Minister to Prime Minister cable of 5th
July [1], the most important question to be dealt with at the
Berlin Meeting is the future of Germany.

This issue is covered by Item 2 in United States of America Agenda
all four sub-items (a) to (d) being germane to the question and
indicate a logical approach.

Item 3 of United Kingdom Agenda covers the question but only sub-
items (c) and (e) are directly relevant.

No indication, however, is given as to the policy the United
Kingdom Delegation proposes to advocate and would desire to see
adopted if United States of America and U.S.S.R. agreement can be
obtained. All my efforts to ascertain what this policy is have
been unsuccessful. My clear impression is that no decision has
been reached and that the line to be taken at Berlin will be
determined in the light of developments there without consultation
with the United Kingdom Cabinet and certainly without any
opportunity for the Dominions to express their views.

This is most unsatisfactory as the future form of Government in
Germany e.g. a Control Government maintaining the unity of the
Reich (even if substantial tracts of territory have been detached
at the perimeter) or localised administrations involving the
dismemberment of the Reich brought about either by compulsion or
German initiative resulting from a period of decentralised control
by the Allies-is a matter of vital importance.

Equally important is the question of Germany's economy, e.g. how
far the maintenance, re-establishment and even expansion of German
industry will be permitted and the extent of the control and
direction of such industry.

Without some directive as to the fundamental policy on these great
issues, even if only of the broadest character, I cannot see how
the Central Control Commission or the Allied Administrations can
perform their tasks as they must have some basis upon which to
function.

I imagine this necessity will become apparent during the present
Conference with the result that some broad general guidance will
be afforded to meet the immediate situation and a reference of the
problem will be made to the Council of Foreign Ministers proposed
by the United States of America.

While in this cable I am only dealing with this one issue many
other questions in which we have a vital interest, but with regard
to which we have had no opportunity of expressing our views, will
arise at the Conference.

I do not think, however, that in all the circumstances there is
any useful action you can take. I will continue to press for
information as to the United Kingdom attitude on all major
questions and for an opportunity for you to express your views
before decisions are taken.

BRUCE