You will recall that the Council of Foreign Ministers' meeting in London at the end of 1947 failed to reach any solution to a variety of problems which grew out of the unsettled condition of Germany. The United Kingdom, United States and France then felt obliged to meet some of these urgent problems through a series of individual and concerted actions.

2. One of these actions was the holding by the United Kingdom, the United States and France of the London meeting on Western Germany. This took place from February 23rd to March 6th. The Benelux states were invited to this meeting. The agenda of the meeting was divided into two parts:

(a) Interim administrative problems which were reserved for the consideration of the United Kingdom, the United States and France alone:

(i) The relationship of Western Germany to the European Recovery Programme.

(ii) Reparations.

(iii) Political and economic organization of Germany as related to trizonal fusion.

(b) Topics of wider implication in the discussion of which the Benelux states participated:

(i) The role of German economy in the European economy and the control of the Ruhr.

(ii) Security against Germany.

(iii) Evolution of the political and economic organization of Germany, excluding the discussion on trizonal fusion.

(iv) Provisional territorial arrangements, e.g., the Saur.

3. Although a cursory examination of this agenda leads to the conclusion that something approaching a peace settlement was being aimed at, we did not consider that we should regard the association of the Benelux states or the exclusion of other belligerents, including ourselves, as a denial of Canadian interests in the discussion. We felt that the association of the Benelux states was a necessary step toward the realization of the European Recovery Programme, which the Canadian Government had already welcomed.

4. The London meeting created a number of committees called Working Patties, some of which reported back before the conclusion of the London meeting on March 6th. One of these Working Parties was charged with examining the future political organization of Germany. Its work, however, was not complete and it was decided that the settlement of disagreed points should be referred to a new Working Party to meet in Berlin. The Canadian Government has been invited to express its views informally to this Working Party. It will be noted that this topic, while of great importance, is not of outstanding importance as compared with some of the other topics on which our views have not been solicited.

5. The London meeting is being resumed in the middle of April. At this meeting the representatives of the six Governments arc expected to produce decisions over the whole field of subjects which were studied in the first meeting. These decisions will then be placed before the governments concerned for approval and implementation.

6. It seems evident that a peace settlement for Germany is being reached and that no satisfactory method has been found for associating the smaller powers with that settlement. This is not, of course, in line with the declared policy of the Government that Canada should take a part in any German settlement proportionate to the part this country took in the defeat of Germany.

7. However, the situation is extremely difficult for the United Kingdom, the United States and France who arc anxious not to take any action which would leave them open to a Soviet charge that they were making a separate peace with Germany. This difficulty is further complicated by the fact that the problems involved are subject to extreme differences of opinion among the Western Powers themselves, and that the introduction of any more countries would mean the introduction of further differences and a slowing down of Western European consolidation which we are anxious to see achieved with all possible speed. Our information from London is that a confeTence of all belligerents would be inappropriate at present because:

(a) The Bogota Conference is at present in session and pressure would be brought to bear upon the United States to include non-active belligerents in any projected deliberations.

(b) The situation in Germany is extremely uncertain as regards the Soviet Union's next move and it would he well to see what develops befoTe undertaking any fresh approach to the German settlement.

(c) The progress which is now being made, particularly toward the realization of the European Recovery Programme, might he adversely affected.

8. The United Kingdom has expressed the hope that we will take part in the Berlin Working Party and states that they would gladly receive any views the Canadian Government may wish to express directly to them.

9. In the circumstances I feel:

(a) That General Pope should be authorized to present comments to the Working Party on the future political organization of Germany; and

(b) That a note should be transmitted to the United Kingdom, the United States and French Governments pointing ow that we believe something approaching a peace settlement is being reached; that there is no adequate part assigned to this country in that settlement; and that, with due consideration of the difficulties involved, Canada would welcome any suggestion those Governments may have to make on how this country could be associated in the settlement we believe is being reached.

10. I attach for your consideration draft telegrams to General Pope and to our missions in London, Washington and Paris as well as a copy of C.R.O. telegram Q.40 of March 9tht on which our telegram to General Pope is based.

L.B. PEARSON