settlement are in addition to the procedure at the London meetings
contained in my telegram No. 10.

Begins:-

Solution of German problem is a vital need of post-war Europe. The
solution in itself must be just and far-sighted so that it
contains no seeds for future war. The method of reaching that
solution is also important. It must be such as to leave no residue
of bitterness between the nations who have taken part in the
victory. To fulfil the latter condition the German settlement must
be prepared in a spirit of co-operation by just and democratic
methods.

2. This condition was not fulfilled in the preparation of the
Peace Treaties with Italy and Germany's satellites. As a result we
have no confidence in the permanence of these treaties. This must
not be the case with Germany and Australia has definite proposals
to avoid similar errors.

Procedure-
3. Australian policy on procedure for preparing peace settlements
has frequently been stated by the Minister for External Affairs.

No procedure is just and democratic unless all substantial
belligerents participate fully in negotiations from the outset. By
full participation is meant:-

(a) discussion at an early stage of the views of effective
belligerents; and
(b) final decisions to be made by a full conference of effective
belligerents.

4. Australia has urged that the first of these requirements can
and should be met during the present meetings. We also urge that
consideration be given to the second requirement.

General Conference-
5. When a conference is taking final decisions, those decisions
should as far as possible be unanimous. We believe that with
adequate preparation and prior discussion such as is taking place
now, many decisions will be unanimous. Where differences of
opinion prevail, we believe that a simple majority should be
sufficient on questions of procedure and a two-thirds majority
might be necessary for a decision on a question of substance. It
is to be clearly understood that the ultimate objective is
unanimity.

Interim Agreement-
6. Specific proposals on procedure must be based on the facts of
the situation before us. The significant difference between the
German problem and that, for example, of Italy is that there is no
German Government in existence to accept a peace treaty. In our
view it must be some years before such a Government will be in
existence. Over a long period the Germans have shown themselves
unfit for self-government. The process of educating them to this
responsibility will be long, and in the intervening period the
Allies must act as guides and trustees. Nothing would be worse for
the peace of the world than to hasten the formation of a central
German Government merely in order to have a treaty signed and the
state of war ended to suit the convenience of certain Allies.

7. Nevertheless we believe the general nature of the eventual
peace terms should not be kept from the Germans. They should be
incorporated not in a treaty of peace, but in an Interim Agreement
to be prepared and signed by all substantial belligerents. This
Agreement would be in effect a revised and enlarged Potsdam
Agreement. This Agreement would have what Potsdam lacked-the
sanction of all substantial belligerents.

8. Australia therefore proposes that the immediate step to be
taken in the solution of the German problem is the preparation of
an Interim Agreement on the lines indicated.

Summary-
9. Summing up, we propose that the present meetings should be used
for the exchange of views and discussion, and in particular as a
fact-finding machine. Where necessary sub-committees should be set
up to consider facts relating to specific claims. As a result of
these meetings the Council of Foreign Ministers in March should
draft an Interim Agreement on lines here recommended. This draft
should be submitted immediately after the March meeting to a
conference of all substantial belligerents which could make
amendments and would take final decisions.

10. Such an Interim Agreement is required urgently because of the
importance of Germany to the economy of Europe. Where many nations
are involved, a satisfactory agreement can only be reached if
objectives and the steps to be taken to achieve them are clear and
definite. Our proposals to this end are submitted in a
constructive and co-operative spirit and merit the full support of
all Governments concerned.