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Harry S. Truman and Joseph Stalin meeting at the Potsdam Conference on July 18, 1945. From left to right, first row: Stalin, Truman, Soviet Ambassador Andrei Gromyko, Secretary of State James F. Byrnes, and Soviet Foreign Minister Vyacheslav Molotov. Second row: Truman confidant Harry Vaughan [1], Russian interpreter Charles Bohlen, Truman naval aide James K. Vardaman, Jr., and Charles Griffith Ross (partially obscured) [2].

Stalin, Truman and Churchill at Potsdam Conference

Clement Attlee, Harry Truman and Joseph Stalin at the Potsdam Conference, July 1945

The Potsdam Conference was held at Cecilienhof, the home of Crown Prince Wilhelm Hohenzollern, in Potsdam, Germany, from July 17 to August 2, 1945. The participants were the Soviet Union, the United Kingdom, and the United States, the three largest and most powerful of the victorious Allies that defeated the Axis Powers in World War II. The three nations were represented by Communist Party General Secretary Joseph Stalin, Prime Minister Winston Churchill and later Clement Attlee, and President Harry S. Truman.

Stalin, Churchill, and Truman—as well as Attlee, who replaced Churchill after the Labour Party's defeat of the Conservatives in the 1945 general election—had gathered to decide how to administer the defeated Nazi Germany, which had agreed to unconditional surrender nine weeks earlier, on May 8 (V-E Day). The goals of the conference also included the establishment of post-war order, peace treaties issues, and countering the effects of war.

• Soviet Union, represented by Joseph Stalin.

He arrived at the conference a day late, citing "official business" that required his attention, but in fact may have suffered a minor heart attack.^{[citation needed]}

• United Kingdom, represented by Winston Churchill and later, Clement Attlee.

The results of the British election became known during the conference. As a result of the Labour Party victory over the Conservative Party the Premiership changed hands.

• United States, represented by the newly inaugurated President Harry S. Truman.

Joseph Stalin suggested that Truman preside over the conference as the only head of state attending, a recommendation accepted by Churchill.

Main article the Potsdam Agreement

At the end of the conference, the Three Heads of Government agreed on the following actions:

The Oder-Neisse Line (click to enlarge)

Poland's old and new borders, 1945. Territory previously part of Germany is identified in yellow

• Germany:

  See also Expulsion of Germans after World War II, The industrial plans for Germany and Oder-Neisse line

  • Issuance of a statement of aims of the occupation of Germany by the Allies: demilitarization, denazification, democratization and decartelization.
  • Division of Germany and Austria respectively into four occupation zones (earlier agreed in principle at Yalta), and the similar division of each's capital, Berlin and Vienna, into four zones.
  • Agreement on the prosecution of Nazi war criminals.
  • Reversion of all German annexations in Europe after 1937, these included Sudetenland, Alsace-Lorraine, Austria and the westernmost parts of Poland
  • Germany's eastern border was to be shifted westwards to the Oder-Neisse line, effectively reducing Germany in size by approximately 25% compared to her 1937 borders. The territories east of the new border comprised East Prussia, Silesia, West Prussia, and two thirds of Pomerania. These areas were mainly agricultural, with the exception of Upper Silesia which was the second largest centre of German heavy industry.
  • Expulsion of the German populations remaining beyond the new eastern borders of Germany.
  • Agreement on war reparations to the Soviet Union from their zone of occupation in Germany. It was also agreed that 10% of the industrial capacity of the western zones unnecessary for the German peace economy should be transferred to the Soviet Union within 2 years. Stalin proposed and it was accepted that Poland was to be excluded from division of German compensation to be later granted 15% of compensation given to Soviet Union (this has never happened)^{[citation needed]}.
  • Ensuring that German standards of living did not exceed the European average. The types and amounts of industry to dismantle to achieve this was to be determined later. (see The industrial plans for Germany)
  • Destruction of German industrial war-potential through the destruction or control of all industry with military potential. To this end, all civilian shipyards and aircraft factories were to be dismantled or otherwise destroyed. All production capacity associated with war-potential, such as metals, chemical, machinery etc were to be reduced to a minimum level which was later determined by the Allied Control Commission. Manufacturing capacity thus made "surplus" was to be dismantled as reparations or otherwise destroyed. All research and international trade was to be controlled. The economy was to be decentralized (decartelization). The economy was also to be reorganized with primary emphasis on agriculture and peaceful domestic industries. In early 1946 agreement was reached on the details of the latter, Germany was to be converted into an agricultural and light industry economy. German exports were to be coal, beer, toys, textiles, etc — to take the place of the heavy industrial products which formed most of Germany's pre-war exports.^[1]

• Poland:

  See also Western betrayal and Territorial changes of Poland after World War II

  • Creation of a Provisional Government of National Unity recognized by all three powers. Recognition of the Soviet controlled government by the Western Powers effectively meant end of recognition for the existing Polish government in Exile.
  • Poles who were serving in British Army formations should be free to return to Poland, with no security upon their return to the communist country guaranteed.
  • The provisional western border should be the Oder-Neisse line, parts of East Prussia and former free City of Danzig should be under Polish administration, but that the final delimitation of the western frontier of Poland should await the peace settlement, which had to await the Treaty on the Final Settlement With Respect to Germany in 1990.
  • Polish share of German war reparation to be taken by Soviet Union instead of Poland.

• All other issues were to be answered by the final peace conference to be called as soon as possible.

Main article the Potsdam Declaration

In addition to the Potsdam Agreement, on July 26 the United States, the British Empire and the Republic of China (the Soviet Union was not at war with Japan during the Conference) issued the Potsdam Declaration which outlined the terms of surrender for Japan during WWII in Asia.

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