Three issues of primary importance faced the Prague government during the summer of 1945: (1) transfers out of the country of the German and Hungarian minorities; (2) simultaneous withdrawal of occupation armies; and (3) nationalization decrees, their application, and their enforcement.
Klieforth, the U.S. chargé d'affaires in Prague, reported on June 28, 1945 to his chief, James Francis Byrnes, at the State Department:
The outstanding issue on which... reconstruction depends is solution of the minority problem, involving transfers to Germany and Hungary of about three million Czechs ... who constitute 20% of the country's population... [This] must be undertaken in agreement with the Allied governments... All reconstruction is halted until the transfer problem is solved. This problem unsolved presents the greatest danger to President Beneš' prestige [presenting opportunities] for more radical leaders to arouse the people and seek a solution by force.1
The vast dimensions of the problem loomed at Washington and Whitehall as staggering, but they responded with delay. The Foreign Office had already advised the Czechoslovak representative in London that final authorization for the transfers would have to be made by the Great Powers at the forthcoming summit meeting scheduled to convene in mid-July. The determination of the method and timing of the transfers would be given to the Allied Control Commission set up for Germany and for Hungary.
Acting Foreign Minister Vladimír Clementis, acknowledging the Allied request for a plan, wrote to Klieforth on July 3rd advising that "the Czechoslovak Government was preparing a plan for the transfer"