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Charles E. Saltzman Oral History Interview

 

Oral History Interview with
Charles E. Saltzman

General staff officer with Gen. Mark Clark's Fifth U.S. Army, 1943-46, including service in occupied Austria. Assistant Secretary of State for Occupied Areas, 1947-49.

New York, New York
June 28, 1974
by Richard D. McKinzie

[Notices and Restrictions | Interview Transcript | List of Subjects Discussed]

 


Notice
This is a transcript of a tape-recorded interview conducted for the Harry S. Truman Library. A draft of this transcript was edited by the interviewee but only minor emendations were made; therefore, the reader should remember that this is essentially a transcript of the spoken, rather than the written word.

Numbers appearing in square brackets (ex. [45]) within the transcript indicate the pagination in the original, hardcopy version of the oral history interview.

RESTRICTIONS
This oral history transcript may be read, quoted from, cited, and reproduced for purposes of research. It may not be published in full except by permission of the Harry S. Truman Library.

Opened January, 1976
Harry S. Truman Library
Independence, Missouri

 

[Top of the Page | Notices and Restrictions | Interview Transcript | List of Subjects Discussed]

 



Oral History Interview with
Charles E. Saltzman

 

New York, New York
June 28, 1974
by Richard D. McKinzie

[1]

MCKINZIE: Mr. Saltzman, would you explain how you happened to deal with occupied areas during World War II?

SALTZMAN: I got into occupied area work in the American Occupation Headquarters in Austria at the end of the war because I was one of the initial staff officers of General Mark Clark at the time the Fifth Army was organized in Morocco at the beginning of 1943, and remained on his staff until the end of the war and went with that staff, and him, to Austria.

MCKINZIE: At the time you became involved in that work in Austria, how did you perceive the future of Austria and Germany in Europe? There was at that time Henry Morgenthau's plan for "pastoralization."

SALTZMAN: Well, I don't think at that time I had much of an opinion about the future of Germany, because

[2]

we were pretty busy with Austria and I didn't know whether the conditions were the same in Germany as they were in Austria -- which goes back to the attitude of the occupying powers. As I look back on it, I think I felt that Austria had very little chance of becoming, and continuing to be, a going concern economically. I think that view was reinforced by the way the Russians acted in their participation in the occupation because there, as in Germany, I understand, they acted as if they did not realize that the European Advisory Commission agreement provided for a really joint occupation of the country as a whole with the four zones of the occupying powers serving merely as administrative facilities for quartering troops and that sort of thing. The Russians always acted in Austria as if the zone belonged to them and we could only do, with respect to their zone, whatever they would let us do, which was practically nothing.

MCKINZIE: This attitude was apparent from the very first, when you first moved in with the troops?

SALTZMAN: Oh, before we moved in. I remember my shock at the way the Russians acted with us before we went into Vienna. You will recall that they had captured Vienna

[3]

and had occupied Vienna for several months before the occupying powers took over the occupation. When we indicated from Italy that we wanted to come to Vienna and talk to them about administrative arrangements, they said something like this, "Yes, you can come in next week and stay two or three days, you can bring a party of not more than so many people, etc."

So, we went in, and I was in that party. We went in and sat down, we discussed the administrative arrangements, and they said, "You may use one road to go from Vienna to the American zone, and may use one road to go out from Vienna to its Tulln Airport. You can have only "X" number of telephone pairs from Vienna to communicate with your American zone. And your planes flying to Vienna will fly within a ten mile wide corridor."

Now, this to me was absolutely incomprehensible, and I shall never as long as I live understand why our Government (and the same thing was happening in Germany), why our Government didn't say to Stalin, "Look, Stalin, you don't understand, read the European Advisory Agreement. We are partners, we are joint partners in a consolidated occupation of Austria and Germany. Don't misunderstand, we're going to fly our planes into Vienna

[4]

from any direction we want to and I've told General Spaatz to protect them, and we're going to use as many roads as necessary, any roads that we please. And if we want to land at the Schwechat Airport, we'll land at the Schwechat Airport. And, oh, by the way, I've told General Patton to move the Third Army to Linz."

I seriously think that if that attitude had been taken with respect to Germany and Austria in the summer of 1945 there would have been no cold war. That's the only thing they understand.

MCKINZIE: To what extent were you able to protest this?

SALTZMAN: I don't know, we operated that way, that's the way we operated. In the meanwhile, the Russians were engaging in pillage on a large scale. I've often gone down that one road from Vienna to the American zone, through the Russian zone, through the distance from Vienna to Linz where the American zone started and seen truckload after truckload after truckload being moved east by the Russians full of furniture and pianos and every conceivable thing that they thought they might have use for.

MCKINZIE: When you left Austria in early 1946, did you

[5]

anticipate that occupation of Austria would drag on and on?

SALTZMAN: No. No, I don't think so, not to the point it did. No, I had no idea it would go on for about ten years.

MCKINZIE: Had you, at the time you returned to civilian life in 1946, any expectation of going back into either military or Government service?

SALTZMAN: None at all, no.

MCKINZIE: How did that happen then?

SALTZMAN: At the end of the war a subdivision of the State Department was established to work on our Government's policy respecting the occupied areas. This was under an Assistant Secretary of State, created for the purpose, and that position was first occupied by General John H. Hilldring, who had been the head of the military government section of the War Department during the war.

In the late spring of 1947 General Hilldring decided to resign, and I was invited at that time to succeed him, undoubtedly on his recommendation to General [George C.] Marshall. I had been a general officer during the war and

[6]

General Marshall probably knew a little about me.

MCKINZIE: When you took that position, how did you assess the situation in Germany and in Japan? Had there been progress, had the occupation policy up to that time, in your view, been satisfactory? Did it call for any major changes that you wished to make when you took the office?

SALTZMAN: Well, when I took the job succeeding General Hilldring I don't think I knew enough about what had happened during the year since I had left the occupation headquarters in Austria to have much of an opinion about that as I first took up the work. A year had passed during which I had been engaged in business in New York and had been, in effect, just a newspaper reader.

When I did begin to work in the State Department on occupied area work, I think I felt that the progress in Japan had been more apparent than it had in Germany and that this was probably caused by a couple of problems we had in Germany and to a lesser extent in Austria that were not present in the Japanese occupation. The lack of cooperation which continued always in the occupation, impeded, obviously, the kind of progress in Germany which

[7]

had been contemplated at the end of the war. These problems were not in the Japanese occupation at all, which was entirely under the control of General [Douglas] MacArthur at that time, and this obviously enabled tangible results to be obtained more easily and more quickly.

In addition, in Europe we had some problems with our other allies, particularly the British, which I encountered as soon as I took office. The British were extremely short of dollars at that time, and there were various things involved in the occupation which required the payment of dollars by the British, without which our part of the occupation would suffer financially, and this required a great deal of negotiation, particularly when the so-called bizonal agreement was renegotiated shortly after I took office.

The bizonal agreement revision was negotiated in Washington in the autumn of 1947, and both General [Lucius D.] Clay and General Robertson, who was the British military governor, came back to Washington for those negotiations. Clay acted as a spokesman for our delegation in that conference because of his intimate familiarity with the problems concerned and the final agreement was not reached until the Council of Foreign

[8]

Ministers meeting in London in November to which General Marshall went and at which I was also present. The very last things to be decided were decided in London between General Marshall and the Foreign Affairs Minister, Ernest Bevin.

MCKINZIE: Could I ask you to comment on the relationship between the Defense Department -- the National Defense Establishment I think it was called at the time -- and the Department of State during the transition, because I understand that at the end of the war the Army didn't particularly want a prolonged presence anyplace, and that the Army was anxious to turn over the administration of occupied areas to the State Department, but that the State Department was not particularly anxious to get involved in operations. Was that an issue so far as you recall?

SALTZMAN: Well, the general issue we are talking about was a very, very major one. I don't know from my own personal experience or recollection that the causes of it were just what you have said, because you will recall that I didn't go to work on this problem until two years after the war had ended and one year after I had come back

[9]

from occupation work in Austria.

So, I'm not sure that the Army wanted to turn it over to the State Department, or that the State Department was reluctant to take on administrative duties, though I think this latter point is true. They had never been in the administrative business, I guess, in this sense, and they were not organized well for it. And I suppose it is true that Secretary [James F.] Byrnes and later Secretary Marshall were probably reluctant to do that. However, the fact that they didn't do it, in my opinion, caused a great deal of difficulty and that the decision not to do it was very costly -- the decision not to have the State Department administrate.

If I remember correctly, the French were much wiser than we were in this. The French immediately put it under the Foreign Office, but we adopted a type of organization for occupied areas which went on for several years which was really an impossible one, because the arrangement was that the State Department was responsible for policy, for the Government's policy respecting the occupied areas, but the administration of that policy was by the Army.

Now, I learned by bitter experience that whoever

[10]

has the administration gets the money and whoever gets the money can, in fact, as a practical matter, set the policy. I'll give you an example of that.

Let us say that General Clay, who was our military governor in Germany and in charge of the carrying out of our policy in Germany, might be told by the State Department that he ought to buy the tobacco he needed for the American zone from Greece, for reasons which might be diplomatic reasons, or reasons dictated by our general international situation. General Clay is an excellent administrator and a very good soldier, and when he got that instruction he would have looked at his directive, and his directive said, in effect, "Run the American zone as economically as possible."

So, he'd say, "Well, no, I can buy tobacco cheaper from North Carolina than I can from Greece and if I do what you tell me to I cannot defend this before the Appropriations Committee of Congress. My orders come from the War Department and they tell me to run this as economically as possible."

Well, there's an illustration of what I mean, and this went on all the time because the fellow who gets the money can, in effect, set the policy, because

[11]

he has to defend what he does before Congress in order to get his annual appropriations. And so we were establishing policy from the State Department's point of view and the Army was carrying it out, if it thought it wise, and it was not carrying it out, or resisting it at least, if it didn't think it was wise. And the amazing thing to me was that if General Clay and I had been sitting in each other's seats we would have said exactly what the other fellow did. Secretary Marshall would have been saying just what Clay said and Clay would have been saying what General Marshall had said.

MCKINZIE: That being the case, and, given the fact that in the spring of 1947 when you took this job, the Marshall plan was being evolved and the decision was being made that Europe was going to have to be reconstructed in a more integrated fashion, given the fact then that Germany was pretty much the job of General Clay, given the fact then that General Clay had so much control over Germany, how do you perceive his views of Germany's role in a more integrated Europe? He had a terrible job. In the beginning it was to demilitarize, de-Nazify, deindustrialize, in a way, and

[12]

then suddenly by 1947 we've come to the decision that Germany had to be industrialized and integrated with Western Europe. Were you at all cognizant of his changing views on the subject?

SALTZMAN: By 1947, or at least by the end of 1947, when we failed to come to any agreement with the Russians in the meeting of the Council of Foreign Ministers at the end of the year, General Clay, I think, was so impressed by the uncooperative and aggressive attitude of the Russians in the German occupation and in Europe in general, that he thought, I believe, that the important thing was to strengthen Germany and make it one of the elements in any defense necessary against Russian aggression. Now, what he thought between '45 and '47 I don't know. I don't know what his attitude was when he arrived on the scene in 1945.

MCKINZIE: Well, Mr. Saltzman, there is a reason I asked the question and I'd invite a response. There is a scholar, a very good one, who has done work on Germany, during and after the war, who has suggested that the situation in Germany had deteriorated so much by 1947, economically, that it was necessary to rebuild the rest of Europe in

[13]

order to get Germany off the U.S. taxpayers' back. Do you recall any such discussions as that?

SALTZMAN: No. No, I don't, although this very important consideration may have been a factor in his thinking.

MCKINZIE: I've avoided perhaps the central issue, yours was a very sensitive kind of job because you were in a sense advocating the reconstruction of a recent enemy. What kind of public feedback were you getting when you first began to advocate the reconstruction of Germany? Were there a lot of people, individuals, or groups, who pressured you in opposite direction?

SALTZMAN: No, I don't remember that with respect either to Germany or Japan. It may be remarkable that it wasn't so, but I don't recall that.

Of course, we must remember that we're talking as far as I'm concerned about it, at least two years after the war, and I think there was less public emotional reaction against Germany and Japan than there would have been right after the war.

MCKINZIE: The other thing is that rebuilding Germany was conceived by many to be an anti-Soviet move. Henry

[14]

Wallace, I think, took you on one time and said some uncomplimentary things about how rebuilding Germany was an affront to the Soviet Union. Do you recall that story?

SALTZMAN: No.

MCKINZIE: Mr. Saltzman, one unanticipated problem was the massive influx of displaced persons into West Germany and the inability of the West German economy to support that influx.

SALTZMAN: That was a major administrative problem.

MCKINZIE: Yet it was a difficult one because of the attitude of the Congress about taking a large part of those refugees into the United States. Obviously one solution to the problem would have been for some of the victorious powers to have taken a large quota of immigrants. The alternative was to keep them in Germany and support them there. Did you perceive that to be a political problem as well as administrative one?

SALTZMAN: I don't remember its being a political problem in the sense of the issue that you mentioned of whether or not to allow immigration here. I don't recall that that was one of the things we were concerned with in my

[15]

office, we were concerned with what you did with them in Austria.

MCKINZIE: You didn't then perceive that the creation of Israel would be a major help...

SALTZMAN: Oh, yes, I think so, I think we realized that, that that would be an administrative help.

MCKINZIE: To what extent were you brought in on the planning of the Marshall plan, the machinery of the Marshall plan when that was being evolved? Did you have any dealings with the Policy Planning Staff as they began to work out their program for Europe?

SALTZMAN: Not much, no. I remember, when I first went down there, appearing before a Senate committee, I guess it was either the Finance Committee or the Foreign Relations Committee, about the initial planning for the Marshall plan. But after that got underway we were not really involved in it. It was done more in the Secretary's office in the sense of the Policy Planning Staff or someone like that.

MCKINZIE: At what point in your own mind did you conclude that Germany and Japan were going to have to be rebuilt

[16]

in order for the postwar world to be economically viable? Had you concluded that at all by the time you left Austria or was this something that you had thought about afterwards, do you recall?

SALTZMAN: I think I felt strongly about Austria before I left there, as I said earlier on, I didn't see how Austria was going to make it, I'm still a little surprised that they did. I remember thinking before I left Austria, "Perhaps if they put the headquarters of the United Nations here that that just might do the trick, but otherwise, as far as I can see, all they've got to sell is scenery and I don't see how it's going to do."

Now, I wouldn't have felt that way about Germany because they're the most industrious people in Europe, or among the most industrious, and obviously, if you gave them a chance they could make it.

On your question of when I felt that it was necessary, well, I always felt it was necessary about Austria, but with respect to Germany and Japan I was very tepid, I was very sluggish in my thinking about that. I didn't realize that as soon as I should have, and the War Department was ahead of us on that.

[17]

I remember very well that Bill [William H.] Draper became Under Secretary of War about the time I became the Assistant Secretary of State for Occupied Areas, and almost immediately he was prodding us to adopt what he called a change of emphasis with respect to Japan. It was farsighted on his part; I'll give him credit for that. I didn't know enough about the Japanese situation, or else I wasn't smart enough to figure out, but it was quite some time before I realized that that needed to be done. I can't tell you just when, but I certainly didn't realize it when I took office.

MCKINZIE: Mr. Saltzman, there were during the war lots of ideas about what the postwar world ought to be like, and Cordell Hull had brought into the Department of State quite a number of like thinkers. I suppose the most prominent would have been Will [William C.] Clayton, whose view seemed to be that in the postwar world there ought to be a kind of economic integration which had never before existed, and if not free trade, something close to it. And that as a result of that there would be a kind of interdependence which would assure peace. That was shared in varying degrees, I think, by lots of people. Did you subscribe to that view at all?

[18]

SALTZMAN: That's difficult for me to answer now. I would subscribe to it now very emphatically, but this is 25 years later and I don't know whether my global economic thinking had developed by that time to a point where I had a conviction about that one way or the other. My guess is that I would have been in favor of the Will Clayton point of view. I am now, and I don't remember having been converted to it.

MCKINZIE: One of the smallish problems that you had to deal with was the territory of Venezia Giulia, the part of Italy which was occupied by Yugoslavia and which dragged on until the time of the conference in 19...

SALTZMAN: '54.

MCKINZIE: ...and there were a number of commissions that went out there. Did that rate a high priority among the things you worked with?

SALTZMAN: No. No, I don't look back at that as being one of the things that I was worried about. Somebody else was worrying about that. That wouldn't affect my office much as far as I can remember.

MCKINZIE: A lot of people now, 25 years later, look back

[19]

on those years and say that it was a period of "Europe first foreign policy." In your own thinking, and in your own work, did you rate the problems of Germany above those of say Japan?

SALTZMAN: Yes, I think so, because they were causing more trouble. It was "the wheel that made the most noise got the grease" is what I think.

MCKINZIE: Were there people on your staff who were, at that time, very deeply concerned about what was going to happen in the Far East as a result of the vacuum created by Japan's defeat?

SALTZMAN: Only, as far as I can remember, in the military sense, and I think by that I mean we were concerned about the situation in Korea. That was one of our occupied areas where you had, generally speaking, the same kind of situation you had in Germany and Austria, as you have a divided country, Communists in one part of it and the occupation by ourselves in the other part.

MCKINZIE: Were you in favor of large-scale economic assistance to South Korea? When you came in, they were planning the Marshall plan for Europe and there was a China Aid Bill

[20]

and then there was some smallish assistance for Korea. A lot of people argued that the way to assure stability in sensitive areas and to assure anti-Communist feeling, was to provide economic assistance. Was that a major concern of yours?

SALTZMAN: No, it wasn't a major concern of mine at the time, whether or not it should have been. As it turned out Korea was a participant in the Marshall plan; the ECA had a mission in Korea.

MCKINZIE: Mr. Saltzman, I guess a question that everyone is interested in is, why did you quit in 1949?

SALTZMAN: Oh, this is because of the sort of loggerheads that we were at with the Army. Because this, in my opinion, unfortunate organization arrangement of occupied area operations wherein the State Department set the Government policy and the War Department (later the Department of the Army) carried it out, did not work very well. And you may recall that about February of 1948, General Marshall at an appearance (if I remember correctly), before the Senate Committee on Foreign Relations said out of a clear sky that the State Department would take over the administration of Germany on the 1st of May.

[21]

 

We had not been told anything about that, and so that news was of a major significance for me because that meant that on the lst of May our occupation in Germany would be administratively a baby of mine and so we proceeded right away to plan for that on a priority, urgent basis. And it would have been carried out had it not been that in March General Sokolovsky flounced out of the Control Council meeting in Germany and the Berlin Blockade started. That was deemed by General Marshall, very wisely, not to be the moment to change the system of administration. And so the plan of transferring the administration to the State Department was never carried out.

MCKINZIE: Do you have any idea what moved General Marshall to announce that the State Department would take over...

SALTZMAN: I think it's just what I've been saying to you, that this just didn't work. It does not work to have the policy set by one department and the administration of it conducted by another, with all of the money appropriated to the administrative department conducting the administration. A fellow who gets the money, in effect, sets the policy, or at least is in a position, as I have

[22]

tried to explain, to question the policy, to resist the policy, and my belief is that General Marshall made that decision because he had had enough of that. His people, my office, and all the rest of the geographical offices, everybody, were having difficulty about that, and I think he thought that a way to cure it was for us to conduct the administration ourselves.

Well, going back to your question, why I left. Therefore, these difficulties, administrative difficulties, continued, and it was finally decided in the early months of 1949 to turn policy matters respecting occupied area matters over to the geographical office concerned, except for Germany, where a special office of German affairs only was created. Robert Murphy was brought back from Germany where he had been General Clay's political adviser to head that Office of German Affairs. The Japanese-Korean occupied area matters were put under the Far Eastern office of the State Department, Austria under the corresponding European one, et cetera. And the office of Assistant Secretary of State for Occupied Areas was eliminated.

MCKINZIE: To what extent do you think President Truman was sensitive to the problems of the occupied areas, and from

[23]

where you stood, what kind of awareness did he have of your problems in your job?

SALTZMAN: As far as I can remember I saw very little reflection of any concern of his about it, and in fact at the time of the Berlin Blockade when the decision was made not to drive a convoy through the Russian zone to Berlin, but to adopt the famous airlift instead, my impression was, and I may be quite wrong about this (because if you sit in the State Department Building you don't know what's going on in the White House), that the initiative, the impetus, the guide, the force of anything that was done, was coming more from General Clay and the Secretary of the Army, than it was from the President and the National Security Council.

Now, I may be wrong about that because, as I say, I wasn't there in the White House, but that was my impression. I have always felt in my mind that the airlift, for example, was a monument to Clay and [Kenneth] Royall more than anyone else.

MCKINZIE: And preceding that, however, you had no feel that President Truman was particularly concerned about the problems of occupation?

[24]

SALTZMAN: No.

MCKINZIE: That he saw those separate some way from the problems of reconstruction in France, or reconstruction in Germany?

SALTZMAN: No, but again I was busy doing my job in one of the executive departments and it happened to be on that, but I wouldn't necessarily know what subjects occupied his mind in any given period of time.

MCKINZIE: I think you have already answered the question, but if you were to have made any changes during those years, what would the major one have been -- to straighten out the business between the Army and the State Department concerning administrative procedures?

SALTZMAN: Oh, first of all, yes, that was the most important one -- in order to get on with the business better. I would have wanted to get that straightened out as quickly as possible because the State Department needed to be able to establish policy for the occupied areas, it ought not to have to be arguing about it with another part of the Government all the time, and that's what we were doing. No, that, I think, should have been taken care of first, and then later on, as soon as that was done,

[25]

then we could devote our attention more completely and more effectively to the solution of the various problems of the occupied areas.

I didn't realize this problem when I took the job. You asked me about the circumstances of my leaving the State Department. As I say, the position of Assistant Secretary of Occupied Areas lapsed then, or was eliminated, as a result of those changes which I mentioned. I was invited to head one of our diplomatic missions abroad, but I was on leave from my business in New York and I felt what I ought to do in personal terms was to come back to business in New York.

MCKINZIE: Thank you very much, sir.

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List of Subjects Discussed

Allied Control Council for Germany, 21
Austria:

Berlin blockade, 21, 23
Bevin, Ernest, 8
Bi-zonal agreement-Germany, 7
Britain, 7, 8
Byrnes, James F., 9

Clay, Lucius D., 7, 10, 11, 12, 23
Clayton, Will, 17, 18
Cold War, 12, 13, 21, 23
Council of Foreign Ministers Meeting (1947), 7, 8, 12

Defense Department, U.S., administration of Germany, 8-11, 20, 21, 24, 25
Displaced persons, 14, 15
Draper, William H., 17

Economic integration, global, 17, 18
"Europe first foreign policy," 19
European Advisory Commission, 2, 3

Fifth Army, U.S., organization of, 1
France, administrative policy on Germany, 9

Germany:

Hilldring, John H., 5, 6
Hull, Cordell, 16

Israel, 15
Italy, 18

Japan, U.S. occupation of, 6, 7, 15, 16, 17, 19, 22

Korean, U.S.-Soviet occupation of, 19

Linz, Austria, 4

MacArthur, Douglas, 7
Marshall, George C., 5, 6, 8, 9, 11, 20, 21, 22
Marshall Plan, 11, 15, 19, 20
Morgenthau, Henry, Jr., 1
Morgenthau Plan, 1
Morocco, 1
Murphy, Robert D., 1

National Security Council, 23

Occupied areas, administration of, 8-11, 20, 21, 24, 25
Office of Far Eastern Affairs, State Department, 22
Office of German Affairs, State Department, 22

Patton, George, 4
Policy Planning Staff, State Department, 15

Robertson, Sir Brian H., 7
Royall, Kenneth C., 23

Schwechat, Airport-Vienna, Austria, 4
Sokolovsky, Vassily D., 21
South Korea, 19, 20
Soviet Union, 2, 3, 12, 13, 14
Spaatz, Carl, 4
Stalin, Joseph V., 3
State Department, U.S., administration of Austria-Germany, 8-11, 20, 21, 24, 25

Truman, Harry S., 22-24
Tullin Airport, Vienna, Austria, 3

Venezia, Giulia, 18
Vienna, Austria, 2, 3

Western European Union, 11, 12

Yugoslavia, 18

    • administration of occupation, State-Defense Department division on, 8-11
      length of occupation, 5
      looting by Soviet Army in, 4
      occupation of in 1945, 2, 3, 4
      reconstruction in, problem of, 16
    • administration of, State-Defense Department division, 8-11, 20, 21, 24, 25
      occupation of by the allies, 1, 2, 6, 7
      reconstruction of, 12-16
      refugees, problem of, 13
      role of in European union, 11, 12

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