740.00119 Control (Germany)/5–246: Telegram
The United States Political Adviser for Germany (Murphy) to the Secretary of State
[Received 9:27 p.m.]
1160. See my 987, April 10, and 1051, April 18.1 Fifty-first Coordinating Committee meeting 26 April discussed principle in regard to common import-export program.
British member said issue was clear and of great importance. To regard each zone as separate economic entity was a possible way to administer Germany but in direct contradiction to Potsdam Protocol. Its cardinal point is that German assets are essentially for all Germany. British zone probably can export such things as coal and many manufactured articles much easier than can other zones, and thereby at least substantially cover cost of necessary imports of food. However, that would be antithesis of protocol, and British have not yet considered that right way balance deficit. British tax-payers cannot be expected cover deficit, and British delegation must insist upon pooling resources on agreed standard of German consumption. If quadripartite agreement impossible on these two points, British delegation considered Four Powers did not intend execute Berlin Protocol. General Robertson supported thesis of General Clay, namely, that failure agree common import-export program will necessitate revision reparation program; moreover, common sense suggested that even temporary operation on zonal basis called for temporary revision.
French member gave full support to French position taken at Economic Directorate. He said Coordinating Committee could consider Germany only as economic unit in conformity with Potsdam [Page 546] Protocol; assets of four zones must be pooled for use throughout Germany; as French zone had very meager resources, it needed aid of other zones; and French Government could not accept unbearable charge for inevitable deficit in its zone, should it attempt self-sufficiency. To Soviet inquiry whether French delegation had not in effect changed view about central administrative organs in Germany, French member said emphatically No, French delegation always having favored economic unity but not central organs.
Soviet member said that since French answer confirmed previous French position, he must give full support to Soviet position at Economic Directorate, which was that, taking Potsdam Protocol as basis and considering Germany as economic whole, common import-export policy must now be formulated. However, while implementing policy, local conditions must receive consideration as also prescribed by Protocol.
Agreeing with General Robertson, General Clay insisted consideration also be given to burden of occupation on U.S. taxpayers; U.S. Government had already invested much capital in occupation regime, and had accepted present boundary its zone, important assets of which were scenic beauties, on understanding that in harmony with Protocol German resources would be available to all zones equitably. Regretting he could not do as his French colleague and accept favorable parts of Protocol, while rejecting less favorable ones, he could not agree Protocol did not also envisage central organs necessary to successful administration of common import-export program. As he felt cleavage of opinion was too wide to be bridged at this time, General Clay proposed, and his British colleague concurred, Coordinating Committee members should report to their respective governments that principles of reparation, import-export program, and central organs were so interrelated that application of the first two must be held in suspense until latter shall have been decided. Should British find it necessary to attempt make British zone self-sustaining, manifestly US zone with its relatively unimportant industries could not yield any of them because he was not ready to burden the US Government with resulting deficit.
Thereupon Soviet member invited attention to article 19 of Potsdam Protocol. In his opinion export and import program must be based solely on productive capacity left in Germany after reparations. Any attempt to link one with other would constitute breach of Protocol.
US member disagreed with Soviet colleague and quoted paragraphs 14, 15 and 16 of Protocol, asking whether colleagues could honestly say that end of one year of occupation those elements of Protocol were [Page 547] being carried out. He thereupon proposed holding paper over for further consideration at later meeting and that members report to their respective governments. He said he would report Four Powers had reached point in governing Germany where they must decide whether or not Protocol can be applied.
French member said he would report on matters raised by General Clay to his government, but desired to point out that for several months his government has been requesting Soviet, British and US Governments examine all questions concerning Germany. He regarded central German administration as only one means to attain desired objective, and said another was central Allied Import-Export Bureau.
General Clay said he desired emphasis US authorities might now find it necessary to interrupt work of some 16 to 17 thousand persons engaged in dismantling machines for reparation deliveries.
Members agreed to adjourn further consideration of this problem to next meeting.
Foregoing is for Department’s strictly confidential information. Repeated to Paris for Matthews.
- Latter not printed; it reported that the Soviet delegate on the Economic Directorate emphasized the position of his government that, while Germany should be considered as an economic whole, local conditions demanded that foreign trade for Germany be handled on a zonal basis at present (740.00119 Control (Germany)/4–1846).↩