740.00119 Control (Germany)/7–1946: Telegram
The Secretary of State to the Ambassador in France (Gaffery)
3541. Opening paragraphs War Dept cable July 18 to CG USFET state:
“Accordance publicly announced US policy (SecState speech July 15) and proposal made by SecState in CFM July 11,42 you are authorized and requested announce in ACC Berlin as follows:
As no zone in Germany is self-sustaining and as treatment of two zones or more as economic unit would improve situation in zones concerned, US zonal authorities will join with those of any other zone or zones in measures for treatment of their respective zones as economic unit, pending Four Power Agreement for application of Potsdam decision regarding treatment all Germany as single economic unit and attainment of balanced economy throughout Germany. You should further state that you are prepared cooperate with any or all of other three occupying governments in establishing appropriate administative arrangements to this end. These essential administrative arrangements would be established in such fields as finance, transportation, [Page 579] communications, industry and foreign trade in such way as to obtain economic unification of zones concerned and to be capable of development, upon adherence all four zones, into central German administrative departments headed by state secretaries provided in Potsdam decision. In making this proposal, it is not US intention, to divide Germany but to expedite its treatment as economic unit. Whatever arrangements are made with one government will be open on equal terms to governments of other zones at any time they are prepared to participate. The US Govt believes that Germany cannot continue to be administered in four airtight compartments without free economic interchanges between them and further that continuation of present situation will lead inevitably to economic paralysis in Germany. US Govt is, therefore, not willing to permit this creeping paralysis when it may be possible to attain economic unity between some of zones as prelude to economic unity for Germany as a whole.
If this offer is not accepted by all participating representatives, you are authorized and requested enter into negotiations at once with occupation authorities of any other zone or zones for measures to accomplish principles of preceding paragraph and designed to effect treatment of such zones as economic unit. Respect French zone, you are authorized, accordance statements made by SecState Paris, to negotiate with French representative on basis excluding Saar Territory from any arrangements for economic unity that may be agreed upon. Please keep State and War Depts currently advised course such negotiations and submit any agreed recommendations and plans for approval here.”
There follows detailed CFM background already familiar to you.43 Fr Emb here informally advised our plans this connection.
Sent Paris as 3541; rptd London as 5505, Moscow as 1320, USPolAd Berlin as 1555.