Foreign Relations of the United States, 1946, The British Commonwealth, Western and Central Europe, Volume V

740.00119 Control (Germany)/7–3046: Telegram

The United States Political Adviser for Germany (Murphy) to the Secretary of State

secret

Berlin, July 30, 1946—9 p.m.
[Received 9:30 p.m.]

1825. See mytel 1767, July 20. 1. At thirty-fifth meeting Control Council July 30 British made known their acceptance in principle of General McNarney’s invitation to participate in measures for German economic unity whereas Soviets adopted a position considerably short of acceptance [which] nevertheless may prove to be an advance. French were without instructions to reply.

2. British member stated his Government accepted invitation in principle and said he had instructed his staff to begin discussions with US delegation for joint administration in the fields of agriculture, commerce, industry, finance and transport. He hoped Soviet and French delegations would be authorized to join in arrangements for accomplishment of economic unity to which all delegations were committed by Potsdam. British did not regard their action as a step toward division of Germany but were still resolved that Germany should be treated as an economic whole, hoping thereby to reinforce cooperation rather than diminish it. They particularly wished to see an increase in trade and thought the best way to accomplish this would be to encourage the German administrations to meet and discuss commercial exchanges. British delegation hoped that the Soviet and French would likewise consent to this procedure in the event that they would not also accept General McNarney’s offer.

3. Soviet chairman declared that he could not regard General McNarney’s invitation, which he had received with great interest, as dealing with economic unity since such unity would not be furthered by the division of Germany into two or more parts based on pronounced autarchy. The offer ignored political unity whereas the Soviet delegation stood for the two principles of German political and economic unity in accordance with the Potsdam decisions. The Soviets always envisaged and were ready to accept all measures to facilitate inter-zonal cooperation conforming with Allied policy. Sokolovsky mentioned that the Soviets had already participated in steps designed to join together various parts of Germany and to ameliorate conditions in them. He referred to the agreements reached by the Control Council on wages, finance, mining, etc., as well as to inter-zonal arrangements such as those made by German businessmen for an exchange of goods between the US and Soviet zones and the Soviet agreement with the British for the use of the Elbe. The Soviet delegation desired an intensification of inter-zonal trade, without which a distribution of products could not be carried out. Sokolovsky then proposed the creation of a special organ for inter-zonal trade which would remove present obstacles and would concern itself with facilities for transfer, issuance of passes to German businessmen, etc. He suggested the Coordinating Committee and directorates be instructed to adopt measures to improve inter-zonal cooperation as a preliminary step toward the setting up of central administrations envisaged by Potsdam.

4. Noting that the Soviets were not ready to concur fully in his proposal, US member said he naturally accepted their Suggestion to stimulate inter-zonal trade by measures which would be consistent with US and British intentions. The US and British staffs will operate within the framework of quadripartite agreement. The US member stated that far from fearing the division of Germany as mentioned by the Soviets, he considered his proposal a first step toward economic unity which would be followed by political unity. He would be pleased to see the Soviets or any other delegation issue an invitation to establish German political unity which he was ready to accept now.

5. Although he was without instructions French member accepted Soviet proposal which was likewise welcomed by British member.

6. Control Council decided to instruct Coordinating Committee to undertake examination of questions bearing on German economic unity such as transport, finance, water communication and in particular commerce and inter-zonal exchange. There was no reference to common export-import program.

Sent Department as 1825, Department please relay to Moscow as: 203, to London as 263, to Paris as 222 for Matthews.

Murphy