862.50/8–346: Telegram
The United States Political Adviser for Germany (Murphy) to the Secretary of State
secret
Berlin, August 3, 1946—8
p.m.
[Received 8:15 p.m.]
[Received 8:15 p.m.]
1860. Coordinating Committee at 68th meeting, Aug. 2, discussed following two items bearing on German economic unity.
- (1)
- Economic directorate with French delegate sitting as “observer”, had submitted a proposal, dated July 5, for the establishment of a central German administrative department for industry. While United States and British presented one text and the Soviets an alternative draft, the proposal provided briefly for a central German department for industry to function as a direct agent of the Allied Control Authority and to handle questions such as industrial statistics, requirements of the Laender and provinces, formulation of over-all production programs for internal use and export, allocation of fuel, electricity, raw materials and semi-finished products to the Laender and provinces and related functions.
- At Coordinating Committee meeting U.S. member suggested withdrawal of the paper and its subsequent discussion on a tripartite basis unless the French in the meantime had changed their position. He indicated any tri-zonal arrangement would be open to the French to join. French member said he could not discuss the proposal. Stating his remarks were independent from French position, Soviet member asserted the Potsdam Agreement did not envisage that German central agencies should be integral organs of the ACA, as proposed by Economic Directorate. He also pointed out that the large powers given the suggested industrial department limited the roles of the zone commanders. He regarded the creation of central agencies as a first step toward a central German government, and he remarked the division of Germany into separate parts militates against political unity and German democracy. Russian member continued that while he hoped the French would change their position, he had no objection to further discussion of the proposal in the Economics Directorate with the French sitting in the role of observer. Coordinating Committee agreed to return the proposal to the Economics Directorate for reconsideration and General Clay expressed the hope that the Soviets would make known their views concerning his suggestion for a trizonal agency.
- (2)
- With reference to the instructions from the Control Council to consider measures to stimulate interzonal trade (see mytel 1825, July 30) British member opened the discussion by citing the principles stated by Bevin at the Council of Foreign Ministers regarding the equitable distribution of German indigenous resources and the application of surpluses in one zone first to meet deficiencies in other zones and subsequently to help balance German foreign trade.50 In the meantime, however, British member was willing to accept Soviet proposal for development of interzonal trade. French member said he supported Soviet proposal since it accorded with French principles of economic unity. U.S. chairman stated that while he did not dare to hope for acceptance at this time he was under obligation to declare that the U.S. was ready to abolish all interzonal barriers immediately.
- (3)
- On chairman’s proposal Coordinating Committee agreed to instruct Economics Directorate to recommend measures expediting and facilitating interzonal trade. After consulting I.A. and C. and Transport Directorates with a view to removing present difficulties, Economics Directorate will submit a coordinated report.
Sent Department; repeated Moscow 211; London 269; Paris for Matthews 226.
Murphy
- For text of the proposal by the United Kingdom delegation, July 11, 1946, C.F.M. (46) 224, see volume ii.↩