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

740.00119 Control (Germany)/8–1146: Telegram

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

secret
u.s. urgent

Berlin, August 11, 1946—4 p.m.
[Received August 11—1:21 p.m.]

1898. 1. Mytel 1767, July 20. At thirty-sixth meeting Control Council, August 10, French member replied to McNarney’s proposal for German economic unity by submitting memorandum and statement⁵⁴ suggesting establishment of Allied agencies.

2. Preamble of memorandum referred to Bidault’s declaration in CFM, July 12.⁵⁵ French did not object to setting up allied agencies employing German operating personnel to carry out under ACC control the principles of economic unity within certain definite fields, and in a provisional way, excluding the Saar which should be immediately incorporated into French economic and monetary system. While believing a German central administration should not be allowed to predetermine Germany’s future political status, French agreed that certain economic problems require immediate implementation in absence of efficient machinery.

Memorandum furnished following details of French plan:

(a) Organization. Each Allied agency to be headed by a managing board of one representative from each four powers. Decisions by majority vote. A single manager, national of one of the four powers, to be appointed as executive by ACC on account of merits and qualifications. Manager to be assisted by staff of assistants and advisors of allied or German nationality. Germans could be employed in either advisory or operating capacity. ACC and its organs would lay down general principles; each managing board would control implementations; manager would be responsible for technical execution.

(b) Responsibilities. Agencies would examine problems and inform ACC and would also have executive authority to implement ACC policy in following fields: transport, communications, banking industry, agriculture, foreign trade, prices.

(c) Relations with allied authorities. Allied agencies would directly instruct local agencies. Each zone commander would be informed but he could not oppose execution of instructions except by appeal to ACC. Memorandum concludes it is not necessary for control powers now to take a position on future political and administrative organization of Germany. Agencies would not overlap existing directorates or committees but would strengthen their authority and means of action. Staff could be recruited from civil servants and experts of occupying powers and other United Nations as well as German personnel.

3. French delegate in statement presenting plan stressed vital principle of maintaining coordinated action by the four occupying powers. (This argument by the French is not without its amusing side because during the past year the French attitude toward this problem in the face of agreement on it by the US, UK, and USSR, has disrupted allied unity). With respect to McNarney’s proposal, he feared that any agreement limited to certain zones as established on such a wide basis might ultimately conflict with above-mentioned principle. French confirmed their agreement with Sokolovsky’s proposal (mytel 1825, July 30), and were willing to go further by suggesting allied agencies for practical implementation of economic unity. French contended that control powers should not give direct powers of administration to strictly German central department while Allied agreement was still lacking on such vital questions as allocation of raw materials, prices, currency, public debt, external trade and decartelization. Allied direction should remain predominant to prevent Germans from taking advantage of Allied disagreements.

4. Mentioning that French had previously made a similar proposal (presumably in connection with Allied agency for external trade—mytel 951, April 4), British delegate said he failed to see what suggested agencies could achieve beyond current operation of ACC directorates but he promised further consideration. Soviet delegate had no commen. US Chairman agreed with British delegate and proposed reference of matter to Coordinating Committee for study and subsequent report to ACC. This was approved.

Repeated to London as 276, and to Paris for Matthews as 233.⁵⁶

Department please relay to AmEmbassy Moscow as Berlin’s 216.

Murphy

54. Neither printed.
55. For a summary of the statement, see telegram 1740, July 18, from Berlin, p. 577.
56. In telegram 4120, August 20, 8 p.m., from Paris, Ambassador Caffery reported that M. Chauvel had told him that the French memorandum did not constitute a final rejection of General McNarney’s proposal. M. Chauvel said that the French Government could go no further at this time in accepting German unification but that after the French elections agreement might be possible on individual questions (740.00119 Control (Germany)/8–2046).