800.515/10–1846: Telegram
The United States Political Adviser for Germany (Murphy) to the Secretary of State
[Received October 18—3:25 p.m.]
2402. Disagreement developed at 84th meeting Coordinating Committee October 17 on two important items of finance and questions were referred to next meeting Control Council.
- 1.
- Coordinating Committee had before it United States proposal82 on elimination of excessive banking concentration which provided for liquidation of national head offices of large German banks and restriction of the activities of such banks to the limits of one state or province. Soviet delegate in Finance Directorate had reluctantly accepted this solution, reserving right to insist in future on “complete liquidation of German bank monopolies”. The second part of proposal provided for a “commission of central Laender banks” under supervision of Allied Banking Board. Soviet delegate in Finance Directorate favored establishment central banking agencies in Germany but maintained suggested central banking machinery be taken up as part of study being made of future German financial system.
- Arguments of Soviet member in Coordinating Committee followed same lines, namely, that decentralization part of proposal should be immediately adopted and that central banking agency be studied further [Page 626] in Finance Directorate. He claimed bank monopolies still existed in Western Zones whereas Soviets had closed big scale banks and had stopped their payments. He insisted provision for Allied Banking Board and central Laender bank commission was identical with French proposal for Allied agencies which had been rejected by Control Council. He favored immediate setting up of central German finance department.
- United States and British delegates pointed out the chain of big five German banks had been broken and that local branches had no connection with head offices. They favored adoption of both parts of Finance Directorate’s plan, pointing out differences in banking practices militated against economic unity. French member suggested merging Allied board with central Laender bank commission.
- 2.
- On considering United States plan for financial reform,83 Finance Directorate considered 8 months would be required to produce any new approved currency and suggested preliminary steps be immediately taken for its production. United States, British, and French proposed printing should be done by state printing office in Berlin, whereas Soviet delegate reserved right to print Soviet zone supply of currency within Soviet zone subject to control of issue by a central agency.
In Coordinating Committee, Soviet member desired reference back to Finance Directorate of currency production proposal for presentation later in connection with completed finance reform plan. He claimed necessary currency could be produced in one month in several places. United States, British, and French members disagreed and British member stated that in view of Soviet attitude and Soviet’s failure to report total issue of Allied military marks he could only conclude that they have no intention of treating Germany as an economic or political unit for a long time. Soviet member retorted he assumed that British member’s remark was a personal opinion.
Sent Department as 2402; repeated Moscow as 325, Paris as 340, London as 351.