Office of the Historian

740.00119 Council/4–1447

Paper Prepared by Major General William H. Draper

secret
[Moscow,] April 17, 1947.

Comments on Memorandum on the Operation of the Fusion Agreement46

Paragraph 1— General and unnecessary.
2— Real question involved is whether political fusion of the zones is now to supplement economic fusion. CFM/47/M/121 defined the powers of the Provisional German Government. The question is whether in effect the bizonal area is to gradually develop a provisional government rather than merely bi-zonal agencies.
3— No comment except that these are matters of internal administration within the bizonal area.
4— Very general and requires interpretation as to whether it intends further centralization.
5— No comment.
6— Adds nothing to present understanding unless word “boldly” is intended to direct greater freedom in expenditures. The British have urged large expenditures for many imports only very indirectly connected with developing exports.
7— This involves American position against permitting Russians to print currency in Leipzig.
8— Recommend against setting specific steel level until joint study made in Berlin.
9— Recommend against deciding this issue until reaction from Moscow Conference is clear and general situation can be evaluated better. No plants can be moved in any case until level of industry study completed and as transportation permits. Present allocations will tax transport for many months.
10— No comment.
11— Same comment as 9.
12— This should be discussed in Berlin as much is involved.
13— No comment.
14— No comment.
[Page 483]

General Comment

Only real decisions involved are level based on ten million tons of steel—and East-West allocation. I question whether any memorandum is needed but only an understanding that a new level of industry will be set for the bizonal area, reparations plants listed and joint recommendation then made to the respective Governments by the two Zone Commanders.

W. H. Draper Jr.
  1. The memorandum under reference is printed supra.↩