740.00119 Control (Germany)/2–2647: Telegram
The Acting Political Adviser for Germany (Muccio) to the Secretary of State
urgent
461. Presaging possible Soviet line at Moscow CFM, Marshal Sokolovsky at 56th [55th] meeting ACC February 25 read long prepared statement bitterly attacking US-British zonal fusion.24 He referred to reported plans for establishment of economic and political bi-zonal bodies and alluded to last Wiesbaden meeting of ministers presidents which had approved Political Committee to assume political direction (see Frankfurt’s 8, February 1925). Reports indicated this body will have governmental authority and be in fact embryo govt. Since bi-zonal fusion produced such plans Sokolovsky considered clarification necessary on substance of agreement. ACC had no connection with bi-zonal fusion which in fact violated principles of quadripartite work and might endanger German political future.
According to Sokolovsky, first stated reason for fusion was to lighten burden US-British taxpayers. It was unjust to use such arguments in view of Soviet occupation costs. Now these arguments have been dropped and the taxpayers were paying for US-British monopolies. Agreement did not carry out Potsdam requirements for liquidation war potential and provision of reparations but instead encouraged [Page 854] Fascism as represented by Junkers estates. Democratic world opinion had become aroused by these arrangements which gave full scope to Fascist elements. German leader Agartz had openly boasted about abrogation of Potsdam reparations decision. Germany cannot obtain confidence other nations by evading its reparations obligations.
Sokolovsky asserted that fusion represented separate economic plan embracing two-thirds German iron and steel industries; it militated against economic unity and produced concentrations violating Potsdam principles of equal distribution. Plan neglected inter-zonal trade and treated rest of Germany as a foreign country as shown by dollar payment demand for exports to French zone.
In Sokolovsky’s view, ACC should aim at uniform standard of living. US-British fusion benefited nobody and meant splitting Germany. US credit of one billion dollars will place heavy burden on German debtors, will determine flow of trade and will enable US and British monopolists to dictate Germany’s future. Taking advantage of occupation, plan deprives western zones of their independence and transforms them into appendages of western monopolies. Such economic penetration entails subjugation and uncontrolled activity of monopolists to sorrow of country concerned. It works serious damage to peaceful German economy and position in world market. Europe needs German grounds and can be assisted by a peaceful and independent Germany.
Sokolovsky asserted that if short-sighted bi-zonal policy prevails it will lead to partition of Germany and a threat to European security by enabling Junkers to regain control. New aggression will develop which will mean final disaster for Germany and Europe. ACC cannot stand accused of such incorrect policies before history and seriousness of situation forced him to raise matter for inquiry.
Dealing with political consequences, Sokolovsky attacked rearrangement of western Laender as artificial and aiming at transforming Germany from single national state to a number of small, competitive weak states. Allies were being invited to sanction a kind of “carcass” Germany and to set up a form of federalism like a United States of Germany restricted to the framework of a customs union. Sokolovsky doubted if federalist plan had popular support, particularly since in times of stress certain people are always prepared to betray their country. Federalism is the desire of the Junkers and monopolists. The German people should be allowed to express their view without restraint. Germany cannot be put back one hundred years.
Sokolovsky concluded that Allies had agreed to demilitarize Germany, remove Fascist remnants and develop it as a democratic peaceful nation which one day will take an equal place with the other peace [Page 855] loving nations. This cannot be done by repeating mistakes of bi-zonal arrangement. He was confident that difficulties could be overcome by agreement along lines of Yalta and Potsdam Conferences.
Clay said he would advise his govt accordingly and pointed out fusion as agreed by US-British Govts after invitations had been extended to Soviet and French zones. He was not prepared to discuss statement but assumed it will be repeated at CFM.
British member denied existence of political fusion. As regards US and British monopolists whom he had not had the pleasure of meeting, he could give assurance that there has been no such transfer of ownership of industry to British hands as there has been to Soviet hands. With respect to alleged iniquities of bi-zonal fusion Soviet could remedy them by extending fusion to four zones.
In reply to Robertson’s question whether statement was for press, Sokolovsky said it will not appear in Soviet zone newspapers but he could not control press of other countries. Clay asked permission to publish Sokolovsky’s statement with US reply. Sokolovsky said he could answer neither yes nor no. Clay said that burden of remarks had already appeared in Soviet press; if statement were printed elsewhere than in Germany, he reserved right to publish his reply.
Repeated Paris as 76, Moscow as 92 and London for Ambassador Murphy as 100.