Foreign Relations of the United States, 1947, Council of Foreign Ministers; Germany and Austria, Volume II

740.00119 Council/3–1747: Telegram

The Secretary of State to the President and the Acting Secretary of State

top secret
urgent

Moscow, March 17, 1947—11 p. m.

856. Delsec 1308. For the President and Acheson from Marshall. Seventh CFM 17 March, Bidault presiding.

Bevin conceded by reaffirming British position that economic unity of Germany is essential. He proposed revision of level of industry plan and stated that while it is essential to remove Germany’s potential for war, it is also essential to maintain her potential for peace. He stated flatly that no additional financial burden to the UK was acceptable, and agreed that economic unity must be associated with our intentions on political unity. On reparations, Bevin said that any plan depends on large measure on cooperation from the German people, but we cannot expect this without a clear, reasonable, firm and unified plan of the controlling powers. His proposals to obtain this were submitted for later consideration.³⁰

Molotov objected to economic unity of the Anglo-American zones as being contrary to previous agreements and adding nothing but chaos to the problem. He pointed up the opportunity for British and American industrialists to penetrate the area and establish economic empires.

Molotov continued his usual line of attack on the three western occupying powers in the field of reparations, concurrently lauding Soviet activities in this regard. He opened all stops and pressed all pedals in describing the damage done to the Soviet Union by Germany during the war, giving all his figures in dollars. He held steadfast to the Crimea protocol and further confused the issue by urging coordinated allied action to rehabilitate German peace-time economy to provide much-needed goods for war-torn nations. He deplored what he called the “cock-sureness” of monopolistic industrialists in the British-American zones, and their attempts to revive cartels, trusts and other forms of capitalistic monopoly. He then tabled his measures for the economic unity of Germany for later discussion.³¹

I then stated that I did not agree with the basis or logic of much that Molotov had said, but that charges and countercharges get us nowhere except to develop greater differences. “They do not solve our problems,” I said, “they only complicate them.” I indicated complete understanding on the part of the American people of the losses suffered during the war by the Soviet Union and our other allies and stated that in all of our discussions we will have these facts clearly in mind.

I stressed that the key to the solution of Germany’s economic problem is economic unity and that is vital to the success of the occupation and the future peace of the world. I considered the program under six headings, all designed to promote a stable economy within Germany and a system of export and import to establish a balance of trade, including withdrawal of reparations. I said “We cannot accept a unified Germany under a procedure which in effect would mean that the American people would pay reparations to an ally”. I defended the Anglo-American zonal merger and again invited France and Soviets to participate on the same basis. I then tabled a proposed directive for the Allied Control Authority to treat Germany as a single economic unit.³²

I continued by relating unified economy, revised levels of industry, and reparations as inseparable for the accomplishment of our end and desires.³³

The remarks this afternoon were all read from previously prepared statements. Reading last and struggling through two laborious translations, I held the meeting till even Molotov was restless. I then took occasion to apologize for my time consuming procedure and referred to the failure of the Council to accept my previous recommendation that the meeting be limited to discussion and that prepared papers be distributed beforehand but not read and translated at the table. While I perhaps revived interest in this method of procedure, no decision was made.

[

Marshall

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30. For the text of Foreign Secretary Bevin’s statement, which was circulated to the Council as document CFM(47) (M) 24, March 17, see Documents on International Affairs 1947–1948, pp. 424–427.
31. For the text of the statement and proposals by Foreign Minister Molotov, circulated to the Council as document CFM(47) (M)23, March 17, see Documents on International Affairs 1947–1948, pp. 427–439 or Molotov, Problems of Foreign Policy, pp. 359–378.
32. For the text of the Secretary of State’s statement on the treatment of Germany as an economic unit, which was circulated to the Council as document CFM(47) (M) 26, March 17, see Germany 1947–1949, pp. 441–444 or Department of State Bulletin, March 30, 1947, pp. 564–567. For the text of the proposed directive to the Allied Control Authority, circulated to the Council as document CFM(47) (M)27, March 17, see Germany 1947–1949, pp. 444–445 or Department of State Bulletin, March 27, 1947, pp. 567–569.
33. For the text of the Secretary of State’s statement on reparations, circulated to the Council as document CFM(47) (M) 28, March 17, see Germany 1947–1949, pp. 411–412 or Department of State Bulletin, March 30, 1947, pp. 563–564.