Foreign Relations of the United States, 1948, Germany and Austria, Volume II

740.00119 Council/4–1948: Telegram

The Ambassador in the United Kingdom ( Douglas ) to the Secretary of State

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London , April 19, 1948—11 p. m.

1625. Delsec 1678. For Saltzman from Douglas. Reference message to Reber and myself from Murphy; repeated Department as 914 and to Paris as 768,¹ regarding Delsec 1674 of April 16.²

I wish to make it clear that there is no feeling here that tripartite conversations should be extended to include matters which are of exclusive or predominant concern to military governors and, therefore, more appropriate for consideration and disposition Berlin. I am most desirous of limiting our London discussions to subjects which are of immediate and direct concern to the respective governments. On this basis, and without approving an enlargement of the official agenda of the meeting, I believe it entirely appropriate and unavoidable that there be discussion here of the subjects of reparations, German assets in Italy and the Berlin situation.

Regarding reparations, subject was on the original agenda, and I was instructed on the one hand to seek to obtain agreement with the British and French regarding suspension of reparations deliveries to USSR and Poland except upon a proposed modified basis, and on the other hand, retention in Germany of certain plants which can contribute more effectively to ERP in their present location than if removed elsewhere. Moreover, this is consistent with terms of ERP legislation and previous statements of Secretary. Partial agreement only was accomplished at the first session and I think it necessary to press for further agreement on these and related points at this time.³

Finally, it is to our advantage to discuss with the British and French what form of allocation machinery should be established in the event that quadripartite allocation machinery breaks down. This is an aspect of the matter which is of pressing importance. Without some understanding concerning it, it will probably be impossible to dispose of the other aspects of the reparations problem. (Any views which the Department may have concerning substitute allocations machinery would be extremely helpful.)

With regard to German assets in Italy. I agree with General Clay that this question does not concern the military governors.

There is no thought that any discussion here of the military situation in Berlin should be of a character which would interfere with the responsibility of the military commanders. However, the developments in Berlin have a direct and vital bearing upon the other problems which we are to discuss and, in fact, the timing for the implementation of certain decisions which may result from these conversations will to a considerable extent depend upon the military governor’s judgment as to probable future course of events in Berlin. Moreover, it will be of the greatest benefit to our conversations to hear at first hand from the three Commanders-in-Chief concerning this subject.

I do not believe Bizonal trade with Denmark or Italy should be on the agenda; nor do I think scrap is appropriate for discussion.

I am in full accord with Mr. Murphy’s concluding observation to the effect that principal emphasis should be placed on items C, F and D of the agenda. These are the most significant items and they will receive the relative amount of attention which their importance demands.

Sent Department as 1625; repeated USPolAd Berlin as 94, AmEmbassy Paris as 164.

Douglas

1. Telegram 137, April 18, from Berlin to London, supra.
2. Ante, 187.
3. In telegram 1629, Delsec 1681, April 20, from London, not printed, Ambassador Douglas added that he wished to make clear that reparations would not be on the official agenda of the London Conference. He also felt that the question of machine tools should not be discussed in London but should be referred to the Military Governors. (740.00119 Council/4–2048)