862.00/2–848: Telegram
The Acting United States Political Adviser for Germany (Riddleberger) to the Secretary of State
urgent
311. Personal for Saltzman and Hickerson Eyes Only. General Clay concurs that we should seek to persuade UK to settle Saar question along the lines indicated in Deptel 227 of February 6.1 We accordingly approached the British here with the additional suggestion that we would be prepared to reconsider the matter at the end of six months in the light of trade developments and cooperation displayed by French. There is however no indication of any change in British position [Page 59] on Bizonia French zone trade as reported in ourtel 259,2 although they promised to report our suggestions to London.
British had firm instructions that 70 million RM is minimum acceptable figure as reparations value of Saar. They do not feel lower figure could be defended to IARA. French have indicated 60 million as their top figure. We believe reasonably plausible justification can be made to IARA for either figure, but obviously higher amount would be easier to defend.
Working Party still attempting reach general agreement on probable magnitude of deficit in French zone bizonal area trade. Present range is wide with French indicating loss to JEIA (Joint Export Import Agency) at 45 million dollars and British claiming 75 to 100 million dollars. Working Party hopes to narrow these deficits considerably by eleventh February. Almost entire loss will be in dollars, since it arises from decreased coal exports. Therefore it will remove that much of a cushion from our sterling balances and make sterling conversion relatively more difficult to avoid. JEIA not yet in position forecast dollar requirements against prospective dollar availability, but assuming nine-fifteenths of 320 million dollars ERP funds are available, it should be possible avoid converting beyond 40 million dollar limit which we agreed to try to observe.
Must emphasize that attempt to reach entire Saar settlement in Berlin prior to London will be most difficult unless British instructions are changed within the next few days. Robertson and principal British negotiators are now in UK zone for meeting and will not return to Berlin before February 10. Clay will also approach Robertson directly but is not sanguine that Robertson can agree unless his instructions from London are modified. Clay and Robertson must both be in Frankfurt February 14 for bipartite board meeting, Clay also has appointments in Frankfurt February 15 after which OMGUS party will leave for London discussions. Clay believes however that we could conclude entire Saar settlement in Berlin in 24 hours if London would instruct Robertson in the general sense of Deptel 227.