740.00119 Control (Germany)/7–3148: Telegram
The United States Political Adviser for Germany ( Murphy ) to the Secretary of State
1897. Personal for Lovett. Please see my 74, July 30 from Frankfurt.1 At Frankfurt yesterday there was a development which might be the cause of difficulty. I was there for attendance at the US/UK bipartite board meeting and other staff meetings during which there was discussion of the question of French participation in JEIA under the trizonal fusion plan as approved by the London Agreements (annex J of final report2) and as you know, August 1 is established as the date of the beginning of French participation in JEIA but as yet there is no agreement on details and a major stumbling block has appeared in US objection to the fact that French Army of Occupation is living off the land in the French zone as contrasted with the maintenance of the British and US Forces of Occupation at the expense of their respective governments. The item in question is an estimated $10,000,000 annually although this estimate is subject to verification.
Clay took the position that Bizone could not supply the French zone unless French took prior action to rectify this practice and remove the expense of feeding the French Forces from the trizonal budget. The French apparently are not at all prepared to do this now and had talked in terms of taking this action effective 1 January 1949. Robertson of the British delegation concurred in the US viewpoint and the French have been so informed. I am sure that you will agree that this is a matter which deserves immediate study as it is capable of inducing friction and delay in the implementation of this feature of the London Agreements. Both the US and British delegations here feel that it is necessary for us to have a firm understanding with the French now on the theory that if we do not the American taxpayer will for the indefinite future be granting indirect subsidy to the French Army. Clay informed.