740.00119 Control (Germany)/8–2448: Telegram

The United States Political Adviser for Germany ( Murphy ) to the Secretary of State

[Extract]
secret

2136. Personal for Saltzman and Hickerson. Reference Deptel 1467, August 17.1 Negotiations regarding inclusion French zone in JEIA are summarized as follows:

OMGUS reported to Army on August 18th providing text of draft agreement between French zone and Bizonal area on the subject of fusion of foreign trade. The draft text is given below.2

According to General Clay, it was his understanding that US had agreed to trizonal fusion of foreign trade on the condition that there would be no increased cost to any of the three countries participating in the London agreement on this question, and pending the development at governmental level of an over-all fusion agreement. It is not contemplated that additional funds will be requested because of French participation in JEIA and, therefore it can be said that this participation will not cost the US any additional money. Actually, however, French participation will require a substantial diversion of food and raw materials to the French zone to bring latter up to level of bizonal area. In practical effect this will mean wider distribution of US/UK assistance so that the spread will be thinner throughout the 3 zones than it would have been in only 2 zones. Some economic savings will derive from unification of the 3 zones and in some measure this will offset the spread of US/UK aid. This, of course, would be further reduced by aid which French zone will receive from ECA. General Clay entertains the view that there should be at least token financial participation by French to extent that francs can be used to provide German essentials. It had been expected that this would be worked out at governmental level but OMGUS recently received a telegram from Army indicating that latter expected three military governors to discuss problem initially and then submit to governments the question at issue. Clay is not certain regarding the willingness of Robertson and Koenig to proceed on this basis but he has [Page 672] reported to Army that matter will be discussed with them at earliest opportunity.

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Sent Department 2136, repeated London 517, Paris 528.

Murphy
  1. Not printed; it stated that the Department of State was awaiting the results of working party negotiations on the subject of the fusion of foreign trade before taking up on the governmental level those economic and financial matters relating to French participation in JEIA (740.00119 Control (Germany)/8–1748).
  2. The draft text under reference is not printed here. For the final text of the agreement as signed at Berlin on October 18, see p. 677.