740.00119 Control (Germany)/9–2248: Telegram

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


2364. Personal for Saltzman and Hickerson. Regarding tripartite fusion developments, following are two telegrams from BICO to OMGUS for bipartite secretariat for Major Mather (US member of secretariat):

September 20:

“Following is first consolidated report on tripartite working parties

A. Foreign Trade Fusion

The European Recovery Program plans of the Bizone and the French Zone for the FY 1948/49 have been mutually adjusted.1 The French Zone has agreed to reduce exports of newsprint and textile rayon pulp in order to make them available to the Bizone in internal trade. The Bizone has agreed to process raw rubber imported by the French Zone into tires for the French Zone.
The French Zone has agreed to adopt the transport priorities in force in the Bizone.
The representatives of the French Zone were supplied with a list of items that have been decontrolled in the Bizone. They expressed themselves as being in general agreement with the list except for paper and timber.
Discussions on mutual adjustments in the European Recovery Program plans for 1949/50 and in the long-term plan will be conducted as soon as possible.

B. Occupation Procurement

There has been no progress in this field since 18 August when the working party met in Baden Baden. A report2 on this meeting and their developments was forwarded to you by our letter of 27 August (Bipartite Control Office/British element 500/20) and cannot be condensed.

[Page 673]

C. Food Importation, Procurement and Rations

It has been determined that the French Zone will have deficit of approximately $75,000,000 for food during the current year, based on the ration level planned for the Bizonal area. An additional undetermined deficit exists in seeds, fertilizer and other agricultural prerequisites. French Zone authorities are now studying means of financing this deficit so that the terms of the London agreement, requiring that the merger be made without additional cost to the US/UK Governments, may be complied with.
In order to permit negotiations looking to uniform ration levels and rationing procedures to begin without further delay, French military government has established in Baden Baden a food and agriculture secretariat, consisting of representatives of each of the Land and Agriculture Ministries. French military government has requested this secretariat to work directly with Bizonal food and agriculture authorities in drawing up proposals for a unified ration for the trizonal area, in view of the delay encountered in establishing this body, however, it is unlikely that plans for the unified ration can take effect before 1 November at the earliest.
French Zone food and agriculture officials have informally indicated that the French Army will cease requisitioning food from German sources on 15 October, although no formal assurances have yet been made in the negotiations at this level.
French Zone representatives participated in the regular monthly Bizonal food and agriculture conference held at Stuttgart on 27 August 1948, and have been invited to attend the next conference scheduled for Frankfurt on 24 September.

D. Customs Report 3 Tripartite Finance Customs Working Party Sent Forward 10 August

Action is awaited on recommendations creating tripartite liaison groups German and Allied.
The implementation of the agreed transport tax plan is delayed pending French concurrence.
Automobile club discussions are under way.
The recommendations of the Bizonal Department for Finance on uniform customs administration have been received.
German tariff studies as a basis for future discussions are presently under way.”

September 21:

“Reference is made to paragraph B of our cable (Bipartite Control Office secretariat 262). Subject tripartite working parties.

[Page 674]

The following additional information is submitted:

UK/US agreed upon: (1) Central approval by Bipartite Control Office of all allocations of indigenous material procurements. (2) No export indigenous material unless paid for through JEIA at export prices. (3) Demands approved by Bipartite Control Office for indigenous goods to have priority over export demands and articles manufactured from imported materials not available to occupation forces unless materials furnished in kind or paid for to JEIA in hard currency. French representative lacks authority to agree. Information exchange continuing.”

Ambassador Murphy sent you copy of draft of fusion agreement approved by JEIA September 14 in letter dated September 20.4

  1. Documentation regarding the relationship between the European Recovery Program and the Western Zones of Occupation of Germany is included in volume iii .
  2. Not printed.
  3. Not printed.
  4. Neither the draft agreement for the fusion of the foreign trade of the French Zone and the combined U.S.–U.K. zones, nor Ambassador Murphy’s letter is printed. For the text of the agreement as signed on October 18, see p. 677.