862.515/6–2348: Telegram

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

us urgent

1440. Personal for Saltzman and Hickerson. At the quadripartite meeting of the financial and economic advisers 22 June1 the attitude of the Soviet representatives was one of inquiry; whether the western representatives had any information to offer regarding their plans for currency in Berlin. After several hours of discussion it became apparent that the Soviet position is that in future there will be but one currency in Berlin and that that currency will be the same as the one current in the Soviet Zone of occupation/The US representatives made it equally clear that their instructions did not permit them to consider such a proposition; that quadripartite sovereignty in Berlin [Page 913] requires joint authorization and control of currency; and that the latter must be a separate currency for Berlin. The UK position supported the US although it would have permitted discussion of technical features such as the possibility that Soviet zonal currency would be accepted for the city subject to certain conditions regarding issuance and control of the currency by the quadripartite Kommandatura, and the attachment of certain conditions such, for example as guaranteeing communication and transport for the Berlin corridor. The French position was weak and French financial adviser indicated that he was to refuse no compromise solution but before taking any position he was obliged to contact Paris.

After about four hours of discussion it was agreed to suspend and resume at 8 p. m. The Soviet representative proposed that agreement to meet again should be conditioned on agreement to discuss only Soviet proposal of a single currency for both the Soviet Zone and Berlin but US insisted on agreement to meet without limitation. Meeting suspended without definite commitment from Soviet representative who obviously was operating under the strictest kind of instructions to make no concessions.

Upon resumption of meeting at 8 p. m. the US representative stated again the US proposal that a special currency be approved by the four powers for Berlin and that the body authorized to deal with this problem under international agreement was the Kommandatura. He was supported by the UK and French representatives. When it became evident that the Soviet representative was unable to consider this proposal, he was informed that in the absence of an agreement the western powers would find it necessary to introduce in the three western sectors of Berlin the new Deutschmark currency. While the meeting was in session the Soviet Military Administration issued its orders for currency reform in the Soviet Zone including Berlin and a letter was received from Marshal Sokolovsky by each of the western commanders-in-chief dated 22 June reading as follows:

[Here follows the text of Marshal Sokolovsky’s letter of June 22 and extracts from Soviet Military Administration Order No. 111 on the introduction of the new Soviet zone currency. For the text of Sokolovsky’s letter, see Carlyle, Documents on International Affairs, pages 580–581. For the text of Order No. 111, see Ruhm von Oppen, Documents on Germany, pages 295–300.]

General Clay and General Robertson are replying this morning to Marshal Sokolovsky’s letter reaffirming point of view to the effect that the Kommandatura is the duly authorized agency in Berlin to deal with the question of currency reform, and stating that in view of our inability to obtain Soviet agreement it will be necessary to introduce [Page 914] western zone German currency in Berlin.2 The expression “Berlin” is used rather than the “western sectors of Berlin” because the Soviet proclamation also reads that way. Thus far the French are still awaiting instructions from Paris and are unable to concur.

The proclamation to be issued by the Military Governors of the three western zones regarding the introduction of the deutschmark in Berlin is now being revised iii the light of the Soviet action and it is anticipated that it will be broadcast sometime today.3 The French representative is awaiting definitive instructions from Paris before he can give his concurrence. The Department will note that the Soviet currency reform is effective 24 June and it is anticipated that the western reform under the circumstances will become effective 25 June.

Sent Department as 1440; repeated London as 260; Moscow as 234; Paris as 266.

  1. For the full record of the meeting of the Finance Directory described in this telegram, see Berlin Senate, Berlin, Quellen und Dokumente, pp. 1347–1362, or Documented Chronology, pp. 111–122.
  2. For the text of General Clay’s letter of June 23, to Marshal Sokolovsky, see Berlin Senate, Berlin, Quellen und Dokumente, pp. 1368–1369, or Documented Chronology, p. 125; for General Robertson’s letter, see Cmd. 7534, p. 18 or Documents on Berlin, pp. 64–65.
  3. For the full text of the proclamation under reference here, released to the press, June 23, 2:30 p. m., see Berlin, Quellen und Dokumente, p. 1370; for an excerpt, see Documents on Berlin, p. 65.