740.00119 Control (Germany)/8–648: Telegram

The Ambassador in the Soviet Union (Smith) to the Secretary of State

top secret   us urgent

1544. Eyes Only for Secretary, Berlin Eyes Only for Murphy and Clay, London Eyes Only for Douglas, Paris Eyes Only for Caffery. Our meeting this afternoon was with Molotov and Smirnov as we did not insist on seeing Stalin at a stage when it appeared the discussion would be one primarily of detail. The meeting lasted three hours and was from start to finish an exemplification of typical Soviet tactic of trying to sell the same horse twice.1 After the opening reservation of our juridical position,2 Molotov reviewed the proposed joint announcement3 and while reserving his remarks with respect to the first three paragraphs, immediately opened vigorous attack on paragraph 4 which he said was completely different from the “agreed decision” produced at Monday night’s conference. He immediately coupled this with the question of implementation of the London Conference decisions and the creation of a west German government. In fact, his first remark was “there is nothing in here about the insistent desire of Generalissimo Stalin for the postponement of the decisions of the London Conference.” Since he opened immediately with this gambit and was clearly going to press it, I felt it necessary to make the explanation contained in Deptel 898 August 44 in further definition of the London agreement with regard to the western zones, insisting however that since Stalin had not made this a condition to our present discussion the point was not germane this afternoon and, in any case, Stalin had only referred to physical establishment of a government in western Germany. This did not by any means satisfy Molotov who kept on reverting to this subject throughout the meeting and finally when the discussion became very frank said bluntly, “Tell me, do you or do you not intend to postpone the convocation of Parliamentary Council on September 1st.” He insisted that this would lead up to and was in effect the beginning of a western government for Germany. Our reply was, of course, that it was not our intention to postpone the convocation of the meeting referred to, but we reiterated the statement that this did not [Page 1019] physically constitute the establishment of a German government and that the study on which it was contemplated this constituent assembly would be engaged would unquestionably be a protracted one. Nor would the findings reached there in any way militate against decisions with respect to a central German government which might be arrived at by our four governments.

This also did not satisfy Molotov and even to the end of our conversation he continued to bring the question up again and again. Turning to our draft Molotov’s first criticism was that it failed to provide for simultaneous action on points 1, 2 and 4 “as agreed with Stalin.” His particular point of attack in paragraph 4 was the phrase “issue and control of currency in Berlin” and he asserted vigorously that the three western Allies had and could have no function whatever in connection with the control of Berlin currency once the Soviet zone mark had been accepted. He said this was not a technical question but one of principle, on which Soviet Government could not give way.

He argued that the only outstanding technical problems were (a) the time limit for the currency changeover and (b) problem of occupation costs. His proposal for (b) was that each zone should bear the cost of its own troops in Berlin thus freeing Berlin itself from heavy burden. (The significance of this is inescapable.) He also constantly argued that quadripartite control of Berlin no longer existed, without however pressing this point to its logical conclusion. He repeated that regardless of its juridical position Soviet Government had no wish to oust US from Berlin and still regarded US as their allies in the late war. He made one surprising suggestion that if technical discussions took place in Berlin they should be not between the four Commanders-in-Chief but between the Soviet Commander-in-Chief and one representative of the western powers since Germany and Berlin were now divided into two and “there were only two sides in Berlin.” We vigorously refuted this and argued that it was essential at this point to maintain facade of four-power control while we tried to see whether we could put some reality behind it.

His comments and questions with regard to the other three paragraphs were much less searching. He asked for further amplification of what was meant by the meetings referred to in paragraph 3 and resisted the idea that there was any important question which need be discussed in Berlin by the Allied authorities in Germany. Toward the end he seemed to weaken a bit on this. He regarded the Council of Foreign Ministers or the deputies as the appropriate agencies for dealing with wider German questions.

He raised the question of currency again in connection with point 1, arguing that some restrictions would have to be maintained to prevent flooding of Berlin and Soviet Zone by western currency or vice versa. [Page 1020] I believe that we stated our position with equal vigor and clarity and gave way on no point. We emphasized that, if faced with choice between conceding in whatever way our juridical rights or continuing as at present and increasing air lift our governments should choose the latter.

Molotov finally stated the Soviet Government wanted to find a practical solution of present deadlock without loss of prestige on either side. He has undertaken to produce a Soviet counterdraft which he stated could hardly be ready tomorrow because of the lateness of the hour today. We gathered this to mean that Generalissimo Stalin was not in the Kremlin tonight.

We all had the impression that Molotov himself was more willing than Stalin had seemed, to accept for the present the division of Germany, unless he could force us to suspend the execution of London decisions. He argued that the division of Germany had been created by us and repeated that Berlin should be regarded as capital of the Soviet zone and not of Germany as a whole.

We felt no reason to be either depressed or encouraged today, if as we believe, we are being treated to a display of conventional Soviet conference tactics. Discussion was unusually frank and not acrimonious and surprisingly blunt statements were made. The next meeting will be more significant. It is evident that these conversations may be protracted and it is obviously the Soviet desire to settle all points including technical ones (which they wish to reduce to almost nothing) in Moscow rather than to transfer any discussion to Berlin. We made it clear that from our point of view this was quite impractical.

A complete minute of the conversation will be despatched tomorrow but will take some time to produce and condense it.

Above was produced in conjunction with British and French Ambassadors. My personal impression is that Molotov is riding two horses. He is trying to force us out of Berlin through Soviet monopoly of currency and by depriving western powers of any control staff, while at the same time he is trying to disrupt our plans on western Germany government, using as bait the lifting of the blockade. His counterproposals and discussions thereof will tell more. I estimate we will have to have at least two more talks with Molotov, during which the proposals of both sides will be rendered to their irreducible minimum, and then we will have to see Stalin for the final decision.

What impressed me most was Molotov’s insistence on the fact that Germany and Berlin were actually divided and that there were now two “sides” instead of four participants. I have the impression he is completely skeptical of producing agreement on Germany by conference on any level, while Stalin seems still to lean toward the idea that eventually some agreement may result.

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It may help us, during next discussion, to be able to point out steps already taken under Soviet sponsorship by People’s Congress movement towards drafting a constitution. Request you wire urgently pertinent details.

  1. A verbatim account of the meeting reported upon here was transmitted in telegram 1558, August 7, from Moscow, not printed (740.00119 Control (Germany)/8–748).
  2. The oral statement reserving full juridical rights in Berlin was made by Frank Roberts; for the text, see Cmd. 7534, p. 25.
  3. The text of proposed joint announcement was contained in telegram 1528, August 5, from Moscow, supra. It is also printed in The Berlin Crisis, pp. 22–23 and Cmd. 7534, pp. 24–25.
  4. Not printed; it transmitted the supplementary instructions to Ambassador Smith printed in The Berlin Crisis, pp. 21–22. For the text of Smith’s oral statement made at this point, see Cmd. 7534, p. 25.