Foreign Relations of the United States, 1948, Germany and Austria, Volume II

740.00119 Control (Germany)/8–1748: Telegram

The Secretary of State to the Embassy in the Soviet Union

top secret   us urgent
niact

Washington, August 17, 1948—9 p. m.

962. ReDeptel 958, Aug 17¹. Should your interview with Stalin indicate that there is still possibility of reaching agreement, we have some suggestions for use with him.

1. It was never our intention to make a distinction between time of the lifting of the blockade and the timing of the currency change in Berlin. It has been our understanding that these two measures would be simultaneous, although we agree that our draft may have left that point ambiguous. You are authorized therefore to accept any wording to indicate that these actions would be taken simultaneously provided arrangements had been made for quadripartite regulation of the use of Soviet mark in Berlin.

2. It now seems that the obvious point of difference appears to have been narrowed to the issue of quadripartite control as reflected in the question of currency. It may be significant that in the last conversations, Molotov did not insist upon mention of the London decisions or revert to the question of a four-power meeting. The first is obviously not to our interest and as regards the second, we proposed the meeting on the assumption that it was desired by the Soviets. In these circumstances, we would be prepared, in fact would prefer, to limit the announced agreement to the two issues of lifting the blockade and the control of currency and could therefore accept a modification of Molotov’s proposal contained in your Niact 1648, Aug 17² provided it maintains the principle of continued quadripartite authority in Berlin even though reference is limited to the two issues of lifting the blockade and control of currency. We suggest language somewhat as follows:

“The Governments of France, Great Britain, United States and U.S.S.R. have agreed that the following steps are to be taken simultaneously as soon as the governments have approved the detailed arrangements concluded between the four military governors:

• “(a) The restrictions imposed by both sides during the current year on communications, transport, and commerce between Berlin and the Western zones and between the various zones of Germany shall be lifted and freedom from such restrictions shall be maintained.
• “(b) The German mark of the Soviet zone shall be introduced as the sole currency for Berlin and the German mark ‘B’ for the Western zone shall be withdrawn from circulation under quadripartite arrangements insuring (1) that there shall not be any discrimination against the holders of German marks of the Western or Eastern zones, (2) that a sufficient amount of Soviet currency shall be at all times provided for the reasonable needs of all sectors of Berlin, and (3) that equal treatment as to currency, credit and commerce shall be accorded to all sectors of Berlin.

“The Military Governors are instructed to determine, in the shortest time possible, and if possible before August 25, the detailed arrangements necessary for the quadripartite implementation of this agreement, and to inform their governments of the agreed recommendations and exact date on which this agreement can be brought into effect.” All of foregoing to be published if agreement reached with Stalin.

3. As regards occupation costs, the language proposed above would seem to take care of our requirements by insuring the provision of adequate currency. We note that Molotov did not revert to his original proposal in this respect. You should however make clear that while we do not insist on mentioning occupation costs specifically we understand they will continue to be met as in the past under quadripartite arrangements to be agreed in Berlin.

4. If Stalin suggests that in event of agreement confidential directive be sent to military governors to work out details before announcement we would not wish to block agreement on this point reurniact 1661, Aug. 17,⁵ but it should be understood that the talks in Moscow are in abeyance to be resumed as soon as military governors can report. We are concerned lest distorted version that agreement in principle has been reached in Moscow be given publicity before it is confirmed as a result of military governors’ report. This might be taken care of by an interim announcement making it plain that discussions in Moscow have not terminated but will be resumed as soon as certain technical reports have been received from Berlin.

5. Copies of this message are being sent to London, Paris and Berlin for their comment. Please await these before submitting any formula to Stalin. Clay is being requested to comment direct to you.⁶

For Douglas [:] Please endeavor to have Brit and French send their comments urgently to Smith for coordination.⁷

Marshall

1. Supra.
2. Ante, p. 1042.
5. Not printed.
6. Telegrams 2071 and 2081, August 18 and 19, from Berlin, not printed, reported Clay’s full concurrence with this telegram and his belief that an effort should be made in Moscow to obtain immediate agreement on a directive to the military governors. Further negotiations at Moscow would be suspended until the governors reported to their Governments. (740.00119 Control (Germany)/8–1848 and 1948)
7. Smith subsequently reported that the proposed statements could be coordinated in Moscow without difficulty. (Telegram 1668, August 18, from Moscow, not printed, 740.00119 Control (Germany)/8–1848)