740.00119 Control (Germany)/8–2348: Telegram

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

top secret   us urgent
niact

1716. Eyes Only for the Secretary. At tonight’s meeting with Stalin and Molotov, I shall use following final agreed draft as basis for my opening statement to Stalin.1

Statement begins:

“In entering upon this series of discussions with Soviet Government, the governments of the three western countries were mindful, as was made clear at our meeting August 2, of the gravity and dangers of present situation in Berlin. They were hopeful that a mutually acceptable solution might be found and, equally, they were aware that failure in these talks would render existing dangers even more acute. Moreover, in expressing their willingness to take part in discussions on the whole German problem they were actuated by sincere desire to reach agreement on tills vital question.

“Since our last meeting with you, Generalissimo, we have had four further discussions with Mr. Molotov. At those meetings we have exchanged views in frank and, I think, friendly way, and our talks have perhaps served a useful purpose inasmuch as they have at least cleared some, of the ground. We have not, however, reached agreement.

“The main obstacle to joint agreement on a communiqué is one of principle. All four governments have stated they would be willing, under certain conditions, that the various restrictions on communications should be lifted, that Soviet Zone mark should be accepted as the sole currency in Berlin, and that Four-Power meetings should be held to discuss any other outstanding questions affecting Berlin or Germany. The essential point on which we have failed to reach agreement is conditions under which Soviet Zone mark should be accepted as sole currency for Berlin. On this issue, standpoint of Governments of France, United Kingdom and United States of America, is that before we can agree to that arrangement we must have an adequate guarantee, in form of joint Four-Power regulation of provision and use of Berlin currency. Our governments cannot accept an arrangement which might result in undermining their unquestionable right to be in Berlin or in making it impossible for them to exercise that right, or to discharge fully their obligations as occupying authorities. On that question of principle there is no possibility of our governments altering their position. There is no hidden motive behind this attitude and no idea of trying to produce a situation which would be damaging to economy of Soviet Zone. We have informed Molotov that arrangements on which we must insist concerning provision and use in Berlin of German mark of Soviet Zone do not, of course, imply any [Page 1062] claim on our part to interfere with, this currency as such. They relate exclusively to amount of currency provided in Berlin and its use there. Our object, as I hope we have made clear, is simply to safeguard our own position if German mark of the Soviet Zone becomes sole currency for Berlin.

“For the rest, it seems to us that respective points of view expressed by Molotov for Soviet Government and by ourselves for our respective governments are not too far apart to preclude agreement.

“At our first meeting with you we were glad to hear you say that Soviet Government had no intention of attempting to oust western powers from Berlin, and we think it would probably enable us to reach an agreement almost immediately if you and Molotov found yourselves able to give practical expression to that attitude by meeting us on this question of quadripartite regulation of currency in use in Berlin. If, however, you consider it impossible to accept our standpoint, then I am afraid our three governments will be forced to conclude that Soviet Government is intent on maintaining that our three governments have no rights in Berlin and are thus not entitled to participate in regulation of city’s currency, credit and trade.

“Speaking personally, I think that by agreeing with us on this point Soviet Government would have nothing to lose and much to gain. To our governments and our peoples Berlin has always been one of tokens of common allied victory. It has become more than a piece of territory to be controlled by this or that power. It has come to be a symbol. The possibility of peaceful co-existence and collaboration of our respective systems in which you yourself have more than once expressed belief will be largely judged by what happens there. If we are able to get along together in Berlin, we can hope to get along in other spheres too. If we break down over Berlin, then a lot of ordinary folk will give up hope altogether.

“I have stated the position of our three governments and I hope the Generalissimo will give it his most serious consideration. I have certain practical proposals to put forward which have been drafted so as to conform as closely as we can to the Generalissimo’s initial proposal on August 2 and to suggestions made during our conversations with Molotov. May I present them now?”

(If the Generalissmo agrees, the statement will continue as follows:)

“We have two documents, draft communiqué and draft directive to Military Governors in Berlin. We have drafted communiqué to conform as closely as possible to the formula suggested by the Generalissimo himself on August 22 while at the same time providing what our governments consider to be minimum essential safeguards on fundamental question of our position in respect to Berlin.

“As regards the directive, we have adopted Molotov’s suggestion3 that a directive should be sent to four Military Governors in Berlin because our governments see that nothing we do here can be final unless it is clear that it can be implemented in Berlin. In preparing this directive we believe we have included the main questions on which [Page 1063] Molotov expressed concern at our last meeting August 164 in addition to those to which our own governments attach importance. Taken together, these two drafts present what is in our view the best suggestion for solution which it has been possible for our governments to arrive at in light of series of talks we have had in Moscow. Our proposal is that the directive should be sent immediately by four governments to their Military Governors in Berlin. They should then be given one week in which to complete their task and report back to governments. Our further suggestion is that we meet again with Generalissimo and Molotov one week from today to reach final agreement on the basis of the draft communiqué which meanwhile will be held in abeyance.” Statement ends.

At this point we would produce following final drafts communiqué and directive. Both of these would be accompanied by our unofficial translations into Russian. Communiqué begins:

“The Governments of France, the United Kingdom, the United States of America and the Union of Soviet Socialist Republics have agreed that the following measures under (a) and (b) shall be put into effect simultaneously, and have approved detailed arrangements for their implementation jointly worked out by the four Military Governors:

  • “(a) The restrictions imposed on communications, transport and commerce between Berlin and the western zones and between the various zones of Germany shall be lifted, and freedom of communications shall be maintained.
  • “(b) The German mark of the Soviet Zone shall be accepted, under quadripartite arrangements already agreed, as the sole currency for Berlin and the western mark ‘B’ shall be simultaneously withdrawn from circulation in Berlin.

“The four governments have also agreed that in addition to meetings of the four Military Governors, meetings among representatives of the four governments, in the form of the Council of Foreign Ministers or other conferences of representatives of the four powers, shall be held in the near future to discuss:

  • “(1) Any questions which may be outstanding as regards Berlin, and
  • “(2) Any other outstanding problems affecting Germany as a whole”. Communiqué ends.

Directive begins:

“The Governments of France, the United Kingdom, the United States of America and the Union of Soviet Socialist Republics have decided that, subject to agreement being reached among the four Military Governors in Berlin for their practical implementation, the following steps should be taken simultaneously:—

  • “(A) Restrictions on communications between Berlin and the western zones and on the traffic of goods to and from the Soviet Zone of Germany shall be lifted;
  • “(B) The German mark of the Soviet Zone shall be introduced as the sole currency for Berlin, and the western mark ‘B’ shall be withdrawn from circulation in Berlin.

“In connection with the above you are instructed to consult together with your colleagues so as to make, in the shortest time possible, the detailed arrangements necessary for the implementation of these decisions, and to inform your government not later than August (blank) of the results of your discussions, including the exact date on which the measures under (A) and (B) above can be brought into effect.

“The arrangements relating to the currency changeover and to the continued provision and use in Berlin, under quadripartite agreement, of the German mark of the Soviet Zone shall include such regulations as may be necessary to safeguard the currency of the Soviet Zone issued by the German bank of emission of the Soviet Zone and the currency of the western zones and to prevent illicit black market operations in currency; they shall also ensure: that in connection with the substitution of the German mark of the Soviet Zone for the western mark ‘B’ in Berlin at the rate of one for one, there shall be no discrimination against holders of the western mark ‘B’ or the German mark of the Soviet Zone; equal treatment as to currency and provision of fully accessible banking and credit facilities throughout all sectors of Berlin; unhampered trade and economic connections for Berlin with third countries and with all the zones of Germany, subject only to such provisions as may be agreed from time to time among the four Military Governors; and the provision of sufficient currency for budgetary purposes and occupation costs.” Directive ends.

If Soviets agree above, we would invite their suggestions for an interim communiqué, producing only if needed or invited our own following proposal.

Interim communiqué begins:

“At a meeting between the President of the Council of Ministers of the Union of Soviet Socialist Republics J. V. Stalin, the Minister for Foreign Affairs of the USSR V. M. Molotov, the Ambassador of the US Mr. W. B. Smith, the Ambassador of France Mr. Y. Chataigneau, and Mr. F. K. Roberts the personal representative of the Minister for Foreign Affairs of Great Britain, Mr. Bevin, on August (blank) it was decided to refer certain technical questions which had arisen in the course of the present conversations in Moscow to the four Military Governors in Berlin. Meanwhile the conversations in Moscow are continuing.” Interim communiqué ends.

If question of occupation costs is raised by Soviets, we shall handle it as indicated my telegram 1664, August 17.

Likewise, if Soviets persist in further discussion of implementation London decisions, we shall proceed as indicated my telegram 1664, except that last two sentences of proposed supplementary announcement have been amended to read: “They explained that the London decisions did not preclude such an agreement and, while they were not able to agree to any postponement of the implementation of the London decisions, they would make a sincere endeavor to ascertain [Page 1065] whether there is a real prospect of agreement among the four powers.”

If, however, Soviets remain adamant on basic issue of our Berlin rights, we shall make final statement as given Deptel 958, August 17, except that last paragraph has been amended to read:

“The three governments, therefore, will find themselves obliged to examine the question of resorting to the appropriate organs of the United Nations, at the same time reserving to themselves full rights to take such measures as may be necessary to maintain in these circumstances their position in Berlin.”

Sent Department 1716; Department pass to London as 159, Eyes Only for Douglas, Paris as 271, Eyes Only for Caffery, and Berlin as 326, Eyes Only for Clay and Murphy.

Smith
  1. From August 18 to August 23 the three heads of mission in Moscow, acting on instructions from their respective governments, had Worked on texts for an opening statement to Stalin, a four power communiqué, and a directive for the military governors in Berlin. The draft texts from which they worked are those transmitted in telegram 1664, from Moscow and telegrams 958 and 962, to Moscow. August 17, pp. 1049, 1053, and 1056.
  2. See telegram 1508, August 3, from Moscow, p. 999.
  3. For the text of Molotov’s counterdraft, under reference here, see The Berlin Crisis, pp. 23–24 or Cmd. 7534, p. 26.
  4. See telegram 1648, August 17, from Moscow, p. 1042.