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

740.00119 Control (Germany)/8–2548: Telegram

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

top secret
urgent
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Moscow, August 25, 1948.

1749. Eyes Only for the Secretary. I share the apprehensions expressed in your 1006, August 24,¹ but I am frankly somewhat puzzled by its contents. You state “we are much concerned that these drafts do not contain any confirmation of the principle of quadripartite administration of the city of Berlin,” but later state that this could be covered by, (1) inclusion in the communiqué of an appropriate statement by the three Western Powers, or (2) by a communication from the three Western Powers to be published.

I am rather at a loss to understand how either of these alternatives would constitute Soviet confirmation of the principle of quadripartite administration of the city of Berlin. We have, during these conversations, stated repeatedly our position re Berlin and the Soviet conferees have repeatedly stated theirs. This problem of diametrically opposed positions has been clearly defined since the first talk of our series and we have always been alive to the dangers inherent in any interim agreement here. I tried to bring these clearly into focus in my 1663 of August 17² which might profitably be reread at this time.

Western Governments have no intention of abandoning present juridical position re Berlin, and the Russians no intention of abandoning theirs while the London decisions are still hanging over their heads. The best we could hope to get would be a somewhat negative paragraph to the effect that the agreement had been entered into without prejudice to the juridical position taken by the respective governments in regard to their occupation of Berlin, and for this we might barter the equally negative statement we are prepared to make with regard to the London conference.

We feel Department’s view that directive formula “implies that currency in the City of Berlin shall be primarily under Soviet direction” is a little too pessimistic and premature. Certainly Soviet conferees in Berlin will do everything they can to extend their control of currency and Berlin’s economic life but is this not one of the things that we intend to develop and resist in Berlin?

We were not concerned about substituting in certain functions previously exercised by the Kommandatura the financial commission proposed by Stalin, since I understood definitely from Department’s and Clay’s messages that the resurrection of Kommandatura as an active agency was not particularly desirable.

The fundamentals of the situation seem to me to be as follows:

(1) Quadripartite control does not exist in Berlin today.

(2) The Russians have no intention of permitting the revival of quadripartite control in Berlin so long as they are unable to achieve quadripartite control of Germany.

(3) The Russians are, however, prepared to make practical concessions as regards the control of financial and economic operations in Berlin as the price of getting their currency introduced there and western currency withdrawn. Actually this means that they are shifting their offensive line in Berlin from transport to currency and this offensive will have to be met just as we have met their aggressive action in connection with transportation. It is possible that as a result of technical discussions in Berlin we will be in a better tactical position to meet it. The extent of the practical concessions they are prepared to make can only be determined by such technical discussions in Berlin but I am sure that these concessions will in no case include resumption of quadripartite control over the life and government of the city.

In my opinion we must accordingly decide whether our position is better in Berlin if we simply stay under present conditions and take the necessary measures to organize the life of the three western sectors independently; or whether it is better to have communications resumed under circumstances in which we would not have complete control over the life of our own sectors.

Finally it was our understanding that we are to produce conditions under which higher level talks might begin at some future date in an atmosphere free of direct pressure. In other words we have worked on the basis of an interim agreement. I am sure it will be quite impossible here to produce any public major concessions of principle.³ I will comment in detail on Department’s 1007,⁴ just received, in my immediate following.

Sent Department 1749. Department pass Berlin 337, Eyes Only Murphy and Clay; Paris 282 Eyes Only Caffery; London 171 Eyes Only Douglas.

Smith

1. Ante, p. 1072.
2. Ante, p. 1047.

3. Telegram 1019, August 25, to Moscow, not printed, expressed the view that no Soviet confirmation of Western rights in Berlin could be expected but added the following conviction:

   “We feel we must, however, make certain that the communiqué and directive do not in fact give any grounds for a Soviet claim that we have abandoned these rights by the present agreement or alternatively permit world opinion to conclude that we have given up an important principle merely for the sake of agreement. We believe that the necessities of the situation would be met satisfactorily if the communiqué or separate announcement stated that this agreement was made without prejudice to the rights of the parties as occupying powers on the one hand and without prejudice to the position taken by the Soviets with respect to the London Conference decisions on the other.” (740.00119 Control (Germany)/8–2548)

4. August 24, p. 1074.