740.00119 Control (Germany)/8–2748: Telegram
The Ambassador in the Soviet Union (Smith) to the Secretary of State
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1776. Eyes Only for the Secretary or Lovett; Douglas, Murphy, Clay and Caffery. Following are texts of draft communiqué and directive [Page 1086] as they emerged from our 3-hour meeting with Molotov and Vyshinsky tonight:1
Begin communiqué:
“The Governments of France, the UK, USA and USSR have agreed that 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 which have recently been 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, transport and commerce shall be maintained.
- (B)
- The German mark of the Soviet zone shall be accepted, on the basis agreed between the four military governors, as the sole currency for Berlin and the Western mark ‘B’ shall be simultaneously withdrawn from circulation in Berlin.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 outstanding questions regarding Berlin, and (2) any other outstanding problems affecting Germany as a whole.” Communiqué ends.
Directive begins:
“The Governments of France, the UK, US and USSR have decided that, subject to agreement being reached among the four military governors in Berlin for their practical implementation, the following steps shall be taken simultaneously:
- (A)
- Restrictions on communications, transport and commerce between Berlin and the Western zones and to and from the Soviet zone of Germany which have recently been imposed 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German mark of the Soviet zone shall be introduced as the sole currency for Berlin, and the Western mark ‘B’ shall be withdrawn from circulation in Berlin.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 September 42 of the results of your discussions, including the exact date on which the [Page 1087] measures under (A) and (B) above can be brought into effect. The four military governors will work out arrangements involved in the introduction of the German mark of the Soviet zone in Berlin.
The arrangements relating to the currency changeover and to the continued provision and use in Berlin of the German mark of the Soviet zone shall ensure:
- (A)
- No discrimination or action against holders of Western marks ‘B’ in connection with the exchange of those Western marks issued in Berlin. These shall be accepted for exchange for German marks of the Soviet zone at the rate of one for one;
- (B)
- Equal treatment as to currency and provision of fully accessible banking and credit facilities throughout all sectors of Berlin. The four military governors are charged with providing adequate safeguards to prevent the use in Berlin of the German mark of the Soviet zone from leading to disorganizing currency circulation or disrupting the stability of currency in the Soviet zone;
- (C)
- A satisfactory basis for trade between Berlin and third countries and the Western zones of Germany. Modification of this agreed basis to be made only by agreement among the four military governors;
- (D)
- The provision of sufficient currency for budgetary purposes and for occupation costs, reduced to the greatest extent possible, and also the balancing of the Berlin budget.
The regulation of currency circulation in Berlin is to be undertaken by the German Bank of Emission of the Soviet zone through the medium of the credit establishments operating at present in Berlin.
A financial commission of representatives of the four military governors shall be set up to control the practical implementation of the financial arrangements indicated above, involved in the introduction and continued circulation of a single currency in Berlin.”3 Directive ends.
Explanation and preliminary comments contained in my immediately following telegram.4
Sent Department 1776; Department pass London 177; Berlin 343; Paris 288.
- Participating in this meeting, which was held at the Kremlin at 5 p. m., were Smith (U.S.), Roberts and Lunghi (U.K.), Chataigneau and Boyer de Fons-colombe (France), and Molotov, Vyshinsky, Pavlov, and Yerofeyev (U.S.S.R.).↩
- In the final agreed text of the directive, this date was changed to September 7.↩
- With the change indicated in the previous footnote, this directive was finally agreed upon by the American, British, French, and Soviet representatives at their meeting on August 30 (see telegram 1818, August 30, from Moscow, p. 1092). The final agreed text, dated August 30, is printed in The Berlin Crisis, pp. 40–41 and Cmd. 7534, p. 56 as well as in Germany 1947–1949, pp. 211–212, Carlyle, Documents on International Affairs, pp. 594–595, and Documents on Berlin, pp. 83–84.↩
- Telegram 1777, August 27, from Moscow, infra.↩