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

740.00119 Control (Germany)/9–148: Telegram

The Secretary of State to the Embassy in the Soviet Union ¹

top secret   us urgent
niact

Washington, September 2, 1948—1 p. m.

1050. For the Ambassador. After further consideration Clay’s report on meeting (ref Berlin’s 2212 repeated to you as 464,² London’s 3939 repeated to you as 238³) it is our belief that had this issue been referred to Moscow for decision at this stage it would probably have meant a break over a technical point in Berlin. For this reason we have, as you are aware, recommended that the Military Governors explore this and other portions of the directive further (ref our 3480 to London repeated to you as 1047⁴) in order to ascertain more clearly how far the Soviets are prepared to go. If the Military Governors as a result of their efforts in Berlin have to submit to the governments a report on agreed and unagreed items the basic disagreements would emerge more clearly than would the case if one item, no matter how important, should be selected for reference back to the governments.

In our telecom with Clay this morning he agreed that Military Governors should proceed with the authority of the finance commission as a disagreed item until no further progress is possible. He considers to negotiate in Berlin with disputed items being referred daily to Moscow would be a time consuming and probably a fruitless process. Clay’s present feeling is that “Soviet position is to take their terms in full or else.” However, he considers this may be their usual opening tactics of “shooting for the moon”.⁵

Marshall

1. Repeated to London as 3483, Paris as 3420, and Berlin as 1570.
2. September 1, p. 1100.
3. Not printed; it contained Robertson’s report on the second meeting of the Military Governors and Douglas’ view that Smith should be authorized to concert with his colleagues and approach the Soviet Government with respect to the powers of the commission and paragraph C of the Directive (740.00119 Control (Germany)/9–248). In telegram 4555, September 2 from Paris, not printed, Caffery reported that the French Government was instructing Chataigneau to request an interview with Molotov for the same purpose (740.00119 Control (Germany)/9–248).

4. Not printed; in it the Department of State affirmed its view that the limited control proposal was contrary to Stalin’s assurance, but added:

   “… before taking the question of the financial commission back to Moscow the Mil Govs should further explore other portions of the directive and also if possible and appropriate the question of the financial commission in order to ascertain the extent of control which Sokolovsky is prepared to accept.” (740.00119 Control (Germany)/9–148)

5. In telegram 1841, September 2, from Moscow, not printed, Smith expressed his agreement with these views. He felt sure Sokolovsky had complete reports of the Moscow conversations and was acting according to his instructions in pressing for maximum powers for the bank of emission. The Ambassador agreed that it was most important to ascertain as far as possible the form and extent of control that Sokolovsky was prepared to accept. (740.00119 Control (Germany)/9–248)