740.00119 Control (Germany)/9–1248: Telegram
The Secretary of State to the Embassy in the Soviet Union
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1102. It is our hope that you will not be drawn into detailed discussions of the technical matters dealt with in the aide-mémoire.1 The following background material for your guidance only is transmitted as of possible assistance to you:
Point 1. Transportation restrictions. This is so clean cut that further material seems unnecessary.
Point 2. It is quite apparent that the financial commission would be powerless to discharge its functions assigned to it under the directive “to control the practical implementation of the financial arrangements” for Berlin which are to be worked out by the four Military Governors along the lines indicated in Paragraphs A, B, C and D of the directive, unless the commission were endowed with the power to control, insofar as Berlin is concerned, the operations of the financial institution from which the currency requirements of Berlin are to be supplied. This fact was recognized in the discussions with Premier Stalin and Mr. Molotov on August 23, when specific assurance was obtained from Premier Stalin that the operations of the Bank of Emission, insofar as they relate to the introduction and continued use of German marks of the Soviet zone in Berlin, would be subject to the “control” of the financial commission and the four Military Governors. It was only in reliance upon this specific commitment that the three Western Powers were prepared to accept a directive to the four Military Governors in which this relationship was not specifically and categorically established.
In view of these circumstances, the Western Powers are unable to understand the position which has been taken by the Soviet Military Governor in the Military Governors’ recent discussions in Berlin, namely that the German Bank of Emission should in no respect be [Page 1156] subject to the control or direction of the Financial Commission. It is therefore proposed that the Soviet Government instruct the Soviet Military Governor in Berlin that the Financial Commission should be empowered to control the operations of the German Bank of Emission insofar as they relate to the introduction and continued use of the German Mark of the Soviet zone in Berlin, and to direct the Bank of Emission to take such steps as are necessary to implement the financial arrangements for Berlin agreed to by the four Military Governors, including the provision of the necessary supplies of currency for that purpose.
Point 3. The position taken by the Soviet Military Governor in the recent Berlin discussions that the control of the trade between Berlin and third countries and the western zones of Germany should be exercised unilaterally by the Soviet military administration does not constitute a reasonable approach to “a satisfactory basis for trade between Berlin and third countries and the western zones of Germany” as provided in the directive. The Western Powers consider that the arrangements agreed upon by the four Military Governors with respect to such trade of Berlin should, insofar as they concern exports and imports (other than food and fuel imported in fulfillment of their responsibilities) provide for administration of trade regulations under the control of the four occupying powers. At the same time, each occupying power in view of its special responsibilities for maintaining the health and welfare of the civilian population in its sector of Berlin, must maintain its continued right to import at its descretion food and fuel for purposes of civilian consumption. Furthermore, each occupying power should be entitled to control the disposition of the proceeds in German Marks of the Soviet zone derived from the sale of food and fuel imported in fulfillment of their responsibilities into its sector from third countries and the western zones of Germany.
It is therefore proposed that the Soviet Government instruct the Soviet Military Governor in Berlin that a satisfactory basis for trade between Berlin and third countries and the western zones of Germany should be reached between the four Military Governors which does not involve the unilateral control of such trade by the Soviet Trade Administration and which recognizes the right of each of the occupying powers to import in fulfillment of their respective responsibilities, and to control the proceeds from, food and fuel imported for the use of the Berlin population and industry.
The above is not a statement but is only for your background guidance.
- Text transmitted in telegram 1101, supra.↩