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

862.515/9–2543

The Soviet Ambassador (Panyushkin) to the Acting Secretary of State ¹

[Translation]

No. 177

The Ambassador of the Union of Soviet Socialist Republics presents his compliments to the Acting Secretary of State of the United States and, upon instructions from the Soviet Government, has the honor to communicate the following:

1. The Government of the Union of Soviet Socialist Republics has acquainted itself with the note of the Government of the U.S.A. of September 22, 1948² concerning the negotiations of the four powers which have taken place in Moscow and Berlin on the question of introducing the German mark of the Soviet zone as the sole currency in Berlin and of removing the restrictions on communication, transport, and trade between Berlin and the western zones of Germany.

In this connection the Soviet Government considers it necessary to state that the position taken by the Government of the U.S.A. not only does not facilitate but on the contrary makes more difficult the reaching of an agreement concerning the settlement of the situation in Berlin which has arisen as a result of effecting a separate currency reform and introducing a special currency in the western zones of Germany and the western sectors of Berlin, which constituted a measure that was most far-reaching in execution of the policy of dismemberment of Germany on the part of the Governments of the U.S.A., Great Britain, and France.

2. In its note the Government of the U.S.A. points out three questions at issue which were mentioned by the Governments of the U.S.A., Great Britain, and France in their aide-mémoire of September 14³ and the Government of the U.S.S.R. in its aide-mémoire of September 18, 1948.⁴

The Government of the United States of America states that a further continuation of negotiations on the aforesaid questions on the present basis would be useless and considers that, in order to create conditions which would permit a continuation of negotiations, it is necessary to remove the provisional restrictions on transport between Berlin and the western zones which were introduced by the Soviet Command to protect the interests of the German population as well as the economy of the Soviet occupation zone and of Berlin itself.

Such a statement of the Government of the U.S.A. is a direct contradiction of the agreement reached on August 30 in Moscow between the four Governments (the directive to the Military Governors⁵) in which it was said:

“The Governments of France, the United Kingdom, the United States, and the U.S.S.R. 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 also on the movement of cargoes 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.”

From the text of the agreement cited above it is evident that during the negotiations in Moscow the four governments agreed on the simultaneous lifting of restrictions in respect to trade and communications between Berlin and the western zones and on the introduction of the German mark of the Soviet zone as the sole currency for Berlin. The Soviet Government insists on this, because the situation created by the separate measures of the western powers means that the three governments do not confine themselves to their sovereign administration of the western zones of Germany but wish at the same time to administer also the Soviet zone of occupation in currency and finance matters by introducing their own separate currency in Berlin, which is in the center of the Soviet zone, thus disrupting the economy of the eastern zone of Germany and, in the final analysis, forcing the U.S.S.R. to withdraw therefrom.

The Soviet Government considers it necessary that the agreement reached in Moscow be carried out and believes that further negotiations can be successful only if the other three governments also adhere to this agreement. If the Government of the U.S.A. repudiates the agreement reached on August 30, only one conclusion can be drawn therefrom, namely, that the Government of the U.S.A. does not wish any agreement between the U.S.S.R., the U.S.A., Great Britain, and France on the question of settling the situation in Berlin.

3. In as much as the position of the Governments of the U.S.A., Great Britain, and France was stated in the note of September 22 concerning the three questions at issue, the Soviet Government considers it necessary to do likewise:

a) As regards air communication between Berlin and the western zones, the establishment by the Soviet Command of control over the transport of commercial cargoes and passengers is just as necessary as in the case of railway, water, and highway transport. The air routes cannot remain without control, since an understanding has been reached between the four governments to the effect that the agreement must provide for the establishment of appropriate control in regarding to currency circulation in Berlin and trade between Berlin and the western zones.

b) In the directive to the Military Governors adopted by the four governments on August 30 the control functions of the four-power financial commission in regard to the execution of financial measures connected with the introduction and circulation of a single currency in Berlin were explicitly provided for.
The Soviet Government considers it necessary that this agreement be carried out, including the maximum reduction of occupation costs in Berlin as provided for in that agreement, and the establishment of a balanced budget in Berlin, which has not been considered in the Berlin negotiations to date.

c) The Soviet Government has already expressed its agreement that trade between Berlin, third countries, and the western zones of Germany be placed under the control of the four-power finance commission. The Soviet Government now declares its willingness to establish four-power control over the issuance of import and export licenses also, provided agreement is reached on all other questions.

4. Thus the reaching of agreement on the question of the situation in Berlin depends now, first of all, on whether the Governments of Great Britain, the United States of America, and France aspire to such an agreement.

Washington, September 25, 1948.

1. The Soviet Government transmitted identic notes to the United Kingdom and French Governments. For the Soviet Government’s translation of this note, see The Soviet Union and the Berlin Question, pp. 54–57.
2. Supra.
3. See telegram 1101, September 12, to Moscow, p. 1152, and footnote 3 thereto.
4. Ante, p. 1162.
5. See telegram 1776, August 27, from Moscow, p. 1085, and footnote 3 thereto.