740.00119 Control (Germany)/10–2148: Telegram
The Acting United States Political Adviser for Germany (Riddleberger) to the Acting Secretary of State
urgent
2568. For Lovett. Following is OMGUS and our comment on Jessup’s message to you contained in Paris Delga 417.1
We appreciate the lack of clarity in the Moscow discussions on 30 August with respect to precise functions of the Financial Commission. The Molotov statements as reported would in some part appear contradictory to Molotov’s statements on the 27th of August and to Stalin’s statements on the 23rd August.
This confusion arising from the 30 August meeting appears to have given rise to the Soviet interpretation of the directive which gives to the Financial Commission the power only to intervene to assure “equal treatment as to currency and provisions of fully accessible banking and credit facilities”. It is quite clear from the Soviet discussions in Berlin that the Financial Commission could only intervene upon evidence of a lack of equal treatment and then only upon unanimous conclusion of the Financial Commission. The effect of Financial Commission intervention in the Soviet mind appears to be an appeal to the German Emission Bank, which in their view is the control authority in these matters, to take corrective measures.
Whatever interpretation can or may be placed on the directive, it is clear that to surrender to the Soviet view that the Financial Commission does not actually control the introduction, circulation, and continued use of the ost-mark in Berlin and does not control the credit policies of the credit institutions as well as the budgetary policies of the city administration would leave the Western military governments powerless to protect their position in Berlin and to protect the Germans under their jurisdiction from arbitrary manipulations of the financial structure to the end of the achievement of political objectives. If the Western powers cannot be assured that currency will be made available to the Western sectors inhabitants without political controls and that banking facilities and credit will be made available to Western [Page 1231] sectors firms in an adequate amount and manner, they can no longer assume that they have jurisdiction and any participation and sovereignty over the lives of Western sector inhabitants.
It is perfectly apparent from the steps already taken by the Soviet authorities in the Soviet Zone and in the Soviet sector of Berlin that they intend to utilize the currency reform and the control of currency circulation and bank credits as a means of accomplishing purely political objectives. If the Soviet authorities of the German Emission Bank are able to control, without effective Western powers’ intervention, the currency circulation and credit issuance in the Western sectors, there is no means preventing their accomplishing the same objectives in the Western sectors as they are now seeking to accomplish in the Soviet Zone and in the Soviet sector.
It must be remembered that acts of the Financial Commission would presumably be on the basis of unanimous decisions. If, therefore, the Financial Commission is left to a role of taking definitive action to stop discrimination, the Western powers are of course unable to stop discrimination. For summary of Military Governors discussions on Berlin finance question see our supplemental report conveyed in ourtel 228a to Department, repeated London 602, Paris 619, Moscow 512 of September 9.2
Sent Department 2568, repeated Paris 824, London 766. Department pass Moscow 663.