740.00119 Control (Germany)/10–3048: Telegram
The Acting Secretary of State to the United States Political Adviser for Germany (Murphy), at Berlin1
1785. Dept has received French Emb Memorandum2 re use western B mark in Berlin. Summary follows. Introduction western B mark sole legal tender and linking of Berlin banking system with central Laender bank could be interpreted as a measure aggravating present situation in Berlin and as contrary to paragraph 1 of SC resolution as well as Paris Communiqué of October 27 stating the three western govts accepted the resolution of the neutrals and were ready to give it effect.3 Furthermore, there are technical objections to proposed Berlin monetary plan. The program has serious inflationary aspects. The financing in B marks of supplies from the eastern zone [sic] and the movement of B marks toward the eastern zone cannot be controlled. Thus a permanent flight of B marks would take place which would oblige the Allies to put new quantities in circulation in the western sectors, thereby jeopardizing the monetary stability of western Germany. Moreover, the sole use of the B mark in the western sectors will raise great difficulties in the daily life of a part of the Berlin population. Workers living in the western sectors and receiving salaries in east zone marks will be unable to pay taxes and rents. French Govt is cognizant of the deficiencies of the present Berlin monetary system. General Koenig has been asked to consider measures which might be taken to remedy this situation, it being understood that the latter would not contradict the provisions of paragraph 1 of the neutrals’ SC resolution.
We are urging French Embassy to request that French representatives in Berlin press forward with planning discussions.