740.00119 Control (Germany)/12–2948: Telegram

The Acting Secretary of State to the Embassy in the United Kingdom

top secret
us urgent

4814. Further material concerning compelling need for introducing B mark as sole legal tender in Western sectors is contained in Delga 1205 of Dec 17 from Paris (rptd London 1486 and Berlin 7991) and in memorandum prepared in Paris for Jessup entitled “Necessity for Introducing Westmark as Sole Legal Tender in Western Sectors of Berlin”2 (copies understood available Embassies London and Paris). In presentation to British and French urging that decision be taken for currency changeover Jan 10 believe following points deserve emphasis:

Our freedom of action fully preserved by reservations made by Western Powers when submitting Berlin problem to UN Security Council and when accepting Bramuglia proposal for Neutral Committee.
Present dual currency system in Western sectors was makeshift expedient intended for operation only for brief period in order facilitate conduct negotiations with Soviets on single currency for Berlin. Abandonment this makeshift device should not be regarded as provocative, since only equalizes position created by Soviets on June 22 [Page 1283] by their unilateral action in introducing currency of their zone as sole legal tender their sector of Berlin.
New Western sector government can scarcely conduct its budget operations effectively as long as entire revenue accrues in Eastmarks. Furthermore it is understandably anxious, in midst of many other difficulties, at least to have a coherent and rational currency system on which to base its efforts to support Berlin economy.
Split in city and anticipated suspension of Neutral Committee activities may drive Soviets to more flagrant exploitation of opportunities created for them by continued acceptance of Eastmarks as legal tender for essential payments in Western sectors.
Not only does continued legal tender status of Eastmark present Soviets with ready instrument for economic warfare; on other hand by introducing Westmark as sole medium of circulation we would facilitate acquisition by West Berliners of goods and services from Soviet zone and sector since Westmarks in demand for hoarding purposes in latter areas. In absence effective Soviet counter-measures (see below), net effect of currency changeover upon Soviet capacity to acquire supplies in Western sectors and Western sectors capacity to acquire supplies in Soviet territory may appreciably reduce demands on airlift.

Since British and French may possibly argue that introduction B mark will lead to Soviet reprisals in Berlin of unmanageable nature, following is furnished in rebuttal:

Although Soviets can take further reprisals against us in city, the Importance of these possible measures should not be exaggerated. If Soviets believed measures would be effective or to their net advantage, which is probably not case, they would have moved before now or will move anyway. Soviets could isolate West sectors by interdicting transportation and personnel movements across sector boundaries and attempting interfere with technical services. Interference with movement of black market commodities implicit in tight physical blockade of western Berlin would be partly counteracted by increased buying power of West Berlin population, and stronger incentive to circumvent controls. Interference with technical services could at worst become inconvenience, as each half of city either has own utilities or, as in case sewage disposal system, can improvise adequate facilities.

Soviet reprisal action against our communications from city to Western zones could take form of cutting our long line telephone telegraph connections but OMGUS reports that this contingency foreseen, and that adequate emergency radio equipment for all essential and some German civilian traffic is on spot. Furthermore, air traffic between Berlin and west is quick and plentiful, providing another means of communication. This threat to our telecommunications has existed many months, and questionable if our action re currency will affect this situation.

[Page 1284]

Even if effective blockade of Berlin does materialize in spite many factors operating against this contingency, essential requirements of West Berlin population can be met through airlift. Commodity leakage from Soviet zone into Western sectors is not essential factor and OMGUS states ability successfully to meet winter period requirements will not be affected by any retaliatory measures Soviets may take.

We should therefore not be deterred by the potential threat from denying to Western sectors of Berlin positive economic benefits to be derived from currency changeover.

  1. Not printed; in it Jessup had stressed that the western powers had refrained from introducing the B mark in Berlin in order not to obstruct the work of the Security Council, but the complete split of the city and the needs of the newly elected Magistrat demonstrated that further delay would only help the Russians (501.BC/12–1748).
  2. Not found in the Department of State files.