740.00119 Control (Germany)/1–2649: Telegram

The Secretary of State to the Embassy in the United Kingdom

us urgent

285. Fr Emb note, Jan. 26,1 states re Occ stat discussions of occupation costs issue: Massigli has indicated that Fr Govt ready to accept principles of federal responsibility; on condition that occupation costs be charged against the amount of common revenues foreseen in Art 122 B of Bonn draft constitution2 and that Laender be responsible for the administration and collection of all taxes except customs and administrative revenues of the federation (postal fees, clearing fees, etc.). This proposal has the advantage of establishing responsibility of federal state to the Allies for payment occupation costs without furnishing a powerful aid to centralization tendencies.

It appeared during discussion that while Brit representative was ready to agree that representatives of three powers intervene at Bonn to recommend to Parliamentary Council a solution in conformity with Fr compromise proposal, US charge was bound by his instructions and could not agree to this.

Fr Emb has recd instructions to bring urgently to attention of Dept very grave consequences which maintenance of position taken by [Page 22] US representative could have on future of federalism in Ger. Fr Govt is in fact convinced that if payment of occupation costs were made a charge on the federation, considerable increase of financial charges on it resulting therefrom would have effect of increasing chances of centralization. Accordingly Fr Govt desires that instructions be addressed to US representative specifying that he agree to compromise proposal suggested by Fr representative. End note

We pointed out to Fr Emb rep that Fr proposal was contrary to para d of London Letter of Advice and to corresponding paragraph in Mil Govers’ aide-mémoire of Nov 223 which authorized Fed Govt to raise revenues for purposes for which it is responsible. Also stated that our info did not confirm UK acceptance of Fr proposal (urtel 279, Jan 234). At considerable length we told him that Fr proposal appeared endeavor to prejudge work of Parliamentary Council re division of finance powers and tax administration; that it was mistake to take one particular technical detail of this nature out of proper constitutional context; that Gers should be given a free opportunity within framework of London Letter of Advice to develop details of their constitutional law, and that we would be ready to give particular attention to this problem at time of general review of draft constitution.

Dept does not intend alter your standing instructions on occupation costs issue.

  1. The French text of this note, which was handed to Beam, is in file 740.00119 Control (Germany)/l–2649.
  2. Presumably this is a reference to the draft constitution, which had passed its second reading on January 20. For documentation relating to the drafting of the Basic Law, see pp. 187 ff.
  3. For the London Letter of Advice of May 12, 1948, and the Military Governors’ aide-mémoire, see Foreign Relations, 1948, vol. ii, pp. 240 and 442.
  4. Not printed.