Foreign Relations of the United States, 1949, Council of Foreign Ministers; Germany and Austria, Volume III

740.00119 Control (Germany)/1–1249: Telegram

The Chargé in the United Kingdom ( Holmes ) to the Acting Secretary of State

top secret
us urgent
niact

London , January 12, 1949—9 p.m.

149. Met this afternoon with Seal, Dean, Gifford of Foreign Office (French not present) for further discussion re reply to neutral committee and question currency changeover Berlin. No basic change evident British position. However they offered agree to warning experts committee that introduction West mark may be necessary in near future although they are still unwilling to agree now to January 30.

With respect to reply to neutral committee British propose that reply criticize committee report,¹ expressly reserve governmental positions as to acceptability of report even if these criticisms met, and submit counter-proposal as desirable solution. British feel this would provide more time for reconciliation views three governments as to acceptability of neutral committee report.

British obviously concerned at possibility break in common front and were searching compromise formula. They promised produce tomorrow, amendments² to our draft reply³ to neutral committee in order to clarify extent to which they could subscribe this reply. In view convening neutral committee in Geneva Friday and presence a Soviet expert we all felt it most important reach agreement tomorrow in order permit western experts take Friday morning plane Geneva.

Our present instructions require that British French accept our position as whole, including agreement introduction Western mark January 30.

Following situations may confront us tomorrow:

1. British-French might conceivably accept full substance of our proposed reply to neutral committee, including warning re West mark but refuse commitment on date currency changeover. In such circumstances we strongly recommend our joining in reply and in oral elaboration, leaving issue on date of currency changeover to be pressed separately.

2. Same as (1) but British-French unwilling include in reply statement that basic pattern of neutral committee’s proposal unworkable and present counter-proposal only as alternative solution. Our choice in this case is between (a) maintaining common front and deferring until later date (after report submitted to President Security Council) our rejection of neutral committee’s plan or (b) seeking to extend content of tripartitedly agreed reply to maximum extent possible and having US expert submit unilaterally supplementary comment and conclusions.

We must have your guidance on these points immediately unless we are willing to prolong discussions here and incur inevitable adverse reaction from further postponement neutral committee meeting.⁴

Sent Department 149, repeated Paris 33, Berlin 29.

Holmes

1. Regarding the neutral committee’s report, see editorial note, p. 643.
2. The text of the British amendments which included many U.S. suggestions was transmitted in a telecon between Washington and London January 13. The transcript of the telecon, not printed, is in file 740.00119 Control (Germany)/1–1349.
3. Transmitted in telegram 99, January 9, from London, not printed (740.00119 Control (Germany)/1–949.
4. In telegram 150, January 13, to London, not printed, the Department indicated that Knapp in his discussions with the Neutral Committee in Geneva was to follow course b of paragraph 2 indicating that events in Berlin might render currency counter measures inevitable. In the same telegram Holmes was instructed to indicate the Department’s profound disappointment to the British and French and repeat the warning that the United States might be required to take steps in Berlin to protect itself against further currency drain. (740.00119 Control (Germany)/1–1249)