Department of Defense Files

The United States Military Governor for Germany ( Clay ) to the Department of the Army

top secret

FMPC 186. For SAOUS. Reurad W 82831.1 I favor strongly the unilateral statement proposed to be made by our representative in Geneva,2 to which I note Holmes objects.

I do not believe that a unilateral issue of the West mark as sole legal tender in US Sector is really possible and such introduction would create an insuperable burden for the West Berlin Govt. The movement of people between the 3 West Sectors is not limited nor is their ability to shop in all Sectors so that our introduction of the West mark alone would result in its immediate flow to the French and British Sectors, with probable consequent increase in the purchase of East marks to use in those Sectors which would eventually represent a further flow of the West mark into Soviet hands.

If we did proceed unilaterally, I believe that both the British and French would have to accept if we tied the move into our financial support, not only of Berlin but of Western Germany. In point of fact, we could require that all food imported into Berlin be paid for by West marks, as we are either directly or indirectly financing all such food imports. This would necessitate the British and French placing so much West mark currency into circulation as to accomplish practically the making of the West mark legal tender in Berlin. Of course it would be regarded as a high-handed action and would undoubtedly arouse adverse public reaction in France and the UK. I believe that the French would really like to pull out of Berlin and such public reaction might give them the opportunity. The British have grown lukewarm, in my opinion, to remaining in Berlin.

Therefore, I believe that the unilateral introduction by US of the West mark would be of doubtful success. It would not seem to me the appropriate tool if we feel so strongly about the matter as I feel [Page 660] that we should. We had better demand acquiescence in our policy not through threat of unilateral action in Berlin but as a condition to our continued financing of the German deficit.

I am sorry to recommend against unilateral action in Berlin as I feel that we are losing ground daily through our failure to make the West mark legal tender and I am for any measure which promises success. I believe we have other resources to use to force the issue if we choose to use them.

[ Clay ]
  1. Not printed; in it Draper asked Clay whether it was feasible for the United States to introduce the B mark unilaterally and whether such a step would force the British and French to take similar action. (Department of Defense files)
  2. Clay was referring here to a proposed statement that the United States felt its counterproposal was the only possible basis for the use of the Soviet mark. If agreement could not be reached on it, events in Berlin would force the introduction of the B mark. (Telegram 150, January 13, to London, repeated to Berlin as 53, not printed 740.00119 Control (Germany)/1–1249).