740.00119 Control (Germany)/1–2149: Telegram

The United States Expert at the Technical Committee on Berlin Currency and Trade (Knapp) to the Secretary of State

top secret
us urgent

53. From Knapp.

[In the omitted parts of this telegram Knapp reported his testimony before the Committee and its delivery of the U.S. counterproposal to the Soviet expert.]

Met last night with Gifford, Robertson, Kaldor to review situation. With stout support Gifford and obvious sympathy Robertson, insisted first priority was obtain definitive Soviet reaction counterproposal1 and that full exchange replies now would prejudice this reaction. Robertson will ask Malietin this morning when to expect definitive reaction but fears Malietin may make this conditional upon receipt full Western replies.2 With some support Gifford I further expressed extreme doubt whether full exchange replies appropriate in any case, reiterating committee function not negotiation and that for purposes development its thinking should be adequate to test Western criticism neutral plan3 on Malietin orally without identifying source. Robertson again sympathetic but apparently may be outnumbered in committee which reportedly inclined yesterday suspend even discussion with Western [and] Soviet experts their respective comments on neutral plan until full exchange replies accomplished. Gifford and I vigorously protested such loss time, and urged that committee [Page 661] press these discussions forward while awaiting Soviet reaction counterproposal.

IV. Following is my assessment course committee activities following receipt Soviet reaction counterproposal.

If reaction is acceptance counterproposal as basis discussion, believe neutral plan will be dropped and remains only for Western experts offer rebuttal to detailed Soviet criticisms conveyed them orally by committee. Report to President SC would then propose some variant of counterproposal.

If Soviet reaction wholly or in substance adverse (as must be anticipated) committee could:

Report promptly to President SC that discussions with Western [and] Soviet experts reveal no prospect agreement.
After extensive further discussions with Western [and] Soviet experts, formulate final report incorporating some variation of initial proposals.
Make further progress report explaining difficulties in general terms but undertaking pursue studies for indefinite period, perhaps through establishment continuing subcommittee.
Report promptly to President SC technical judgment that interests of parties irreconcilable and that problems of use common currency in two separate jurisdictions inherently insoluble.

In cases 1 and 3 feel sure report would refrain from attempting fix onus of failure, but in cases 1 and 2 and probably 4 we may be pressed authorize committee transmit text our replies (see question 2 in section III mytel 32 to Department January 17; repeated Berlin 2, London 3, Paris 24).

Heavy pressure likely from secretariat representatives for course 2, or at least 3, while British French may well give support course 3, but I presently believe committee likely follow course 1 if no relaxation evident in our position. I propose, however, make maximum effort direction course 4 without any real expectation success.

Re recent rash press reports, plan strong representation to committee regarding security precautions here but finger clearly points to French both in Paris and London.

V. Would appreciate your guidance soonest on issues raised under III and IV above. Despite most pressing personal and office consideration (please consult Thorp) believe must spend further week or ten days here impressing our ideas on committee and convincing them our good faith. Cannot believe any longer time justified even if committee adopts course 2 or 3.

Sent Department; repeated London 7, Paris 6, Berlin 7.

[ Knapp ]
  1. Regarding the United States counterproposal, see editorial note, p. 658.
  2. Not printed.
  3. Regarding the neutral committee’s preliminary draft recommendations, see editorial note, p. 643.
  4. Not printed.