740.00119 Control (Germany)/1–2649: Telegram

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

top secret
us urgent

71. From Knapp.

Chairman opened committee meeting with Western experts this morning by making formal request full exchange replies1 and stating that in view Malietin’s representations2 committee not prepared pursue discussions with Western experts until reply received from Western powers re full exchange replies and re acceptability committee’s draft proposals as basis further discussion. Chairman argued committee procedure must be acceptable experts all four occupying powers, and that in order preserve appropriate balance committee unable pursue discussions with Western experts so long as Soviet expert withholding participation.
With complete support Gifford, protested vigorously against committee’s decision adjourn discussions and after long consultation both with Western experts and in closed session, committee has agreed pursue discussions with Western experts this afternoon, meanwhile [Page 664] informing Malietin this action. You should appreciate that, especially in absence Robertson and Myrdal, Kaldor comes close to dominating committee which is group very weak sisters. As author committee draft proposals and as person with at least ambiguous political orientation, Kaldor has been consistently hostile our position.
Though defeated this morning understand Kaldor about make new proposition, namely, that committee seek clarification its terms reference only after having determined that its own draft proposals do not constitute “basis for equitable and workable settlement.” I see serious danger this course (e.g. many of our comments on committee proposals assume August 30 directive3 not binding) and have come to view that we (including if possible British-French) should now insist upon committee seeking immediate clarification from President SC of its terms reference (see paragraph 5 mytel 69 January 25, repeated to Berlin 12, Paris 10, and London 114). Ensuing delay would give more time preparation initiative in SC on political problem, though believe during same interval committee might well pursue discussions with West experts concerning their comments committee proposals.
Took occasion this morning point out to committee significance that Soviet insistence adherence basic principles August 30 directive based upon interpretation committee’s terms reference with which I could not agree. However, did not pursue matter pending receipt your instructions.5

Sent Department 71, repeated London 12, Paris 11, Berlin 13.

[ Knapp ]
  1. Regarding the replies of the four occupying powers in Germany to the preliminary draft recommendations of the technical committee, see editorial note, p. 658.
  2. In telegram 69, January 25, from Geneva, not printed, Knapp reported that Malietin had rejected the United States counterproposal and informed the technical committee that he could not participate in the discussions unless the committee abided by its terms of reference and adopted its own draft plan as the basis for its work. Malietin also insisted on a full exchange of replies among the four experts. (740.00119 Control (Germany)/1–2549). For the text of Malietin’s statement on January 25, see Sovetskii Soiuz i berlinskii vopros(dokumenty), vypusk vtoroi, Moscow, 1949, pp. 81–82.
  3. Foreign Relations, 1948, vol. ii, pp. 10861087.
  4. Not printed.
  5. In telegram 76, January 27, to Geneva, not printed, the Department of State authorized the exchange of the four experts’ replies through the Committee and reiterated that the Western Powers were no longer bound by the August 30 directive. (740.00119 Control (Germany)/1–2549)