740.00119 Control (Germany)/3–2949: Telegram
The Ambassador in the United Kingdom (Douglas) to the Secretary of State
us urgent
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1260. From Holmes. Occupation statute, plenary scheduled for this afternoon cancelled at last minute by French who, contrary to their expectations, have not yet received instructions on matters referred to [in] Embtel 1218, March 26, repeated Berlin 180.1 Instead, we had long discussion with Kirkpatrick, Stevens and Nicholls on paragraph 5, principles trizonal fusion. Kirkpatrick stated preferred US language unacceptable as were alternatives we were authorized to submit since all of them would have effect of making US military governor “the military governor of Western Germany”, thus reducing British to mere “mercenaries”.
He based argument on grounds that American texts, especially in the light of unilateral statement paragraph 1b Deptel 747, March 6,2 would give US military governor right to intervene in Laender as well as federal legislation and administrative action, and would make him judge of scope of his intervention in that he could claim with justification that almost any action Germans might contemplate would affect their export and foreign exchange position and thus bring it within the purview of his weighted vote. In this connection British asserted parenthetic phrase inserted in US preferred formula in accordance Deptel 850, March 141 and reading “In situation where action or non-action, as the case may be, would increase the need for US assistance from appropriated funds” would increase rather than limit US military governor power.
Kirkpatrick also maintained that all US formulae would give US military governor power to draw up laws on any matter which in his opinion affected German foreign trade—foreign exchange and force his colleagues to sign them against their will. Reference to 30 [day] [Page 58] appeal procedure under paragraph 4 fusion agreement did not move him on this point nor did assurance US Government would not sustain its military governor in arbitrary action appealed against. Pie gave indication of feeling that appeal right was a small concession and one which British military governor would use only with great reluctance.
Kirkpatrick agreed that in present circumstances it would be advisable for London meeting to prepare split text to be forwarded to the Foreign Minister[s] at Washington. Assuming that French receive satisfactory instructions on occupation statute and fusion agreement and that PRI discussions3 can be concluded in London, there can be forwarded to Washington conditionally agreed upon texts occupation statute and all fusion agreement except paragraph 5. Foreign Ministers will thus have before them for settlement questions of Kehl, weighted vote and German basic law.
If this procedure followed Kirkpatrick said would have to withdraw his latest proposal on weighted voting, text of which had not been specifically cleared with Bevin although drawn up by Kirkpatrick on basis of general principles approved by Bevin.
Kirkpatrick prepared to defend text as final settlement only since it represented substantial concessions in an effort to meet US desires. It was not text for negotiation. He stated that he would draw up a new British formula setting forth original British position to be included in split paper, as basis for Washington discussions. Latest British proposal paragraph 5 withdrawn today by Kirkpatrick reads as follows:
“5. (i) In exercise of powers reserved to occupation authorities in occupation statute for control of German foreign trade and foreign exchange and of federal legislation and administrative actions directly affecting foreign trade and foreign exchange, decisions of occupation authorities will be arrived at by a system of weighted voting in all cases where action or non-action, as case may be, would increase need for assistance provided for Germany from US appropriated funds.
(ii) Under this system, representatives of occupation authorities will have a voting strength proportionate to funds made available by their respective governments, except that no action taken hereunder shall be contrary to any intergovernmental agreement among the signatories.
(iii) Legislation or action by occupation authorities in matters dealt with in this article shall, without prejudice to provisions of Article I of this agreement, require approval of military governor who enjoys a predominant vote, or of his representative.
(iv) A military governor who disagrees with a decision taken by his colleagues under provisions of this article may require suspension of action in circumstances and on terms described in Article 4.
Although foregoing represented distinct improvement over earlier British drafts, we considered it unacceptable on basis our instructions and have so informed British. Our objections are:
- 1.
- Word “federal” in first sub-paragraph would prevent US from exercising weighted vote in regard to Laender legislative and administrative actions affecting foreign trade and exchange.
- 2.
- Sub-paragraph (iii) would prevent taking by US military governor of legislative or administrative action which he might consider necessary in interest our financial contribution if such legislation or action opposed by his two colleagues.
- 3.
- Sub-paragraph (iii) could also be interpreted as preventing US military governor from employing weighted vote in approval German applications for permission to legislate under provisions paragraph 6 occupation statute and from employing weighted vote to cause approval German legislation under paragraph 6. British asserted that language was not intended to curtail authority US military governor in this way and stated that they would be willing to remove this objection.
As we hope to be able to transmit split paper following tomorrow’s plenary please instruct on urgent basis whether Department wishes us to include as US proposed text paragraph 5: (a) formula contained Deptel 613 February 234 without accompanying note; (b) above formula with accompanying note or (c) above formula with inclusion parenthetical statement referred Deptel 850 with accompanying note or (d) without accompanying note. Irrespective which formula included we propose, unless otherwise instructed in accordance with paragraph 2(b) Department’s 874, March 154 to include in paragraph 5 sentence along following lines: “Appeal procedure provided under paragraph 4 above shall apply to decision taken under provisions of this paragraph.”
Language of note which we propose to include, if Department so desires, is as follows: “It is the understanding of the US Government that formula set forth in paragraph 5 will enable representatives of US to exercise predominant vote among three powers and with Germans in those matters which clearly affect German foreign trade and foreign exchange because of major contribution US is making toward economic rehabilitation of Germany. The exercise of such vote shall extend to any proposed action which might result in an increase in financial burden borne by US, as for instance internal pricing if it was of a nature to increase export costs and thereby decrease exports, and would thus increase financial burden borne by US. The JFEA has already disappeared, and functions and powers of JEIA will desirably become less as more authority is given to German legislative and administrative bodies. The transfer of power of JFEA and JEIA to [Page 60] Bank Deutscher Laender or to other German agencies shall in no way lessen predominant vote exercised by US representatives.”
Sent Department 1260, repeated Berlin 185.