740.00119 Control (Germany)/2–1949: Telegram

The Secretary of State to the Embassy in the United Kingdom

top secret
us urgent

592.1 Army is addressing following message to Clay:

“Essential question is introduction Western mark Mar 10, which is assuming increasing urgency in light reports Eastern zone currency dislocation and rapidly depreciating exchange value East mark in Western sectors. Paris Emb conversations Fr officials reported in Paris Tels 55 and 56 to Berlin2 indicate possibility Fr might agree to introduction Western mark on basis so-called Plan X3 which, while making West mark sole legal tender Western sectors Berlin, would leave Berlin Central Bank as correspondent of, and not voting member of Bank Deutscher Laender. We believe we should exploit this opportunity to obtain Fr agreement. This step would not prejudice development closer relationship Berlin with Western zones in financial as well as polit matters should this be decided upon. Would Plan X be acceptable as basis for immediate discussion three Mil Govs with view to establishing technical arrangements for full introduction Western mark Mar 10? Feeling is here that discussion of separate currency for three Western sectors as proposed in Paris tel 55 to Berlin not profitable or useful and we plan so to inform French if you agree. We do not accept Fr conception of three to four weeks delay for purpose SC discussion, mentioned their note in Paris tel 55, since we and Brit are of firm opinion that SC consideration experts report [Page 679] would serve no useful purpose. Please repeat your reply to Paris and London through Murphy.”4

  1. Repeated to Paris as 531, Berlin as 210, and New York as 95.
  2. Neither printed.
  3. The Plan under reference here called for the transformation of the Berlin Currency Commission into a Berlin equivalent of a Central Bank with the law establishing such a bank providing that it might become a bank of issue. The currency issued in Berlin would be applied against the books of the Bank Deutscher Laender and the relation between the Berlin Central Bank and the Hank Deutscher Laender would be correspondential. (Letter from Murphy to Saltzman, February 23, not printed (862.515/2–2349))
  4. In telegram CC 7817, February 22, from Berlin, Clay replied:

    “I can see no justification technically or politically for Plan X. It springs entirely from French desire to separate Berlin from West Germany. If we propose to accept this principle it is difficult to conceive why we stay in Berlin with an expensive air lift burden. Presumably we are remaining in Berlin to maintain its ties with West Germany and the West. French were fully willing to have German Bank of Emission of Soviet Zone control Berlin currency and yet are unwilling for Bank Deutsche Laender to do so. An allied commission can do the job but certainly not as effectively as BDL. If British would go along with us in proceeding with the West mark under BDL, French would have to accept.” (Department of Defense Files)