740.00119 Control (Germany)/2–2249: Telegram

The Ambassador in the United Kingdom (Douglas) to the Secretary of State

top secret
us urgent

648. For the Secretary’s Eyes Only from Douglas.

Completion of work of Expert’s Committee on Berlin currency and trade problems and course of action proposed Deptel 603, February 211 will mark an important turning point re Berlin case. Department’s instructions raise two issues, i.e. the immediate problem of whether experts’ report should be published and the basic question of our next steps with respect to Berlin situation.
Regarding publication of report, I heartily agree with Department that it would be most unwise for us to attempt to suppress publication and I do not anticipate much difficulty in persuading British to agree to our point of view.
Regarding second question, Foreign Office has informed us that they hope SC will not discuss currency, that they have no plans for further steps which might obtain a lifting of blockade, and hope that, while Berlin case will remain on SC agenda, it will not be actively considered by SC for an indefinite period. Thus British thinking re at least immediate future in SC seems to conform program outlined reference telegram although Department states after currency changeover Berlin, “Western powers would consider possibilities further SC action for resolution.” In view of fact British position already close to our own, I would like to set forth following data for Department’s consideration before approaching British along lines reference instructions.
As I see it, the question to be answered is how can we remain in the Western sectors of Berlin with least cost to us in money, prestige, and bargaining position for the future? Can this best be accomplished by introducing West mark and continuing air lift, or by agreeing to the introduction of the East mark into all of Berlin, obtaining a satisfactory trade agreement, and thus obtaining a lifting of the blockade?
If I correctly interpret Department’s reference telegram, we propose to abandon effort to obtain a lifting of blockade on basis of agreeing to introduction East mark into all of Berlin. In other words, avenue we have been following since August 22 for resolving Berlin issue will be closed. If we now discontinue efforts to reach a settlement [Page 682] on this basis, it seems to me that our possible courses for further action, and our room for maneuvering on the diplomatic level, may become extremely limited. The limitations on our future action are underlined by fact that we are committed not to negotiate with Soviets about Berlin or Germany under the duress of the blockade. The stalemate we have reached re Berlin, and consequently Germany as a whole, will continue, and perhaps all SC will then be able to do is to attempt to maintain a precarious status quo in Berlin through the airlift and to hope that some presently unforeseen circumstances in the indefinite future will provide a new basis for a settlement.
The Department may have chartered [charted?] a clear course to follow after closing the present avenue. If so these observations in this telegram obviously may not apply.
The airlift, which has now successfully weathered the winter, does at least insure that we can temporarily remain in Berlin or if associated with evacuation of portion of population remain for a protracted period. But in absence of drastic measures of this order it is manifest that we cannot look forward with any confidence to the situation in Berlin, say a year from now, when the initial psychological effect of this magnificent demonstration of air power has been dissipated by the humdrum but compelling problems of meeting the minimum economic necessities of the Western sectors of Berlin, if indeed they can be met satisfactorily. This problem has been accentuated by the virtual cessation of economic intercourse between the Western sectors and the surrounding area. While the introduction of the Western mark may on one hand provide some relief it may on the other induce additional counter measures by Soviet such as for example termination inter-exchange of power which will further aggravate our precarious position.
Moreover exploitation of this situation by Germans to their own advantage but perhaps not to ours, already seen in embryo in the Western Berliners’ demands for an increase in the air lift, for the incorporation of the Western sectors into the Western zones, etc. may present some serious questions which with the passage of time will undoubtedly become more and more difficult for us to resolve. If they also set German against German, they may become more dangerous in their consequences.
Thus to my mind, the airlift does not provide an answer to the problem of Berlin, nor can it be an escape for us from this problem. It has given us time to search for a solution. It has also, up to the present, had an incalculable and positive psychological effect on our position in Germany and Western Europe. However, can we have any [Page 683] assurance that this affect will continue as the contrast becomes more apparent between the tremendous effort involved and the abnormal and unnatural airlift which simple road blockades by the Soviets force us to employ and the normal and natural rail, road and water routes which we cannot use.
Thus, I believe it is at least an open question whether our bargaining power re Berlin, insofar as the airlift is concerned, is not greater now, immediately after the winter, than it will be at some time in the future. I also wish to raise the question whether our bargaining position with the Soviets may not be greater under the “threat” of the formation of a West German government than it may be after the full exposure of all the complex problems connected with establishing that government. Our experience here on the occupation statute, and the initial reaction of the military governors to the basic law bring into sharp focus some of the difficulties ahead.3

These problems regarding the economic condition and status of Berlin, the future psychological effect of the airlift, our program in West Germany, etc. are, of course, problems which we must and are energetically facing and which, I have no doubt, we will resolve.

They are, however, relevant to any assessment of the timing of our next move re Berlin. Since we cannot with certainty predict the net effect of these developments on our own position, it seems to me, from this vantage point at least, that we have nothing to lose by pressing ahead now in the SC in a further search for a solution of the Berlin problem.

Furthermore, as the French point out, it was the Western powers who took the initiative in bringing the matter before the SC. We have correctly labelled the blockade a “threat to the peace.” Having in mind our responsibilities and obligations to the UN, I do not see how we could encourage the Council to do nothing about a problem which we have so forcefully declared might at any time impair the peace.
I should also think it to our advantage to have the Council actively continue its efforts to resolve the dispute since we may still hope that the Council’s deliberations will be successful. It was with this objective clearly in mind, and explicitly stated, that we referred the matter to the SC. While in no way abandoning our rights in the Council, it was also our intention to abide by the majority wishes of the Council even though those majority wishes might not meet our [Page 684] desires in every respect. This position seemed a highly desirable one to me because it served as a striking demonstration that we at least were willing to give UN our full support.
Regarding our next steps in SC, I would like to put forward the following suggestion which centers around retaining possibility of utilizing a trade on currency in return for Soviet agreement to lift the blockade. Since the Experts’ Committee has now given exhaustive consideration to the problem, and since we have raised certain political issues with which it was not competent to deal, could we not propose to the neutral members of the SC that, after they had reviewed the work of their experts and the relevant political factors, we would welcome their own recommendations for a plan which would resolve the Berlin currency and trade issues. The Experts’ Committee has reported its inability to obtain an “agreement”. What is now proposed is that we say to the neutral members of the SC that we would welcome their recommendations for an equitable solution of the problem, without any further effort on their part to obtain a solution agreed upon in advance of its presentation to SC.
I suggest that we make this further effort to have the blockade lifted in return for a solution of the currency problem not only because it is the only avenue thus far suggested which might lead to a settlement, but also because prestige considerations would seem to make difficult embarking on an entirely new course at this time. The suggestion would also seem feasible from a procedural point of view since, after the elaborate exposition of the various technical points of view before the Experts’ Committee, further technical discussion with representatives of the parties directly concerned would appear unnecessary. Finally, I cannot believe this scheme would subject us to substantial risks since it is hardly conceivable that the “neutral” members of the SC would produce a plan which would injure our interests in view of their general sympathy for an alignment with the Western powers. In this connection, however, we might wish to emphasize again to at least some of the neutral members the particular points which we would consider most important in any currency and trade plan. With respect to this, I feel that satisfactory trade arrangements would be the most essential features in any such plan to insure our position in Berlin.
It seems to me that the above step would prevent the Soviets from capitalizing in their propaganda on the Experts’ Committee report. Perhaps more importantly it would place us in a strong position with the neutral members of the SC. I have been disturbed over the fact that the Canadian Ambassador could call at the Department to [Page 685] inquire whether we in fact did want solution of the Berlin issue.4 It is obviously important to remove any such doubts in the minds of the neutral members as to our intentions. If we follow plan of Deptel, the “burden of proof” re failure of Experts’ Committee will lie with us, and this could have a seriously adverse effect on us in Western Europe. On the other hand, the suggestion advanced above, if it does not bring a settlement, should at least put the “burden of proof” on the Soviets.
I hope you will understand that I have raised the above questions, and put forward the above suggestion as to future action in the SC, in part because I am not clear where we go next on the Berlin issue. I am sure you will agree that we should, if possible, avoid a situation where we are forced, say, to withdraw from Berlin or use an armed convoy to remain there, or a situation in which we might be forced to consider negotiations about Berlin or Germany while the blockade is still being employed by the Soviets. It will obviously be extremely difficult for us to make decisions of this character if we are forced to because of Soviet action. On the other hand, it will be relatively easy for us to accept a recommendation of the neutral members of the SC for a resolution of the problem if their recommendations provide us with minimum protection.
I will await further word from you before taking up Deptel 603, February 21 with British.5

  1. Supra.
  2. The reference here is to the negotiations in Moscow during August and September 1948, among the four occupying powers in a vain attempt to negotiate a settlement to the Berlin problem. Documentation relating to these discussions is in Foreign Relations, 1948, vol. ii, pp. 995 ff.
  3. For documentation relating to negotiation of the occupation statute and the basic law for Western Germany, see pp. 1 ff. and pp. 187 ff.
  4. The reference here is to a conversation between the Canadian Ambassador, Hume Wrong, and Bohlen on January 13, 1949. During the conversation Wrong indicated that the Canadian representative on the Neutral Committee, Robertson, was not clear whether the United States desired the continuation of the status quo in Berlin, or whether the United States really desired a settlement of the Berlin question. Bohlen had told Wrong:

    “… that the United States Government no less than the other Western Powers desired a settlement of the Berlin situation, but a settlement which would be workable and which would not involve the abandonment of our position in Berlin and the turning over of the control of the Western sectors to the Soviets.”

    A memorandum of this conversation, not printed, is in file 740.00119 Control (Germany)/1–1349.

  5. In telegram 662, February 23, from London, not printed, Douglas asked about the effect of the counterblockade on the Soviet zone. “If Department’s analysis of this factor demonstrates that counterblockade is so seriously damaging economy Soviet zone that Soviets will be compelled to accept our terms in Berlin, then this would, of course, offset tone of considerations outlined in Embtel 648.” (740.00119 Control (Germany) 2–2349)