662.0031/5–1249: Telegram

The Ambassador in France ( Caffery ) to the Secretary of State

us urgent

1957. Subject is economic relations between Eastern and Western Zones Germany.

[Page 753]

Terrill1 of Embassy and Ashley Clark of British Embassy, called by Alphand of Foreign Office at request of Schuman to outline following situation and request clarification certain points by US and British Government:

On occasion of JessupMalik conversations, attended by Chauvel and Cadogan on May 4,2 Jessup indicated in connection with lifting of trade blockade, that barriers to be removed would be of physical character, and that owing to existence two currencies and absence of trade and payments agreement, certain trade controls would be necessary.
On May 5 in Berlin in discussion with Wilkinson, Weir and Leroy Beaulieu, US and UK representatives were inclined to issue no licenses to Soviet Zone until payments questions settled. French representative, on instruction from Foreign Office, stated that although trade and payments agreement might be necessary, it would take some time to conclude and recommended that some licenses be issued, specifically excepting however items on US 1–A and 1–B control lists.
Foreign Office has today received wire from Leroy Beaulieu (Embtel 1950, May 123) that Wilkinson and Weir upon instructions their governments have issued orders permitting shipment from Bizone to Soviet Zone of all goods with no licensing procedure. Only railway bills of lading required, and these to be issued by German Laender officials.
French feel that such instruction should have been tripartite and based on prior agreement between governments.
In light of foregoing, French have raised following questions:
How will payment for shipments between zones be made?
In view Soviet access to Soviet Zone of Germany, has entire principle of Eastern-Western trade control been abandoned by US and UK?
If goods move freely Bizone to Soviet Zone, will goods supplied under ECA grants also move freely? Is US consequently in effect applying ECA aid to Soviet Zone of Germany?
In view US–UK action, has not bargaining position of three powers vis-à-vis Soviets at forthcoming CFM meeting been seriously impaired?
Throughout this conversation, Alphand showed friendly spirit and emphasized request only for purpose of eliciting US–UK opinions. He stated that since these questions would be raised with Ambassador Jessup and UK representatives at first preliminary [Page 754] meeting,4 it would be helpful if US and UK Governments informed in advance of French concern.5

Sent Department 1957, repeated Berlin 168, Geneva 24. (for Harriman and Porter).

  1. Robert P. Terrill, First Secretary of Embassy, Paris.
  2. The reference here is to the meeting of the four representatives of the Occupying Powers, May 4, in New York at which the text of the communiqué calling for the lifting of restrictions on trade and communications with Berlin and the convoking of the Council of Foreign Ministers was agreed. For documentation relating to the JessupMalik talks, including the meeting May 4, see pp. 694, ff.
  3. Not printed.
  4. Alphand was referring to the first preliminary meeting, May 14, of representatives of the three Western powers in Paris before the Sixth Session of the Council of Foreign Ministers. For documentation relating to this meeting and other matters in preparation for the Council of Foreign Ministers, see pp. 856 ff.
  5. In response to this cable, the Department of State repeated the text of WARX 88559 (supra) for the Embassy and Jessup.