740.00119 Control (Germany)/5–1249: Telegram
The Acting United States Political Adviser for Germany ( Riddleberger ) to the Secretary of State
709. Mytel 701,1 re resumption interzonal trade. Representative Bizonal Economic Administration, who today discussed interzonal trade agreement with Representative Soviet Zone Economic Commission reported following:
Soviet zone Economic Commission (hereafter DWK) tentatively agreed to inclusion West Berlin in trade agreement as part of Trizone, use of West mark as computing medium; and establishment two clearance accounts in Bank Deutscher Laender, “A” for “essential” goods, listed as such in trade agreement, and “B” for nonessential goods, which would include everything else. Accounts would be cleared every four months. Lists of essential goods not yet decided. Warenbegleitscheine (border transit authority) for goods would be issued only for goods certified as purchased with West marks from either “A” or “B” balances in BDL (different from pre-March 1948 practice when currency not a problem and Warenbegleitscheine were issued for goods not included in trade agreement). Thus Soviet Zone would be able to obtain goods designated by West Germans as “essential” only in value of deliveries East zone “essential” goods and of West mark credits established in BDL. Same would apply to nonessential goods account. West mark accounts in West Berlin and West [Page 755] Germany, now blocked, would be released as either “A” or “B” accounts.
DWK expressed desire for credit, steel, tires and tubes. Was not able to offer goods which would likely be classed as essential. DWK said pitprops, sugar, grains for feed, textile machinery, chemicals, porcelain insulators, lenses, and other commodities desired by Trizone not available. (Comment: In view of known exports, reparations, and sales to Soviet trading companies of most foregoing items (missions despatch 4732) DWK statement of unavailability and request for West mark credit in BDL appears as means of obtaining West goods without reducing reparations, etc., and that without such credit Soviet zone would have to reduce reparations, etc., or forego imports from West Germany.)
Bizone Economic Administration representative stated West zone border customs control greatly improved, with customs police at 18 to 20 border crossing points and remainder closed to goods transit.
Goods from West Germany to West Berlin would be restricted to Berlin requirements. No control contemplated border West Berlin Soviet zone and West Berlin Soviet sector. Soviet Zone purchasers have now and would have free access to cash purchases in West Berlin in either West or East marks. However, currency exchange rate, which rose during past day or two from 3–3.20 to 3.40–3.60 at official exchange offices, might inhibit sell out to Soviet zone in competition with outlets selling at Soviet zone legal prices. West mark prices would at present exchange rate be much cheaper than Soviet zone “free shop” prices, which have been 10 times legal prices and 3 times West mark prices.
Negotiation on interzonal trade agreement to be continued Monday, after which lists of “essential” goods and further details will probably be available.
To question whether DWK would permit exit goods to West pending conclusion interzonal trade agreement, Trizone Economic Administration representative said probably not except for goods despatched to sell in West for accumulation West mark cash, and that only stocking, curtain material, and suiting (rayon and artificial wool) would be sent, goods which have accumulated as surplus because quality too low for export and reparations.
Sent Department 709, repeated London 251, Paris 241, Frankfurt 27 and pouched Moscow.