740.00119 Control (Germany)/5–1449: Telegram

The Acting United States Political Adviser for Germany ( Riddleberger ) to the Secretary of State

us urgent

732. Bohlen telephoned me last night to express his apprehension at manner in which revived trade arrangements between East and West zones Germany were being dealt with by OMGUS. He implied that in raising trade restrictions that OMGUS had failed to take into account over-all world trade policies of US and further that I should remind OMGUS of the JessupMalik interpretation of paragraph 2 of agreement. At that time, of course, I had no knowledge of Jessup’s observations on resumption of commercial relations as this information was only received during the OMGUS Army Telecon of last night.1 I told Bohlen that all of us here were trying to carry out what we believe to be the intent of agreement and that we had received no interpretation on paragraph 2 which states clearly that all the restrictions imposed since March 1, 1948 on trade between East and West zones of Germany will be removed. I reminded Bohlen that I had [Page 765] raised the problem he mentioned in mytel 628 April 302 from Frankfurt in which I had concluded by stating that we would probably need a clear position for immediate application if blockade is lifted. No reply was received to this message.

I note from Paris’ 1976 May 133 the assurance given by Jessup to Schuman and further re Department’s position as expressed in second paragraph of its 1586 May 134 to Paris. I think Department should realize that these decisions may place OMGUS in the dilemma foreseen in my 628. Wilkinson cabled Army just before Allied meeting with Soviet representatives asking for clear instructions on application of 1A and 1B lists. He is telegraphing this afternoon the experts report which resulted from the meeting and which in my opinion offers some possibility for a solution.5 However, it cannot be pretended that no 1A or 1B items would move under the proposal which is being cabled. Furthermore, Soviet ideas on financing may likewise be unacceptable. Next meeting of economic experts has been fixed for Wednesday May 18, which will allow several days for consultation.

As my advice is constantly being sought on interpretation of the New York agreement of May 5, I should very much appreciate parallel instructions plus any background of the JessupMalik conversations which may be pertinent. I should assure Department that in this unfortunate misunderstanding the intent of OMGUS was to apply what we thought was the meaning of 4 power agreement. As no answer had been received to either mytel 628 from Frankfurt or to a corresponding OMGUS telegram a few days later, we naturally assumed that paragraph 2 of agreement was to be interpreted literally as otherwise OMGUS could have been accused of failing to carry out an agreement entered into by the US Government.6

Sent Department 732, repeated London 263, Paris for Jessup and Bohlen.

  1. Supra.
  2. Not printed; in it Riddleberger noted that some of the restrictions on trade to the Soviet Union and satellites had been imposed subsequent to the imposition of the blockade. A return to the status quo ante would force the United States to forego restrictions on such trade or breach the JessupMalik agreement. (740.00119 Control (Germany)/4–3049)
  3. Not printed.
  4. Not printed; in it the Department of State agreed with a French interpretation of the JessupMalik agreement that physical barriers would be removed but trade controls would still be necessary. (740.00119 Control (Germany)/5–1249)
  5. Wilkinson’s telegram is printed infra.
  6. In reply to this cable the Department of State stated that WARX 88559, (p. 751 and WAR 88649 (p. 769) provided instructions with respect to the problem of materials on the 1A and 1B lists. Riddleberger was informed that nothing In the JessupMalik conversations should be construed as abandoning the policy of controls on shipments of these items. (Telegram 571, May 15, to Berlin, not printed, 740.00119 Control (Germany)/5–1549)