740.00119 Control (Germany)/5–1949: Telegram

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


763. After one week of experience in the application of the New York agreement of May 51 on raising of blockade and counter blockade restrictions, we describe below the factual situation on restrictions as it exists today and the negotiating positions developed in conferences with the Soviets during the past few days. Our estimate of Soviet intentions is appended to the conclusion of this telegram.

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Status removal restrictions on transport.

Following is review situation re transport operations and controls over movement vehicles, persons and goods, and communications.

Quadripartite conference was held May 18 re transport on technical level, western allied transport officials meeting with General Kvashnin, Chief Transport SMA. Results will be indicated below under subject, (mytel 756, May 182 on transport situation.)

New controls over rail operations. Soviets have instituted direct control of all rail movements, including military, (a) by placing Soviet liaison officers in rail yard offices West Berlin between allied authorities and German rail authorities through whom all schedules and equipment must be channeled and (b) by requiring that Soviet Zone locomotives, as well as engineers and train crews, be used within Soviet Zone. These restrictions make possible for Soviets to implement trade controls or other economic controls and at least make allies subject to any administrative lack of interest or incompetence in transport and movements between Berlin and West. Formerly, although Soviets exercised overall control, allies worked out specific movements directly with German rail authorities (Soviet Zone) and because operating with own engines and crews were able retain cars and locomotives needed. Although Soviets objected, they were at beginning unable supply necessary locomotives and, in any event, allies then discovered this was only way to assure West Zone/Berlin traffic.
Operational difficulties resulting from Soviet control. Chief difficulty at present time is controversy over number of train paths, which Soviet claim are limited in accordance with fundamental quadripartite agreement based on Soviet paramountcy in its zone. Soviets have granted 16 freight train paths (freight train speed and treatment) and one passenger and have now specifically agreed, in reference conference, to change two freight to two passenger train paths (to total three of latter). Presently only the British train enjoys regular passenger train schedule (presumably because it was first to enter after blockade), traversing Soviet Zone around three and one-half to four hours, while US takes around seven hours (averaging about 15 miles per hour). German train takes about four and one-half hours (but is not charged against allied train paths). AH find impossible keep to schedules. Kvashnin said schedules were German matter but also objected allied going direct to Germans (rather than through Soviet liaison). In reference conference, allied transport authorities pressed Soviet to permit 20 train paths but Kvashnin insisted that terms New York agreement being complied with and gave no assurance request would be considered (reftel 756, May 18). Kvashnin maintains [Page 781] 16 train paths should be accepted because that was number officially agreed at Control Council level, while allied position is that since 21 paths later agreed on quadripartite technical level and actually in use prior to 1 March 1948, limitation to 16 is violation of New York agreement.

Two effects of failure to restore pre-blockade conditions on incoming movements (other than taking advantage pre-blockade overall control to reduce number train paths) are reduction from freight capacity of 12,000 metric tons to maximum of 7500 and elimination of US military train Berlin/Munich through refusal by “German rail authorities” supply locomotive therefor (train not considered important by US Military Government, however).

As for outgoing freight, new Soviet control over operations makes possible refuse locomotives and cars as Soviet desires, with specific reference to German goods whose export not approved by Soviet. Cars are being withheld for shipment scrap lacking Soviet permit (see 756, May 18).

Debt 1300 freight cars mentioned reference telegram not considered serious by BICO transport chief, since cars being returned and normal “pipeline” before blockade was 3000 cars. Situation must be watched, however. Kvashnin, on being questioned re 5000 car debt from pre-blockade stated he had no authority to discuss.

Final operational difficulty with rail is closing all crossing points for Berlin/West Germany traffic except Helmstedt. This does not mean Helmstedt only crossing point for East/West traffic of which at least six. Allied officials point to firm agreements on technical level which opened for use up to 1 March 1948 crossing points which have been closed, but Kvashnin refused recognize as agreements since not on Control Council level.

No operational difficulties reported as yet re highway and barge movements similar to rail outlined above except closing certain border crossing points for highway.

Interference through documentation requirements.

A. Personnel.

Allied and allied-sponsored travel (carrying travel orders). Documentation and control procedures applying now as before blockade with no increased demands.
German. OMGUS officials state interzonal passes and personal identification being accepted by Soviets as before blockade. Too early yet to judge whether Soviets will intensify controls beyond previous practice although they have let be known will be easier for travelers showing written evidence they engaged in business transactions to [Page 782] obtain entry and exit re Soviet Zone. Informed requests for interzonal passes to leave Berlin beginning assume large proportions.

B. Freight.

Allied official. Controls same as before blockade; that is, freedom movement without inspection if covered by proper allied documents.
Berlin/West. Soviet border control officials have announced will permit no goods leave Berlin for West that appear on their restricted list unless bill of lading contains Soviet approval stamp. Allies taking position this demand illegal. Only one freight train has left Berlin for West, carrying goods other than restricted list. Intended second train not permitted depart because carrying scrap for which no Soviet permit. Machine tools and radio parts also turned back. Apparently Soviets covering 90 percent Berlin production in restricted list and West Berlin economy may have yet depend on airlift.

(1–1) German highway freight for Berlin. By seven this morning, around 400 trucks loaded with fish, fresh vegetables and miscellaneous items for Berlin economy had collected at Helmstedt control point on autobahn as result Soviet refusal permit entry into their zone.

Reason given by Soviet official there to transport chief, US Berlin sector military government, was that merchandise must be covered by German economic commission (Soviet Zone) stamp on purchase contract. Berlin importer would mail stamped copy to exporter in West zones, who would have to send it with goods. Stoppage trucks was effected from 11:20 p. m. May 17, Soviet border control official stating regulation existed from time blockade opened and only failed be implemented through ignorance former official.

SMA economic official has just informed OMGUS that trucks now waiting at Helmstedt will be permitted proceed to Berlin—without SMA stamp—but that henceforth they must have SMA stamp. In meantime, Soviet official at Helmstedt had informed truck drivers they could enter at border crossing point north of Helmstedt—without SMA stamp—and some had done so. Kvashnin had stated in conference he had no authority over matter, as it was trade and not transport matter.

(2–2) Entry German freight trains. As of 11 a. m. May 19 there had been no interference with incoming German trains on basis documentation, although considerable number of Cars had been refused entry and sent back on basis alleged technical defects. This being investigated. German freight trains continuing enter Soviet Zone for Berlin, however, at normal rate 12 or 13 per day.

(3–3) Barges. According latest report, being reactivated without undue difficulty, allies agreeing with Soviet contention new crew lists required, obtention of which causing some delay but expected have all barges properly documented two or three days. Several barges have entered Soviet Zone, and 11 have set off from Hamburg loaded with rye.

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4. Communications.

A. Mail and parcels.

OMGUS reports shipment mail (including parcels, which were not permitted during blockade) up 1000 percent between West and Berlin; 16,600 parcels having been dispatched from West to Berlin since lifting; 13,500 other direction. Protest just received from Soviet re carrying mail cars on military trains. This was practice on March 1, 1948 although no agreement.

OMGUS officials fear Soviets may impose controls over incoming and outgoing parcels but to date have been able unload incoming in Western sectors and to date Soviets have not required inspection and stamping individual outgoing parcels although do require “warenbegleitschein” from SMA to cover carloads.

B. Telecommunications.

Only restriction reported that did not obtain March 1, 1948 is necessity place long distance calls between Berlin and Soviet Zone through Soviet sector facilities. This not considered breach New York agreement, however, since agreement did not include Soviet restrictions on Soviet Zone/West Berlin communications (nor trade and transport).

Status removal restrictions on trade:

Laender and sector military governors US, French and British areas of control instructed May 10 that all restrictions imposed by MG’s on trade, transport and communications on or since March 1, 1948, be removed and that goods moving from West zones to Soviet Zone and all sectors of Berlin be permitted to cross interzonal borders if accompanied by warenbegleitschein (shipment approval certificate) duly issued by LWA’s (Laender economic offices) under procedures prevailing in West zones prior to March 1, 1948 even though no interzonal trade agreement in force. Special emphasis placed in instructions issued May 16 that any goods destined for Soviet Zone and properly paid for should be allowed to move and that any previous restrictions on their movement should be removed.

Laender government economic offices instructed on May 13 by Bizone economic department (VFW) that until offset account established, warenbegleitschein should be approved only for fully paid deliveries and for goods not enumerated in JEIA restricted lists B and C. Restricted also would be materials of precious metals, semi-finished materials of non ferrous metals, precious stones, semi-precious stones, jewelry diamonds, pearls, controlled soaps, soap products and washing agents, shoes of all kinds except clogs; applications for warenbegleitscheine for these items to be submitted to functional sections of VFW. [Comment: Laender economic offices thus competent to approve only warenbegleitscheine for non restricted items; procedure was in effect 1 March 1948 and designed to restrict issuance of warenbegleitscheine when item in short supply in Land.3] Above VFW instructions [Page 784] amended subsequently, to remove as pre-condition for issuance of warenbegleitscheine the requirement of full payment for deliveries of goods. Instructions of BICO to VFW stated “bizonal suppliers shall be free to negotiate sale of goods in interzonal trade on such terms as may be desired by them.”

Representatives Bizone economic administration (VFW) have held several conferences with representatives Soviet Zone economic commission (DWK), coming to tentative agreement to regard 1948 trade agreement invalid, to establish new trade agreement, including West Berlin with West Germany, to list in trade agreement items promised in restricted amounts, to establish clearing account “A” in Bank Deutscher Laender with restricted total value for essential items of trade, and clearing account “B” for all other items. Agreed clearing accounts to be based on shipments and 10 million dm initial “pump priming” credit, clearance to be effected every four months. Representatives of VFW will use JEIA “B” and “C” lists, plus items added by MG’s to protect economy, as West zones restricted list for limited trade; DWK representatives expected to propose lengthy restricted list.

Meanwhile in quadripartite economic advisers meeting May 18 re Soviet proposals reported in CC 85994 Soviets declared as repudiation of New York agreement proposal by US (Wilkinson), supported by British and French, that all implication recognition of Validity of 1948 trade agreement be eliminated. Impasse reached also when Soviets insisted re paragraph six Soviet proposals on establishment clearance agreement, rejecting British suggestion that no clearing or other financial agreement necessary and that trade should be handled by buyer and seller on mutually agreeable basis; and US position that while British proposal best, some type clearing arrangement possible. Soviets rejected further proposal initiative be left to Germans. Soviets position that bank clearing system had been in effect before 1 March 1948 vital to trade and entitled to demand equivalent clearing arrangements now, on grounds lack of one restricts trade. Full report of May 18 meeting of economic advisers sent by OMGUS in CC 86335 repeated to Paris for Jessup.

At reparations meeting on technical level May 12 Soviets offered resume reciprocal deliveries at early date under second consignment of reciprocal deliveries program and OMGUS acceptance (CC 8582, relayed Paris for Jessup in ourtel 261, May. 166). Also offered additional list to be applied against outstanding balance of account and these items now being considered by IARA.

Status of publications distribution:

No Western-licensed publications at present being distributed in Soviet sector or Soviet Zone with single exception of 300 copies of Neue Zeitung, recently ordered by Liberal Democratic Party office in Dresden, which were sent from Munich and which crossed Soviet Zone border. Unknown whether shipment reached final destination. Neue Zeitung [Page 785] sent 20 telegrams to former dealers in Soviet Zone and received identical answers from former dealers saying that they could not contract for Western-licensed papers unless contract was made through monopoly distribution agency set up in SMA order number 105. All Berlin West-licensed press refuses to deal with Soviet distribution monopoly. Still unknown to US authorities whether US zonal papers have contacted distribution monopoly, but possibility exists.

There is no ban on distribution of Soviet-licensed publications in any sector of West Berlin. Distribution Soviet-licensed press effectively blocked, however, by fact that SMA licensed press refuses to sell for West marks. West Berlin news dealers will sell only for West marks. Attempts have been made to sell Soviet-licensed press through unlicensed dealers, all of whom have been arrested by West-sector police upon apprehension, for being unlicensed.

Soviet-licensed newspapers, books and other publications coming into US Zone unhindered, selling for West marks. Prices are’ substantially lower than Western-licensed publications. Same situation is true of French Zone where ban has never existed. All Soviet-licensed publications continue to be banned in British Zone. British are disturbed by fact Soviet-licensed publications trickling into British Zone via US Zone.

Concluding comment.

From the foregoing description of the present situation it is fair to state that whatever the terms of the New York agreement, Berlin remains today in a state of semi-blockade. As has so often been the case with agreements drafted in general terms which do not stipulate specifically what detailed measures are to be taken, the Soviets have now returned to their well-known tactics of slanted interpretation. In this regard the situation is somewhat similar to that which existed in the Berlin negotiations of last summer on the Moscow directive, with the exception that the blockade has been partially lifted in this instance.

Wilkinson had received Army Department instructions and Department instructions as set forth in its 580, May 177 before he went into the meeting with the Soviets on trade yesterday and was guided by them. It should be explained re possible clearing agreement that Weir’s instructions did not permit him yesterday to agree to a clearing agreement. Wilkinson therefore supported Weir but made it clear that the US did not exclude the possibility of some type of clearing agreement. Wilkinson and Weir, who now is empowered to discuss clearing agreement, are conferring today for the purpose of concerting their views on a clearing arrangement (see CC 86518). Both are dubious as to what progress can be made with the Soviets who in yesterday’s meeting [Page 786] remained adamant on two points, i.e., the continued existence of the 1948 trade agreement and the necessity for some mechanism for financial settlement as otherwise trade could not be restored. It is clear that the Soviet interpretation of the New York agreement places great emphasis on these two points.

With respect to Soviet intentions in this negotiation, it may well be that the rapidity of developments making possible the establishment of a Western German Government in the near future have caused the Soviets to have second thoughts on the raising of the blockade. They may now think that sufficient advantage to them to warrant the lifting of the blockade is unlikely to result from any agreements which they may obtain at this CFM. A corollary to this could be a Soviet desire raise the blockade only to the minimum necessary to ensure the convening of the CFM, particularly if there is no overall settlement on Germany at this meeting and it may be desirable to work out some provisional arrangement for Berlin. In the latter case, the Soviets would not want to be committed to any great relaxation of the controls they can exercise over Berlin trade. A second possibility is that the Soviets hoped for a crack in the overall trade policy vis-à-vis the Soviet Union and the satellite states and are disappointed that the New York agreement has not automatically guaranteed this development. A third possibility is that the-Soviet hoped to obtain simultaneously with the lifting of the counterblockade a flow of goods from the Western zones essential to the economy of the Soviet Zone and to the continuance of Soviet reparations policy. In any case the attitude they are taking here on the trade agreement and clearing arrangements is not such as to indicate any immediate solution of this problem. It therefore seems to us that the Department will have to decide within the next few days whether it considers the Soviet fulfillment of the New York agreement to be sufficient to warrant the convening of the CFM. Certainly there is little evidence of Soviet willingness to approach a solution of the practical problems raised by the New York agreement in a conciliatory spirit, in spite of the tenor of the JessupMalik conversations.

There is also the distinct probability that we shall face an opening blast in the CFM consisting of Soviet charges that the Western allies have repudiated the New York agreement. Soviet controlled press accusations already made, point in this direction. The Soviet delegation may attempt to justify its restrictions on transport and trade as being the result of failure on the Western allied side to agree with the [Page 787] Soviet interpretation of removal of restrictions on trade. We believe this possibility should be taken into account in the present tripartite discussions in Paris.

This message has been read by General Hays and Wilkinson who consider it the best forecast that can be made on the basis of present information.

Sent Department 763, repeated London 274, Paris for Jessup 279. Please pass to Army Department.

  1. For the text of the Four-Power communiqué, May 5, which lifted the restrictions on trade and communication with Berlin, see editorial note, p. 750.
  2. Not printed.
  3. Brackets in the source text.
  4. Ante, p. 766.
  5. Supra.
  6. Not printed.
  7. Ante, p. 773.
  8. Not printed.