Foreign Relations of the United States, 1949, Council of Foreign Ministers; Germany and Austria, Volume III

CFM Files: Lot M–88: Box 143: USDel Working Papers

Report by Representatives of the Western Occupation Authorities in Germany to the Western Delegations at the Council of Foreign Ministers in Paris ¹

secret

[ Berlin ,] June 13, 1949.

1. Effective on the 12th May, the authorities of France, the UK and the US issued instructions to lift restrictions imposed since March 1st, 1948 and referred to in the New York Agreement. The authorities of the USSR issued instructions which we understand were designed to give effect to that agreement.

2. Since that time, there have been discussions as to details of practice as to communications, transport and trade, as well as about the new clearing arrangements for trade proposed by the Soviet authorities.

3. It has not proved practicable to formulate the terms of agreement on these matters and there have been some differences of opinion as to what restrictions have, or have not, in fact been imposed since the 1st March 1948, but all concerned have expressed the determination to live up to the New York Agreement and to facilitate communications, transport and trade.

4. All restrictions imposed since the 1st March 1948 by France, the UK and the US on communications, transport and trade between the Western Zones and the Eastern Zone and Berlin have been lifted.

5. It is understood on the basis of oral statements made by the Soviet representatives, that the SMA will continue to secure compliance with its general instructions as to the lifting of restrictions imposed since the 1st March 1948 on communications, transport and trade, referred to in the New York Agreement. It appears from these discussions that as to the following matters the SMA will pursue the following courses:

a. Rail traffic to and from Berlin will be handled via Helmstedt, but authorization for the use of other crossing points for specific movements may be given.

b. Nineteen trains will be scheduled for daily operation via Helmstedt into Berlin from the Western Zones.

c. Locomotives and crews for the movement of these trains through the Soviet Zone will be provided by the Reichsbahn of the Soviet Zone following usual railway operating procedures.

d. Requests of the Western Occupying Powers regarding the handling of their railway traffic within the Western Sectors will be made to the Reichsbahn representatives with simultaneous notification to the SMA rail representative.

e. Railway wagons for shipments out of Berlin will be provided promptly by the Reichsbahn. The SMA has issued instructions that wagons sent to Berlin from the Western Zones shall be returned promptly and will not be diverted for use in the Soviet Zone.

f. Certificates permitting the operation of IWT craft of the Western Zones in the Soviet Zone will be issued promptly by the SMA. The SMA will require the submission of full crew lists before issuing such certificates, but will recognize later amendments to such crew lists, as authorized by the Western Occupying Powers.

g. Road traffic will be authorized to move in accordance with practices in effect on 1st March, 1948.

6. France, UK and the US have further pointed out that the following matters are inherent in the fulfillment by the USSR of the New York Agreement in letter and spirit.

(I) Goods exported from the Western Sectors of Berlin and the Western Zones and vice versa shall be permitted to pass promptly through the Soviet Zone on the basis of documents issued by the responsible German authorities in the Western Sectors of Berlin and the Western Zones respectively. France, the US and the UK are, however, prepared to enter into an agreement with the USSR for a special licensing procedure to control the export to the Western Zones of a limited range of goods derived from the Soviet Zone which the Soviet deem are in short supply in the Soviet Zone.

(II) While Western Occupying Powers accept for the present the arrangements outlined in “c” above, they would have the right to provide their own locomotives and crews to work such traffic in the event that satisfactory service is not provided.

7. In order further to facilitate trade in the new circumstances which have arisen [since?] the 1st March, 1948, discussions have also been held on trade and payment arrangements. In the absence of a general agreement covering these matters at which it has not so far been possible to arrive, France, the UK and the US believe that it may be helpful to outline what they expect to do as to trade and clearing arrangements. Such outline is as follows:

a. Germans of the Soviet and of the Western Zones are free to purchase and sell goods in interzonal trade, as was the case on 1st March 1948.

b. To the extent that buyers and sellers desire, contracts entered into under the Berlin trade agreement for 1948 may be completed.

c. The coal and power agreement concluded between the British and Soviet Military Governments on 1st December 1947 would be reviewed and, if found desirable, revised by mutual agreement of all four occupation authorities.

d. In the absence of a rate of exchange between the West Mark and the East Mark, and without stipulating parity or a rate of exchange between the two currencies, an account in Marks may be opened in the Bank Deutscher Laender of the Western Zones, to become operative when a similar account is opened in the Deutsche Noten Bank, for the settlement of accounts with respect to interzonal trade in goods.

Charges to the accounts so established will be made on the basis of evidence that goods have crossed the interzonal border, and on the basis of invoices in Marks accompanying the goods. The balance of the accounts shall not exceed 10,000,000 Marks, as determined by periodic or special balancing of the liabilities of the two accounts.

e. Similar arrangements may be effected with respect to settlement of accounts for trade between the Western Sectors and the Eastern Zone, and between the Eastern Sector and the Western Zones, utilizing the facilities of the Berliner Stadtkontor (Kurstrasse) and the Berliner Zentral Bank (Charlottenburg).

f. Appropriate arrangements will be established for the prompt liquidation of outstanding balances under this system of clearing by delivery of goods, in the event of its termination. (A more detailed draft of the trade and clearing procedures was discussed in Berlin during the meetings.)

8. The action of France, the UK and the US in setting up a clearing arrangement is a step which is not required by the New York Agreement, which referred only to the lifting of restrictions imposed since the 1st March, 1948. They have expressed readiness to take this additional step as a gesture of good will and to facilitate communication, transport and trade between Western and Eastern Germany. France, the UK and the US believe that a lifting of documentation requirements of the SMA on exports from the Western Sectors of Berlin to the Western Zones is one of a number of comparable actions which should be taken.

The action of the French, the UK and the US authorities in the fields of transportation, communications and trade (including clearing) will depend on the future course of action by the USSR in these fields of communications, transportation (including documentation) and trade.

1. The title in the source text includes the following phrase: “Reflecting Their View of the Conclusion of the Negotiations in Berlin on 13 June 1949.” This report was transmitted to the Western Delegations at the Council of Foreign Ministers in Paris and was designated USDel Working Paper/41 in the records of the United States Delegation. The source text is from those records.