740.00119 Control (Germany)/3–2549: Telegram

The Ambassador in the United Kingdom (Douglas) to the Secretary of State

[Extracts]
1
secret

1208. Following aide-mémoire re certain outstanding German questions was transmitted to me yesterday just prior to Bevin’s departure. Our comments follow text.

A. Foreign Office aide-mémoire: 2

. . . . . . .

“3. Basic law. Germans have produced draft which, although not entirely in accordance with Allied letter of advice, was a relatively reasonable document founded upon a compromise between CDU and SPD, in which latter had made most of concessions. Three Military Governors agreed on 2nd March, upon a commentary criticizing this draft. The German Representatives have studied commentary, and on some matters have made amendments to meet Military Governors views. There are, however, three points of difficulty. The first is method of equalizing financial burdens amongst the states; the second is powers of the federal government and state governments respectively, in field of financial administration, particularly tax collection; and third is rights of state governments and of federal government respectively, in non-financial matters where there is scope for concurrent legislation. On these three points Social Democrats are in favor of more centralist solution than French Military Governor and probably US Military Governor, is willing to accept. British view is that no further pressure should be brought to bear upon SPD to give way on these three points, since such pressure would probably lead to a break up of SPD CDU compromise upon which whole basic law is founded. In fact CDU have accepted SPD views on these three questions. In circumstances it seems mistaken policy to imperil whole of our German program by compelling both CDU and SPD to give us satisfaction on these three points, particularly since in respect of other observations made by Military Governors Germans have given us satisfaction.

In order to close debate on basic law, what is required is to tell two German parties that we shall be satisfied with amendments (they) have already made to meet our views, and do not propose to embarrass them or imperil our program by insisting on 100 percent acceptance of all points made in our commentary.

[Page 230]

4. In addition to above there are two subsidiary points outstanding:—

(1)

Revision of Land boundaries. In accordance with decisions of London conference last year, the Ministers President were invited to put forward recommendations on Laender boundary changes. In event only one change was recommended by Germans, namely, in boundaries of Wuerttemberg and Baden. After a delay of six months, during which French and US Governments failed to reach any agreement, French are now proposing that this question should be discussed at Washington.3 If a decision were made at this stage to alter Land boundaries, a referendum and fresh elections would have to take place in the Laender concerned before the basic law could be ratified. This would mean a long delay in whole of our program in Western Germany.

Laender boundaries can be amended after federation has come into existence, and what is required is agreement that this procedure shall be followed.

(2)
The Ruhr agreement. This agreement has still to be signed.”

B. Embassy’s comments

. . . . . . .

3. Basic law: Since negotiations re basic law have not been carried on here, we do not feel qualified to comment in detail on British estimate of situation. Nevertheless, as Department is aware from position we took many months ago during London discussions on form establishment German government I am convinced centralization financial powers particularly power to tax in provisional German government would ultimately destroy federalist form of that government. Since I understand from General Clay that present draft basic law would tend to concentrate power to tax in central government, I feel that we should be unbending on this fundamental question. (This is merely expression personal opinion of subject which is not in our lap.)

4. (1) Revision of Land boundaries: Embassy is not in position to comment on British statement re Land boundaries since matter has never been taken up here. We are inclined to share British view, however, that decision on this question should not be of nature to delay establishment provisional German government.

(2) Ruhr agreement: As instructed Deptel 689, March 2, repeated Berlin 239,4 we have informally advised Foreign Office we are not prepared to make final decision on Ruhr agreement now. British extremely anxious to have agreement signed soon as possible and it is quite likely Bevin will discuss matter in Washington.

Douglas
  1. For the remaining portions of this telegram, see p. 55.
  2. The original aide-mémoire, handed to Ambassador Douglas on March 23, is in the London Post Files: Lot 58 F 47: Box 1394: 350 Germany.
  3. For documentation on the Washington Foreign Ministers talks on Germany, see pp. 156 ff.
  4. Not printed.