Foreign Relations of the United States, 1949, Eastern Europe; The Soviet Union, Volume V

600.629/12–3049: Telegram

The United States High Conwuspioner for Germany (McCloy) to the Secretary of State

secret

Frankfurt, December 30, 1949—noon.

5335. Sent Department 5335; Repeated Paris Torep 1239, London 289. References: Deptels 3575¹ and 3536,² Repto 8136 repeated Frankfort Repto 821,³ and mytel 5243⁴ repeated Paris 383. Subject: German export controls.

1. As result of Hanes-Erhard conversation December 22, Allied-German working party met December 23 and Dec. 28 with discussions as follows:

(a) International cooperation in export controls. Germans were informed of results Paris discussions to date. Report for January meetings as transmitted mytel 5243 modified slightly to obtain British, French and German agreement, and if agreed formally by British and French, will be transmitted to US, UK and French delegation heads for submission January 9 meeting]

(b) Germans at present planning “oberbehoerde” in Ministry of Economics to deal with both import and export problems of centralized nature. This agency to be completed April but hoped that export licensing agency in operation late January, with twenty to thirty employees.

(c) Limiting period of validity of all licenses to twelve months, as suggested by mytel 5093⁵ and concurred by Deptel 3536. German reaction negative Germans stated government would much prefer to assume responsibility later for requiring re-issuance of licenses to, say, Yugoslavia, should that be necessary, rather than limiting validity of licenses in any way at time of issue. We concur this view and would appreciate Department’s comments.

(d) Decentralization of licensing approval. Germans suggested that Laender Economic Ministries might be empowered to approve or deny certain applications, thus decreasing administrative delay. This suggestion disapproved.

(e) Department of Commerce invitation for German official to visit Washington. See Blaisdell letter to McCloy November 16.⁶ Germans appreciate invitation and will notify HICOG of person and approximate date of visit. No HICOG personnel will accompany.

2. Germans cooperative and helpful and extremely desirous participate Paris meetings earliest date and are concerned over fact that proposed controls in Germany appear stronger than in other countries. We also concerned—witness recent problem of rail shipments to China—and feel that once Paris group has arrived at final agreement on 1–A, 1–B lists and other problems, instructions to Germans should be modified accordingly. On December 22, Erhard expressed view that distribution of Marshall Plan aid should be contingent upon degree of controls exercised by various countries. While not necessarily concurring, we feel that Germans will cooperate with Paris group and once they form part of group cannot and should not be asked to apply more stringent controls than group as a whole will apply.

Consequently, while Germany will not be represented at January meeting, we feel that US delegate should make strongest effort to reach final agreement on 1–A and 1–B lists at that meeting. If agreement is not reached, HICOG will feel obligated eventually to take steps to revise instructions to Germans accordingly.

3. Attendance January 9 meeting. US representative from Frankfort may remain for January 9 meeting as member US delegation, but will be representing ECA mission rather than HICOG. Robertson⁷ understood to disapprove attendance by UK representative from Germany. If neither UK nor French representative from Germany attends, however, probably advisable for US representative not to attend, since control program here has been tripartite and not a part of ECA mission program.

4. Military Security Board⁸ may send representative, Zahner, January 5 meeting. Would appreciate hotel reservations.

McCloy

1. Not printed. It expressed the view that questions regarding the effectiveness of West German export controls would probably be raised at the forthcoming January 9 Paris intergovernmental meeting on East-West trade, and it requested a formal report on the status of those controls (640.6031/12–2749).
2. Not printed, but see paragraph “(c)” below.
3. Not printed.

4. Not printed. It reported that in view of French opposition to German participation in the January 9 Paris meeting on East-West trade, representatives of the Office of the United States High (Commissioner for Germany would attend. French and British representatives from West Germany would probably also attend. An outline of a report on the status of West German export controls was submitted. The report indicated that in a conversation on December 22 with ECA Mission Chief Hanes, West German Minister of Economics Erhard had expressed his willingness to cooperate fully with export control plan proposed by the Allies on November 25 (600.629/12–2740).

   Regarding the control plan submitted to the West German Government on November 25, see editorial note, p. 172.

5. Not printed.
6. The letter under reference is not further identified.
7. Sir Brian Robertson, British High Commissioner for Germany.
8. Documentation on the establishment and operations of the Military Security Board in Western Germany is included in volume iii.