762A.0221/2–250: Telegram

The Acting United States High Commissioner for Germany (Hays) to the Secretary of State 1

top secret   niact

22. Reference yourad 668. I discussed the general issues raised by the re-imposition of restrictions on transport by the Soviets with the French and British Deputy High Commissioners. East-west trade position shows that although officially only 133 million DM have been charged against the 15 million DM account which German Federal Republic established as clearing account for stimulation of east-west trade, actually west German steel companies have delivered approximately 10 million DM worth of steel to east Germans which has not been charged to clearing account and when so charged will over-obligate clearing account by about 8 million DM. Also promises of east Germans to deliver supplies such as potatoes, grain and sugar to be credited to clearing account have not been carried out. It was agreed tripartitely that US [it?] is imperative to take action to protect west German economy [from] loss of additional commodities for which repayment is made. Discussion arose over whether an embargo should be placed now on shipments of all categories of supply as west to east and it was finally agreed that now only steel shipments which are under order and which Soviets are urgently in need of will be embargoed. In the event embargo on steel does not produce satisfactory reaction consideration will be given to extending the embargo to additional commodities. Agreement was reached that action on steel was to be taken under east-west trade agreement provisions2 and not necessarily connected with interruption of traffic by Soviets. Agreement reached to confer with Blankenhorn3 tomorrow at 1000 hours, ask that Adenauer request Muller of VFD to direct no further shipments of steel to east zone until further notice and take parallel action ourselves through Allied steel control groups. Also ask Blankenhorn to submit proposals to ensure that permits (Warenbegleitschein) are not issued for shipment of commodities to east zone until their value is set off against clearing account (this may require invalidating outstanding permits—Warenbegleitschein).

Also ask Blankenhorn to submit proposals to establish control points along Soviet zone border denying movement of commercial supplies by highway except through control points. Establish control points in western Berlin and set up control machinery between Soviet zone border and Berlin to determine what supplies documented for [Page 822] Berlin are diverted to east zone. All above actions to be considered part of east-west trade agreements, but will in reality set up control machinery along Soviet zone border which will enable countermeasures that we may agree upon later to be put into effect. We agreed that above measures would be put into effect with minimum of publicity, that Soviets would soon learn of action with particular reward to embargo on steel.

We agreed to continue military convoys between Berlin and Helmstedt, such convoy commanders not to recognize any rights of Soviet zone German police to control or inspect convoys or other interference with their movements. Identification by convoy only to be made to east German police. I requested that such convoys be increased, but best agreement I could get from French and British was that they would not be diminished over normal past movements. Personally agree with tenor of reftel and feel that I have not secured tripartite agreement to take such energetic action as reftel indicates should be taken.

Do not believe approach to Soviets on High Commission level as indicated in reftel is best solution when more energetic action is finally agreed upon. Feel such approach would be considered by Soviets in nature of ultimatum and involve loss of face on their part and would not trust us not to publicize same. Recommend counter-measures be applied gradually under guise of protection west German economy in such a way that Soviets will realize we intend to apply appropriate counter-measures of equal severity. Unless I get instructions to contrary before 1000 hours tomorrow will assume I have Department’s concurrence to actions contained in this message.4

Sent Department niact 22; repeated Frankfort 80, Berlin 7.

Hays
  1. The United States High Commissioner for Germany, John J. McCloy, was in Washington for consultation.
  2. For documentation on United States policy on East-West trade, see pp. 65 ff.
  3. Dr. Herbert Blankenhorn, Adenauer’s personal secretary.
  4. In telegram 2, February 2, 8 p. m., to Bonn, not printed, Hays was instructed to “withhold action pending receipt further instructions from Dept.” (762A.0221/2–250).