CFM Files: Lot M–88: Box 144: Ambassadors’ Meeting Rome 1950
Paper Prepared by Mr. Louis A. Wiesner of the Office of German Political Affairs1
Papers for Ambassadors’ Meeting at Rome—March 22–24
Subject: Berlin
U. S. Policy: (1) to hold Berlin and defend it against hostile Soviet action. (2) To strengthen ties between Berlin and the German Federal Republic. (3) To improve Berlin’s economic situation to an extent comparable to the progress attained in Western Germany.
problems of implementation
1. Defense of Berlin against Hostile Soviet Action.
(a) Planned Communist Youth Demonstration in Berlin, May 26–30, 1950.
The Soviet Zone “Free German Youth” (FDJ) is planning a gigantic youth rally in Berlin May 26–30, at which it wants to assemble from 5 to 600,000 youths from all Germany and other countries. Preliminary organizational work for this rally is well advanced, and recruitment is proceeding throughout Germany. The FDJ on February 2 asked Lord Mayor Reuter for permission to parade through West Berlin and to use the Olympic Stadium in the British Sector for sports demonstrations. This request has been refused.
Concern over the rally arises out of repeated and reliable intelligence reports that high Communist officials intend to use it to overthrow the legal Berlin Government by violence. The latest reports indicate that activists of the Soviet Zone “People’s Police”, either singly or in groups, may be sprinkled throughout the FDJ ranks.
A Western Allied standing action committee has been formed in Berlin to coordinate counter-measures. At their February 16 meeting the Berlin Commandants agreed that, while it would not be possible to exclude all FDJ elements completely, organized marching or demonstrations would not be permitted. Reuter stated this policy publicly on March 2, and the Commandants publicly backed him up. The High Commission on February 23 agreed to undertake such troop reinforcements as necessary in Berlin and other detailed plans to prepare for the demonstration have been worked out between the Allied Commandants [Page 830] and the Berlin City authorities. The Secretary has been informed in detail of these plans.
(b) The “little blockade.”
When the Berlin blockade of 1948–1949 ended, the National Security Council in its paper 24/32 of June 1949 recommended that if the blockade were reimposed we should reply by resuming the airlift and reimposing the counter-blockade. This recommendation was approved by the President.
Beginning on January 13, 1950 with the seizure of eleven trucks laden with non-ferrous scrap, the Soviets have been imposing a series of intermittent restrictions on transport between Berlin and the Western Zones of Germany. The principal effect of the measures has been to strike at business confidence, without which the economic recovery of Berlin will be impossible in spite of all governmental aid measures. (See item 3 below)
In telegram 668, January 31, the Department presented its analysis of the situation and asked HICOG’s reaction to a possible full counter-blockade on truck and barge traffic from the West to the Soviet Zone. At that time it was discovered that the Soviet Zone, if its purchases were paid, would have an excessive deficit in its trading account with Western Germany, principally because of certain steel shipments previously unrecorded. HICOG, in agreement with the British and French, proposed to embargo further shipments of certain valuable steel to the Soviet Zone. Since the British and French Governments would not agree to any further countermeasures, and indeed were reluctant to connect the steel embargo with the Soviet transport restrictions, the Department in telegram 4 to Bonn,3 February 3, agreed to the steel embargo, and it was imposed.
On February 27 it became public that by an unauthorized agreement made with the Soviet Zone German officials, the Western German trade chief in Berlin (Kaumann) had lifted the steel embargo. After prolonged discussion between the Allied High Commission and Adenauer and his principal ministers on March 2, it was agreed that the steel embargo was to be reimposed and even extended to stop shipments already underway.
(For further details on the steel embargo see the paper on East-West Trade between the German Federal Republic and the Soviet Orbit.4)
(c) Prospects.
[Page 831]It can be assumed that the Soviets, either directly or through the German Democratic Republic or both, will continue by every means and at every occasion they feel appropriate to try to make our position in Berlin untenable. Overriding political considerations make it necessary for us to resist these efforts.
2. Strengthening Ties with the Federal Republic.
Berlin has perhaps the most genuinely democratic and pro-Western government and people in all Germany. From the beginning Berlin has wanted to be the twelfth Land of the German Federal Republic, and Article 23 of the Bonn Basic Law provides that it is, although this part of the Basic Law was suspended by Allied action.
This Government has been sympathetic to Berlin’s desires and has repeatedly pressed for their fulfilment. The British have not been unsympathetic. The French have opposed Berlin’s inclusion in the Federal Republic. They oppose any development which seems to lead toward a unified Germany with Berlin as its capital. They have noted with uneasiness that East Berlin was not formally included in the Soviet-puppet German Democratic Republic and have felt that inclusion of West Berlin in the Federal Republic might be a violation of the June 20, 1949, Paris CFM agreement5 on the “normalization” of Berlin life. They fear Soviet reprisals. Chancellor Adenauer has also been unenthusiastic about implementation of Article 23, largely, we believe, for political reasons (Berlin has a Social Democratic majority).
Because of this conflict we have had to be content with a HICOM agreement made October 27, 1949, and approved by the three Governments, to give Berlin Land status (outside the Federal Republic) approve its new constitution, and provide for closer ties with the Federal Republic, including placing certain Federal agencies in Berlin. Full implementation of this agreement is awaiting the Berlin City Assembly’s revision of the constitution, which has been delayed.
3. Improving Berlins Economic Situation.
The blockade left Berlin industry in a very poor competitive situation, and the city’s economy deteriorated steadily until about 28 per cent of the labor force was unemployed on February 15, 1950. The “little blockade” mentioned above contributed appreciably to this deterioration.
The United States took the lead in organizing aid for Berlin’s economy. The German Federal Republic, in the ECA bilateral agreement6 signed December 15, 1949, assumed the obligation to extend such financial assistance as necessary. The Republic has reluctantly [Page 832] continued the budgetary loans which had been given by the Bizonal Administration. Authority was granted McCloy to consider Berlin as entitled to receive ECA aid under the bilateral. In December 1949 ECA counterpart funds in the amount of DM98 million were released for investment in Berlin industry, housing and public works. Certain tax exemptions and other privileges have been given to encourage investment and the placing of business orders in Berlin. The Department of State and ECA are presently considering possibilities for increased aid.
- The source text was attached to a cover sheet which indicated that it and two other papers on German unity and the German refugee problem were documents prepared for the Ambassadors meeting scheduled for March 22–24 at Rome. The composite of the three documents was numbered RAM–6 and dated March 15. For the text of the paper on German unity, see p. 608; the paper on refugees is not printed. For further documentation on the Ambassadors meeting, see vol. iii, pp. 795 ff.↩
- Not printed, but see NSC 24/4, Foreign Relations, 1949, vol. iii, p. 839.↩
- Not printed.↩
- Under reference is RAM D–7, dated March 15, not printed, which reported the nature of the trade control problem in the Federal Republic of Germany and Berlin and concluded that trade controls were expected to be imposed by the Federal Republic on contracts with the Soviet Union and its satellites only so far as other Western European countries exercised controls over similar trade. (CFM Files: Lot M–88: Box 144: Ambassadors’ Meeting Rome 1950 Agenda)↩
- For the text of Paris CFM communiqué on Germany and Austria, see Foreign Relations, 1949, volume iii, p. 1062.↩
- Not printed.↩