Foreign Relations of the United States, 1951, European Security and the German Question, Volume III, Part 2

462A. 62B 31/11–351: Telegram

The Director of the Berlin Element of HICOG (Lyon) to the Office of the United States High Commissioner for Germany, at Frankfurt¹

secret

Berlin, November 3, 1951—2 p. m.

784. Ref Depteire 402,² Berlin trade difficulties and suspension IZT agmt. We believe now nec survey our posit carefully in view East Zone negotiators reported categorical rejection conditions attached by West to implementation IZT agmt and statement that matters touched by these conditions must be handled on Allied level. We believe it also nec to determine a considered plan on basis facts and possibilities open to us and not act on day-to-day or emergency basis in response to Sov actions. Of various issues relating Berlin’s trade and communications, fundamental one is Warenbegleitschein question and Sov insistence on proof of origin of goods as conditions of approval. Autobahn tax question arose later, its settlement was made by HICOM on condition of signing IZT agmt, and FedRep, according Erhard, consider East Zone reduction tolerable. Both questions, Rothensee shiplift (now open) and parcel post interference, though old issues antedating current difficulties and conceivably separable from them, were conditions for signing IZT. Question parcel post interference from practical point of view subsidiary issue since, if Warenbeglietschein question satis settled, goods rejected for parcel post cld be shipped as freight under Warenbegleitschein system.

When proof of origin issue arose Cdts here forbade submission such proof to Sov auths either by Senate or by individual firms. Berlin Senate has complied wth Cdts order and firms by and large have likewise complied. However, compliance by firms in present circumstances may mean substantial fin loss to them and depends almost entirely their sense loyality to West and their willingness comply with Cdts instrs. We believe in practice nothing can prevent them from supplying evidence of origin to Sovs voluntarily if they choose, and detection wld probably prove difficult.

Under arrangements worked out by occupying West powers, commercial airlift was established to assist in export from Berlin of goods held up by Sov denial of Warenbegleitscheine. Even though this airlift has not been maintained at its originally planned level of 100–120 tons daily, it has transported in Sept and Oct from 20 to 30 per cent by value of Berlin’s total exports to West, including exports to FedRep. But with seasonal increase of trade, decline of Warenbegleitschein approvals, and rapid exhaustion of firms supply of Warenbegleitschein approved earlier, Berlin firms are faced with serious situation unless capacity of airlift is increased and some provision made for transport of heavy goods not suitable for shipment by aircraft now in use or not eligible for airlift under present criteria.

Control of interzonal trade our most powerful, if not our only, immed available weapon. As Berliners econ interests are at stake, appears to us we can expect wholehearted cooperation in support our position provided we give concrete evidence of doing what is in our power to protect those interests.

Fol assessment of possibilities open to us is made with foregoing analysis in mind. We think that gen policy represent Berlin trade difficulties shld be: (a) Firmness and solidarity of West in act and appearance with respect to suspension of interzonal trade agmt until at least basic Warenbegleitschein issue satis settled; (b) adoption of immed measures to provide regular and adequate brown coal supply from West. Fact of Berlin’s low stocks undoubtedly known to East and may account for their unyielding position; (c) immed strengthening of airlift to care for Berlin’s exports to West, with special provision for transport of goods not suitable or not eligible for present airlift (reftel Berlin to Dept 650, Fkft 755, Bonn 319 Oct 30³); (d) pressure for organized action in FedRep and in NATO countries to prevent East Gers or Sovs from obtaining, either legally or illegally, goods which they seek to obtain from FedRep under IZT agmt.

Re possibility restricting barge traffic, we point out that restriction DDR trfc may prove ineffective since canals will probably be frozen in about six weeks and East Zone by-pass will probably be open next spring. Although barge restrictions have proved effective Western weapon in past, it might be more to our advantage at moment not to risk retaliatory restrictions our own barge trfc which still has possibility for increase of coal deliveries to West Berlin. (See para (b) above.)

With ref to airlift and measures to maintain deliveries of Berlin’s exports, we point out that some measures of this kind are nec to prevent West posit Berlin collapsing due to gradual desertion by individual Berlin firms. Shld such firms under pressure of econ necessity decide individually to supply Sovs evidence of origin they require in order to obtain Warenbegleitschein, Cdts wld be faced with alternatives either winking at flagrant disregard their orders or attempting enforce by punishment; in either case result wld be loss their prestige and authority and loss of West Berlin confidence in Allies. Shld no adequate provision be made to move exports, econ pressure on firms may be heavy and almost irresistible.

Airlift capacity nec to move outgoing goods, while greater and more expensive than present airlift, very much less than capacity required for incoming goods in case of blockade.

Finally, some assessment must be made of possibilities of success in policy outlined above. In our view these depend on two things:

(a) East Zone’s need for products they wld obtain under IZT agmt, and their ability to obtain them elsewhere;

(b) Sov decisions on question whether their own polit prestige and auth are too deeply engaged to allow retreat, and on usefulness Berlin question to them in wider field diplomatic bargaining.

These questions appear completely independent of each other since Sovs may prevent DDR yielding regardless econ cost to latter. Considered in purely econ terms, possibility East procurement essential items indirectly, from third countries, or via illegal channels, may indicate skeptical views; yet DDR may be already hard-hit by denial steel and machinery from West and Sovs may permit yielding under pressure if econ considerations dominant and West remains firm.

Lyon

1. Repeated to Washington, London, Paris, Moscow, and Bonn. The source text is the copy in the Department of State files.
2. Supra.
3. Not printed; it reported that the Berlin Commandants agreed with the recommendations of their Economic Advisers stating the need for an increase in the capacity of the airlift. (462A.62B31/10–3051)