Office of the Historian

762A.00/11–2053: Telegram

No. 594
The United States High Commissioner for Germany (Conant) to the Department of State

confidential
Bonn, November 20, 1953—2 p.m.

1723. Following telegram sent Bonn 641 from Berlin, November 18, noon. Bonn repeat to Department if considered appropriate. Since Reuter’s death and complete reorganization of Senat with basic changes in economic leadership Berlin, including probable loss of Hertz (from Senat) and uncertainties of political and economic collaboration of the majority and minority groups, additional uncertain factors have been added to Berlin picture.

This comes when considerable gains seem to be within grasp of economic community and when determination to reduce unemployment by another 50,000 was widely supported. The hope for reduction in unemployment 1954 equal to 1953, and renewal of Western confidence after June revolt, has seemed to lay a basis for further expansion, particularly in the small and middle sized firms.

Careful attention being given to firms near the margin of bankruptcy and efforts to aid by stimulating orders from outside recognized as one key to economic progress. Plans for stimulating increase of orders, improved productivity and diversification of investment all progressing.

Rightly or wrongly, Berlin leaders confidently expect and are counting on not only increasing aid from Federal Republic, but some measure of financial United States support for 1954/1955. While Berliners suffer from many pressures, including those resulting from reports of improved consumer goods and higher wages in East Zone, they also seem to have advanced to a new stage of creative economic effort.

Serious psychological or political setback, which might come from a failure to gain expected Federal Republic aid or disappointment [Page 1382] over weakening of United States support, might lead to serious setback in sensitive and fluctuating situation. Reuter’s death has been severe enough blow for this battered city, without it also having its moral and financial props “pulled out” through failure to continue United States aid beyond current year.

Conant