762.00/7–2652: Despatch

No. 704
The Chief of the Eastern Affairs Division, Berlin Element, HICOG (Barnes) to the Department of State1

No. 91


  • Berlin’s Despatch No. 704, July 22, 19522


  • Significance of the Second SED Party Conference With Regard to the Communist Unity Strategy

Summary and Conclusions

The new economic and political program outlined by Walter Ulbricht before the Second SED Party Conference in July of this year, and subsequently approved by both the SED party and the GDR government, represents a break with the previous SED and GDR government policy line. The earlier program was, according to both public and internal pronouncements, limited in scope, due allegedly to the overriding political task of achieving German unification. This task, it had been explained, prevented the GDR from proceeding with the development of socialism. It supposedly imposed economic, political and social policy limitations aimed at preserving sufficient similarity and continuity of development in both parts of Germany. This, in turn, meant the postponement of any attempt to proceed with the transition from a capitalist to a socialist society until after the unification of Germany.

The decision of the SED party conference to proceed with the transition from capitalism to socialism and the establishment of national armed forces in the GDR, together with the rapid issuance of laws and decrees to implement the new program, if viewed also against the background of repressive internal “protective” measures taken by the GDR since signature of the contractual and EDC agreements, suggests that the Communists are not now planning to weaken their present position in the Soviet Zone, in order to prevent ratification of the signed agreements. Available evidence discussed in the paper also suggests that the Soviets still anticipate that the issue of unity will operate eventually in their favor; and [Page 1560] that the new program in the GDR is part of Soviet strategic and tactical plans projected ahead and geared to reaching maximum effectiveness during the period following ratification of the contractual and EDC agreements.

Effective Allied action to undermine the basis upon which current Soviet strategy and tactics are founded would appear to include the following. Avoidance of four-power discussions prior to ratification, unless the Soviets agree on a basis which promises substantive progress and not just a repetition of delaying tactics for propagandistic exploitation. Preparation, preferably on a tripartite basis, of position papers on such fundamental issues as (a) control procedure for all-German elections; (b) status and powers of an interim all-German government; and (c) status and powers of the occupation powers during the interim period following elections and conclusion of a peace treaty. The foregoing should assist the Allies in capturing, maintaining and exploiting the initiative on German unification, as the surest guarantee against successful Soviet exploitation of the difficult period during which the Allies will be attempting to implement the ratified contractual and EDC agreements.

The New SED Political and Economic Program

Until a few months before the Second SED Party Conference, the SED had emphasized both publicly and within its political indoctrination program for members of the party and mass organizations that, due to the struggle for German unification which was the overriding political task of the SED and GDR government, it was impossible to proceed with the development of socialism in the GDR; and that the transition from capitalism to socialism could not be attempted until after Germany had been unified.

At the Second Party Conference held from July 9 to 12, 1952, Secretary General Walter Ulbricht announced that the Central Committee of the SED had decided to proceed in the GDR with the transition from capitalism to socialism. Stating that “the main instrument for the creation of the bases of socialism is the state power (Staatsmacht)”, he described the three main tasks of the “Staatsmacht” as being:

Breaking the resistance of the overthrown and expropriated large capitalists and large land owners, and liquidation of all their attempts to reestablish the rule of capital.
Organizing the development of socialism.
Creating armed military forces of the GDR for defense of the homeland against foreign enemies, and for the fight against imperialism.

[Page 1561]

The New SED Program and the Problem of German Unity

Anticipating the question of what effect this decision would have upon the previous Communist unity formula, Ulbricht answered as follows:

“The central question is and remains the national question, which has a deep social meaning. The development of socialism in the German Democratic Republic and Berlin can only have a favorable influence upon the struggle for a unified, democratic, peace-loving and independent Germany. Now as before we stand firmly by our proposals for the bringing about of a peace treaty and the unity of Germany. The question as to what social order (Gesellschaftliche Ordnung) should be established in the whole of Germany after reunification will be determined by the entire German people without any foreign interference.

Through the development of socialism the decision concerning the shaping of the future social order in Germany will be made easier for the German working class and the entire German people, for then everyone can decide for himself, on the basis of his own experience, which way serves the interests of the working people and which way serves the interests of the armament industrialists, the capitalists and large land owners. Our policy of developing democracy and socialism will destroy the plans of the Adenauerclique and their capitalist backers. The creation of the bases of socialism in the German Democratic Republic will help to bring about a decisive defeat for the Bonn blood-brothers of American monopolistic capital—the West German corporation and bank magnates.”

Minister President Grotewohl in his address terminating the Conference had the following to say on the same subject.

“There are many people, our opponents and some of our friends, who ask whether our decision is not liable to slow down or render difficult the reunification of both parts of Germany. One can only answer to this with a No. One cannot grant to the divisionist politicians of Bonn the right to advance their reactionary, militaristic, anti-social and anti-national principles as the standards for a future unified, democratic, peace-loving and independent Germany. We are much more of the opinion that our decision is an enlightening and convincing example also for the working class and all progressive people in West Germany as to how a nation, which has good friends in the world, can arrive at peace and happiness on the basis of its own power, if it tears asunder the chains of capitalism and frees itself from the slavery of imperialism.”

The decisive prerequisite for us, Comrades, for successful progress on the road to socialism is, however, friendship with the Soviet Union. For all countries occupied with the development of socialism this is a vital necessity.”

Previous SED Economic and Political Policies

In order to determine how much significance should be attached to the II SED Party Conference decision to proceed with the development of socialism and to determine what, if any, light it throws [Page 1562] upon the Kremlin’s intentions with regard to the question of German unification, it is worth while going back approximately six months in order to review what was then being said on this subject. The party line then stands in most glaring contradiction to that advanced in the aforequoted statements of Grotewohl and Ulbricht.

On February 6 the overt Soviet organ, Taegliche Rundschau, published a full page article by Kurt Gossweiler entitled, “The NEP and the Soviet Union and the People’s Democracies”.* Suffice it for the purpose of this analysis to review briefly the three main themes of this article.

The Necessity for and Nature of the NEP in the USSR: Essentially the explanation given is that Russia in 1917 was one of the most backward agrarian countries of Europe; that the NEP was preceded in the USSR by a period of war time communism; and that the USSR, as the first socialist country, was thrown entirely upon its own resources and had to solve the various problems connected with the transition of a country from capitalism to socialism without the help and experience of another socialist country. Of necessity it developed, through experiment, the NEP, which, “in one form or another represents the normal economic policy of the transition period from capitalism to socialism in all countries”. The NEP, therefore, represents an economic policy for the period in a socialist country when the proletariat holds the power in its hands, but, in order to achieve total socialization, must countenance the temporary existence of certain forms of capitalism along side of socialism, until the former can be liquidated without producing crippling effects upon the continued healthy progress of the latter.
The NEP and its Different Form in the European Countries of People’s Democracy: The article points out here that, whereas the USSR after 30 years of hard, experimental work, has established socialism and is now in the period of transition from socialism to communism, the regimes of the People’s Democracies (except that of China) represent the state form of the dictatorship of the proletariat a socialist state in the first phase of its development. “The socioeconomic structure of the european countries of people’s democracy resembles the socio-economic structure of the ussr during the transition period from capitalism to socialism”. They are now passing through in their development the period of the NEP, under more favorable historical conditions. These more favorable conditions, which have enabled the transition, or NEP period, to be considerably reduced in time as compared to that of the USSR, consist primarily of: (a) the existence of a powerful socialist country, the [Page 1563] USSR, which can pass on to them the hard-won but tried and true lessons; (b) the political and material help of the USSR; (c) the fact that, thanks to the strength of the USSR, they are not as exposed to capitalistic encirclement and were not compelled after the war to eject foreign imperialist armies from their countries; and (d) the fact that many of these countries, such as Poland and Czechoslovakia, already possessed a strong, viable industry and in none of them was the pre-capitalistic formation as strong as it was in Russia of 1917.
The NEP and the GDR: Introducing his discussion of the GDR and the NEP with a quotation from Stalin to the effect that the “NEP represents a special policy only of a proletarian state”, the author reached the interesting conclusion that there can, therefore, be no talk about the NEP in the GDR, for “the GDR is not a proletarian state, but a state in which, to be sure, the laboring class possesses decisive influence, in which, however, as Otto Grotewohl explained at the first party conference of the SED, ‘also other working classes and in part also private property owning sections participate in the exercise of power’”.3 In the characterization of the GDR, differentiating its state form of an “anti-fascist-democratic order” from that of a People’s Democracy, the author points out that:
“The state-owned (Volkseigene) sector is not a socialist sector, although the laws of evolution of the socialist economy (five year plan, emphasis on heavy industry, achievement principle etc.) are also the laws of evolution of the state-owned (Volkseigene) economy.”
“The economic policy of the GDR is not aimed at liquidating the capitalist elements in the peoples economy.”
“The five-year plan of the GDR, in contrast to the plans of the People’s Democracies, provides for the increase of production of the capitalist industries in the amount of 156.5 per cent over that of 1950.”
“In the five year plan of the GDR, in contrast to those of the People’s Democracies, there is no provision for collectivization in the agrarian economy.…4 Neither in industry nor in agriculture are socialist goals laid down.”
The content of the economic policy of the GDR is, therefore, not the development of socialism and the liquidation of capitalist elements, but rather the development of the economy, which is best designed to bring to success the struggle for the achievement of unification of germany and to give to it a firm economic basis.”
“This can only be the case, if the economic basis of the GDR does not stand in contradiction to its political order”.
“Although it would be false to think that because of the foregoing it is impossible to learn from the NEP” …4 and although [Page 1564] “it is true that the antifascist democratic order is an order which has departed from the shore of capitalism”, the practice of learning from examples of the socialist order in the Soviet Union “must proceed with the realization that the GDR is held back from socialism and the direct transition to socialism by the task, upon the solution of which all powers must be concentrated, namely: the struggle for the unification of Germany.”

Not only was the foregoing article published by the Taegliche Rundschau on February 6, 1952, but we are in possession of a report, according to which a compulsory meeting of all higher schooling functionaries of the SED, FDJ, FDGB and DFB was held at the Karl Marx Party Hochschule in Klein Machnow from January 28 to February 2, 1952. The purpose of the meeting was to provide ideological clarification on this very same subject. According to the report, similar points were made, namely:

The GDR is in no way to be compared with the Eastern People’s Democracies. On the contrary the GDR was an unfinished part of the Germany now striving for unity. All measures and developments in the GDR, which might be compared with structural elements of Soviet socialism or of the Eastern People’s Democracies, are at best provisional in the GDR and must never be treated as a final condition.
The central political principle which the GDR follows is not planned to lead to the development of a People’s Democracy or Socialism, but to a unified Germany. Only when Germany is reunified can those fundamental developments which already characterize “the progressive peoples” begin to take place in Germany.
Those attending the meeting should indoctrinate every functionary and member of their respective organization with these facts; explain in all schooling courses that Germany’s situation is unique and incomparable; show that the only political task of Germany is its reunification; and that this explains why the GDR can never be named or treated together with the People’s Democracies in any matter concerning joint action of the Eastern countries.

The New SED Policies and the Communist Unity Program

The foregoing leaves little room for doubt that decisions taken at the Second SED Party Conference represent a very definite departure from previous party policy—in any event in its tactical and propaganda manifestations, if perhaps not in long-term strategy. Earlier statements of policy categorically precluded the development of the GDR along socialist lines toward the goal of becoming a People’s Democracy, due to the overriding task of achieving German unity. The new SED policy in the Soviet Zone is officially and openly aimed at achieving those very socialist goals, which the public and party functionaries were previously told could not be [Page 1565] pursued simultaneously with the goal of achieving German unity. On the face of it, this means, logically, that the goal of German unity on the basis of Grotewohl’s proposals of September 19515 has been abandoned by the Soviets and their SED puppets. However, Ulbricht, Pieck, Grotewohl, et al. argue not at all. On the contrary, according to them, the decision to proceed with the transition from capitalism to socialism can only facilitate the reunification of Germany. If they believe this, then for very practical reasons it means, from the Communist point of view, that unification of Germany can only be achieved if the whole of Germany can be enticed or coerced into accepting the SED policies of socialism (Soviet style) as the governing principles for an all-German government. It would appear to mean, as Ulbricht stated in his summary speech at the end of the conference, that, “since Adenauer’s signatures on the contractual and EDC agreements … it is no longer possible … to discuss, so to speak, in the clouds the question of the road to German unity. It is necessary to draw the clear consequence that the prerequisite for the reestablishment of the unity of Germany is the overthrow of the vassal regime of Bonn .… The unification of all patriotic forces and their friendly cooperation with the patriotic forces of the GDR, which is the basis of the struggle for German unity, has become an unconditional necessity.”

In other words the second SED Party Conference, in conjunction with the Soviet proposals for German unification contained in the Kremlin’s notes beginning with the basic one of March 10, 1952,6 was utilized to announce to the outside world substantially the following:

The Soviet Union does not intend at this stage to give in to pressure;
It intends to meet pressure with counter pressure;
It has not given up its strategic objective of capturing control over the whole of Germany, even though attainment of the objective may be delayed;
So long as the Western powers proceed with attempt to integrate the Federal Republic into Western Europe economically, politically and militarily, and to make such agreements binding upon a unified Germany, the Soviet Union will follow the same course with regard to the GDR;
Efforts of the Western powers to undermine and bring about the overthrow of the GDR Communist government will be matched by Communist efforts to undermine and overthrow the Adenauer government.

[Page 1566]

Soviet Intentions in Light of the New SED Policy

If the foregoing analysis is valid, for which supporting evidence is abundant, what conclusions can be drawn from it with regard to immediate and ultimate Soviet intentions and the effectiveness of current Western strategy?

In the absence of any convincing evidence that the Soviets are willing to agree to the unification of Germany on terms acceptable to the Western Allies, the tactics followed by the Soviets since Grotewohl’s note of February 13, 19527 and culminating in the decisions of the Second SED Party Conference would appear to indicate, insofar as immediate Soviet strategy and tactics are concerned, the following:

That the Soviets are prepared to accept the ratification of the contractual and EDC agreements. That, though they will continue to try and prevent it, they question success except at a price involving greater concessions than they are willing to make; and consequently that they are preparing for this alternative. And that they do not intend to make concessions which would risk weakening their hold on the Soviet Zone except for a substantial quid pro quo. (This conclusion does not preclude last minute tactical manuevers prior to ratification such as agreeing to Western conditions for a four-power conference, advancing “apparent” concessions at such a conference, or even agreeing to investigation of election conditions by a neutral commission. Nor does it preclude using a four power conference as a propaganda forum, or proposing tricky compromises on the chance of acceptance).
That, having tried and to date failed to prevent progress toward the integration of Western Germany, with the tactic of advancing proposals indicating an “apparent” willingness to conduct free and secret elections throughout Germany, the Soviets are now hoping to frighten both the Western Germans and Western Allies into abandonment of their integration plans. (It should be noted in this connection that, during the period from September, 1951 to July, 1952, when the Soviets were endeavoring to achieve their ends by convincing the world at large that they were willing to participate in the holding of free and secret elections, they were consequential enough to preach to East Zone Communist functionaries and the rank and file that the achievement of German unity on such a basis precluded the GDR from becoming a People’s Democracy or proceeding with the transition from capitalism to socialism; and that, with the recent shift in tactics toward trying to frighten the Germans and Western powers into acceptance of Soviet conditions—an armed but neutralized socialist Germany—they have now given the green light to proceeding with the transformation of the GDR into a socialist People’s Democracy, which in [Page 1567] turn will require a completely new political indoctrination program.)
That Soviet policy is now founded on the assumptions that: (a) the announcement of an intention to proceed with the open establishment of a people’s army, and the transition from capitalism to socialism in the GDR may cause sufficient fright in the West to contribute to defeat or delay in ratification of the contractual and EDC agreements; (b) that, if not, progress will have been made in building up the defensive and offensive position of the Soviets in the GDR; (c) that elections must take place in the Federal Republic in 1953; (d) that prior to these elections it will not be possible for the Germans to produce trained, equipped and battle-ready divisions; (e) that they (the Soviets) can probably afford to wait out this period if necessary without making any basic concessions to the West on all-German elections, utilizing the time to make such progress as they can in consolidating the so-called progressive, peace loving and patriotic elements in Western Germany (Wirth, Heinemann, Wessel, Niemoeller, Communist and disgruntled SPD and DGB elements) into a more effective political force; and (f) that if they have achieved no satisfactory solution in the meantime, the new SED program of socialism, coupled with renewed offers for all-German discussions to agree on an election law and formation of an all-German government, may have more success later with an SPD government or any new government emerging from the 1953 elections.

In connection with the foregoing analysis of Soviet assumptions underlying the new tactical approach to the all-German question and implied in the new SED policy decisions, it is perhaps well to review some of the points made in .… This report concerns statements allegedly made by Ulbricht in a SED Politburo session June 5–6, 1952, in which were discussed, among other things, probable developments in Western Germany after ratification of the contractual agreements. Ulbricht is reported as having stated that “the Soviets believe both the United States and West Germany will have ratified the agreements by the end of July 1952;” that “England and especially France—will not ratify so quickly;” that “there would remain a relatively long period of time before the agreements could actually go into force;” that this “would be the critical period, affording the greatest possibility for effective resistance;” that “it was a mistake to take a short-sighted view in regard to German policy;” and that “all kinds of actions occurring throughout Europe and the world had one clear frame of reference—the future of Germany.”

With regard to the last statement, Ulbricht is reported to have referred to the “International Conference for the Solution of the German Problem”, scheduled for June 13 in Paris but actually held in Denmark, “the particular purpose of which was preparing the French for resistance against EDC and contractuals;” and to the [Page 1568] World Peace Council meeting called for July 1–6 in East Berlin. Announcement of a World Peace Congress in Vienna next December suggests continuation of the same tactics.

Ulbricht is also reported as stating that the “Soviets expected such meetings to have a world-wide effect against the Western treaties” and that after this “either the willingness of the West to negotiate would prevent or postpone realization of the treaties, or else a completely new period of active opposition, ignited by the German problem, would set in.” And he is reported to have stressed again and again that, today, German policy in Germany was world policy.

Seen in retrospect and in the light of recent events and decisions taken in the GDR, it would appear, as in the case of the … report previously referred to, that this report may have been quite accurate.

In attempting to analyse both short and long range intentions of the Soviets with regard to Germany, we have been and continue to be faced with two schools of thought as to the extent to which the Soviet Union fears the creation of West German military forces, the nature of the price they might be willing to pay to prevent the creation of such forces and, finally, at what particular point in time, if they are indeed willing to pay a high price, they will choose to make known to the West their price and bargaining terms.

One school of thought has consistently held to the belief that the Soviets have such a respect for, and fear of, a German military machine, and its propensity for growth, that they are willing to pay a high price to prevent German military divisions from being created. Within this school of thought views differ as to the nature of the price the Soviets are willing to pay. However, implicit in nearly all of the views is the presumed willingness under certain minimum conditions to sacrifice the SED party’s absolute control over East Germany; and to relinquish their own present unchallenged domination over the Soviet Zone. As to the point in time at which the Soviets will indicate their willingness to pay such a price, it was originally the belief of at least some of this group that it would be prior to the signature of the contractual and EDC agreements. With others it was and remains either just before apparent readiness of the Bonn Bundestag to ratify, or just prior to what appears to be imminent ratification by the French Assembly.

The other school of thought holds to the belief that even temporary forfeiture of complete control over the Soviet Zone of Germany, with all the strategic, economic, political and psychological repercussions which could follow from such a move, represents too high a price for the Soviets to pay, until every hope of preventing implementation of the EDC agreements through other means has [Page 1569] been removed. In fact, there are within this group those who believe that, fearful as the Soviets undoubtedly are of the potential danger which the recreation of a German military machine represents, they prefer to face this danger and to deal with it, if they must, from their present advance position on the zonal demarcation line between the GDR and the Federal Republic with whatever manpower, economic resources and military bases they can develop within the GDR during the intervening period; rather than risk meeting a challenge from well behind this line. For the purposes of this analysis we can restrict ourselves to a consideration of the less extreme view, namely: that the Soviets will not modify appreciably the terms outlined in their note of March 10, 1952 and subsequently, unless and until ratification of the contractual and EDC agreements has been practically assured by all participating countries, and until progress made toward implementing these agreements is such as to indicate that the Western Allies will be able to overcome such difficulties as still remain in their way. If and when events progress to this point, we will learn as a matter of course whether the latter view of the second school of thought is valid or not.

The evidence to date suggests that at least the less extreme view of the second school of thought may be closest to being correct. What in brief, is the evidence?

The Soviets did not alter their basic tactics to prevent signature and ratification of the Schuman plan.
They did not alter their policy sufficiently to prevent the signature of the contractuals and EDC agreements—though the unity campaign was stepped up.
They did not utilize for their own ends the Allied overtures in their note of May 13th.8
Following signature of the contractual and EDC agreements, they took a series of actions directed at further isolation of the GDR from the Federal Republic and Western Berlin and at increasing the powers of the Secret Police over the population and administrative apparatus of the GDR.
The recent policy decisions taken at the Second SED Party Conference, as set forth previously in this analysis, instead of reflecting even an “apparent” willingness to compromise on the question of German unity, represent the first major shift of SED tactics since September 1951 in the opposite direction. They are aimed at further consolidation of the Soviet position in the GDR at the risk of increasing anti-Soviet feeling within the GDR and West Germany. In turn they will have the effect of forcing non-Communist supporters of the Communist unity formula in Western Germany—the neutralist elements of various shades—into a corner. The latter [Page 1570] will now be forced to choose between appearing to be unreservedly on the side of the Communists or reveal themselves as being against them.§

[Here follows a four-page assessment of the implications for United States policy toward the Soviet Union and Germany of the foregoing analysis.]

N. Spencer Barnes
  1. Enclosed with the source text were a translation of an article from Taegliche Rundschau of Feb. 6, 1952, entitled “The NEP (New Economic Policy) in the Soviet Union and the People’s Democracies,” by Kurt Gossweiler, and a memorandum of conversation between Professor Kastner and Soviet Ambassador Semyenov of January 1952. Neither is printed.
  2. Despatch 74 reported the contents of Ulbricht’s statements made at the Second SED Conference on the future economic policy of the German Democratic Republic. (862B.00/7–2252)
  3. A full translation of this article is attached hereto as Enclosure No. 1. It is considered that, in its entirety, this article, in conjunction with the decisions of the II SED Party Conference, represents a rather basic document for an understanding of Soviet policy in Germany. [Footnote in the source text. Enclosure is not printed.]
  4. For documentation concerning the First Conference of the SED, Jan. 25–29, 1949, see Foreign Relations, 1949, vol. iii, pp. 505 ff.
  5. Ellipsis in the source text.
  6. Ellipsis in the source text.
  7. … [Footnote in the source text not declassified.]
  8. For documentation on Grotewohl’s proposals of September 1951, see Foreign Relations, 1951, vol. iii, Part 2, pp. 1747 ff.
  9. Document 65.
  10. The reference is to Grotewohl’s appeal for a peace treaty embodying a plan for the reunification of Germany, addressed to the Soviet Union, the United States, the United Kingdom, and France. The note is printed in Aussenpolitik der DDR, p. 74, as well as in Documents on German Unity, vol. ii, p. 50.
  11. … [Footnote in the source text not declassified.]
  12. Document 101.
  13. In this connection, in his speech before the Second Party Conference Ulbricht warned Heinemann’s “Notgemeinshaft” that “if it did not want to play the role of a collection basin for bourgeois peace friends, thereby preventing them from joining the national people’s movement, then all of these opponents of the separatist treaty must draw the consequences and support the patriotic movement for a peace treaty on the basis of the Soviet proposals, against the General Treaty and for the overthrow of the Adenauer government”. He also warned the church that “under conditions whereby the division of Germany was being entrenched through the separatist pact, the church can no longer conceal its position under the mask of ‘neutrality’”. [Footnote in the source text.]