740.00119 Control (Germany)/8–2448
Memorandum by the Chief of the Division of Central European Affairs (Beam)
Clay at first commented generally as follows on the Moscow texts:1
“I do not feel very happy about directive.
“First—the proposed establishment of a financial commission avoids acceptance of Berlin as a quadripartite city under Kommandatura; in effect our acceptance means a politically separate Berlin under [Page 1072] Soviet currency. The implications and difficulties of future operations are clear.
“Secondly—the proposed trade agreement implies treating Berlin as part of Soviet Zone since it would place trade to third countries and Western zones on same basis. This of course means an even exchange of raw materials for goods of same value which will represent great cost with food and coal subsidized by Allies and west Germany. No provision is made for utilization of Soviet currency obtained from food sales.
“Thirdly, budgetary control of city lies in Soviet hands.
“Fourthly, occupation cost limitation will be severe to west because Berlin subsidized three-fourths by west coal and food, with raw materials brought in for finished goods of same value and relieved of occupation costs represents a great financial liability to west and becomes a substantial asset to Soviet zone.”
After receiving our amendments,2 General Clay felt that the changes overcame most of the various technical objections he had in mind. However, he felt that the issue of quadripartite administration had not been met, and if the agreement were made along the lines of the Moscow texts it might, in fact, be conceded to the Soviets. In his opinion the Germans in political and official life will not believe that the agreement restores quadripartite equality and he commented that in Berlin we will have to fight an uphill battle and the issue will only be postponed. His final comments were:
“Quadripartite control or supervision of currency credit and trade is only a part of issue. At moment we have divided police forces, divided distributing agencies, and threatened Soviet disavowal of city government. There is involved the full political, governmental, social, and economic life of the city.…3 From my view-point here, I would insist on settling the issue now. However, I recognize broad implications which lead you to different view and decision. I am afraid though that we are merely postponing the day when that decision will have to be made. I recognize, too, that this may well be the wise decision and will do my utmost to effect agreement.”
- The reference here is to the interim communiqué and directive to the four military governors, transmitted in telegram 1729, August 24, from Moscow, supra. Apparently this memorandum is a summary of a telecon held with Clay immediately after the receipt of telegram 1729.↩
- See redrafted texts in telegram 1007, August 24, to Moscow, p. 1074.↩
- Omission indicated in the source text.↩