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THE BERLIN CRISIS:
Report on the Moscow Discussions, 1948
33
32
decided, nothing could be done. We said it would be worse to fix a
was presented to Molotov at the fourth and last drafting meeting, that
date and fail to meet it than to leave things as they are now.
of August 17
"We then asked Molotov if he could meet us on the question of Four
"One. On August 25 all restrictions which have been imposed
Power regulation of currency. He evaded direct reply to this by
since March 1 on transport of persons and goods in either direction
reverting to the second part of Paragraph 3 (London Agreements)
between the three western zones of Germany and Berlin shall be re-
although not aggressively. We repeated our Governments' past objec-
moved and freedom of communications shall be maintained.
tion to the Soviet wording on the lines of Paragraph 3 in the following
"Two. On August 25 all restrictions which have been imposed
telegram. He then suggested substituting for the second part of
since March 1 on traffic of goods to and from Soviet zones of Germany
Paragraph 3 our oral statement of August 6. We reiterated that our
shall be removed and freedom of communications shall be maintained.
instructions were specific and our Governments could not agree to any
"Three. The four military governors are charged with the duty
statements of this nature being inserted in a communique representing
of making all arrangements necessary to ensure that the provisions
preliminary agreement. However, I said I was willing to ask my Gov-
of paragraphs one and two above are brought into effect on August 25.
ernment if the oral exchange between Generalissimo Stalin and our-
"Four. In addition to meetings of military governors meetings
selves might be confirmed confidentially by written notes, providing
among representatives of four governments in form of CFM or other
agreement was reached on all other points.
conferences of representatives of four powers shall be held in the near
"Roberts then suggested that insertion of this material would un-
future to discuss (A) any questions which may be outstanding as re-
balance the document, pointing out that Articles I and II were to our
gards Berlin and (B) any other outstanding problems affecting
mutual advantage, and insofar as the Soviet Government might think
Germany as a whole.
Part I benefited us more than Part II benefited them, this was more
"Five. As from August 25 the German mark of the Soviet zone
than balanced by Paragraph 4. Paragraph 3 would, we hoped, be to
shall be accepted as the sole currency for Berlin and the western mark
our mutual advantage. Molotov agreed, and at this point for a few
'B' shall be simultaneously withdrawn from circulation in Berlin
minutes I thought that he was going to accept and conclude the con-
provided however that before that date the four military governors
ference. However, he recovered himself and rediscussed some of the
shall have worked out arrangements for continued issue and use in
parts of Paragraph 4, during which occasion was taken to point out
Berlin under quadripartite authority, of German mark of Soviet zone.
that he would have to meet us on the basic point of principle under
"These arrangements shall ensure no discrimination or action
4 if we were even to consider his proposal under 3, emphasizing again
against holders of German marks of either the Soviet zones or western
that unless our basic requirement for Four Power control and regula-
zones: equal treatment as to currency and provision of full and ac-
tion of currency in Berlin were accepted, the rest of the document
cessible banking and credit facilities throughout all sectors of Berlin;
would automatically fall.
unhampered trade and economic connections with third countries and
"Molotov terminated the conversation shortly afterward by saying
with all zones of Germany subject only to such provisions as may be
that he would report our statements to his Government, who would
agreed from time to time among four military governors; and pro-
consider them carefully. We said we would report his comments and
vision of sufficient currency for budgetary purposes and occupation
proposals and would inform him when we were ready for further
costs. These arrangements shall be implemented by the four military
discussions."
governors."
Though failing to produce definitive progress toward final agree-
This latest redraft was received by Mr. Molotov in much the same
ment, the atmosphere of the August 12 meeting was sufficiently
way as the first draft. The Western representatives discussed it with
encouraging to induce the Western powers to examine exhaustively
him for nearly four hours. His reaction to it appeared to be mainly
among themselves the issues in controversy, and to reduce their de-
exploratory, to try to sound out the Western representatives.
mands to absolute essentials in the hope that Soviet objections would
After a lengthy discussion of specific points in it, much along the
be
overcome. These efforts resulted in the following draft text which
lines of the earlier discussions, Smith and his colleagues were unable
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"ocrText": "THE BERLIN CRISIS:\nReport on the Moscow Discussions, 1948\n33\n32\ndecided, nothing could be done. We said it would be worse to fix a\nwas presented to Molotov at the fourth and last drafting meeting, that\ndate and fail to meet it than to leave things as they are now.\nof August 17\n\"We then asked Molotov if he could meet us on the question of Four\n\"One. On August 25 all restrictions which have been imposed\nPower regulation of currency. He evaded direct reply to this by\nsince March 1 on transport of persons and goods in either direction\nreverting to the second part of Paragraph 3 (London Agreements)\nbetween the three western zones of Germany and Berlin shall be re-\nalthough not aggressively. We repeated our Governments' past objec-\nmoved and freedom of communications shall be maintained.\ntion to the Soviet wording on the lines of Paragraph 3 in the following\n\"Two. On August 25 all restrictions which have been imposed\ntelegram. He then suggested substituting for the second part of\nsince March 1 on traffic of goods to and from Soviet zones of Germany\nParagraph 3 our oral statement of August 6. We reiterated that our\nshall be removed and freedom of communications shall be maintained.\ninstructions were specific and our Governments could not agree to any\n\"Three. The four military governors are charged with the duty\nstatements of this nature being inserted in a communique representing\nof making all arrangements necessary to ensure that the provisions\npreliminary agreement. However, I said I was willing to ask my Gov-\nof paragraphs one and two above are brought into effect on August 25.\nernment if the oral exchange between Generalissimo Stalin and our-\n\"Four. In addition to meetings of military governors meetings\nselves might be confirmed confidentially by written notes, providing\namong representatives of four governments in form of CFM or other\nagreement was reached on all other points.\nconferences of representatives of four powers shall be held in the near\n\"Roberts then suggested that insertion of this material would un-\nfuture to discuss (A) any questions which may be outstanding as re-\nbalance the document, pointing out that Articles I and II were to our\ngards Berlin and (B) any other outstanding problems affecting\nmutual advantage, and insofar as the Soviet Government might think\nGermany as a whole.\nPart I benefited us more than Part II benefited them, this was more\n\"Five. As from August 25 the German mark of the Soviet zone\nthan balanced by Paragraph 4. Paragraph 3 would, we hoped, be to\nshall be accepted as the sole currency for Berlin and the western mark\nour mutual advantage. Molotov agreed, and at this point for a few\n'B' shall be simultaneously withdrawn from circulation in Berlin\nminutes I thought that he was going to accept and conclude the con-\nprovided however that before that date the four military governors\nference. However, he recovered himself and rediscussed some of the\nshall have worked out arrangements for continued issue and use in\nparts of Paragraph 4, during which occasion was taken to point out\nBerlin under quadripartite authority, of German mark of Soviet zone.\nthat he would have to meet us on the basic point of principle under\n\"These arrangements shall ensure no discrimination or action\n4 if we were even to consider his proposal under 3, emphasizing again\nagainst holders of German marks of either the Soviet zones or western\nthat unless our basic requirement for Four Power control and regula-\nzones: equal treatment as to currency and provision of full and ac-\ntion of currency in Berlin were accepted, the rest of the document\ncessible banking and credit facilities throughout all sectors of Berlin;\nwould automatically fall.\nunhampered trade and economic connections with third countries and\n\"Molotov terminated the conversation shortly afterward by saying\nwith all zones of Germany subject only to such provisions as may be\nthat he would report our statements to his Government, who would\nagreed from time to time among four military governors; and pro-\nconsider them carefully. We said we would report his comments and\nvision of sufficient currency for budgetary purposes and occupation\nproposals and would inform him when we were ready for further\ncosts. These arrangements shall be implemented by the four military\ndiscussions.\"\ngovernors.\"\nThough failing to produce definitive progress toward final agree-\nThis latest redraft was received by Mr. Molotov in much the same\nment, the atmosphere of the August 12 meeting was sufficiently\nway as the first draft. The Western representatives discussed it with\nencouraging to induce the Western powers to examine exhaustively\nhim for nearly four hours. His reaction to it appeared to be mainly\namong themselves the issues in controversy, and to reduce their de-\nexploratory, to try to sound out the Western representatives.\nmands to absolute essentials in the hope that Soviet objections would\nAfter a lengthy discussion of specific points in it, much along the\nbe\novercome. These efforts resulted in the following draft text which\nlines of the earlier discussions, Smith and his colleagues were unable"
}