Memorandum from Charles Bohlen to Secretary of State George Marshall

TOP SECRET Prosence fails [ CLASSIFIED DEPARTMENT OF STATE O. 11652, Sec. 3(E) and 5(D) or (B) THE COUNSELOR By Dept. NLT- He NARS DEPARTMENT of State 1 rest. MEMORANDUM August 30, 1948 To: The Secretary From: Charles E. Bohlen Subject: Status of Moscow Discussions as of Today. During the last week discussions continued at Moscow revolving essentially around the basic point of the rights of the three Western powers in the city of Berlin. On Monday night, August 23, this basic point of principle did not fully come to a head since Stalin himself produced a draft communique and a draft directive to the Military Governors which represented a considerable Soviet conces- sion to our point of view. At the next meeting with Molotov on Friday, August 27, the principle of four-power control over the circulation and use of the Soviet mark in Berlin was made plainer. The three Western powers, therefore, have accepted the proposed directive to the Military Governors, but are today telling Molotov of their intention to issue a statement for publication at the time of final agreement to the effect that the agreement concerning the lifting of the blockade and currency in Berlin is without pre judice to their rights, duties, and obligations as occupying powers in the city of Berlin. It has already been made clear to Molotov that there is no agreement pending the report from the Military Governors on the working out of arrange- ments to deal with the currency question in Berlin. Thus while it is impossible to state finally until we have had the report of today's meeting, it appears probable that: 1. A Draft Directive will be sent to the Military Governors in Berlin to work out the practical arrangements for the introduction of the Soviet mark in the city under four-power control. 2. A short interim announcement will be issued probably tomorrow morning merely stating that in the course of the Moscow discussions it has been necessary to refer to the Military Governors in Berlin certain technical matters and that the discussions in Berlin have not yet been concluded. TOP SECRET