Foreign Relations of the United States, 1958–1960, Berlin Crisis, 1959–1960; Germany; Austria, Volume IX

234. Telegram From the Department of State to the Embassy in Germany⁰

Washington, October 29, 1960, 2:30 p.m.

796. Paris for Embassy and USRO. Bonn’s 582, Berlin’s 285, 286.¹ Agree Bonn should advise FedGovt that because of our responsibilities re Berlin we wish be kept fully and currently informed re IZT developments.

Should add that we somewhat disturbed over creation public impression FedGovt’s not seeming know what they are about in this matter as well as over impression that there exists considerable sentiment within FedGovt that IZT move was mistake made only because of Allied pressure.

As to Dept’s views re where we go from here, we agree main questions are: 1) is a new interzonal trade agreement desirable; and 2) if so, on what terms?

Seems clear that in absence additional internal acts by FedGovt trade could continue without formal agreement, which essentially merely mutual commitment to license, and facilitate payment for, certain specific amounts trade in specified categories of commodities. Lack agreement would seem to mean (if present circumstances otherwise unchanged) that bulk of any trade would continue be pursued between Western businessmen and Soviet Zone agencies through: 1) West Berlin branch offices; 2) East Berlin trade brokers Utimex and Mercator; or 3) West Berlin middlemen.

Also with absence “swing credits” and specified upper limits within which commitments can be freely made, payments would have to be handled through private credit agreements, foreign exchange, or barter, and licensing each transaction would become uncertain.

Dept has concluded that because of importance of predictability to highly planned economy and difficulty payments problems, formal IZT agreement more important to Soviet Zone than to FedRep.

Appears quite obvious from all reports that Soviet Zone regime: 1) disturbed by FedGovt’s action; 2) wishes trade to continue; and 3) anxious to negotiate new agreement. Apparently also seeking shift trade patterns, raise level negotiations, and deal with Bonn and Berlin separately in order strengthen its position.

Senat and FedGovt have quite rightly stated that any negotiations must be conducted only through plenipotentiaries of two currency areas (Leopold and Treuhandstelle² for Bonn and Berlin) to avoid improving Soviet Zone status.

As to goals, optimum from our point of view would be achievement carefully formulated, explicit Soviet-East German guarantee of noninterference with West German access to Greater Berlin including revocation Sept 8 decree.³

Agree with Brandt the FedGovt should follow through on its statement of readiness to negotiate by preparing draft agreement containing various improvements desired particularly re access to Greater Berlin.

Even though (as Embassy points out) we claim right of free access to Berlin already guaranteed by Soviets in 1949 agreements, since 1951 IZT agreements continuance from FedRep has been most direct and practical means trying guarantee East Germans would not interfere with West German access to Berlin. 1951 letter⁴ put this in writing and we see no objection to bargaining new trade agreement for “GDR” guarantees of noninterference with access. Any such guarantees should be carefully formulated in close consultation with British, French, and ourselves so as not to affect our responsibilities.

Probably unrealistic to expect formal revocation of Sept 8 decree. Minimum goal should be return to conditions existing in August with at least implicit guarantee noninterference with access and nonimplementation of decree so that movement to Berlin and within City essentially unrestricted.

Although desirable, do not believe can insist Soviet bloc visa FedRep passports for West Berliners.

As start Leopold might be empowered inform Behrendt in response to calls for negotiations from Ulbricht, Grotewohl, Rau, Siemer, etc., that negotiations cannot be resumed if East German regime increases in any way whatsoever its harassment of rights of free access to Berlin and free circulation within Berlin and that satisfactory conduct of negotiations will be facilitated by degree to which West Germans are permitted free access to Greater Berlin as well as by reasonable attitude of East German regime—as exemplified in its handling of such questions as access to Steinstuecken and visits by Berliners to graves outside city—toward problems created for Berlin population by unnatural division of country. FedRep should of course avoid recognizing any “right” of “GDR” to control circulation within City.

At very outset should be made clear to East Germans that they faced with choice of: 1) written trade agreement facilitating their planning and payments problems but also guaranteeing noninterference with free West German access to all of Berlin; or 2) no written agreement and trade continued on ad hoc basis but only so long as West Germans have in practice free access to all Berlin. In either case should be made quite clear that trade is dependent upon free access and will vary with it.

Agree for greater flexibility would be advisable limit any new agreement to one year.

One difficulty of having no new formal agreement would certainly be matters such as Warenbegleitscheine,⁵ interzonal rail and postal traffic, and electric power exchange regulated by annexes to 1951 IZT agreement. Assume Soviet Zone has interest in keeping services functioning and that therefore as pointed out these technical problems not necessarily insoluble.

Also agree with Brandt that would be useful in process attempt to achieve complete reorganization interzonal trade mechanism and to create in Berlin a central agency responsive to FedGovt to act as clearing house to minimize close contact between West German firms and Soviet Zone agencies. Somewhat reluctantly conclude from USBER’s 263⁶ that idea of channeling physical flow of all trade through Berlin is impractical.

Believe Embassy should continue emphasize to FedGovt that current trade negotiations with Soviets should be related Berlin problem so that as minimum German implementation any agreement reached would be made dependent upon application same terms to Berlin trade. Desirable, of course, that this be accomplished through Berlin clause or exchange letters but believe it unrealistic to expect Soviets will accept either. Form seems not especially important and could be specific, oral assurances as with last agreement as long as Soviets quite clear on connection of trade agreement with Berlin problem and Germans in position make good on threat if necessary.

If Embassy and USBER agree, suggest that after consultation with British and French (extent and form of which left to Embassy’s discretion) these views be passed along to Germans as US preliminary thoughts on these matters.

G–399⁷ just received. Have not received despatch 509⁸ but gather it deals with whole range of other problems.⁹

Herter

0. Source: Department of State, Central Files, 662A.62B41/10–2160. Confidential. Drafted by Cash on October 28; cleared by Hillenbrand, Davis, SOV, L/EUR, and E; and approved by Kohler. Also sent to Berlin, repeated to London and Paris, and pouched to Moscow.
1. Telegram 582, October 20, advised that the United States should formally inform the Federal Republic that the interzonal trade agreement was not solely its responsibility. (Ibid., 662A.62B41/10–2060) Telegrams 285 and 286 transmitted the text of a letter to Brandt on the trade agreement and described a letter from East German Trade Minister Rau to Erhard. (Ibid., and 662A.62B41/10–2160) For text of Rau’s letter, see Dokumente, Band 5, 1960, p. 439.
2. Trusteeship Office for Interzonal Trade.
3. For text of this decree, see Dokumente, Band 5, 1960, pp. 229–230.
4. Regarding this letter, see Foreign Relations, 1951, vol. III, Part 2, pp. 1872–1873.
5. Interzonal trade permits.
6. Dated October 11, telegram 263 from Berlin transmitted a history of the idea that Berlin might be used as a transshipment point for all trade with East Germany. (Department of State, Central Files, 462A.62B41/10–1160)
7. Dated October 21, G–399 from Berlin referred to despatch 509 which would analyze public reaction to the abrogation of the trade agreement. (Ibid., 662A.62B41/10–2160)
8. Dated October 18. (Ibid., 662A.62B41/10–1860)
9. On October 31, the Mission at Berlin reported its agreement with the views expressed in this telegram. (Telegram 303; ibid., 662A.62B41/10–3160)