Foreign Relations of the United States, 1952–1954, Germany and Austria, Volume VII, Part 2

762.0221/2–2653: Telegram

No. 569
The Director of the Berlin Element, HICOG (Lyon) to the Office of the United States High Commissioner for Germany, at Bonn¹

secret

Berlin, February 23, 1953—1 p.m.

1356. Re Department’s telegram 4232 to Bonn repeated Berlin 405² following is our thinking on questions raised in reference telegram implications Soviet move to complete isolation West Berlin:

(a) Political—such move, in our estimate, will not noticeably disturb political picture West Berlin although it may be expected somewhat strengthen present coalition as previous Soviet pressure has done in past. We do not think it will result in any tendency on part political leaders or parties to give in to Soviet pressure nor in any marked change in party strength.

(b) Psychological—most West Berliners have since December been effectively discouraged from entering both Soviet sector and Soviet Zone (see Berlin’s 1302 to Bonn repeated Department 1202³) and have been resigned to complete split in city for some time now. We therefore think much of psychological effect in West Berlin of isolation has already been largely absorbed. Naturally it will result in additional feeling of insularity particularly since it will eliminate possibility which still exists today of West Berliners receiving visits from East Germany relatives and friends. Nonetheless we do not expect alarming drop in morale of West Berliners unless psychological reaction in West Germany result in refusal place orders in Berlin thus causing increased unemployment.

(c) Economic—see below. Major danger will be psychological impact on Western World and Federal Republic in particular. If move results in lack of confidence in Berlin’s ability deliver goods, results may be serious. It is in this field we have most to fear and in which our strongest efforts needed counter effects of Soviet move.

(d) Security—since completion isolation process would presumably end refugee flow with burden it has placed on Berlin’s facilities, it can be expected improve security situation within city.…

Re economic implications, should be emphasized that for practical purposes city has been split for some months and further possible effects to large extent already discounted. Only major adverse effect expected from psychological impact in West Germany, where customary alarmist handling of news by press may well result in potentially serious decline of orders for Berlin. Re effect on low income groups of elimination access to East sector supplies, this situation has already existed since East prohibition on sales to West Berliners at end November 1952; chief visible effect so far has been pressure for continued bread subsidies which Senate has already agreed maintain until March 31. Should be noted also that in case relief recipients present situation merely puts their real income on basis equality with similar recipients in West Germany, over whom they formerly enjoyed substantial advantage due to access to cheap Eastern supplies. One aspect of split with possibly temporary dislocating effect on local economy is elimination of border-crossing employment; this connection see our telegram pouched Bonn unnumbered July 18, 1952 and memorandum to Bonn dated October 17, 1952 and January 13, 1953.⁴

We do not expect any tendency flight of capital or evacuation industrial plants to West as result split of city. Berlin’s markets and sources industrial raw materials have long been so overwhelmingly in West that elimination of access to Soviet sector cannot possibly affect viability of industry; but it would be sensitive to adverse reactions in West Germany and abroad resulting in cessation or substantial decline of orders or rumors of impending blockade or other grave political consequences. As shown by record of past year, Berlin’s own economic morale remarkably steady under pressure and only evidences of outward capital movements have been due to strictly economic incentives, e.g., local investments in specially favorable West Germany bond issues such as Bavarian loan of last spring and recent Federal Republic loan, in neither case of volume large enough to be attributed to political motivations or to have important economic consequences. No evidence of movements of plants, and believe none likely unless decline of orders of serious importance should occur extending over long period of time.

Kommandatura and Berlin Senate surveyed local situation last summer and plans essentially ready for all foreseeable economic contingencies, with exception some differences of opinion re handling possible S-Bahn developments. West sector in relatiely favorable position to take care all public services and utilities. See our telegram sent Bonn 1292 June 14, 1952, our despatches to Department 960 June 24, 1952, 26, July 8, 1952 and 542, January 2, 1953.⁵

We felt frequent and high level indication should be given of our intention stay in Berlin at all cost. In this connection eventual visit of Secretary to Berlin would have extremely salutory effect. Bonn may also desire suggest Department give consideration protesting at governmental level against measures taken by Soviets or persons under their jurisdiction to isolate West Berlin.

Re protests, letter to Dengin re streetcars was despatched as scheduled February 21 (Berlin’s 1346 to Bonn repeated Department 1249⁶ and status of S-Bahn protest is described in Berlin’s 1354 to Bonn repeated Department 1255.⁷ We are contemplating no further move this nature for present at Berlin level since we feel general protest on Berlin developments will be more effective at HICOMer or governmental level.

It is requested that this message be transmitted to Washington if Bonn approves.⁸ Signed Lyon.

1. Transmitted in telegram 3989 from Bonn, Feb. 26, with the notation that it was being repeated to Washington for information.
2. Telegram 4232 asked for the latest estimate on the implications for West Berlin of a complete split of the city, plans that were being made to meet such developments, and what support the Department of State could give for these efforts. (762.0221/2–2053)
3. Telegram 1302 reported new measures to isolate the Soviet Zone and Sector from West Berlin, but stated that no new measures had been instituted which were directed primarily at the population of West Berlin. (762.0221/2–1253)
4. None found in Department of State files.
5. Telegram 1292 was apparently not repeated to the Department and has not been found in Department of State files; despatches 960 (local transport system in Berlin), 26 (economic consequences of possible complete separation of East Berlin from West Berlin), and 542 (plans for dealing with severance of S-Bahn service) are not printed. (962.51/6–2452, 862A.00/7–852, and 662A.62B/1–253)
6. Not printed. (762.0221/2–2053)
7. Telegram 1354 transmitted the text of a draft note to Dengin protesting further changes in S-Bahn service. (762.0221/2–2153)

8. On Feb. 26 Bonn commented on this telegram, concluding as follows:

   “We think isolation West Berlin, which violates agreements establishing city as single entity under quadripartite government, is serious enough to warrant consideration of general protest at governmental level. This protest may induce uncertainty in Soviets as to Allied future moves. It also creates danger, of which we should be fully aware, that Soviets having gone too far in splitting city will disregard Allied protest and be in increasingly stronger position if we are unable to back up any implied threats in our protest.” (Telegram 3990 from Bonn, 762.0221/2–2653)