662.0031/11–1745

The United States Political Adviser for Germany ( Murphy ) to the Secretary of State

1044. RefDepts 701, October 22, 4 p.m. concerning possible modification of paragraph 41 c of JCS 1067 to allow resumption of trade between Germany and neutral countries.

The Trade and Commerce Branch, Economic Division, OMGUS, would be glad to have approval to deal with neutrals consistent with four conditions suggested by the Dept. However, [it] is believed by the Trade and Commerce Branch that quadripartite or tripartite machinery is not currently organized and operating in a manner to allow it to clear proposed agreements by a zone commander with a neutral country. It is suggested as an alternative that details of such transactions be supplied to the other powers on the Trade and Commerce Committee of the Allied Control Authority without, however, asking for approval prior to the making of the trade arrangement. In view of the probable limited nature of trade with neutrals and in view of the restriction as set forth in the fourth consideration of the Dept, these agreements with neutral countries would not include any substantial sales or long term commitments. On this basis we agree with the position taken by the Trade and Commerce Branch and believe there should be immediate modification of paragraph 41 c.

Repeated to Stockholm as 30 and Bern as 46.

Murphy