740.00119 Control (Germany)/8–2647: Telegram
The Acting Secretary of State to the Embassy in the United Kingdom
3693. For the Ambassador and Gen. Clay from State and War. British Chargé has presented following note dated 23rd August:
“Following on your conversation with Sir Wilfred Eady yesterday,73 I am writing to confirm that His Majesty’s Government would wish to discuss as early as possible the revision of the financial provisions [Page 955] of the Agreement concerning the British and American Zones of Occupation in Germany, signed on the 2nd December, 1946.74
It is clear that even at the current rate of expenditure the present United Kingdom appropriation for this purpose will be exhausted by the end of December next or early in January. As this Embassy has explained to the State Department on behalf of His Majesty’s Government, it will be quite impossible for us in present circumstances to provide further sums in dollars for this purpose once the appropriation has been exhausted.
The facts of the strain upon our dollar resources which have led to this situation have been fully explained to you and to Mr. Secretary Snyder.75 His Majesty’s Government will, however, wish to discuss with the United States Government what contribution from non-dollar sources they may be able to make for the bizonal area of Germany.
Article 12 of the Fusion Agreement provides for amendment by mutual agreement and for review at yearly intervals. In the opinion of His Majesty’s Government it would be unwise to defer a review of this problem until a later date, as this would leave too little time for alternative arrangements to be made. Moreover, as was explained to your representatives during the discussions this week, His Majesty’s Government is in the act of reviewing its over-all financial resources and it is of the utmost importance that its liabilities in relation to Germany should be determined at the earliest possible moment.
His Majesty’s Government would accordingly suggest that the examination of this problem should begin at the earliest possible moment. British officials with knowledge of the relative financial arrangements are in Washington and are available to discuss the problem.
I should be glad to be informed what arrangements for these discussions you would propose.”76
Believed here by State and War desirable undertake negotiations with British at early date. Washington logical site in view presence British experts. Presence high officials US and UK zones believed essential.
Comments Douglas and Clay urgently requested, including Clay’s views last sentence.
- No Department record of the conversation under reference has been found.↩
- For the text of the United States-United Kingdom Bizonal Fusion Agreement of December 2, 1946, see Department of State Treaties and Other International Acts Series 1575, British Cmd. 6984, or Germany 1947–1949, pp. 450–453.↩
- For documentation regarding the British dollar crisis and the revision of the Anglo-American Financial Agreement of 1945, see volume iii .↩
- In a note of September 17, 1947, not printed, Acting Secretary of State Lovett informed British Ambassador Lord Inverchapel of the willingness of the United States Government to review the financial provisions of the Fusion Agreement and to begin discussions on the subject in Washington beginning October 8 (740.00119 Control (Germany)/8–2347).↩