Foreign Relations of the United States, 1948, Germany and Austria, Volume II

740.00119 Control (Germany)/1–948: Telegram

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

secret
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Berlin, January 9, 1948—4 p. m.

43. Personal for Saltzman and Hickerson (Eyes Only). Reference my telegram 42, January 9.¹

General Clay yesterday at Frankfurt opened afternoon meeting with German Minister Presidents and heads of bizonal agencies with statement that military governors were ready to listen to views of Minister Presidents on proposals made to them preceding day by military governors, account of which was telegraphed you from Frankfurt.

Minister President Ehard of Bavaria arose and stated he had been authorized by Minister Presidents to summarize their point of view and, that position of Economic Council would be stated by Koehler. Ehard explained that in view of brevity of time allowed to Germans for consideration these complex problems he would first make general statement in outline form. First of all he stated fundamental agreement with remarks made on preceding day by Clay and Robertson (see mytel Frankfurt 15²). Minister Presidents fully in accord and welcome clarification given. Minister Presidents also do not want to write off eastern Germany and declare their firm belief in and desire for German unity. They also do not wish to sit with folded hands (repeating language used by Robertson). Terrible distress of the German people demands immediate action in financial and economic fields.

Koehler then made brief statement to effect that this marks beginning of new relationship between occupying powers and Germans and that Germans welcome this opportunity. Germans urgently hope that mutual relationship will be established on basis of law and that it is urgently necessary that statute of capitulation be replaced by statute of occupation. Germans, he said, had listened with pleasure to statements of Clay and Robertson regarding German unity with which they fully agreed. Germans agree with Clay and Robertson that it is false to accept the partition of Germany as a fact. Rather the Germans in complete agreement with US and British Govts want unified Germany with responsible democratic govt and that nothing should happen to prejudice this goal. German attitude will be governed by this principle. Germans will not fail to do everything to improve standard of life in bizonia. Most urgent steps should be taken in area of greatest distress, namely the Ruhr, to support the ration as meager as it is. It is equally important to make available all funds to cover importation of necessary raw materials. He hoped that within framework of Marshall Plan, which Germans welcome, that economic aid will be extended. Koehler then said, on behalf of Germans, Germans are prepared to accept greater responsibility.

Ehard then resumed, stating reactions of Minister Presidents to US–UK proposals. There is, he said, a slight divergence of reaction between Minister Presidents and Economic Council. This divergence, however, is not fundamental and it is largely due to brief time allowed to Germans for consideration of proposals.

1. Regarding doubling of membership of Economic Council Minister Presidents agree and suggest that system of selection be based on one representative to each 375,000 of population. He raised question whether a member could be recalled and recommended that this be settled by the Landtag.

2. On subject of the second house Ehard proposed its title be “Laenderrat of the United Economic Zones”. Minister Presidents agreed to proposed system of composition and recommended that votes of each two delegates from a given land should be made in unison. Minister Presidents suggested a fourteen-day veto right of ordinance and laws of Economic Council. In case of veto by Laenderrat there must be second vote by Council and in that case the second vote must be majority vote of all 104 members of council. Functions of Laenderrat were agreed except that Minister Presidents felt that the two exceptions regarding “money bills” should not be made.

3. On subject of Executive Committee, issue as far as Germans are concerned is whether this body should have a political head. Minister Presidents are against a permanent chairman. They believe that directors of agencies should coordinate their work in regular meetings and that there should be special statute to regulate relationship between council and committee. Appointment and recall of members of committee should, they believe, be in hands of council.

4. Functions of council. Minister Presidents agreed to proposal regarding establishment of budget for council. They suggested that form of revenue-raising be examined further and they would appreciate elucidation of proposal regarding raising of revenues. Laenderrat would be paid for by individual Laender.

5. On subject of the high court they agreed in principle to creation of this tribunal to act as court of arbitration. They urged that details of organization should be studied. It was important to examine more closely the work of court as related to regular administrative and state courts. Regarding selection of members they felt that four members should be appointed from council and Laenderrat. Presiding justice should be chosen by agreement of council and Laenderrat and that this personnel should be qualified as judges or higher administrators.

6. Laender union bank. Germans stated that this proposal was left rather vague. Germans under the circumstances can only note proposal and hope it can be studied further by technicians.

After Ehard’s remarks German statement continued by Koehler, President of Economic Council, and Dahrendorf, vice-president. Koehler stated council agreed its membership should be increased in size. It would be most useful to select additional members following same system used heretofore and to have one representative for each 500,000 of population which would mean increasing size of council from 52 to about 80 members. In Koehler’s opinion this membership should be sufficient to take care of business of council which would then be done at smaller cost than if size of membership were doubled. He also thought this important in view of limited housing and facilities at Frankfurt. He stated that this council was not quite in agreement with Minister Presidents. He recommended that tenure of membership harmonize with life of respective Landtage.

Regarding second house of Laenderrat, composition should be on basis of two members from each land. They would have right to veto laws and ordinances within a period of 14 days. He agreed with Ehard’s proposal regarding passage of laws after veto.

Vice-president Dahrendorf suggested council could not agree with proposal regarding composition of Executive Committee. He felt it was not possible or right to elect one chairman by council if he is not to be responsible to council. Proposal for political directorate, he said, is so novel that it should not be included in the plan (Clay objected to use of word novel stating this had been United States practice since 150 years. Dahrendorf replied that nevertheless it is novel for Germany and that it would be better for Germans to have system to which they are accustomed). Dahrendorf continued that council believed that five directors included in Executive Committee should be retained and be responsible to council. He asked that consideration be given that the directors also include one for labor and social insurance. He felt that this organization should be a group of five or six members to form an Administrative Council of which one of the directors would be chairman. It would be chairman’s function to represent Administrative Council before military governors. In special matters individual directors would report to military governors.

Dahrendorf proposed also to leave civil service agency way it now is. This would be a separate office under direct supervision of Chairman of Administrative Council. Same thing would apply to statistical office. He felt that regulations governing activities of Administrative Council should be issued by Economic Council.

In behalf of Economic Council Dahrendorf summarized that there is basic agreement with proposals made by military governors. He said that Economic Council already had right to draw up budget. Economic Council believed it is urgently necessary create court of arbitration, but that this is matter requiring further discussion and study. Koehler resumed regarding the bank. This is one of most important proposals made. Germans welcome heartily creation of such a banking institution. Naturally in short time available to Germans they could not formulate detailed recommendations.

Dahrendorf then recommended that military governors consider proposal to open discussion as soon as possible in order define competence of respective Laender in bizonia vis-à-vis Frankfurt organization. He also stressed that economic agencies now existing in only one zone would have to be eliminated.

Meeting adjourned for 20 minutes at this point at instance of military governors to permit some time for brief consideration of German reaction.

After meeting resumed Clay announced decisions of military governors stating that these decisions are not such that they may not be changed after a certain time. Clay stated that it is recognized we have exerted pressure to make rapid progress. We do feel that present machinery is not adequate and must be improved as matter of urgency.

1. Size of Economic Council. Military governments believe it would be simpler to double size of that body following its present representative character. Therefore decided that size of membership be doubled. In this emergency situation it is considered best that members continue in office as long as a given Landtag continues in office.

2. German proposal regarding title of second house, namely (Laenderrat of the United Economic Zone) is approved. However military governments are not willing that two representatives in Laenderrat from each Land should be required to vote in unison. If the Land wishes them to vote in certain way that is up to Land itself to make its own arrangements.

3. Function of Laenderrat. Clay stated these would be entirely in German hands and the German proposal is acceptable. Regarding veto provision, approval of a bill after veto would require only simple majority of council rather than majority of all members.

4. Executive Committee and directorates. Due to provisional nature of organization and emergency it faces, US–UK not willing to accept all recommendations Germans have made. In military government’s view duties of chairman make it important for one of members to serve in this capacity without neglecting his other duties. It is necessary for council to approve appointments. Regarding removals, if necessary military government could meet with the two houses to remove chairmen should such a situation develop. There should be one director without portfolio.

5. Regarding Dahrendorf’s remarks on subject of council’s budget Clay pointed out that the power Germans now have is for council’s expenses only. It might, however, be possible that council would wish to enact legislation, for example in subsidy field. Such expenditures would necessarily be included in council’s budget. We agreed that details of where and how funds are collected should be discussed later. This would be done under the broad authority given by charter of council.

6. High court. The military government proclamation will be drafted and submitted to Germans. Charter of high court will not be legislative issue. This will develop later when eventual constitutional provisions of a German government are considered. Details of provisional arrangement will be worked out with Germans. Military government will consult with Germans regarding selection of court personnel and it is entirely possible that German proposals will be quite satisfactory. However, it is not possible to give Germans definite approval today.

7. Bank. Military government financial advisers will consult with Germans promptly (financial and economic advisers have remained in Frankfurt today for discussions on this and other subjects). While German recommendations will be carefully considered Clay said it is hot matter for bizonal legislation because we hope that bank will eventually include other areas. If that should not however materialize bank will then fall under bizonal legislation. Charter will be drafted immediately but prior to its issue committee from council and Minister Presidents will examine it.

Clay stated further that entire plan of bizonal reorganization when drafted will be examined by a committee which Ehard and Koehler will be asked to form. Military government will try to prepare this draft in 10 days. Existing rules will remain in force until the new have been approved and issued.

Clay stated also that German suggestion relating to civil service office is approved, but that regarding separate director for labor and social insurance we are reluctant to increase number of agencies. He wanted Germans to know we are entirely sympathetic their proposal regarding labor office and would work out some form of liaison labor agency. It is our feeling that at the moment in view of quadripartite situation in Berlin that we adhere to Potsdam limitation of five departments. Labor agency can be taken care of without calling the head of it a director. (See following telegram³ for balance of message.)

Repeated Frankfurt for Gantenbein as 3.

Murphy

1. Not printed; it reported that General Clay and Ambassador Murphy left Frankfurt on the evening of January 8 and arrived in Berlin by train the following morning. Because the meetings had been going on in Frankfurt throughout January 8, Murphy had not been able to send any telegraphic reports from Frankfurt. In the remainder of the telegram under reference, Murphy gave a detailed account of the 20th meeting of the Bipartite Board held on the morning of January 8. (740.00119 Control (Germany)/1–948)
2. January 7, p. 8.
3. Presumably reference to telegram 46, January 9, from Berlin, infra.