762B.02/2–1050: Circular airgram

The Secretary of State to Diplomatic Offices

secret

On December 15, 1949, at a meeting of the Permanent Commission of the members of the Brussels Pact, the following position paper was adopted:

“The five governments and the Government of the United States are opposed, in present circumstances, to de jure or de facto recognition of ‘The German Democratic Republic’. They hope that all the governments accepting this principle will adopt, with regard to the German Democratic Government, a similar attitude to theirs towards the following problems, all of which, either directly or indirectly, are likely to involve the question of recognition:

1.
Commercial relations between the Government and Eastern Germany:

Trade should be conducted solely through the intermediary of private organizations, such as chambers of commerce. The fact that such private organizations on our side may deal with ‘official’ organizations on the other is of no significance with regard to recognition.

Insofar as it may be necessary to discuss questions relating to trade agreements with Eastern Germany, the five governments and the Government of the United States wish to maintain the state of affairs existing before the creation of the ‘German Democratic Republic’, that is to say, to deal with such questions through the intermediary of the Soviet authorities.

Should it prove impossible in some particular and exceptional case to avoid some form of contact with the Eastern German administration, then such dealings as take place will be carried out on as low and ‘technical’ a level as possible. It should be made clear that such Eastern German administration is considered as acting under the governmental responsibility of the Soviet occupation authorities.

2.
Protection of property and nationals:

The five governments and the Government of the United States consider that this protection is incumbent upon the Soviet Government which is responsible for the acts of the ‘German Democratic Republic’.

3.
Participation of the Eastern German ‘government’ in international organizations:

The five governments and the Government of the United States express the hope that the governments concerned will be prepared to exchange with them information on the difficulties they meet within their relations with Eastern Germany and, if necessary, to consult with them with a view to maintaining a common attitude.”

In commenting on this paper the Department pointed out that intent is an important factor in the question of de facto recognition; therefore, emphasis should be given at all opportunities to the fact that there is no intent of granting recognition to the GDR.

With reference to the phrase “Trade should be conducted solely through intermediary of private organizations such as chambers of commerce”, the Department assumed that no intention existed to preclude private traders from continuing to negotiate directly with buyers or sellers in Soviet zone. Although private organizations such as chambers of commerce could render valuable services in protecting interests of private traders in dealing with the Soviet Zone, similar to function of American-Russian Chamber of Commerce in 1920’s in representing commercial interests of private traders to Soviet Government authority prior to recognition by US, arrangements which would Head to situations in which private organizations or associations would in effect have exclusive right to export and import or to conclude trade agreements on behalf of their respective country with Soviet Zone would be deemed undesirable. In such cases restrictive business practices might well develop in direct opposition to the United States objectives under ERP of fostering competition in trade and production. For example, private organizations which in effect possessed such exclusive rights could well use their position to allocate markets, exclude or limit imports which compete with domestically-produced goods, and bring pressure on recalcitrant firms to adhere to domestic restrictive arrangements.

As a result of their observations the British representative made the following statement at the meeting of Permanent Commission held on January 5, 1950:

“First section subparagraph 1 DA/561 final reads: ‘Trade should be conducted solely through intermediary of private organizations, such as chambers of commerce’.

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In view slight ambiguity in this phrase, UK representative wishes to place on record that according to his understanding, it was not intended as recommendation that trade should be transacted solely through bodies like chambers of commerce, but that it should be transacted either through such bodies or by individuals and firms dealing direct with their opposite numbers in Soviet Union.

US agrees with this interpretation. UK Representative hopes that members of Committee are of like opinion.”

It has been agreed that this statement of policy would serve as a guide for representations to be made by the representatives of all six powers to all other OEEC countries; and that the six governments would be free to make same representation to other governments. British representative stated that matter would be placed on agenda for consideration by Commonwealth Nations at Colombo Conference. The United States representative stated that the United States Government would probably communicate this position to some or all Latin American republics.

You are, therefore, authorized at your discretion to use the foregoing as the basis for an oral and confidential démarche to the government to which you are accredited. It is suggested that you may wish to ascertain the instructions received by the representatives of the members of the Brussels Pact, i.e., France, United Kingdom, Belgium, the Netherlands, and Luxembourg, and entirely at your discretion to coordinate your action in such manner as you may determine individually or in concert.

As this circular is being sent to all Diplomatic Officers, the action to be taken rests with individual officers. No action is required, for example, in the Missions to the Brussels Pact powers. In the other American Republics, the Officers receiving this instruction should assume primary responsibility for the communication of this information to the governments to which they are accredited. In the case of the OEEC countries, the procedure for conveying the above is entirely at the discretion of the Officers-in-Charge.

This instruction is being sent to the Officers-in-Charge of Missions in Communist-dominated countries solely for information. No action is to be taken by Missions to these countries.

The action to be taken by the Missions at Helsinki and Belgrade is at the discretion of the Officers-in-Charge.

Acheson