279. Paper Prepared by the Operations Coordinating Board0


(Approved by the President on February 7, 1958)

(Period Covered: From July 17, 1957 Through September 3, 1958)

A. Summary Evaluation

Owing to the continued intransigence of the U.S.S.R., no progress could be made during this period toward achievement of the basic long-range objective of the reunification of Germany in freedom. The Communist regime of the Soviet Zone was able to continue the gradual consolidation of its position within Eastern Germany. Measures for greater control of the church, of universities, and of travel to the West have been effectively instituted. The Communist Party leader, Walter Ulbricht, carried out a successful purge of high-ranking party members who had taken a position at variance with his own program for pushing ahead rapidly with further steps of communization.
The regime was successful in gaining a certain measure of international acceptance during this period. It received diplomatic recognition from Yugoslavia in 1957. It also succeeded in bringing official representatives of the United States and Belgium to negotiate directly with it for the release of the crews of aircraft which had strayed into the Zone and in inducing the Belgians to sign a formal governmental agreement with it in this connection.
Continued use was made of the Western position in the Federal Republic and Berlin to make these areas appear attractive and the Zonal regime correspondingly unattractive in the eyes of the East Germans. Partially because of these influences, and owing also in part to the broadcasts of RIAS (Radio in the American Sector of Berlin) and to the various joint projects of the German population in maintaining the connections of the East German population with the West, the population of Eastern Germany has continued opposed to the regime though there is no longer any great hope of a resolution of their problems through the reunification of their country in the immediate future.
A review of policy is not recommended.

B. Major Operating Problems or Difficulties Facing the United States

Possibility of Uprising. The potentially most serious operating problem facing the United States is the possibility of an uprising in Eastern Germany. However, by present indications a widespread uprising in Eastern Germany appears unlikely though it always remains a possibility. Such an uprising might involve direct conflict between Soviet and NATO forces. If it were repressed by Soviet forces, Western prestige would suffer a heavy blow even though the U.S.S.R. would be still further discredited.
Hindering Regime Progress toward International Acceptance. Another major problem we face is to prevent or slow down further progress of the Zonal regime toward international acceptance. Such acceptance could lead finally to widespread international recognition of the Zone, and thus to the consolidation of the Soviet position in Germany and in its European satellite system. This problem has manifested itself particularly in the three following areas:
The U.S.S.R. has attempted to transfer to the Soviet Zone regime its responsibilities for Germany as a whole, for the Soviet Zone and for Berlin under quadripartite agreements and arrangements. Simultaneously, the Soviet Zone regime has attempted to utilize its control over the territory and airspace of Eastern Germany, including the access routes to Berlin, to force the Western Powers, particularly the United States, France, the United Kingdom, and the Federal Republic, to deal with it officially and on a high level. The case of the American helicopter whose crew was forcibly retained by the regime in June 1958 (see paragraph 11 of Annex A to this Report) and used as a basis for the attempt to extort recognition from the United States is an excellent example of this process. Such dealings could be pushed further and further up the scale in the direction of diplomatic recognition. Evidence of Western acceptance could be used by the regime to encourage diplomatic recognition from uncommitted countries, particularly in Asia and the Near East, and to demonstrate to the population of the Soviet Zone that further resistance to the regime is futile since even powerful states hostile to the regime have come to accept it as part of the status quo in international affairs.
Independent of but related to this process, have been the attempts of the GDR regime to exploit the German desire for reunification by bringing public pressure to bear on the Federal German Government to enter upon closer relations with the regime. There is already a considerable body of opinion in Western Germany which sees such relations as the only way to make progress towards German reunification. Closer official contact with East Germany is a part of the official policy of both [Page 735] major opposition parties. This trend would be greatly accentuated by further evidence of Western acceptance of the status quo in Germany, whether voluntary or enforced. Closer official relations between the Government of the Federal Republic and the Soviet Zone regime, whether through extortion or increased political pressure from within the Federal Republic, would have a considerable effect in undermining the case against international recognition of the Zone and in furthering acceptance of the regime outside Germany. Closer official relations could also be a step toward involvement in a morass of negotiations in which the Soviet Zone regime might be able to influence Federal Republic policy by exploiting the desires of the West German population for an improvement in the living conditions of their East German relatives and friends. The Soviet Zone regime might, for example, pose conditions which would limit the freedom of movement of the Federal Republic in foreign policy questions.
The GDR regime has also striven to gain membership or participation in governmental and non-governmental international organizations, to establish trade and cultural missions abroad, and to establish connections between its agencies and institutions in the non-Communist world. Success in any of these efforts can be used as a lever to gain admission into additional organizations and given full exploitation in propaganda addressed to the Zonal population as an indication of world acceptance of the regime and the futility of further opposition to it. A further complicating factor in this context lies in the increasing tendency of Western public opinion to confound the Soviet Zone with countries of Eastern Europe with which it may be in the Western interest to improve relations and to feel that closer relations with the Zonal regime may result in an “evolutionary” development there—an illusory hope in the light of the regime’s total dependence on Soviet military support.
Declining Morale. A gradual worsening of Soviet Zone morale, as the division of Germany continues, remains a severe problem. The regime is likely to take further repressive measures against the churches and within the universities of the Soviet Zone and against travel from the Soviet Zone to the Federal Republic. Such developments, coupled with continued failure of the Western Powers to bring the U.S.S.R. closer to a negotiated settlement of the German question and evidence of increasing international acceptance of the Soviet Zone, may result in increased apathy and an increased tendency to accept the continued existence of the regime as a permanent fact of life. Increases in the pervasiveness of this attitude would naturally assist the regime in further consolidating its position in the Zone.
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Note: See National Intelligence Estimate NIE 12-56, dated 10 January 1956, “Probable Developments in the European Satellites Through 1960”.1

Annex A


Economic Developments. The regime carried out a currency conversion in October 1957 primarily designed to decrease the amount of money in circulation, but aimed also at private businessmen, the churches and other hostile groups in the population. Food rationing was ended in May 1958. As a result of new arrangements with the USSR, programs to induce higher productivity will almost certainly result in the increases of production necessary to meet the economic goal established by the regime for 1958. An extensive economic reorganization on the Soviet pattern is being carried through. In sum, the immediate prospect is that the economy will continue to make steady progress at a higher rate than in the past.
GDR Trade with Non-Communist Countries.
In January 1958 the GDR Foreign Trade Minister claimed that in 1957 trade with capitalist countries was 23.7% larger than in 1956, indicating a volume of $537, 900,000 at the official ruble/dollar exchange rate. He also stated that GDR trade with capitalist countries was just under 27% of the country’s total foreign trade. Trade with the UAR and Sudan was double the 1956 figure and trade with India 70% higher.
New trade agreements (between unofficial contracting parties) were concluded with Italy in mid-1957 and Vietnam in March 1958. The unofficial agreement with Yugoslavia was replaced by a government-to-government agreement in October 1957. Trade agreements with non-Communist countries, all unofficial, now number seventeen (including the Federal Republic of Germany). Unofficial trade missions were established on a more or less permanent basis in Argentina, Denmark, Iceland, and Italy, in addition to the officially recognized trade missions in Egypt, Syria, Yemen, Sudan, India, and Indonesia, bringing the total to ten in non-Communist countries.
Refugees. The refugee flow from the Zone continues, with over 260, 000 people leaving the area in 1957. The flow has continued high in [Page 737] 1958, amounting to approximately 96, 000 in the first six months of the year. The regime has been suffering from the economic effects of this continual drain of productive manpower and has imposed heavy exemplary prison sentences on persons apprehended while attempting to leave the Zone without permission.
Soviet Evasion of Responsibility. As indicated above (see paragraph 6. a. of this Report), the obverse of the problem of preventing the acceptance of the GDR regime is that of maintaining the principle of Soviet responsibility in the Soviet Zone. Recently there have been two flagrant instances of Soviet attempts to disclaim such responsibility. On June 7, 1958 a United States Army helicopter mistakenly crossed the zonal border and made a forced landing in the Soviet Zone. Although they were obliged to do so under long-standing agreements and arrangements, the Soviets refused to return the men and the aircraft to United States control, insisting that the matter fell within the competence of the “sovereign” GDR. (The men were returned July 19, 1958 through the mediation of the American and East German Red Cross societies.) On June 18, 1958 an organized mob ransacked the headquarters of the United States Military Liaison Mission to the Soviet Forces in Potsdam.2 The Soviets took the position that “such demonstrations are an unalterable right of the population of each sovereign democratic republic”. Although vigorous protests were made in each instance, it did not appear that the United States and the other Western Powers would have the means to oblige the Soviets to acknowledge their responsibility.
Fifth SED Party Congress. The Fifth Party Congress of the Soviet Zone Communist Party, the Socialist Unity Party (SED), took place between July 10-16, 1958, with Khrushchev leading the list of non-German participants from the Soviet Bloc. The main themes of the Congress were(a) that East Germany and the remainder of the Bloc were entering a phase of accelerated economic development and economic interrelationship within the Bloc which would have the result of bringing per capita consumption in Eastern Germany on a level with that of the Federal Republic by 1961; (b) the strength and unity of the Bloc and its inevitable victory over capitalism; and (c) the necessity for relentless eradication of “revisionism” as exemplified by Tito. The Congress criticized Schirdewan, Oelssner, Selbmann and other Party leaders purged by Ulbricht in February of this year, but none was ejected from the Party.
  1. Source: Department of State, S/S-NSC Files: Lot 63 D 351, NSC 5803. Series. Secret. For the section of this report on Germany (Berlin) see vol. VIII, Document 19. For the section on Germany (the Federal Republic) see Document 246. A Financial Annex is not printed.
  2. For text, see Foreign Relations, 1955-1957, vol. XXV, pp. 115118.
  3. Documentation on this incident and a similar attack on the British Mission the same day is in Department of State, Central File 762.0221.