Currency Discussions

As a member of the Security Council Canada has been taking an active part in the attempts to find a solution to the Berlin dispute which have been made in Paris and more recently by the Technical Committee on Berlin Currency and Trade in Geneva.¹ The Canadian representatives have been governed, first of all, by the view that the Berlin situation constitutes a threat to the peace. On the substance of the dispute, Canada has been intent on a solution which is acceptable to the Western Powers. Bearing these considerations in mind, our representatives have used every effort to seek an agreement which would serve the best interests of the Western Powers. The Canadian delegates have constantly taken the view that the Western Powers themselves should be the ultimate judges of what is acceptable and have striven to see that nothing emerged from the negotiations which would embarrass them.

2. It appears, however, that the Technical Committee on Berlin Currency and Trade has, in fact, produced a document (its preliminary draft report) which promises to be a source of considerable embarrassment. This was not the result of any lack of diligence on the part of the Committee.

3. The four powers involved in the dispute have recently offered their comments on the Committee's preliminary draft report. The United Kingdom, France and the U.S.S.R. have confined their comments to suggesting amendments which would make the draft a satisfactory basis for the settlement of the Berlin dispute so far as currency and trade are concerned. The United States alone has rejected the draft for these purposes, although its reasons for doing so seem to differ in no major respect from those which prompted the United Kingdom and France to offer amendments within the framework of the draft.

4. From the Canadian point of view it was a matter of some concern that Western solidarity had not been achieved on this important problem. Considering the advantages which accrue to the U.S.S.R. by the United States attitude, it would be reasonable to suppose that some compelling reasons must have governed the United States authorities in their outright rejection of the draft. The Soviet Government is now able to claim that it participated fully in the work of the Committee and that it accepted the general framework of the report as a satisfactory approach to the problem even though this report was drawn up by representatives of countries which would scarcely be called friends of the Soviet Union. The U.S.S.R. could go on to argue that, as the United Kingdom and French Governments had accepted the framework of the report, the United States rejection of it sprang from more than purely technical considerations. From here Soviet propagandists could insist, as some already have done, that the United States Government did not really want a settlement at all.

5. This conclusion is, of course, hardly justified when one considers the expense and difficulties involved in maintaining the airlift but it is the sort of argument which is difficult to dispose of.

6. More recently, the United States Government has suggested another approach to the problem. This envisaged an "interim solution" whereby the United States counter?proposals to the Committee's draft would be put into effect for the control of Berlin currency and trade at the same time as the blockade was lifted. This "interim solution" would remain in force until the four powers, by direct negotiation, could reunite the administration of all of Berlin. The United States would then accept the Committee's draft as a basis for the control of Berlin currency and trade in the re?united city.

7. While this fresh proposal was a considerable advance over the previous United States position, it would require the Soviet acceptance of the United States counterproposals which the Soviet Government have already rejected as being outside the terms of reference of the Technical Committee. Furthermore, it involved the acceptance of the United States counter?proposals by the United Kingdom and France with which they had previously been unable to identify themselves. If these two countries were now to accept a United States view they had previously rejected, Soviet propagandists would not be slow to claim that they had yielded to American pressure.

8. The present states of affairs is such that one can hope for very little by way of settlement from the Technical Committee. However, it seems important to us that the Soviet Union should not be permitted to make expansive gestures of conciliation based on the Committee's report without being challenged and that the apparent difference of opinion between the United Kingdom and France on the one hand and the United States on the other should be narrowed. We should accordingly be interested to know what compelling reasons the United States authorities had for not making their comments within the framework of the Committee's report. We should also be interested to hear if the United States authorities have any plans for counteracting the effective use the Soviet Government might make of the Committee's report and what the United States Government considers to be the best future course of action.

¹Norman Robertson était le president du Comité technique.
Norman Robertson was chairman of the Technical Committee.