301 Watt to Department of External Affairs

Cablegram 292, MOSCOW, 7 September 1948, 8.20 p.m.

IMMEDIATE TOP SECRET

1. Before leaving Moscow for Paris it may be of some use to sum up my impressions of the Four Power negotiations regarding Berlin situation. In view of my lack of official information, however, I desire to emphasise that statements of fact made, should not be accepted as accurate unless corroborated from other sources. Validity of inferences will, of course, depend upon accurate statements of fact.

2. First draft of Western note[1] to Russia included references to aforesaid matters being considered at some stage by Council of Foreign Ministers and by U.N.O. These references were deleted from final test, one at the instance of the United Kingdom, and one at the instance of France.

3. Mr. Bevin's general attitude prior to despatch of note appears to have been based upon the belief that as the Soviet Government did not agitate war a firm stand would call the Russian bluff. He knew, however, that risks were involved and was prepared to face the consequences if his estimate of the Russian attitude proved mistaken. To the House of Commons therefore he foreshadowed the possibility of war though not in explicit terms. As British opinion strongly resented the Berlin blockade, Mr. Bevin felt that he had the country behind him. Although Parliament and public opinion in France, and Congress and public opinion in the United States, were not as well prepared for immediate crisis, these two countries agreed to go along with the United Kingdom.

4. The stiffness of the Soviet reply proved embarrassing. Firstly, the Soviet Government showed no signs of fear or weakness and its 'bluff' remained uncalled. Secondly, the complications not only of feeding Berlin by air but keeping industry working in Berlin had become apparent. Thirdly, countries on the continent of Europe likely to be quickly overrun by Soviet troops in the event of war show no enthusiasm for the immediate prospect. Fourthly, even in England some criticism appeared of the Government's handling of the general situation.

5. When, after receipt of the Russian reply, Mr. Bevin announced in Parliament that British policy remained the same, and immediately afterwards added that if the blockade was lifted the United Kingdom was prepared to discuss with Russia not only Berlin but other German matters, he does not seem to have realised that Russian and other Governments (except, presumably, the United States and France) would interpret his remarks as proof that Russia had gained a major diplomatic victory. For whatever the private intentions of the Western Powers, the Western note as despatched and published contained no reference to their readiness to discuss the German question as a whole. The Russian note on the other hand in effect rejected the discussions on Berlin alone and insisted that any discussions must cover the general German question. Russia would therefore regard Mr. Bevin's second statement to the Commons as proof that she had succeeded in calling, in a substantial degree, the bluff of the Western Powers. This belief was and still is dangerous because the Soviet Government is likely to have inferred, firstly, that the Western Powers were afraid of war, and, secondly, that continued Russian intransigence might still secure a verdict of Russian control of Berlin. Thus the negotiations in Moscow opened with Russia believing that she had won the first round.

6. The initiative for the approach to Stalin[2] in a few weeks came from the United States, presumably supported by France. The United Kingdom was far from enthusiastic and agreed with some reluctance. By this time, however, the very great tactical advantage of the Russian position in Berlin had become more clear. The Western Powers had been put in the position of having to fire the first shot in an atomic war, the first results of which were likely to be overrunning by Russian forces of Western Europe and much of the Mediterranean area. The importance of exhausting the processes of peaceful negotiations (as Mr. Marshall said later) was more fully appreciated even though the chance of success in such a struggle might be small.

7. Of the three Western Envoys only the United States' Ambassador had the necessary status and experience to be fully effective immediately. The French Ambassador, though an able man, had only recently arrived in Moscow, while the Russians, who attach so much importance to status, were unlikely to forget that Roberts was technically Bevin's 'principal private secretary'. Nevertheless, the three Western Envoys worked harmoniously together and within the limits of their instructions have probably done best job possible in the circumstances.

8. The original visit to Stalin gave some ground for hoping that the Russians were not merely intent on exerting all their power in Berlin to throw the Western Powers out. There seemed some readiness to reach an agreement, the details of which would have to be worked out with Molotov. From the Russian side the most important issues were the control of currency and steps being taken to establish a government for Western Germany. Negotiations with Molotov, however, proved very difficult. Unfortunately, in spite of his great ability and shrewd, hard realism, Molotov's thoughts move in somewhat rigid Russian channels and he can make grave errors of judgment regarding Western reactions. In particular there is always the danger that he will lose the wood in defending every individual tree. (In this connection the State Department document on Nazi-Soviet relations deserves careful study, especially account of Molotov's conversation with Hitler in Berlin in November, 1940). Unlike Stalin, whose outlook seems to be broad enough to permit him to make concessions without undue haggling in return for what he regards as being corresponding advantages, Molotov has carried on negotiations very much like any other negotiations not involving the issue of war and peace, exploiting to the full the tactical strength of the Russian position in Berlin, pressing home every advantage and yielding, if at all, only at the last possible moment.

9. Russians, including Stalin, genuinely think the Western Powers unreasonably want to have their cake and eat it too. To the somewhat formalistic Russian minds the decision of the Brussels Pact countries to set up Western German Government[3] destroys the basis of legal rights of Western Powers to share control of Berlin. (Apparently the French think that the Russian legal, as compared with political, economic or moral case, has at least some substance.) While Russians do not like decision of Western German Government and publicly will fight and condemn it, they might accept it like any other unpalatable fact if capital were in Western zones. But for the Western Powers to claim as well the right to exercise intransigent authority at an important point well inside the Soviet zone, seems to the Russians inconsistent and irregular. It seems to them to imply that the Western Powers not only want to develop Western Germany as they think fit but that the Western Powers are also determined to prevent the Russians from developing Eastern Germany as the Russians think fit. The Russians might even be prepared to tolerate continued presence of Western Powers in Berlin without any share in control (in spite of obvious advantages of this to the Western Powers as regards military intelligence). But the Russians feel that for the Western Powers to demand to share economic control, particularly as regards orders in Berlin, is in effect to demand the right to put the brake upon the Soviet control of Eastern Germany, although Russia[4] granted no corresponding right to put the brake upon the development of Western Germany. In addition, of course, the Russians fully realize the value of Berlin as a symbol of German experiments.

10. Throughout the negotiations the Russians have steadily maintained and even increased pressure in Berlin. Any agreements in principle which may have been reached in Moscow will be meaningless unless Military Governors in Germany also reach agreement upon application of these principles in practice.[5] If the Governors agree presumably the blockade in Berlin will be lifted, tension will ease, Foreign Ministers can once more discuss German settlement and crisis will recur only if and when Foreign Ministers fail to reach such a settlement. If the Governors fail to agree presumably Moscow talks will have failed and Western Powers will have to decide whether to bring the matter before U.N.O. rather than start an immediate war. Deteriorating conditions in Berlin and approach of winter do not leave much time to adopt and carry out new procedures.

11. In my opinion only present ground for optimism regarding the possibility of settlement on Berlin is the fact that the Russians have agreed to the meetings of the four Military Governors in spite of the fact that the Western Powers have rightly resisted strong pressure to postpone the meeting of the Constituent Assembly for Western Germany. This suggests that the Russian desire to avoid war is strong enough to prevent them being completely intransigent or that deterioration of conditions in Eastern Zone (economic conditions and low prestige of Russian sponsored German duties) has reduced the strength of the Russian bargaining position in Berlin.

12. If agreement is reached on Berlin it will still be extremely difficult to reach agreement on Germany as a whole. Apart from the political and military problems involved the economic problems seem very complicated. Moreover, even if a solution of the whole problem can be found, I am far from sure that the United States is prepared to exchange its predominant influence upon the development of Western Germany and indirectly upon Western Europe for a Four Power settlement of the German question, involving, as it presumably would, Russian participation in the economic development of the West, possibly with the right to veto. Russian participation might so complicate the development of the Western Union[6] in its present form, in military as well as economic field, as to be unacceptable to Washington.

13. Meanwhile, patience shown by the Western Envoys in Moscow and their Governments during current negotiations is all to the good. Even if negotiations break down I feel that the Western Powers are now in a stronger position in relation to their own public opinion than four weeks ago. As a result their position will be even stronger if, before forcing the issue, they are also able to exhaust the possibilities of a peaceful settlement through U.N.O. By this means world opinion can be brought to bear upon the Russians and general supporters organized for grave decision which the Western Powers may have to take if all peaceful means of settling the issue fail.[7]

[1] See Document 288 and note 1 thereto.

[2] See note 1 to Document 291.

[3] See paragraph 3 in Document 282.

[4] A sign in the text here indicates 'word omitted'.

[5] On 30 August 1948 the four powers had agreed on the text of a directive to be sent to the four Military Governors instructing them to work out an agreement about how to implement two steps to be taken simultaneously: (a) to lift the restrictions on communications between Berlin and the Western zones and on the traffic of goods to and from the Soviet zone; and (b) to introduce the Soviet zone mark as the sole currency in Berlin. On 3 October 1948 the Soviet government advised the other three powers that it proposed to accept the directive as an agreement between the four governments for the settlement of the Berlin question.

[6] On Western Union see Document 312.

[7] External Affairs replied asking Watt to discuss the matters urgently with Evatt when Watt arrived in Paris. Meanwhile Burton forwarded the cablegram to Evatt with the message that Chifley desired him to see it.

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