Evening star., 1949-05-01

oIldl oOhOlONohy, oofiSb hAAAAtnAS
governor. dropped the bombshell.
At it's meeting March 20 he read
a prepared statement to the four
power Allied Control Council. an
nouncing it was at an end. and
walked out.
Soviets Tried to Stall
The Soviets have fostered the
belief that the Berlin blockade did
not begin until currency was re-
formed three months later. In
fact, it dates from March 20. when
the Soviets began methodically to
impose restrictions on military
supplies and on German civilian
traffic.
There Is evidence that the So
viets wanted to continue currency
discussions. So long as the West
ern powers continued to talk. they
could do nothing positive without
Soviet approval. Currency reform.
and the economic recovery Of
Western Germany which depended
upon 1t, could be delayed in
definitely.
The Western Allies took the po-
sition that the currency talks were
but a phase of the overall activi-
ties Of the Control Council and
that until the Russians were ready
to resume their place, it was use
less and futile to talk money.
The three Western Allies decided
to 60 ahead independently with
currency reform in Western Ger
many.
The new currency was intro
duced June 20. 1948. and the So
viets acted in desperation. AS q
first move. they printed stamps
or stickers which were attached
to old notes to give them renewed
validity. As soon as new notes
could be printed. a second ex-
change was made.
The original Colin Goldsmith"
plan had broad social and polit-
ical aspects, as well as economic
ones. An estimated 10000, 900 900
marks was circulating in the three
western zones. This was to be cut
more than 10 to /.
No figures have ever been made
available. According to the best
guesses, Eastern German currency
was cut about 8 to l, instead OF
10 to l as in the West. The East
ern mark, In consequence, was
worth q little less than . third as
much. This is approximately the
rate at which they have been
traded in Berlin.
East Germany Lays
At the same time that money
was reformed. many rationing
controls and trade restrictions
were removed. Free enterprise
had q delirious binge. Money is
worth something again. People
will work for wages because they
can buy things. Production
spurted to more than 80 per cent
Of the 1886 level. the basic goal.
In some fields it exceeds 100.
Nothing like this has occurred
in Eastern Germany. Its cur
rency is still deteriorated. Its in
dustries are cut on from raw
materials. Its economy becomes
more rigid instead Of more flex-
ible. Uncontrolled trafilc In goods
and people between East and
Western Germany remains i'm
possible In the Soviet view.
Long before currency reform the
Soviets decided rs q political meas
ure to incorporate Berlin into
Eastern Germany and to force
the Western Allies out by Great
Ing an impossible situation. Soko-
lovsky's March 30 walkout was the
beginning.
The Western Allies were insist
ing on the status OF Berlin as O
four power city In which each OF
the occupying authorities had
rights and obligations.
When currency reform Was In
troduced In the West. they speci-
ficaIly refrained from applying II
In Berlin. Instead they asked for
a meeting Of the four comman-
danfs. The Soviets, who had
valked 0aft of the K0mmaudatuyal
three days earlier. refused. The
Kommandatura. like IT. parent
Control Council. has not met
since.
On Juns -. eovist financial