Soviet Relaxes Financial Blockade in Berlin Area

Grey River Argus, 7 August 1948, Page 5

Soviet Relaxes Financial Blockade in Berlin Area

Lest Allies Counter It LONDON, Aug. 5. Russian authorities to-day agreed to unblock part of the Eastern mark account of the Berlin city administration and Western sector’s firms. This will enable the administration to pay its bills and wages. (Rec. 5.30). LONDON. August 6. The Russian financial blockade of Berlin was relaxed on Thursday, when funds were made available to the City Administration to pay the wages and salaries of many thousands of its workers and employees, and to meet other liabilities. Firms in the Western sector of Berlin were also able to draw on their hitherto blocked accounts. The Times correspondent at Berlin says: “There naturally is much speculation on why such a change of tactics should have been decided on at this moment. One suggestion is that the Russians, seemingly, havo feared that, if their financial blockade had gone on, the Western Powers would have had no option but to bring in more of their own currency to Berlin. The Soviet’s financial blockade would, in that day, have been broken, just as the Soviet’s land and water blockade has been broken by the institution of ‘Air Bridge. But the primary consideration which swayed the Russian decision is believed to have been a desire not to bring matters to a head in Berlin at this time when major exchanges are taking place in Moscow”. Mr Charles Giard, chief of the British Finance Division, Berlin, said the move did not materially alter the Russians’ bargaining position in Moscow.

BERLIN COUNCIL ABLE TO PAY SOME WAGES After the unblocking of part of the Eastern mark bank account by the Russians, the Berlin City Council immediately withdrew twenty-five million Soviet marks to pay its employees, who had not received any salaries since July 15 last, says the British United Press correspondent at Berlin. Withdrawals of one hundred million marks will be made next week from the Bei'lin Council’s three hundred and fifty million marks balance to meet other debts. . Business and industrial accounts in the Western zones of Berlin have also been unfrozen. It is reported that Western economic experts told the Berlin city fmance officials that the Western Powers would issue further Western Geimany currency if the Russians refused to unfreeze Eastern currency. Food Shortage in Soviet Zone Causing Demonstrations LONDON, Aug. 5. While it was officially reported that the food rations for Germans in the Western zones will be increased to 2000 calories daily from September 1. the evidence indicates that tne Germans in the Russian zone aie not faring well for food. Reuter’s diplomatic correspondent quotes a F’oreign Office spokesman as saying that there is reason to suppose that a chronic food shortage existed in Eastern Germany. Reliable reports suggested that the normal consumer in the Soviet zone gets about 1400 calories daily The food shortage is partly due to the Russians’ requisitioning Eastern zone food for the project of feeding all Berlin The Russians had originally claimed that they would supply Berlin with food from the Soviet zone. The British-sponsored newspaper, Diewelt, reports numerous hunger demonstrations, mostly led by German women, throughout the Russian zone Diewelt asserts that the Russians' quelled some demonstrations by making arrests. They told the demonstrators that the food shortages were due to inefficient distubution by German officials. ’ The French-licensed newspaper, Kurier, says the Russians are taking special measures to Protect goods trains transporting food through the Russian zone. . A report from Halle, in ...oviet zone, says that large crowds have attempted to’ break through Geiman nolice cordons to plunder wagons. The Halle police chief ordered that, in the event of further , big denwn.strations, the Soviet military police, as well as the German police,- must 'be informed. „ . , . , ' An American official spokesman said to-day that Soviet zone officials often refused to honour ration cards and often substituted decayed fish for meat. . . , ... The Soviet authorities madet thenpropaganda promises to feed the whole of Berlin at the expense of the Soviet zone. This zone was a better crop producer than the Western zones, but the food situation was worse, because the Soviet occupation forces lived off the land and shipped hundreds of thousands of tons out of the country. Yet at the same time food was imported into Bizonia. The food situation in the West had improved to such an extent that the nightmare days of last winter would never he repeated. The Russian zone received! supplies from .the Western Allies’ air bridge to-day, hut in an unexpected way. Bags'of flour showered down on the Russian zone when, a United. States plane flying supplies to Berlin developed engine trouble and jettisoned part of its cargo.