Documents / FOIA release
This Top Secret study by the Interdepartmental Coordinating Group on Germany and Berlin, dated July 12, 1961, and released by the Central Intelligence Agency, answers NSC Directive No. 58 of June 30, 1961. It sets out courses of action for the Berlin crisis but does not judge their merits. It covers imminent presidential decisions, a three-phase timetable running to January 1, military preparations and mobilization, covert action, economic sanctions, public information, negotiating positions and checkpoint procedures for East German personnel.
“Cooper”8 pages
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## SECRET ## Appendix B inflationary forces would also come into operation, but it is unlikely that further additions to the imports would help the U.S. trade balance appreciably. In summary, the net adverse impact of Berlin preparations on U.S. trade and service accounts, even excluding military expenditures, could be substantial depending on the magnitude of the preparations and the corrective measures adopted. Controls to restrict imports for balance of payments purposes were not considered necessary to deal with the substantial U.S. balance of payments deficits incurred during the Korean War and World II (although domestic restrictions in World War II gave the authorities considerable indirect control over impqrts). The imposition of such controls would represent a fundamental change in U.S. Policy and should not be taken except after the most careful consideration in an extreme national emergency. ## Impact on Capital Movements. A large part of the balance of payments problem last year resulted from speculative capital movements into European currencies and gold. The effect of heightened tension over Berlin on the financial markets has not been appreciable up to now, although some slight nervousness has been noted on the part of a few sellers of German Marks. On balance, the movement of capital has continued inward into Continental Europe. Berlin preparations might stimulate some movement of European capital into dollars or gold, especially the latter. However, it is doubtful that the United States is regarded as a safe haven, as it has been in the past. Continental European nations could withstand some reserve losses without difficulty, but the U.K. is already facing a serious exchange drain. A rush into gold on the London Market and on Continental Markets would likely aggravate the dollar problem. It would probably be a more serious problem for the U.K., in accentuating the present stress upon the pound. To the extent that foreign central banks become nervous and move to convert dollars into gold, however, the U.S. could face the threat of a cumulative run on the dollar. Both the German and Italian Central Banks have been very cautious in acquiring gold, and have been willing to hold large dollar balances. The Swiss
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FOIA release, from the cia-readingroom collection. The PDF is mirrored here; the original link is above. The text was read from the page images by GLM-OCR; expect the odd misread word. 163 pages are in the text index: search them above, or from the library's search.