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Military government weekly information bulletin
Number 79 (February 1947)

[Military government series],   pp. [4]-[29] PDF (18.4 MB)


Page 18

control," and a German custodian is ap-
pointed who must see that no transactions
are made which would impair the value or
permit the concealment of the assets. In
practice, the custodians appointed by MG
usually have been persons who already were
connected with the business and therefore
familiar with its operations. Under the pro-
gram for delegating maximum control to
German authorities, steps have been taken
to provide that after any fines or partial
confiscation ordered by denazification tri-
bunals have been paid from the blocked or
controlled properties, the balance remaining
shall be released to the owner.
CONTROL OF EXTERNAL ASSETS
Supplementing the control of Germany's
internal assets is the program for identifying
and marshalling German external assets,
that is, assets located outside the prewar
boundaries of Germany. By carrying out
this program, the German war potential re-
presented by these foreign holdings is elim-
inated and the proceeds of liquidation are
made available for reparations as provided
by international agreements.
After the Potsdam Agreement of August
1945 had given the Allied Control Council
power to control and dispose of German ex-
ternal assets, Control Council Law 5 vested
title to these assets in the German External
Property Commission. The Finance Division
represents the US element on this commis-
sion and assists it in carrying out its re-
sponsibilities.
PROBLEM OF IDENTIFICATION
A major problem in this work is to identify
German-owned assets outside Germany,
which the Division does through two co-
ordinated programs. One is the census pro-
gram under which Germans in the US Zone
and the US Sector of Berlin are required to
file declarations listing in detail their foreign
assets and liabilities. The information ob-
tained, after analysis and tabulation, is
distributed to the interested agencies and
diplomatic missions. The census is supple-
mented by the investigative program of the
Division whereby it endeavors to uncover
foreign assets which are not voluntarily
declared and which have in many instances
been deliberately concealed. The division
maintains at the Ministerial Document Center
a large collection of financial records ob-
tained from official and semi-official Ger-
man agencies. These records have served
many purposes, including the supplying of
valuable information on German-owned ex-
ternal assets.
The only foreign exchange assets currently
available to Germany are those which have
accrued during occupation by sale of German
products abroad, since previously existing
foreign exchange assets held in Germany
were delivered to Military Government under
MG Law 53. The proceeds of exports are
applied first to pay for necessary imports,
and the broad policy for controlling the use
of foreign exchange assets is to secure these
resources and prevent their diversion to
purposes other than those approved by MG.
CIRCUITS OF FINANCING
Since no general rate of exchange has yet
been established for the Reichsmark, the
financing of German imports and exports
has run in two circuits, one in marks at
internally controlled prices, and the other in
foreign exchange at world prices. In the
mark circuit the proceeds derived from the
sale of imports in the German economy are
used to reimburse German suppliers for the
mark cost of exports. In the foreign ex-
change circuit, the cost of approved imports
is defrayed, insofar as possible, from the
proceeds of exports. Thus far the cost of
necessary imports into the US Zone has ex-
ceeded proceeds from exports, and the de-
ficit has been made up from War Depart-
ment appropriated funds, intended to be
reimbursed from proceeds of future German
exports.
During the past year both the internal and
external circuits have been operated by
Finance Division. In accordance with MG
plans to turn over additional responsibility
I s


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