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Military government weekly information bulletin
Number 87 (April 1947)

Press and radio comments,   pp. 24-31 PDF (4.3 MB)

Page 30

ship can thwart every action of co(.n(.ntrOl lo
of up-building by joint action of other
nations. German industry must be operated
by Germany if any international control is
to work, if she is to recover production and
is to serve all nations equally.
(4) There can be no separation or dif-
ferent regime of the Ruhr or Rhineland front
the new Germany. That is the heart of her
industrial economy. Any Control Commission
can dictate the destination of coal or other
exports from that area and even such control
would not be needed after the area of
scarcity passes from Europe.
Part II: The interregnum before peace.
How long it may be before there is such a
constructive peace with Germany, no one can
tell. It may be long delayed. In the mean-
time, we are faced with the feeding of the,
people in the Anglo-American Zones on a
level just above starvation until we can
develop enough export goods from these
zones so that the Germans may pay for their
food. I have said, American and British tax-
payers are called upon for about 600,000,000
dollars a year for relief.
We have an admirable staff in Military
Government of Germany under Generals
Clay and Draper but their administration is
constantly frustrated in building up the
needed exports to pay for food and minimum
raw material imports. A larger part of these
delays is due to the following:
A. The Russians and the French have
failed to carry out the provisions of the
Potsdam Agreement for economic unity ill
the four zones. The Russian Zone ordinarily
produces a surplus of food but that surplus
is used elsewhere, thus increasing the burden
of imports on the Anglo-American Zones.
Both the Russian and French Zones are pro-
ducing industrial commodities which would
relieve necessities in the Anglo-American
Zones and -could contribute to- exports with
which to pay for food. The net effect is that
the United States and Great Britain through
relief are paying Russian and French rep-
B. The inability to determine what specific
plants are to be the victims of "L:1,evel of In-
dustry," or destruction or the removal for
reparation, produces stagnation because the,
Germans do not know where to begin to
C. There is lack of working capital with
which to import raw materials for such inn-
dustries as are allowed to function.
D. An inflated currency and no adequate
banking system hampers all forward move-
ment in such industry as is left.
E. While denazification and decarteliza-
tion are necessary and important, certain
phases of them limit recovery. They are Iso
involved as not to warrant description here;
As to the bizonal administration  - if,
however, we cannot get a quick and sound
peace on the lines I have recounted, the
Anglo-American Zones should abandon the
destruction of plants, the transfer of plants
for reparations and the "Level of Industry"
concept, and start every plant, "heavy"' as
well as "light," which can produce non-
arms goods. This will relieve far more
rapidly great costs to our taxpayers; it will
do infinitely more for Europe than American
loans and charity.
Indeed, the Congressional Committee on
postwar economic policy urged, on December
30, 1946, that the "levels of industry" be
ignored wherever they conflict with exports
so that there may be earlier recovery and
payment for food.
The violation by Russia and France of the
Agreement for Economic Unification of the
four Zonies of Military Occupation and the
additional burdens thus imposed upon us in
consequence certainly warrant our ignoring
all agreements for "level of industry" trans-
fer and destruction of non-arms plants.
If this interregnum is to endure for long;
we could build a self-sustaining economic
community out of the Anglo-American Zones
alone.: This could- be only a temporary ex-
pedient, not a final solution. Building a
lasting peace in Europe should -be our 1ob;:

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