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all economic unity of Germany is
achieved, however, German recovery
will be hampered by obstacles to the
free flow of goods within the country.
Transportation has suffered parti-
cularly badly from war damage. Mili-
tary Government can be proud, how-
ever, of its record in repairing rail-
roads, inland waterways, port faci-
lities, and highways. Railroad tracks
in operation represent 97 percent of
the prewar total. Almost as many
sunken vessels have been raised in
the American Zone as in all other
zones together and the proportion of
port channels cleared is higher than
in any other zone. The American
Zone also has a larger proportion of
operating motor vehicles than any
other zone.
Despite this progress, transporta-
tion is even now in need of repair
and maintenance is a constant pro-
blem. Allocations of materials are
being made for this purpose but must
be revised as required to meet new
priority demands from other sides of
the battered economic structure.
International Trade
In 1946, the foreign trade of the
American Zone was almost entirely
confined to the importation of food-
stuffs and other essential goods by
the occupation forces in order to pre-
vent disease and unrest among the
population. Such imports are financed
by War Department appropriations.
The only other substantial import
transaction was the shipment of some
surplus American cotton held by the
Commodity Credit Corporation. This
cotton was delivered to German pro-
cessors; the finished goods are being
exported in an amount sufficient to
pay for the cost of the imports, and
the rest is available for German con-
sumption.
In the fall of 1946, similar arrange-
ments were made by American Mili-
tary Government for the importation
of raw materials required for the
manufacture of ceramics, optical in-
struments, building materials, chemi-
cals, and toys. The interim financing
for these imports is handled by the
US Commercial Corporation, a sub-
sidiary of the RFC. Exports from the
American Zone in 1946 were confined
mainly to lumber and hops and a few
industrial goods, taken from existing
inventories or produced from raw
material stocks. The amounts shipped
were very small, in the neighborhood
of three percent of the estimated pre-
war exports of the zone's area.
Imports into the British Zone were
similar to those of the American
Zone, but exports from the British
Zone were considerably larger, due
almost entirely to Ruhr coal. Coal
exports reached a weekly volume of
260,000 tons in the summer of 1946,
or about 40 percent of prewar, but
this involved heavy drafts on existing
stocks and inadequate allocations to
the needs of the German economy. As
a result, exports of coal had to be
reduced by about 30 percent in the
fall of 1946. Even the peak figure in
the summer of 1946 was far from suf-
ficient to meet demand in the rest of
Europe, and the reduction of coal ex-
ports was a heavy blow to the im-
porting countries.
In the first months of 1947, exports
had to be curtailed still further,
reaching a low of 103,000 tons per
week in February. Meanwhile, how-
ever, the output of the Ruhr mines
had risen and coal exports could be
increased again. In April and May,
the  unsatisfactory  food  situation
brought about some labor disturban-
ces which kept coal output somewhat
below the March peak.
As soon as these difficulties are
overcome, a further rise in output is
expected, and in that case exports
will reach in summer a minimum of
265,000 tons per week, while at the
same time allotments for the needs
of the merged zones will be a mini-
mum of 860,000 tons per week, or
about 30 percent above the peak
allotment in 1946. The increase in
domestic allotment will mainly bene-
fit industrial enterprises, which in
this way will be enabled to raise
their output and thus to contribute
more efficiently to the projected ex-
pansion of foreign trade.
Apart from coal exports, foreign
trade of the merged zones in 1947
will be determined by the working
of the bizonal merger agreement. This
agreement provides for the coopera-
tion of the American and British oc-
cupation authorities, and of the re-
presentatives of the German states,
in formulating an import-export pro-
gram for the rehabilitation of the
German economy. A major objective
of this rehabilitation program is to
put the merged zones of Germany
back on a self-supporting basis, i. e.,
to develop exports to a point where
they cover imports.
Meanwhile, however, the occupy-
ing powers must bear the cost not
only of the basic program for the
prevention of "disease and unrest,"
but also of the raw material and
equipment imports required to "prime
the pump" of German export indu-
stries, Certain funds are already in
hand for this second part of the pro-
gram, including the receipts from ex-
ports of 1945-46, some former Ger-
man external assets transferred to the
occupying powers under agreements
with neutral countries, and the cre-
dits negotiated with the US Commer-
cial Corporation.
Bears Half of Costs
The United Kingdom is participat-
ing in the program in two ways. It
bears half of the costs of sending
basic necessities to the merged Amer-
ican and British Zones, and it finan-
ces half of the funds needed for
"priming the pump" of the area's in-
dustry. Whenever, in the future,
additional advances should be re-
quired, the United Kingdom also will
bear an equal share with the United
States.
The expected increase in imports
will necessitate, but also make pos-
sible, larger German  exports. In
order to facilitate exports, the occu-
pation authorities have authorized
foreign businessmen to correspond
with prospective German trading
partners. Only so-called ncn-trans-
actional mail, i. e., correspondence
preparing rather than concluding ac-
tual contracts, has been allowed so
far, but transactional mail may be
admitted in the near future.
Military Government also provides
facilities for foreign businessmen to
travel in Germany and renew trade
contacts. Contracts have to be sub-
mitted for approval to the Joint Ex-
port-Import Agency of the US/UK
occupying powers, and all payments
have to be made to the account of
the Agency rather than individually
to German exporters. The Agency
has issued rules of procedure, stat-
WEEKLY INFORMATION BULLETIN
16
16 JUNE 1947