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Military government weekly information bulletin
No. 41 (May 1946)

[Highlights of policy],   pp. 5-12 PDF (4.0 MB)

Page 10

Other industries, essential to war, but
,also essential to -a peeacetiine economy,
have been drastically reduced. Steel is
cut to a third of 1936 production; the
capacity of the basic chemical industries
will be 40 percent 'of 1936. Machine tool
production jand heavy engineering capa-
*city will be 'even more severely cut. The
automobile industry will be allowed to
produc-e no more than 40,000 lighttrucks
and the same numbler 'of passenger cars.
Compare this with 245,000 passenger cars
produced in 1936.
To balance the loss of the heavy in-
dustries and to provide exports to pay
for the necessary imports of food and
raw materials, certain industries will be
allowed to retain their present capacity
and to expand within th'e limits 'of Ger-
nmany's resources. These industries ar'e
those which have no war potential such
as funiture and woodwork, glassware,
ceramics and. the building construction
industries ('excluding cement). The coal
mines will bie allowed to operate to
capacity, for it is from the sale of coal
to the countries of Europe that Germany
will receive most 'of the foreign credits
neleded to pay for imports.
Agriculture is to b'e maximized, but
with nearly a quarter ;of Germany's ar-
iable land ceded to Poland, it is impos-
sible 'tojday and it never was possible in
the past to make Germany completely
In reaching an agreement, the Allied
Control Council proceeded 'on three as-
sumptions: (1) By 1949, the target year
of the plan, the population of Germany
will be 66 and a half million; (2) Ger-
many will be treated as a single econA
iomic unit; and finally (3) Exports from
Germany will be ;acceptable in the in-
ternational markets. If thes'e assumptions
,are not realized, the plan will have to b'e
The level 'of industry blueprint has
be'en criticized as being too drastic. .It
has been claimed that large scale unem-
ployment will be unavoidable. However,
MG 'emphasizes that -the plan does n,ot
guarantee Germany any specific ,standard
iof living. It merely leaves within. the
German   borders sufficient industrial
capacity so that with ingenuity and hard
work, the Germans may develop a toler-
able economy.
It must be remembered that achieve-
ment -of the permitted industrial produc-
tion level will not be ;an easy task. In-
dustries in G'ermany today are operating
at 'only a fraction of capacity. While
steel capacity has been severely cut, the
*current rate of production does not come
near the permitted tonnage. If the Ger-
mans succe'ed in 'overcoming their many
'obstacles they should be able to achieve
'a standard'of living about a third lowei-
than they ienjoyed in pre-war years, when
their standard was 30 percent above that
'of the rest of Europe. In some fields,
such 'as housing, it will take twenty
years to rebuild their country. For many
years there will be shortages of consumer
goods. However, 'although a diet 'of 2700
calories, 10 percent below pre-war levels,
based mainly on bread and potatoes!, is
poor comp'ared with Germany's pre-war
standard, it would look mighty good to
the German civilian today.
What of the plants declared in excess,
of the German level of industry? Firs't,
the bombproof 'and underground war
plants will be blown up. Moveable gen-
eral purpose ,equipment will bie used for
reparations but nothing will be left which
could ble used for another war. Recently,
demolition was begun on the huge, ex-
plosives plant at Allendorf, a subsidiary
'of 'the I. G. Farbien cartel.
Other plants ar-e being crated and ship-
pied to the Allied nations. During April,
the D'eschimag shipyards, near Bremen,
biegan to ble loaded on a Soviet freighter.
They will bie rebuilt at Odessa. in the

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