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Military government weekly information bulletin
Number 79 (February 1947)

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

Page 20

US '-officials have discussed with:'the Land
Governments of the US Zone the possibility
of achieving Potsdam objectives in the US
Zone at least. One result' of such discussions
has been the decentralization of the Reichs-
bank. This was accomplished by Land legisla.
tion which replaced the Reichsbanks in the
US Zone with individual Land' Central Banks.
Other problems have included the provision
of necessary bank clearing facilities between
Berlin and the US Zone, the decentralization
of the branch systems of the big Berlin banks,
the decentralization of affiliated groups of
insurance companies, and the liquidation of
the German Labor Front Bank and insurance
As a basis for some of the banking plans,
extensive investigations have been conducted
into the prewar and wartime practices of the
big banks and into their political relations
with the Nazi Party and with German im-
perialist expansion. The results of these in-
vestigations are made available to the Office
of Chief of Counsel for use in the War
Crimes Trials.
Another Military Government objective is
financial responsibility and autonomy of
local governments, so that Germany even-
tually can finance its normal peacetime
functions. To help the governments reach
this goal the Finance Division observes and
advises on current developments in German
public finances. Draft budgets of the Laen-
der are examined to ensure conformity with
Military Government policy.
To carry out these functions requires
study of the tax system, its relation to pro-
duction and trade and its ability to provide
the funds required by the various units of
Government. Continued study is made also
of such expenditure items as public welfare,
social insurance, pensions, and public works
to determine the continued ability of the
governmental units to support them and, at
the same time, to pay such obligatory items
as occupation costs and care of refugees and
These problems and proposals for their
solution are discussed with other interested
divisions of Military Government, with Land
Military Government officers, with bizonal
authorities, and with German officials, as
the case may require. Views are also inter-
changed with representatives of the occupy-
ing powers in an effort to promote uniform-
ity of principle and uniform application of
fiscal legislation. In this connection, other
action by the Finance Division includes
participation in the development of over-all
price policy for Germany, fiscal policies in-
volved in procurement by US agencies of
supplies and personnel within Germany, and
various aspects- of the proposed German
Central Finance Department.
As a basis for all its Supervisory and
planning  functions, Military Government
must have knowledge of the condition of
German financial institutions and of various
financial aspects of the entire economy of
the US Zone. Therefore the securing and
analyzing of statistics and other field intel-
ligence is another important function of the
Finance Division.
In the first year of occupation, available
financial information came largely from
local MG officers. Since these men have
been withdrawn from local areas, MG has
had to rely increasingly upon statistical re-
ports, prepared by German agencies and
analyzed -in the Finance Division. The
design and procurement of these reports is
the direct responsibility of the various
branches of the Finance Division. It is
supplemented by reports &f Land MG offices
and of other OMGUS divisions. Significant
financial information from  all sources is
combined with information obtained in the
course of current functional supervision, and
is submitted periodically to the Military
Government and the US War Department.
In accordance with quadripartite agreement
financial statistics are also provided cur-
rently through the Finance Directorate to
the other occupying powers.

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