Texts Considered by the Economic Subcommittee
[Babelsberg, July 19, 1945]
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The German economy shall be decentralized for the purpose of eliminating the present, excessive concentration of economic power as exemplified by cartels, syndicates, trusts and other monopolistic arrangements. Notwithstanding this, however, and for the purpose of achieving the objectives set forth herein, central administration of certain forms of governmental machinery, including in particular Finance, Transportation and Communications, shall be restored or maintained.
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In the imposition and maintenance of economic controls authorized by the Control Council, German administrative machinery shall be established and the German authorities shall be required to the fullest extent practicable to proclaim and assume administration of such controls. Thus it should be brought home to the German people that the responsibility for the administration of such controls and any breakdown in these controls will rest with themselves. Any German controls which run counter to the objectives of occupation will be abolished.
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Allied controls shall be imposed upon the German economy but only as may be necessary:
(a) to carry out programs of industrial disarmament and demilitarization, of reparations, and of approved exports and imports.(b) to assure the production and maintenance of goods and services required to meet the needs of the occupying forces and displaced persons in Germany and essential to maintain in Germany average living standards not exceeding the average of the standards of living of European countries. (European countries means all European countries excluding U.K. and USSR).
(c) to ensure the equitable distribution of essential commodities between the several zones so as to produce a balanced economy throughout Germany and reduce the need for imports.
(d) to control German industry and all economic and financial international transactions, including exports and imports, with the aim of preventing Germany from developing a war potential and of achieving the other objectives named herein. For the same purpose no grant of credit to Germany or Germans by any foreign persons or Government shall be permitted except with the approval of the Control Council.
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The production of arms, ammunition and implements of war, including all types of aircraft and ocean-going ships, shall be prohibited and prevented. Production of metals, chemicals and machinery shall be rigidly controlled and restricted to minimum, peacetime needs. Production of selected key items within these industrial fields shall be wholly eliminated. Productive capacity not needed for permitted production shall be removed or destroyed.
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The principles and conditions governing the exaction of reparations from Germany are set forth in Annex I to this agreement.
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Measures shall be promptly taken:
(a) to effect essential repair of transport;
(b) to enlarge coal production;
(c) to maximize agricultural output; and
(d) to effect emergency repair of housing and essential utilities.