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Soviet Zone of productive capacity in excess of that required to meet
approved German peacetime needs. Substantial progress has been made
in the removal of industrial facilities (and of skilled industrial man-
power as well). The consequent interruption of production, however,
and the deterioration of facilities reserved for removal and in transit,
have caused the USSR to seek more immediate benefits from the current
production of plants retained in the Soviet Zone, despite objections to
the principle of taking reparations from current production.
The Sowjetische Industrie A.G. With a view to both immediate
benefits and to the perpetuation of Soviet economic domination of east-
ern Germany, the USSR has obtained control of some 200 key industrial
establishments producing the greater portion of the current industrial
output in the Soviet Zone (for example, some 85 percent of current met-
allurgical production), largely on the basis of their liability to re-
moval as reparations. To control these industries the USSR has estab-
lished a gigantic trust, the Sowjetische Industrie A.G. The USSR thus
seeks to evade the provisions of the Potsdam Agreement requiring that
the proceeds of German exports be made available to pay for necessary
German imports and prohibiting German production of war material, on
the ground that the output of Soviet-owned plants in Germany is to be
considered as Soviet rather than German production and is therefore
exempt from the provisions of the Agreement.
Nationalization. In its Zone, the USSR has caused the import-
ant industries not included in the Sowjetische Industrie A.G. to be na-
tionalized, thus bringing them equally under Soviet operational control.
Demilitarization. A significant proportion of the Soviet
take from German current production is in the form of war materials.
It is well established that war plants and research facilities in the
Soviet Zone have been continued in operation, producing such prohib-
ited items as guided missiles, jet-propelled aircraft, tank treads and
armor plate, optical instruments, synthetic fuel, and synthetic rubber.
Industrial Production. In its desire to obtain immediate ben-
efits from German production, the USSR has pressed vigorously the indus-
trial rehabilitation in the Soviet Zone. The level of production is
still well below former standards, but, despite the disruption occa-
sioned by plant removals, significant progress has been made. The prompt
resumption of operations was initially encouraging to the German workers,
but since most production is for Soviet use without credit toward im-
ports, little improvement results in the German economy. An acute short-
age of consumers' goods exists in the Soviet Zone. Moreover, production
for Soviet use has begun to suffer for lack of coal and iron from the
Western Zones. It is partly on this account that the USSR now shows
readiness to consider a reintegration of the German economy
Agricultural Production. If the Soviet Zone needs coal and
iron, the Western Zones, particularly the British, have long felt
- 5 -
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"ocrText": "Soviet Zone of productive capacity in excess of that required to meet\napproved German peacetime needs. Substantial progress has been made\nin the removal of industrial facilities (and of skilled industrial man-\npower as well). The consequent interruption of production, however,\nand the deterioration of facilities reserved for removal and in transit,\nhave caused the USSR to seek more immediate benefits from the current\nproduction of plants retained in the Soviet Zone, despite objections to\nthe principle of taking reparations from current production.\nThe Sowjetische Industrie A.G. With a view to both immediate\nbenefits and to the perpetuation of Soviet economic domination of east-\nern Germany, the USSR has obtained control of some 200 key industrial\nestablishments producing the greater portion of the current industrial\noutput in the Soviet Zone (for example, some 85 percent of current met-\nallurgical production), largely on the basis of their liability to re-\nmoval as reparations. To control these industries the USSR has estab-\nlished a gigantic trust, the Sowjetische Industrie A.G. The USSR thus\nseeks to evade the provisions of the Potsdam Agreement requiring that\nthe proceeds of German exports be made available to pay for necessary\nGerman imports and prohibiting German production of war material, on\nthe ground that the output of Soviet-owned plants in Germany is to be\nconsidered as Soviet rather than German production and is therefore\nexempt from the provisions of the Agreement.\nNationalization. In its Zone, the USSR has caused the import-\nant industries not included in the Sowjetische Industrie A.G. to be na-\ntionalized, thus bringing them equally under Soviet operational control.\nDemilitarization. A significant proportion of the Soviet\ntake from German current production is in the form of war materials.\nIt is well established that war plants and research facilities in the\nSoviet Zone have been continued in operation, producing such prohib-\nited items as guided missiles, jet-propelled aircraft, tank treads and\narmor plate, optical instruments, synthetic fuel, and synthetic rubber.\nIndustrial Production. In its desire to obtain immediate ben-\nefits from German production, the USSR has pressed vigorously the indus-\ntrial rehabilitation in the Soviet Zone. The level of production is\nstill well below former standards, but, despite the disruption occa-\nsioned by plant removals, significant progress has been made. The prompt\nresumption of operations was initially encouraging to the German workers,\nbut since most production is for Soviet use without credit toward im-\nports, little improvement results in the German economy. An acute short-\nage of consumers' goods exists in the Soviet Zone. Moreover, production\nfor Soviet use has begun to suffer for lack of coal and iron from the\nWestern Zones. It is partly on this account that the USSR now shows\nreadiness to consider a reintegration of the German economy\nAgricultural Production. If the Soviet Zone needs coal and\niron, the Western Zones, particularly the British, have long felt\n- 5 -"
}