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German cartels, syndicates, and trusts, and
power in the banking systems and to estab-
they also exercised, through interlocking di-
lish a uniform policy with regard to currency
rectorates, considerable influence over the
and banking. Implementation of the agree-
greater part of the German monopolistic
ment on currency and banking, however, was
groupings such as I. G. Farbenindustrie, Sie-
delayed by lack of agreement on other essen-
mens & Halske, Krupp, Rhein-Metall-Borsig,
tial matters. The Western Powers, therefore,
and others. The Third Reich in turn exer-
followed an interim policy of liquidating the
cised extremely wide powers in supervision of
central boards of German banking monopolies
banking, concerning itself especially with the
and decentralizing them to the Land level.
dismissal and appointment of the higher
The USSR regarded these steps as partial
banking officials.
measures and regarded the desire of the US,
In its broad outlines this institutional con-
UK, and France to couple the elimination of
trol system had been established well before
excessive concentration of economic power in
the advent of the Third Reich, but the degree
banking with the creation of central banking
of control over industry and the concentration
machinery as an attempt to delay a decision
of this control in the large Berlin banks
on German monopolies, in order to preserve
(Grossbanken) were accentuated during the
them. Inability to reach agreement on such
1929-1939 period. Among some 650 commer-
fundamental issues hampered the orderly ex-
cial banks in Germany, the six Grossbanken
tension of credit, contributed to inflation, and
(Deutsche Bank, Dresdner Bank, Commerz
retarded economic recovery.
Bank, Berliner Handelgesellschaft, Reichs-
In the British Zone of Occupation the bank-
kreditgesellschaft, and Bank der Deutschen
ing system was, with few exceptions, permit-
Arbeit) accounted for 55 percent of total as-
ted to remain substantially unchanged pend-
sets and 59 percent of total deposits in 1938.
ing quadripartite agreement on the future
The Reichsbank, with a network of over 500
system to be adopted for the whole of Ger-
branches, served as the main bank of note-
many. Decentralization of banking without
issue and as the fiscal agent for the Reich.
some form of centralized control was not, in
At the beginning of the occupation existing
the British view, a satisfactory solution of the
economic controls and financial machinery in
problem and was not in accordance with ac-
Germany was preserved and utilized, as far as
cepted principles of economic unity. The
was consistent with occupation policies. This
USSR, on the other hand, closed all German
included the maintenance by local authorities
banks in existence at the time of the capitula-
of such anti-inflationary measures and other
tion, seized all assets, and stopped payment on
economic controls as had been established by
old obligations of the German credit system.
German law, and, in the western zones, the
The USSR then established provincial, city,
continued functioning of most of the banks.
and regional banks of Laender and Provinzen
Branch banks were permitted to retain a re-
Governments, employing new personnel and
porting and policy relationship with main of-
thereby solving the problem of denazification.
fices in their own Laender, but this relation-
In order to restore the economy, the newly es-
ship was not allowed to cross Land or zonal
tablished banks granted long-term credits for
boundaries. The Reichsbank discontinued its
the revival of industry and the needs of agri-
former function of issuing bank notes and as-
culture. All stock exchange transactions are
sumed the functions of a commercial bank.
forbidden Soviet Zone banks, which are also
In addition, Military Government in the west-
not allowed to deal in securities issued before
ern zones employed the Reichsbank as its fis-
the capitulation of Germany.
cal agent, as a supervisor of certain bank ac-
In the French Zone of Occupation, German
tivities in each zone, and as a medium for
banks were authorized to continue function-
transmitting and administering certain Mili-
ing with the exception of the branches of the
tary Government financial laws.
Bank der Deutschen Arbeit which had close
At Potsdam in 1945 the Occupying Powers
affiliations with the Nazi Party. Branches of
agreed to eliminate excessive concentration of
banks whose main offices were situated out-
II-22
ECRET
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"ocrText": "ECRET\nGerman cartels, syndicates, and trusts, and\npower in the banking systems and to estab-\nthey also exercised, through interlocking di-\nlish a uniform policy with regard to currency\nrectorates, considerable influence over the\nand banking. Implementation of the agree-\ngreater part of the German monopolistic\nment on currency and banking, however, was\ngroupings such as I. G. Farbenindustrie, Sie-\ndelayed by lack of agreement on other essen-\nmens & Halske, Krupp, Rhein-Metall-Borsig,\ntial matters. The Western Powers, therefore,\nand others. The Third Reich in turn exer-\nfollowed an interim policy of liquidating the\ncised extremely wide powers in supervision of\ncentral boards of German banking monopolies\nbanking, concerning itself especially with the\nand decentralizing them to the Land level.\ndismissal and appointment of the higher\nThe USSR regarded these steps as partial\nbanking officials.\nmeasures and regarded the desire of the US,\nIn its broad outlines this institutional con-\nUK, and France to couple the elimination of\ntrol system had been established well before\nexcessive concentration of economic power in\nthe advent of the Third Reich, but the degree\nbanking with the creation of central banking\nof control over industry and the concentration\nmachinery as an attempt to delay a decision\nof this control in the large Berlin banks\non German monopolies, in order to preserve\n(Grossbanken) were accentuated during the\nthem. Inability to reach agreement on such\n1929-1939 period. Among some 650 commer-\nfundamental issues hampered the orderly ex-\ncial banks in Germany, the six Grossbanken\ntension of credit, contributed to inflation, and\n(Deutsche Bank, Dresdner Bank, Commerz\nretarded economic recovery.\nBank, Berliner Handelgesellschaft, Reichs-\nIn the British Zone of Occupation the bank-\nkreditgesellschaft, and Bank der Deutschen\ning system was, with few exceptions, permit-\nArbeit) accounted for 55 percent of total as-\nted to remain substantially unchanged pend-\nsets and 59 percent of total deposits in 1938.\ning quadripartite agreement on the future\nThe Reichsbank, with a network of over 500\nsystem to be adopted for the whole of Ger-\nbranches, served as the main bank of note-\nmany. Decentralization of banking without\nissue and as the fiscal agent for the Reich.\nsome form of centralized control was not, in\nAt the beginning of the occupation existing\nthe British view, a satisfactory solution of the\neconomic controls and financial machinery in\nproblem and was not in accordance with ac-\nGermany was preserved and utilized, as far as\ncepted principles of economic unity. The\nwas consistent with occupation policies. This\nUSSR, on the other hand, closed all German\nincluded the maintenance by local authorities\nbanks in existence at the time of the capitula-\nof such anti-inflationary measures and other\ntion, seized all assets, and stopped payment on\neconomic controls as had been established by\nold obligations of the German credit system.\nGerman law, and, in the western zones, the\nThe USSR then established provincial, city,\ncontinued functioning of most of the banks.\nand regional banks of Laender and Provinzen\nBranch banks were permitted to retain a re-\nGovernments, employing new personnel and\nporting and policy relationship with main of-\nthereby solving the problem of denazification.\nfices in their own Laender, but this relation-\nIn order to restore the economy, the newly es-\nship was not allowed to cross Land or zonal\ntablished banks granted long-term credits for\nboundaries. The Reichsbank discontinued its\nthe revival of industry and the needs of agri-\nformer function of issuing bank notes and as-\nculture. All stock exchange transactions are\nsumed the functions of a commercial bank.\nforbidden Soviet Zone banks, which are also\nIn addition, Military Government in the west-\nnot allowed to deal in securities issued before\nern zones employed the Reichsbank as its fis-\nthe capitulation of Germany.\ncal agent, as a supervisor of certain bank ac-\nIn the French Zone of Occupation, German\ntivities in each zone, and as a medium for\nbanks were authorized to continue function-\ntransmitting and administering certain Mili-\ning with the exception of the branches of the\ntary Government financial laws.\nBank der Deutschen Arbeit which had close\nAt Potsdam in 1945 the Occupying Powers\naffiliations with the Nazi Party. Branches of\nagreed to eliminate excessive concentration of\nbanks whose main offices were situated out-\nII-22\nECRET"
}