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Soviet proposals that would have reduced Ger-
little is diverted to the German economy.
many to the status of a satellite country. So-
Other war-potential industries, mainly those
viet reparations demands have been an im-
manufacturing radar and electronic equip-
portant weapon in preventing unification ex-
ment, aircraft parts, tank parts, military ve-
cept on terms unacceptable to Western demo-
hicles, anti-aircraft guns, and ammunition,
cratic interests. The Soviet attitude of delay
are operated to capacity on raw materials
and obstruction may be based in part on the
supplied mostly from sources under Soviet
assumption that the continued drain on US
control. The output of consumer goods is far
resources will hasten the anticipated economic
below the needs of the eastern German popu-
collapse of the US and bring about the with-
lation.
drawal of US forces from Europe. Every US
Strategically, eastern Germany is being
step taken to improve the economic position
utilized as a source of manpower, technical
of Germany as well as of Western Europe has
and scientific equipment, raw materials, and
been opposed by the USSR because such steps
finished goods for the USSR, and secondarily
would strengthen US influence in Europe and
as a point of departure for a possible westward
check the expansion of Soviet power.
expansion of the USSR should that become
The rigorous Soviet policy of stripping the
feasible. A pattern of Communist-dominated
Soviet Zone for the benefit of the USSR has
control has been established for the area
left eastern Germany in a poor economic con-
which is SO widely divergent from that estab-
dition. The alienation of a substantial part
lished under democratic auspices in western
of the territory to Poland further weakened
Germany that unification of the two sections
the economic potential of the area. What was
is no longer feasible except on terms prejudi-
once a surplus food region is now barely self-
cial to US interests. Although an eastern
sustaining, while Soviet land reform has dis-
German state has been established, its sta-
couraged farmers and has resulted in poor
bility is guaranteed only by the presence of
harvests as compared to prewar years. Ex-
the Red Army, while the limitations placed
cept for enormous potash deposits and exten-
upon economic development by Soviet policies
sive reserves of brown coal, the Soviet Zone is
and practices have left the area too weak and
an economic deficit area dependent upon raw-
exhausted to stand alone. Until the USSR
material imports for the maintenance of its
reverses these policies and practices, there is
industries. Formerly, Western Europe and
little likelihood of much substantial improve-
the western zones of Germany were the prin-
ment in the present situation and consider-
cipal sources of supply, but the USSR reversed
able danger of further deterioration.
this trend in an effort to orient the Soviet
Zone toward the satellite economies. This
4. Military Factors.
policy served only to aggravate an already
Germany has been completely disarmed un-
serious situation. Neglect of the transporta-
der the Potsdam Agreement. The western
tion system has reduced Soviet Zone railroads
zones possess no indigenous military or naval
to a very low level of operating efficiency.
forces and no paramilitary forces of signifi-
Most of the canals have been rehabilitated,
cance. In the Soviet Zone a para-military po-
however, and a substantial part of the volume
lice force is being organized, primarily to in-
of freight traffic is water-borne. The high-
sure internal Communist control, but with
ways are in poor condition, and motor vehicle
aggressive military potentialities depending
transport is handicapped by lack of repair
upon the ultimate size, training, character,
parts and shortages of gasoline and lubricants.
and indoctrination of the force recruited by
Although the USSR has maintained the east-
the USSR. Its reliability at present is ques-
ern German synthetic gasoline and synthetic
tionable, and the USSR, aside from satellite
rubber industries at about 50 percent of pre-
objections to a rearmed Germany, cannot af-
war capacity, the bulk of these supplies is
ford to maintain a large armed force that one
stockpiled for the Red Army or shipped as
day may turn against it. Industrial war po-
reparations to the Satellites and the USSR;
tential in western Germany has been partially
SECRET
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"ocrText": "IV-4\nSECRET\nSoviet proposals that would have reduced Ger-\nlittle is diverted to the German economy.\nmany to the status of a satellite country. So-\nOther war-potential industries, mainly those\nviet reparations demands have been an im-\nmanufacturing radar and electronic equip-\nportant weapon in preventing unification ex-\nment, aircraft parts, tank parts, military ve-\ncept on terms unacceptable to Western demo-\nhicles, anti-aircraft guns, and ammunition,\ncratic interests. The Soviet attitude of delay\nare operated to capacity on raw materials\nand obstruction may be based in part on the\nsupplied mostly from sources under Soviet\nassumption that the continued drain on US\ncontrol. The output of consumer goods is far\nresources will hasten the anticipated economic\nbelow the needs of the eastern German popu-\ncollapse of the US and bring about the with-\nlation.\ndrawal of US forces from Europe. Every US\nStrategically, eastern Germany is being\nstep taken to improve the economic position\nutilized as a source of manpower, technical\nof Germany as well as of Western Europe has\nand scientific equipment, raw materials, and\nbeen opposed by the USSR because such steps\nfinished goods for the USSR, and secondarily\nwould strengthen US influence in Europe and\nas a point of departure for a possible westward\ncheck the expansion of Soviet power.\nexpansion of the USSR should that become\nThe rigorous Soviet policy of stripping the\nfeasible. A pattern of Communist-dominated\nSoviet Zone for the benefit of the USSR has\ncontrol has been established for the area\nleft eastern Germany in a poor economic con-\nwhich is SO widely divergent from that estab-\ndition. The alienation of a substantial part\nlished under democratic auspices in western\nof the territory to Poland further weakened\nGermany that unification of the two sections\nthe economic potential of the area. What was\nis no longer feasible except on terms prejudi-\nonce a surplus food region is now barely self-\ncial to US interests. Although an eastern\nsustaining, while Soviet land reform has dis-\nGerman state has been established, its sta-\ncouraged farmers and has resulted in poor\nbility is guaranteed only by the presence of\nharvests as compared to prewar years. Ex-\nthe Red Army, while the limitations placed\ncept for enormous potash deposits and exten-\nupon economic development by Soviet policies\nsive reserves of brown coal, the Soviet Zone is\nand practices have left the area too weak and\nan economic deficit area dependent upon raw-\nexhausted to stand alone. Until the USSR\nmaterial imports for the maintenance of its\nreverses these policies and practices, there is\nindustries. Formerly, Western Europe and\nlittle likelihood of much substantial improve-\nthe western zones of Germany were the prin-\nment in the present situation and consider-\ncipal sources of supply, but the USSR reversed\nable danger of further deterioration.\nthis trend in an effort to orient the Soviet\nZone toward the satellite economies. This\n4. Military Factors.\npolicy served only to aggravate an already\nGermany has been completely disarmed un-\nserious situation. Neglect of the transporta-\nder the Potsdam Agreement. The western\ntion system has reduced Soviet Zone railroads\nzones possess no indigenous military or naval\nto a very low level of operating efficiency.\nforces and no paramilitary forces of signifi-\nMost of the canals have been rehabilitated,\ncance. In the Soviet Zone a para-military po-\nhowever, and a substantial part of the volume\nlice force is being organized, primarily to in-\nof freight traffic is water-borne. The high-\nsure internal Communist control, but with\nways are in poor condition, and motor vehicle\naggressive military potentialities depending\ntransport is handicapped by lack of repair\nupon the ultimate size, training, character,\nparts and shortages of gasoline and lubricants.\nand indoctrination of the force recruited by\nAlthough the USSR has maintained the east-\nthe USSR. Its reliability at present is ques-\nern German synthetic gasoline and synthetic\ntionable, and the USSR, aside from satellite\nrubber industries at about 50 percent of pre-\nobjections to a rearmed Germany, cannot af-\nwar capacity, the bulk of these supplies is\nford to maintain a large armed force that one\nstockpiled for the Red Army or shipped as\nday may turn against it. Industrial war po-\nreparations to the Satellites and the USSR;\ntential in western Germany has been partially\nSECRET"
}