740.00119 Control (Germany)/11–346: Telegram
The United States Political Adviser for Germany (Murphy) to the Secretary of State
[Received November 3—10:57 a.m.]
2543. 1. Skrzypczynski, German head of the Soviet Zonal Administration for Industry, said to Heath4 today that he understood that the recent dismantling of the Zeiss and other key industrial plants and the deportation of their technicians and skilled workers was only decided upon when it became evident to the Russians that their plan of dominating the zone—politically and economically—through the SED Party was a failure. He said that according to his information some 7 or 8 thousand workers plus dependents had so far been deported. While he did not believe that the Soviets had definite plans for further deportations and plant dismantlings at the present time, he thought it was very likely that Moscow would continue on this line unless Allied action prevented it.
2. He estimated the net output of finished industrial products in the Soviet zone at 2½ billion marks per annum (at 1938 prices). The Soviets were taking reparations out of this current production at the rate of 130 million marks a month or some 60 percent of the total. [Page 745] As the Russians were not interested in lumber, cement, glass, and other bulk materials, this take represented an even higher percentage—70 or 75 percent—of the zone’s output of consumers goods.
3. Skrzypczynski stated the Russians had dismantled and largely moved about 40 percent of the industrial equipment they found when they took over the zone and had destroyed as war industry another 15 percent. He estimated that the real value of dismantled plants amounted to from 6 to 8 million marks. The Russians evaluation, however, was based on the annual balance sheets of the concerns after deducting depreciation, etc., and gave a valuation of from ¼ to ⅓ of the sale value of a plant in normal times. The Russians were paying for reparations out of current production by marks seized when they first occupied eastern Germany.
4. To date the Russians had taken title to and were operating under Russian managers some 220 key industrial concerns in their zone. These 220 plants represented from 30 to 35 percent of the normal industrial output of the Russian zone. Their value on a 1938 basis was from 2½ to 3 billion marks. The Russian evaluation was from ¼ to ⅓ this amount based on the plants balance sheets.
5. He assumed that the Russians would try strenuously to avoid any discussion of their action in taking over these plants, at the next meeting of the Council of Foreign Ministers. Presumably they would try to maintain and control these plants regardless of final action taken regarding Germany. Thus this, in effect, would be yet another means of obtaining reparations for Russia—especially if these concerns could be excluded from all general arrangements as representing Soviet “property”.
6. Koval,5 the Russian zonal economic director, described as a very competent engineer and executive, told Skrzypczynski that German administrators had recently been sending in analyses and plans which in effect were criticism of the Russian procedures, and which followed too closely the line of English and American press attacks. Koval said he intended to hold conference of the leading German zonal economic administrators to enjoin on them a wholehearted and disciplined execution of Soviet plans for the zone. Skrzypczynski told him it would be impossible in such a meeting to silence German discussion and criticism of certain happenings. The criticism would be based on a desire to achieve better administration which would be in the interest of both the Germans and the Russians. Koval therefore abandoned his plans for conference.