CFM Files: Lot M–88: Box 86: CFM (47) (L) Documents

Proposal by the Soviet Delegation to the Council of Foreign Ministers 94

CFM(47) (L)22

Economic Principles, Level of German Post-War Economy and Reparations Plan


The Controlling Powers recognize the necessity of accelerating the rehabilitation of German peace-time industry, agriculture and transport and of raising the living standard of the German people, the necessity of Germany participating in the rehabilitation of the economic systems of the European countries which suffered from German aggression as well as the expansion of her foreign trade. These objectives shall be pursued with due regard to the interests of security and to preventing the restoration of Germany’s war industry. Inasmuch as success in the matter of the economic rehabilitation of Germany depends primarily on the efforts of the German people themselves and on the possibility of the relevant measures being taken all over Germany and as this calls for the establishment of economic agencies for the whole of Germany operating under Four-Power control.
The Control Council is directed to set up at the earliest possible moment central German administrative departments dealing with [Page 791] matters calling for centralized decisions in the spheres indicated in the Potsdam Agreement, as well as for food and agriculture.
Central German administrative departments will be under the supervision and direction of the appropriate quadripartite agencies of the Allied Control Authority. When a German provisional government has been established new arrangements shall be made in this field.
The Zone Commanders, each in his own zone shall exercise general supervision and control over the activities of central German administrative departments on the basic questions, being guided by the necessity to ensure the fulfilment by Germany of her obligations to the Allies, the maintenance of the security of the occupation forces and compliance with the instructions of the Control Council in accordance with Four-Power policy in respect of Germany.
In cases where the directives of the central German administration contravene the directives or orders of the Control Council, the Zone Commanders shall have the right to suspend the execution of such directives, informing the Control Council about this and the Control Council will make the final decision on the matter involved.
In modification of the Control Council’s decision of March 26, 1946, the raising of the level of German industry shall be provided for, so as to bring the annual output of steel to 10–12 million tons at an early date.
Central German Departments shall be responsible for framing measures for the rehabilitation of German economy within the limits of the new level of industry, taking into account Germany’s obligation to fulfil unconditionally the reparation and other basic obligations imposed upon her.
With the establishment of central German Departments and of the procedure for the fulfilment by Germany of her reparation and other main obligations, interzonal economic barriers shall be abolished and the necessary facilities provided for the free flow of goods throughout all Germany.
All zonal German economic agencies covering one or more zones shall also be abolished.
In view of the fact that the industry of the Ruhr region was the main basis of German militarism, the Ruhr industrial region shall be placed under the joint control of the United Kingdom, France, the United States of America and the U.S.S.R.
Action on a nation-wide scale shall be taken for improvement of the financial and monetary system in Germany.
In order to ensure imports of raw materials and other materials necessary for German peace-time industry and the discharge by Germany [Page 792] of her obligations to the Allies, the expansion of German exports shall be encouraged.
The Control Council shall be asked to adopt the necessary measures for the taking over of factories and other enterprises from German concerns, cartels and trusts, and for transferring of these enterprises to the ownership of the German State. The democratic parties and free trade unions of Germany shall be invited to assist in carrying out these measures.
The agreement concerning the economic unification of the British and American Zones as well as other separate agreements connected with this unification shall be deemed null and void as contravening the economic unity of Germany.


reparations from germany

In accordance with the decision of the Potsdam Conference on levying reparations from Germany by zones and in order to determine the extent and procedure of levying reparations, the Council of Foreign Ministers considers it necessary:

To fix the total volume of reparations from Germany at … (in 1938 world prices).
To fix reparations for the U.S.S.R. at 10 billion dollars, the Soviet Union to satisfy the reparation claims of Poland from its share.
To utilise for the coverage of reparations:

Once-for-all removals, which were or will be made during the period following the Potsdam Conference, of usable and complete industrial equipment which is not necessary for German peace-time economy.

If the equipment of an enterprise is retained for utilization in Germany, any other property of such enterprise that is connected with its activity may be taken on account of reparations.

Annual deliveries of goods from current production.
German assets abroad.
Various services.
The removals of equipment from Western zones of occupation of Germany provided for by the Potsdam decisions shall be completed by the end of 1948.
To determine that the reparation obligations of Germany must be fulfilled within a period of 20 years, this period to be reckoned from the date of publication of the decisions of the Potsdam Conference of the Three Powers.
To renew the activity of the Inter-Allied Committee for Reparations, consisting of representatives of Great Britain, the USA, France and the USSR.
On condition that the agreed plan for the delivery of reparations is regularly fulfilled, to consider it possible not to put any obstacles in the way of the increase of production of the German peacetime industry, both for the domestic consumption of Germany and for the development of trade with other countries.

  1. Paragraphs 1, 2, and 3 of this paper were circulated earlier to the Council as document CFM(47) (L)21, December 6, 1947, not printed. This paper was discussed by the Council of Foreign Ministers at its 12th Meeting, December 8 and its 16th Meeting, December 12; see telegrams 6381, Delsec 1531, December 8 and 6457, Delsec 1543, December 12, both from London, pp. 756 and 766.