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"15. Allied controls shall be imposed upon the German economy but only to the extent necessary:

(a) to carry out programs of industrial disarmament arrd demilitarization, of reparations, and of approved exports and imports.

(b) to assure the production and maintenance of goods and services required to meet the needs of the occupying forces and displaced persons in Germany and essential to maintain in Germany average living standards not exceeding the average of standards of living of European countries. (European countries means all European countries excluding the United Kingdom and the Union of Soviet Socialist Republics.)

(c) to ensure in the manner determined by the Control Council the equitable distribution of essential commodities between the several zones so as to produce a balanced economy throughout Germany and reduce the need for imports.

(d) to control German industry and all economic and financial international transactions, including exports and imports, with the aim of preventing Germany from developing a war potential and of achieving the other objectives named herein.

(e) to control all German public or private scientific
bodies, research and experimental institutions, laboratories,
et cetera, connected with economic activities."

Economic Principles, Report on the Tripartite
Conference of Berlin, 2 August 1945

By Tom Falco


everal times a month, an American brigadier general, a British civil servant, a French financial expert, and a Soviet engineer leave their respective sectors of Berlin and go to the Allied Control Authority Building, located in a park amidst the destruction of what was once a thriving business section of Berlin. There, in the building that once housed the Kammergericht, highest court of Prussia but which is now headquarters of the Four-Power government of Germany these men sit down with their staffs and go about the business of shaping the economic life of postwar Germany:

How much coal can Germany export to the liberated countries and still maintain a minimum level of civilian economy?

Which plants in what industries will be made available for reparations?

How much steel capacity should be left in Germany, and what proportion should be retained in each of the four zones?

What progress is being made to demilitarize Germany industrially, and is the job moving along at the same pace in all zones?

How can Germany build up her export balance so as to acquire foreign currencies with which to pay for vital imports such as food?

What can be done to speed expansion of the building, textile, ceramics, furniture, agricultural and other peaceful industries?

How can the economic unity of Germany, called for in the Potsdam Declaration and reiterated in the Reparations Agreement, be put into operation?

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It is questions such as these that must be considered by this group, and the answers passed up to the four-power Coordinating Committee and the Allied Control Council, the two top bodies in the Allied Control Authority. These four men, together with their working staffs, constitute the Economic Directorate, one of the most important of the twelve quadripartite Control Staff Directorates in the ACA. Like its counterparts in the ACA, the Economic Directorate takes the various problems connected with the occupation of Germany and tries to settle them in terms of the basic policies agreed to by the governments of the Four Powers. To do this job, the directorate is organized into seven committees – Food and Agriculture, Industry, Central German Administration, Trade and Commerce, I. G. Farben Control, Fuel, Liquidation of German War Potential -, upwards of a dozen subcommittees, and numerous working parties.

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April 1946 was "American month" at the ACA Building. During that month, U. S. members of all directorates and committees acted as chairmen. This extended to the Allied Control Council, consisting of the commanding generals of the four zones of occupation, and to the Coordinating Committee, made up of the four deputies to the commanding generals. March was "Soviet month”, with Soviet members in the chair. May would be “British month”, and June "French month." In keeping with the quadripartite character of ACA activity, all chairmanships rotate month by month.

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It is 1100 hours on a Friday morning in April. The Economic Directorate is about to go into session. In a large room on the second floor of the ACA Building the same room where a two short years ago Hitler set up his Volksgericht, or People's Court, to try some sixty persons accused of plotting against his life

forty to fifty Americans, Britons, Frenchmen and Soviets are gathered. Secretaries are bringing in sheafs of papers. Stenographers are al their places. The members, with the aid of interpreters, are chatting with their colleagues. Tobacco smoke drijis up toward the high ceiling. Brigadier General William H. Draper, Jr., director of the Economics Division, Office of Military Government for Germany (U.S.), is chairman of the meeting.

The General walks toward a set of tables arranged in a hollow square. They are stacked with papers. Water pitchers and ash trays are conveniently placed. Pads and pencils are within easy reach. The General sits down in the center of one of the four sides, flanked by his deputy, his interpreters, and his secretaries. The British, French, and Soviet delegations do likewise.

"Shall we begin our meeting”?

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The general's words are immediately translated into Russian. As almost always, translation into French is not necessary. René Sergent, the regular French member, is present; he speaks English as well as he does French. The directorate can put to good use the time thus saved. Its agenda is long, with anywhere from eighteen to twenty-five items listed.

“Shall we take up the confirmation of the minutes?”

Each of the members has before him a transcript of the minutes in his own language. All three versions English, French and Russian same. Correction of the minutes is now in order. The delegation on the left of the chair is first (it was the Soviet in April), then the work of correction proceeds clockwise from the chair - to the French delegation, the British, and finally the American. Each of the members states at which point in the minutes he may have been incorrectly quoted, or at which point an idea of his has not been properly expressed. An "a" may become a "the"; the word “imperative" may be changed to "important". First and last, the aim is to have the minutes present a true picture of what happened at the last meeting, a precise record of the decisions made and action taken.

Confirmation of the minutes may set the stage for the day's first display of parliamentary strategy. One of the members may have agreed to something which, on later study, he finds he should not have agreed to. It is then his job to try to convince the other members that this agreement was illogical, or unnecessary, or capable of being accomplished in some other way. Sometimes he succeeds; sometimes he doesn't. The remaining members have studied the minutes too, and may have good reason to resist any change. Throughout, each of them is intent on the discussion. It is no time for napping. The wrong word may commit a government to a course of action it does not want to take.

The Delegates

There is Konstantin Koval, the Henry Kaiser of the Soviet Union. He is husky, handsome, and tough as steel. As Deputy Minister for Heavy Industry, he is a driving force behind the Five Year Plan.

There is René Sergent, Inspector of Finance for France. He is slender, wears horn-rimmed glasses and has all the social graces. He speaks exquisite English, and applies to each problem the mind of a logician.

There is Eric Seal, career civil servant, who heads the British delegation. He is of medium build, wears glasses, and smokes a pipe. Now chief of the Trade and Industry Division, British Control Council, Mr. Seal was secretary to Winston Churchill during the early war years and later was assigned to the British Admiralty in Washington, D. C. He succeeds the irrepressible Sir Percy Mills, who rose from factory sweeper to industrialist and war time controller of the machine tool industry of Great Britain. The soul of politeness, Sir Percy Mills' words could, on occasion, sting like a wasp.

There is General Draper, an infantry officer in both wars. The general is an economist by schooling, an investment banker by calling. In early 1940, he was called to active duty from his position as vice-president of Dillon, Read & Co., New York investment bankers. A colonel at that time, he helped General Hershey develop the Selective Service System. Then he saw active service in the Central Pacific as regimental commander of the 136th Infantry, and was later assigned to Washington, D. C. There he did a number of jobs for the Army – from general staff work to supervision of contract terminations. In March 1945 he was detailed to Germany as director of the Economics Division, U. S. Group Control Council (now OMGUS).

General Draper's problem many times is to bring together apparently inreconcilable points of view among the various members.

Sometimes this ability can be turned to neat purpose for the American side. At a meeting last fall, the Soviet member brought up his zone's need for hard coal, available from the British Zone. The British member said that his Zone was quite willing to supply it, but sufficient transport was not at hand. General Draper suggested that each of the three set up a pool of 1,000 railway freight cars to make such a deal possible. All were quick to proclaim this a capital idea – to say nothing of it, being a generous gesture on the part of the American delegation. Then the general suggested that it would be impractical to let those wagons return empty from the Soviet Zonc. Why not fill them up with brown-coal briquettees (which the U. S. Zone happened to need from the Soviet Zone) and drop them off on the way back? The point scored.

All four men are relatively young, ranging in age from the early 'forties to the early 'fifties. All are keen-witted and quick, among the best their nation can produce. All recognize that they are part of an international team that must win the peace as it won the war.

The Interpreters

The directorate's interpreters are as varied and colorful a group as the persons they work for:

Richard A. Steele, the U. S. member's Russian interpreter, was born of American parents in Harbin, Manchuria, went through Russian high school, then studied English at Cambridge. His first visit to the United States was in 1939, after which he served in the U. S. Army, saw combat, and was

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