Excerpts from the Potsdam Agreement On July 17, 1945, the President of the United States of America, Harry S. Truman, the Chairman of the Council of People's Commissars of the Union of Soviet Socialist Republics, Generalissimo J. V. Stalin, and the Prime Minister of Great Britain, Winston S. Churchill, together with Mr. Clement R. Attlee, met in the Tripartite Conference of Berlin. They were accompanied by the foreign secretaries of the three Governments, Mr. James F. Byrnes, Mr. V. M. Molotow, and Mr. Anthony Eden, the Chiefs of Staff, and other advisers. There were nine meetings between July 17 and July 25. The Conference was then interrupted for two day while the results of the British general election were being declared. On July 28 Mr. Attlee returned to the Conference as Prime Minister, accompanied by the new Secretary of State for Foreign Affairs, Mr. Ernst Bevin. Four days of further discussion then took place. During the course of the Conference there were regular meetings of the Heads of the Three Governments accompanied by the foreign secretaries, and also of the Foreign Secretaries alone. Committees appointed by the Foreign Secretaries for preliminary consideration of questions before the Conference also met daily. The meetings of the Conference were held at the Cecilienhof near Potsdam. The Conference ended on August 2, 1945. Important decisions and agreements were reached. Views were exchanged on a number of other questions and consideration of these matters will be continued by the Council of Foreign Ministers established by the Conference. President Truman, Generalissimo Stalin and Prime Minister Attlee leave this Conference, which has strengthened the ties between the three governments and extended the scope of their collaboration and understanding, with renewed confidence that their governments and peoples, together with the other United Nations, will ensure the creation of a just and enduring peace. Economic Principles. 11. In order to eliminate Germany's war potential, the production of arms, ammunition and implements of war as well as all types of aircraft and sea-going ships shall be prohibited and prevented. Production of metals, chemicals, machinery and other items that are directly necessary to a war economy shall be rigidly controlled and restricted to Germany's approved post-war peacetime needs to meet the objectives stated in Paragraph 15. Productive capacity not needed for permitted production shall be removed in accordance with the reparations plan recommended by the Allied Commission on Reparations and approved by the Governments concerned or is not removed shall be destroyed. 12. At the earliest practicable date, the German economy shall be decentralized for the purpose of eliminating the present excessive concentration of economic power as exemplified in particular by cartels, syndicates, trusts and other monopolistic arrangements. 13. In organizing the German economy, primary emphasis shall be given to the development of agriculture and peaceful domestic industries. 14. During the period of occupation Germany shall be treated as a single economic unit. To this end common policies shall be established in regard to: (a) mining and industrial production and -allocation; (b) agriculture, forestry and fishing; (c) wages, prices and rationing; (d) import and export programs for Germany as a whole; (e) currency and banking, central taxation and customs; (f) reparation and removal of industrial war potential; (g) transportation and communications. In applying these policies account shall be taken, where appropriate, of varying local conditions. 15. Allied controls shall be imposed upon the German economy but only to the extent necessary: (a) to carry out programs of industrial disarmament and 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. 16. In the imposition and maintenance of economic controls established by the Control Council, German administrative machinery shall be created and the German authorities shall be required to the fullest extent practicable to proclaim and assume administration of such controls. Thus it should be brought home to the German people that the responsibility for the administration of such controls and any break down in these controls will rest with themselves. Any German controls which may run counter to the objectives of occupation will be prohibited. 17. Measures shall be promptly taken: (a) to effect essential repair of transport; (b) to enlarge coal production; (c) to maximize agricultural output; and (d) to effect emergency repair of housing and essential utilities. 18. Appropriate steps shall be taken by the Control Council to exercise control and the power of disposition over German-owned external assets not already under the control of United Nations which have taken part in the war against Germany. 19. Payment of Reparations should leave. enough resources to enable the German people to subsist without external assistance. In working out the economic balance of Germany the necessary means must be provided to pay for imports approved by the Control Council in Germany. The proceeds of exports from current production and stock shall be available in the first place for payment for such imports. The above clause will not apply to the equipment and products referred to in paragraphs 4(a) and 4(b) of the Reparation Agreement. many occupied by the U.S.S.R. and from appropriate German external assets. 2. The U.S.S.R. undertakes to settle the reparation claims of Poland from its own share of reparations. 3. The reparation claims of the United States, the United Kingdom and other countries entitled to reparations shall be met from the Western Zones and from appropriate German external assets. 4. In addition to the reparations to be taken by the U.S.S.R. from its own zone of occupation, the U.S.S.R. shall receive additionally from the Western Zones: (a) 15 per cent of such usable and complete industrial capital equipment, in the first place from the metallurgical, chemical and machine manufacturing industries, as is unnecessary for the German peace economy and should be removed from the Western Zones of Germany, in exchange for an equivalent value of food, coal, potash, zinc, timber, clay products, petroleum products, and such other commodities as may be agreed upon. (b) 10 per cent of such industrial capital equipment as is unnecessary for the German peace economy and should be removed from the Western Zones, to be transferred to the Soviet Government on reparations account without payment or exchange of any kind in return. Removals of equipment as provided in (a) and (b) above shall be made simultaneously. 5. The amount of equipment to be removed from the Western Zones on account of reparations must be determined within six months from now at the latest. 6. Removals of industrial capital equipment shall begin as soon as possible and shall be completed within two years from the determination specified in paragraph 5. The delivery of products covered by 4(a) above shall begin as soon as possible and shall be made by the U.S.S.R. in agreed installments within five years of the date hereof. The determination of the amount and character of the industrial capital equipment unnecessary for the German peace economy and therefore available for reparations shall be made by the Control Council under policies fixed by the Allied Commission on Reparations, with the participation of France, subject to the final approval of the Zone Commander in the Zone from which the equipment is to be removed. 7. Prior to the fixing of the total amount of equipment subject to removal, advance deliveries shall be made in respect of such equipment as will be determined to be eligible for delivery in accordance with the procedure set forth in the last sentence of paragraph 6. 8. The Soviet Government renounces all claims in respect of reparations to shares of German enterprises which are located in the Western Zones of ocupation in Germany as well as to German foreign assets in all countries except those specified in paragraph 9 below. 9. The Governments of the U.K. and U.S.A. renounce their claims in respect of reparations to shares of German enterprises which are located in the Eastern Zone of occupation in Germany, as well as to German foreign assets in Bulgaria, Finland, Hungary, Rumania and Eastern Austria. 10. The Soviet Government makes no claims to gold captured by the Allied troops in Germany. The Plan for Reparations and the Level of Post-War German Economy in Accordance with the Berlin Protocol 1. In accordance with the Berlin Protocol the Allied Control Council is to determine the amount and character of the industrial capital equipment unnecessary for the German peace economy and therefore available for reparations. The guiding principles regarding the Plan for Reparations and the Level of the Post-war German Economy, in accordance with the Berlin Protocol are: a. Elimination of the German war potential and the industrial disarmament of Germany. b. Payment of reparations to the countries which had suffered from German aggression. c. Development of agriculture and peaceful industries. d. Maintenance in Germany of average living standards not exceeding the average standard of living of European countries (ex cluding the United Kingdom and the Union. of Soviet Socialist Republics). e. Retention in Germany, after payment of reparations, of sufficient resources to enable her to maintain herself without external assistance. 2. In accordance with these principles, the basic elements of the Plan have been agreed. The assumptions of the Plan are: a. That the population of post-war Germany will be 66.5 millions. b. That Germany will be treated as a single economic unit. c. That exports from Germany will be acceptable in the international markets. 3. In order to eliminate Germany's war potential, the production of arms, ammunition and implements of war, as well as all types of aircraft and sea-going ships, is prohibited and will be prevented. 4. All industrial capital equipment for the production of the following items are to be eliminated: a. Synthetic gasoline and oil. b. Synthetic rubber. c. Synthetic ammonia. d. Ball and taper roller bearings. e. Heavy machine tools of certain types. f. Heavy tractors. g. Primary aluminium. h. Magnesium. i. Beryllium. j. Vanadium produced from Thomas Slags k. Radio-active materials. 1. Hydrogen peroxide above 50% strength. m. Specific war chemicals and gases. n. Radio transmitting equipment. Facilities for the production of synthetic gasoline and oil, synthetic ammonia and synthetic rubber, and of ball and taper roller bearings, will be temporarily retained to meet domestic requirements until the necessary imports are available and can be paid for. Restricted Industries 5. Steel a. The production capacity of the steel industry to be left in Germany should be 7.5 million ingot tons. This figure to be subject to review for further reduction should this appear necessary. b. The allowable production of steel in Germany should not exceed 5.8 million ingot tons in any future year without the specific approval of the Allied Control Council, but this figure will be subject to annual review by the Control Council. c. The steel plants to be left in Germany 7. a. Basic Chemicals. In the basic chemical ir dustries there will be retained 40% of the 1936 production capacity (measured by sales in 1936 values). This group includes the following basic chemicals: nitrogen, phosphate, calcium carbide, sulphuric acid, alkalis, and chlorine. In addition, to obtain the required quantities of fertilizer for agriculture, existing capacity for the production of nitrogen through the synthetic ammonia process will be retained until the necessary imports of nitrogen are available and can be paid for. b. Other Chemicals. Capacity will be retained for the group of other chemical production in the amount of 70% of the 1936 production capacity (measured by sales in 1936 values). This group includes chemicals for building supplies, consumer goods items, plastics, industrial supplies, and other miscellaneous chemical products. c. Dyestuffs, Pharmaceuticals and Synthetic Fibers. In the pharmaceutical industry there will be retained capacity for the annual production of 80% of the 1936 production, measured by sales (in 1936 value). Capacity will be retained to produce annually 36,000 tons of dyestuffs and 185,000 tons of synthetic fibers. |