Machine Manfacturing and Engineering

8. a. Machine Tools. For the machine tool industry there will be retained 11.4% of 1938 capacity, with additional restrictions on the type and size of machine tools which may be produced.

b. Heavy Engineering. In the heavy engineering industries there will be retained 31% of 1938 capacity. These industries produce metallurgical equipment, heavy mining machinery, material handling plants, heavy power equipment (boilers and turbines, prime movers, heavy compressors, and turboblowers and pumps).

c. Other Mechanical Engineering. In other mechanical engineering industries there will be retained 50% of 1938 capacity. This group produces constructional equipment, textile machinery, consumer goods equipment, engineering small tools, food processing equipment, woodworking machines, and other machines and apparatus.

d. Electro-engineering. In the electroengineering industries there will be retained 50% of 1938 production capacity (based on sales in 1938 values). Capacity to produce heavy electrical equipment is to be reduced to 30% of 1938 production or RM 40,000,000 (1936 value). Heavy electrical equipment is defined as generators and converters, 6000 KW and over; high tension switch gear; and large transformers, 1500 KVA and over. Electroengineering, other than heavy electrical equipment, includes electric lamps and light fittings, installation materials, electric heating and domestic appliances, cables and wires, telephone and telegraph apparatus, domestic radios, and other electrical equipment. Export of specified types of radio receiving sets is forbidden.

e. Transport Engineering

(1) In the automotive industry capacity will be retained to produce annually 80,000 automobiles, including 40,000 passenger cars and 40,000 trucks, and for 4,000 light road tractors.

(2) Capacity will be retained to produce annually 10,000 motorcycles with cylinder sizes between 60 and 250 cubic centimeters. Production of motorcycles with cylinder sizes of more than 250 cubic centimeters is prohibited.

(3) In the locomotive industry available capacity will be used exclusively for the repair of the existing stock of locomotives in order to build up a pool of 15,000 locomotives in 1949. A decision will be made later as to the production of new locomotives after 1949.

(4) Sufficient capacity will be retained to produce annually 30,000 freight cars, 1,350 passenger coaches and 400 luggage

vans.

f. Agricultural Machinery. To permit maximization of agriculture, capacity will be retained for an annual production of 10,000 light agricultural tractors. Existing capacity for the production of other agricultural equipment, estimated at 80% of 1938 levels, is to be retained, subject to restrictions on the type and power of the equipment which may be produced.

g. Spare Parts. In estimating capacities there will be taken into account the production of normal quantities of spare parts for transport and agricultural machinery.

h. Optics and Precision Instruments. Capacity will be retained to produce precision instruments in the value of 340,000,000 RM (1936 value), of which 220,000,000 RM is estimated as required for domestic use and

120,000,000 RM for exports. A further limitation for this industry is possible, subject to the recommendation of the Committee for the Liquidation of German War Potential.

Mining Industries

9. a. Coal. Until the Control Council otherwise decides, coal production will be maximized as far as mining supplies and transport will allow. The minimum production is estimated at 155 million tons (hard coal equivalent), including at least 45 million tons for export. The necessary supplies and services to this end will be arranged to give the maximum production of coal.

b. Potash. The production of potash is estimated at over 100% of the 1938 level.

Electric Power

10. There will be retained an installed capacity of 9 million KW.

Cement

11. Capacity will be retained to produce 8 million tons of cement annually.

Other Industries

12. The estimated levels of the following industries have been calculated as shown below as necessary for the German economy in 1949:

a. Rubber. 50,000 tons, including 20,000 tons from reclaimed rubber and 30,000 tons from imports.

b. Pulp, Paper and Printing. 2,129,000 tons, based on 26 kg per head per annum in 1949 plus 400,000 tons for export.

c. Textiles and Clothing Industries. 665,000 tons of fiber, based on 10 kg per head for 1949, including 2 kg for export.

d. Boots and Shoes. 113,000,000 pairs. based on 1.7 pairs per head in 1949 (figure excludes needs of occupying forces).

Production may exceed the above estimates in this paragraph (Other Industries) unless otherwise determined by the Control Council.

13. Building. No level will be determined for 1949. The industry will be free to develop within the limits of available resources and the licensing system.

14. Building Materials Industries (Excluding Cement). Existing capacity will be retained. Production will be in accordance with building licensing and export require

(1936 value) for 1949, and that sufficient industrial capacity shall be retained to produce goods to this value and cover the internal requirements in Germany in accordance with the Potsdam Declaration.

b. That approved imports will not exceed 3 billion RM (1936 value), as compared with 4.2 billion RM in 1936.

c. That of the total proceeds from exports, it is estimated that not more than 11⁄2 billion RM can be utilized to pay for imports of food and fodder, if this will be required, with the understanding that, after all imports approved by the Control` Council are paid for, any portion of the sum not needed for food and fodder will be used to pay for costs of occupation, and

services such as transport, insurance, etc. Determination of Capacities Available for Reparations

18. After the approval of this Plan, the existing capacities of the separate branches of production shall be determined, and a list of enterprises available for reparations shal be compiled.

19. After decisions have been given on the matters now referred to the Coordinating Committee, the Economic Directorate would propose to prepare the final plan embodying those devisions and including a description of the various features of the Plan, such as: disarmament, reparations, post-war German economy, and the German balance of trade.