still prevailing in most of the U. S. Zone, whereby a farmer's fields consist of scattered strips and small parcels of widely separated tracts which the farmer and his family must operate with long outdated methods and equipment.

A beginning has been made in each of the Laender in considering these problems and in programming measures for decision and action, while other long range measures have been developed to completion. A step in the limitation of excessively large estates* was taken on 28 February when the Allied Control Council passed Law No. 17, which greatly increased the German inheritance tax rates and eliminated the former discrimination in favor of immediate relatives and large families. A maximum levy of 60 percent replaced the former principal group rate of 14 percent and applied to bequests of property valued at 10 million reichsmark or more. This action will restrict the number and size of large holdings, which often continue their feudal characteristics. A revised and increased progressive tax on incomes is expected to encourage sales from large properties and the placing of such land in economic circulation for use by greater numbers of people.

To care for the great number of people who are scheduled to enter the U. S. Zone by the autumn of 1946, Military Government has directed the attention of the Land Governments to the need for suitable accommodation and employment for these people on the land, as well as for other millions who were bombed out of cities. A special garden program has been promoted. These temporary measures lead logically to provision for permanent land settlement when more stabilized conditions permit. German authorities have been asked to develop proposals for permanent settlement of families on new land.

Throughout the period, necessity has required that first emphasis be given to production of food. Wehrmacht lands have been steadily moved into production after many years of idleness and use for war preparations. Forest lands on good soil have been surveyed to determine areas suitable for use in crop production. Reclamation of moorland is being studied. The State domains have been denazified and turned over to the Land Governments for full production. Meanwhile, land formerly used for pasture is being plowed up for crops, and less intensive land use by such crops as rye and wheat is being displaced by more productive fields of sugar beets and potatoes.

In pursuit of other Allied objectives progress has been made toward repeal of undemocratic and backward laws restricting the use and transfer of lands, and the Land Governments have been requested to propose suitable uses for the income from Wehrmacht property.

Forestry program

Allied plans call for full exploitation of German forests during the first

*On September 19, 1946, Military Government announced approval of the Law for Acquisition of Land for Settlement Purposes and for Land Reform, which had been submitted by the Laenderrat. The purpose of the law is to make land available for small farms and garden plots for expellee Germans, evacuees from bombed-out cities and other uprooted and displaced Germans.

inventory of forest resources in the U. S. Zone is being made. This survey will provide data on acreage, age classes, annual increments of growth, diameter classes and total volume of standing timber for each of the five forest sites in the U. S. Zone. A forest soil survey is also being completed to determine maximum areas of forest land suitable for conversion to arable use.

Quadripartite Machinery and Accomplishments

Quadripartite work in food and agriculture is done chiefly through the Food and Agriculture Committee of the Allied Control Authority, which in turn, works through a number of sub-committees and standing working parties.

The alternates of the Committee members plan and schedule all work of the Committee and the subordinate bodies for several months in advance. Sub-committees on Veterinary Matters, Forestry, and Plant Quarantine initiate proposals in their fields and consider matters referred to them by the Committee. The General Working Party is responsible for all general economic questions, for agricultural finance, for agricultural statistics, and for agricultural cooperatives. The Field Crops Working Party prepares production plans, estimates supply requirements of fertilizers, machinery, seeds, and other producer requisites and proposes interzonal allocations of supplies and of field crop products. The Livestock Working Party has corresponding duties for all German livestock. The Fisheries Working Party deals with marine and inland fish requirements and with supply requirements for the catch and its processing and distribution. Food rationing is handled by Food and Agriculture officers acting as alternates on the Trade and Commerce Committee Working Party on Rationing.

A general framework of food and agriculture policy applicable to the whole of Germany has been adopted by the Food and Agriculture Committee and approved by the Allied Control Authority. These policy decisions cover the relevant provisions of the Potsdam Agreement, except that for a central German Administration for Food and Agriculture.

Important decisions of the Committee approved by requisite higher Allied Control authorities include the following additional items:

a) For the years 1946-49 inclusive, production goals have been set for all primary crops and all types of livestock. These involve substantial increases of arable land to be obtained by conversion of military lands, clean cutting of forest lands, and drainage and reclamation of other lands.

b) For the same four years, full requirements for fertilizers, seeds, farm machinery and spare parts, insecticides and fungicides, veterinary supplies, and other requisites for production have been determined for each year and are being implemented by other Allied Control Authority bodies.

c) Working principles for interzonal allocation of all types of farm supplies have been agreed to and have begun to be implemented in interzonal trading.

d) The Allied Control Council, acting on the Committee's advice, has reported exportable balances of potash fertilizers and has requested import allocations for phosphate and nitrogen fertilizers for the year 1946-47 for Germany as a whole.

e) Under principles for re-establishing agricultural cooperatives and the standard provisions for their charters adopted by the Committee. the restoration of agricultural cooperatives is going forward throughout Germany.

f) A promising resumption of interzonal trading in livestock, seeds, sugar, molasses, and other foods has been begun under principles proposed by the Food and Agriculture Committee. In all of these, the sales are effected by German sellers to German buyers and are cash transactions.

g) Uniform standards for the milling of wheat, rye, barley, and oats have been set for all of Germany.

h) Many uniform census enumerations and current condition reports have been adopted. These cover livestock enumerations; livestock slaughter and slaughter weights; field and garden crop plantings, harvestings and yields; milk yields and utilization; crop forecasts; and incidence of communicable animal diseases.

i) A timber cutting program, together with an allocation of forest products for export and for the several Zones was adopted and is being carried out.

j) A survey of all forest lands with respect to cutting resources and the replanting or conversion of forest lands to agricultural use has been agreed to and is well on its way toward completion.

Interzonal trade

Before the occupation, the interdependence of various geographical regions in Germany's complex agricultural economy made intensified food production and a highly efficient distribution and food processing system possible. In general there was a movement of industrial products to the East and food products, especially grain, to the West. Division of the country into four zones separated by uneconomic trade barriers is therefore a serious hindrance to effective management of the food and agricultural economy under the occupation.

Pending elimination of these barriers and treatment of Germany as an economic unit, a number of makeshift arrangements for interzonal trade have been made. These have usually been two-party agreements, frequently on a carter basis, to permit partial restoration of the former natural division of labor and exchange of commodities between regions in which they can be

economically produced. Completed agreements of this sort have included the following:

(1) Processing vegetable oils from the U. S. Zone in hardening plants in the British Zone and their return to the U. S. Zone for manufacturing into margarine.

(2) A similar arrangement with British authorities for processing palm seeds stored in the U. S. Zone, and for their subsequent return to the U. S. Zone. (3) Sale of 700 metric tons of hops for the manufacture of beer for British troops.

(4) Processing sugar beets from the U. S. Zone in the British Zone and processing beets from the French Zone in the U. S. Zone.

(5) Exchange of seed potatoes from the British Zone for eating potatoes from the U. S. Zone.

(6) Exchange of seed potatoes from the Russian Zone for cattle and salted herring from the U. S. Zone.

(7) Sales of cattle, oxen and yeast extract from the U. S. Zone and purchases from the Soviet Zone of sugar, molasses, seed, miscellaneous laboratory instruments for the dairy industry, and barrel staves for the fishing industry.

Outlook for Agricultural Recovery

On account of critical shortages of essential agricultural supplies and equipment, prospects for 1946 food production are uncertain. Lack of nitrogen for breadgrains may well result in yields of from 15 to 25 percent below normal. This means that the battle for food for U. S. occupied areas of Germany may be even more difficult in 1946-47 than during the previous crop year. Permanent solution of the problem of providing an adequate diet for the German population depends on putting the agricultural economy in a position to produce and distribute maximum amounts of food from indigenous resources. This will necessitate meeting requirements for producer supplies and reestablishing a series of essential agricultural services.

Full utilization of the food and agricultural resources of Germany is impossible without a central administrative agency to translate plans for the country as a whole into operating realities. Other important obstacles to effective management of the food and agricultural economy are barriers to free interzonal trade, continued uncertainty concerning the inherent stability of the medium of exchange and shortages of non-farm commodities which producers need to buy..