Foreign Relations of the United States: Diplomatic Papers, The Conference of Berlin (The Potsdam Conference), 1945, Volume II

Truman Papers

No. 852
Proposal by the United States Delegation¹

[Babelsberg, July 17, 1945.]

Proposed Agreement on the Political and Economic Principles To Govern the Treatment of Germany in the Initial Control Period

Authority of the Control Council

1. The authority of the Control Council to initiate plans and reach agreed decisions on the chief military, political, economic and other questions affecting Germany as a whole shall be paramount in Germany, and those plans and decisions shall be carried out in each zone of occupation by the national Commander-in-Chief concerned. In matters exclusively affecting his own zone, each national Commander-in-Chief shall exercise supreme authority in accordance with directives received from his own government.²

Political Principles

2. The purposes of the occupation of Germany by which the Control Council shall be guided are:—

(i) The complete disarmament of Germany and the elimination or control of all German industry that could be used for military production. To these ends:—

(a) The German armed forces, including the General Staff and all para-military organizations, shall be demobilized as soon as practicable and disbanded in such manner as permanently to prevent their revival or reorganization; and

(b) all arms, ammunition and implements of war and all specialized facilities for their production shall be seized or destroyed. The maintenance and production of all aircraft and all arms, ammunition and implements of war shall be prevented.

(ii) To convince the German people that they have suffered a total military defeat and that they cannot escape responsibility for what they have brought upon themselves, since their own ruthless warfare and the fanatical Nazi resistance have destroyed German economy and made chaos and suffering inevitable.

(iii) To destroy the National Socialist Party and its affiliated and supervised organizations, to dissolve all Nazi institutions, to ensure that they are not revived in any form, and to prevent all Nazi and militaristic activity or propaganda.

(iv) To prepare for the eventual reconstruction of German political life on a democratic basis and for eventual peaceful cooperation in international life by Germany.

3. Nazi laws which proved [provided] the basis of the Hitler regime or which establish discriminations or [on] grounds of race, creed, or political opinion shall be abolished. No such discriminations, whether legal, administrative or otherwise, shall be tolerated.³

4. War criminals and those who have participated in planning or carrying out Nazi enterprises involving or resulting in atrocities or war crimes shall be arrested and brought to judgment. Nazi leaders and influential Nazi supporters and any other persons dangerous to the occupation or its objectives shall be arrested and interned.

5. All members of the Nazi Party who have been more than nominal participants in its activities and all other persons hostile to Allied purposes shall be removed from public and semi-public office, and from positions of responsibility in important private undertakings. Those Germans who are permitted to remain in, or are appointed to, official posts (e. g. in the police or the administration) should understand that they hold office only during good behaviour.⁴

6. German education shall be so controlled as completely to eliminate Nazi and militarist doctrines and to make possible the development of democratic ideas.

7. The administration of affairs in Germany should be directed towards the decentralization of the political structure and the development of local responsibility. To this end:

(i) Local self-government shall be restored throughout Germany through elective councils.⁵

(ii) Non-Nazi political parties with rights of assembly and of public discussion shall be allowed and encouraged throughout Germany.

(iii) Representative and elective principles shall be introduced into regional, provincial and state (Land) administration as rapidly as results of local self-government seem to warrant.

(iv) For the time being no Central German Political⁶ Government shall be established.

8. Subject to the necessity for maintaining military security, freedom of speech, press and religion shall be permitted,⁷ and religious institutions shall be respected. Subject likewise to the maintenance of military security, the formation of free trade unions shall be permitted.

Economic Principles

9. The German economy shall be decentralized, except that to the extent required for carrying out the purposes set forth herein, the Control Council shall permit or secure the establishment of central controls.

10. In the imposition and maintenance of economic controls, German authorities shall to the fullest extent practicable be ordered 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 breakdown in those controls will rest with themselves and their own authorities. Any German controls which run counter to the objectives of occupation will be abolished.

11. Allied controls shall be imposed upon the German economy but only as may be necessary:—

(a) to carry out programs of industrial disarmament and demilitarization, of reparations, of relief for liberated areas and of other supplies as may be notified;

(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 prevent starvation, disease or civil unrest;

(c) to ensure the equitable distribution of essential commodities between the several zones;

(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. For the same purpose no extension of credit to Germany or Germans by any foreign person or Government shall be permitted, except in special emergencies on notice to the Control Council which shall have power to prohibit such transactions.

12. The principles governing the exaction of reparations from Germany are set forth in Annex I⁸ to this agreement.

13. During the period of occupation, Germany shall be treated as a single economic unit. To this end:—

(i) No barriers should be erected to the movement of goods and services which are required for

(a) the maintenance of occupying forces and displaced persons, and (b)the maintenance of a subsistence standard of living in Germany, and (c) subject to the requirements of (a) and (b) above, the discharge of Germany’s reparation obligations.

(ii) To the fullest extent possible there shall be uniform ration scales throughout Germany.

(iii) To the fullest extent possible there shall be uniform policies for industry and agriculture throughout Germany.

(iv) There shall be programs for imports⁹ and exports for Germany as a whole.

(v) There shall be agreed programs on German coal production and allocation.

(vi) There shall be centralized organization of transport.

(vii) There shall be established a centralized control of currency.

14. This agreement does not apply to Austria.

1. Attachment 2 to the minutes of the First Plenary Meeting, July 17. See ante, p. 52. This document bears the following typed notation: “Handed in by President at first Plenary Meeting of Heads of State, July 17 but not read.”
2. Dunn’s copy of document No. 214 (see vol. i) has the following marginal note in his handwriting opposite this paragraph: “go back to original language in CC machinery”. See ante, p. 72.
3. Byrnes made the following shorthand entry in the margin of his copy of document No. 214 opposite this paragraph: “In addition to the measures already adopted, all Fascist laws as well as all Fascist decrees, orders [instruments should be] abolished as [directed] against democratic liberties, civil rights and the interest of the German people.” See ante, p. 73.
4. In Byrnes’ and Dunn’s copies of document No. 214 the final sentence of this paragraph has been stricken. See ante, p. 73.
5. In Dunn’s copy of document No. 214, the words “at the discretion of CC” have been added in his handwriting to this subparagraph, and the following manuscript notation by Dunn has been made in the margin: “unless it interferes with other zones”. See ante, pp. 74–75.
6. In Byrnes’ and Dunn’s copies of document No. 214, the word “Political” has been stricken. See ante, pp. 74–75.
7. In Dunn’s copy of document No. 214, the following marginal entry in his handwriting is indicated for insertion at this point: “and any existing restrictions will be progressively relaxed”. See ante, p. 75.
8. Printed as document No. 894.
9. In a variant copy of this paper, endorsed “‘Boat’ draft less ‘restitution’ the parenthetical phrase “(See Annex n)” has been stricken from the draft at this point. For the text of the annex referred to, see vol. i, document No. 348.