Economie Achievement in the German Democratic Republic 1949-1969 '

Economie Achievement in the German Democratic Republic 1949-1969 ' By Sima Lieberman, Salt Lake City The pistol shot that ended Adolf Hitler's life in Berlin on April 30, 1945, sounded the death knell of the "thousand year Reich", the great German National Socialist empire which lasted for only twelve years. Long before Nazi Germany officially surrendered at Reims and Berlin in the first week of May, a European Advisory Commission representing Great Britain, the United States and the Soviet Union had been preparing during 1944 the details of a plan determining the allocation of future zones of occupation in Germany, each zone to be governed exclusively by one of the three victorious powers. France acquired membership in this Commission in November, 1944. The Commission's protocol of September 1944 provided that Germany, as it existed in December 1937, would be divided into three zones of occupation, the eastern zone being placed under Soviet rule. The city of Berlin was not to be part of any one zone, instead, it was divided into three sectors and was to be administered by a Kommandatura headed by the military commanders of each sector. Furthermore, the British, American and Russian commanders-in-chief were to acquire jointly the power to administer Germany as a whole and each one of them was also to be the supreme ruling authority in his respective zone. This plan was in turn discussed by Churchill, Roosevelt and Stalin during the Big Three Conference at Yalta in the Soviet Union in February 1945. During this Conference, Stalin finally accepted his colleagues' demand that France should also be granted a zone of occupation in Germany, a zone carved out of the British and American zones. The Soviet delegation, in turn introduced a number of proposals, some of which were accepted at this time by Churchill and Roosevelt. A proposal of major significance receiving unanimous approval stipulated that the victorious powers would extract from Germany reparation payments whose amount was then not determined. Germany was to effectuate these payments in a number of ways. In the first place, it was resolved that various types of German economic wealth, e.g., factories, machinery, railroad equipment, ships and other German assets could be confiscated by the Allied Powers within a period of two years after the end of hostilities. Secondly, the victors were also to be allowed to appropriate for an unspecified period of time part of the current German industrial and agricultural outputs, and to obtain further compensation, they would also be able to use the forced services of German war prisoners, both within and outside of Germany. At Yalta, the Soviet delegation also suggested that German war indemnification payments should amount to twenty billion dollars and that the Schweiz. Zeitschrift für Volkswirtschaft und Statistik, Heft 4/1973 556 Soviet Union should receive half of this sum1. Stalin furthermore proposed that Poland should be compensated for the loss of its eastern territories to the Soviet Union through the transfer to Poland of German lands situated east of the Oder and Western Neisse rivers. The German town of Stettin was to be Polish. Through this cession, Poland would receive 44,000 square miles of land which included both Upper and Lower Silesia2. No final action on these proposals was taken at Yalta. Nevertheless, the Soviet Union entered into an agreement with Poland two months later under which Poland was vested with the power to administer the German territory located east of the Oder-Western Neisse line. Polish presence and Polish rule in this area was di fait accompli when the heads of the Allied Powers met at Potsdam, Germany, in July 1945, following the unconditional surrender of the German armed forces. The heart of the Potsdam protocol was the determination of Great Britain, the United States and the Soviet Union to disarm and demilitarize Germany so that this country could never become again a dangerous military power. Germany was to be weakened industrially and its industrial capacity above "peacetime needs" was to be appropriated by the Allied Powers. To achieve this aim, the occupying powers were to dismantle "excess" German industrial capacity. Industrial produc tion ceilings were to be imposed on the German economy by the military govern ments in order to prevent the re-birth of undue industrial power. The Potsdam protocol further provided that "the German economy shall be decentralized for the purpose of eliminating the present excessive concentration of economic power", but recognized that "Germany shall be treated as a single economic unit". The Potsdam resolutions explicitly allowed the dismantling of German industrial installations by the occupying powers as a form of reparation payment by the Germans. But provisions permitting German indemnification to take the form of levies on current German output or the use of forced German labor were entirely omitted. The occupation policy pursued by the Soviets in East Germany promptly revealed that the U.S.S.R. understood the Potsdam Agreement to be simply a supplement to the Yalta determinations, an addendum which in no way su perseded the Yalta resolutions. The Potsdam protocol allowed each occupying power to extract its share of German compensation from the zone it occupied and i J.E.Smith: "Germany Beyond the Wall", Boston, Little, Brown & Co., 1967, p.203. Stalin had asked that half of the German war reparation payments of $ 20 billion be paid during the first two years of occupation, the remainder being satisfied by levies on current German production over a period of ten years. The Western Powers accepted the Soviet demand of $20 billion only as "a basis of discussion". 2 A.Grosser: "Germany in Our Time", New York, Praeger, 1971, pp.27-32. At Yalta, the Polish delegation claimed that a Polish western border along the Oder-Western Neisse rivers would not only compensate Poland for territorial losses in the East, but would also allow Poland to obtain in this way war indemnification from Germany and a more militarily secure border. 557 during eight years following the end of the war, the Soviet Union proceeded to exploit the East German economy to obtain the war indemnification it had asked for at Yalta3. Soviet dismantling of East German industrial, commercial and transport facilities proceeded in successive waves until 1954, even though Marshal Sokolovsky had announced as early as May 21,1946, that Soviet dismantling and appropriations had ended4. From 1945 to 1954, over 1,300 factories and about 4,500 miles of railroad track were removed from the Soviet Zone, which in 1949 became the German Democratic Republic, for shipment to the Soviet Union*. The western tourist who has visited the German Democratic Republic in recent years is quite aware of the fact that the people he observed in East Berlin, Dresden or Leipzig, although apparently well-fed, do not dress with the elegance of Germans in Hamburg, Munich or Wiesbaden. In the cities of the G.D.R., the automobile traffic, the quality and variety of wares displayed in shops and the menus in the restaurants compare poorly with their counterpart in West Germany. If this tourist had visited the G. D. R. in the early 1950s and then again in the late 1960s, he would have to acknowledge that economic progress in the country was quite visible, though the standard of living had not yet attained that of the G. F. R. But how often has our tourist, back in his homeland, stated to his friends, with the conviction of the "expert", that "the government in East Berlin could learn something in Bonn"? What our traveler may not have been aware of, is that in the late 1960s, the G.D.R., a country of the size of New York State, was the tenth largest industrial nation in the world and the second largest industrial power in the Soviet blocö. Although the East German economy is much smaller than the West German one, it produced in 1965 more steel per capita than Italy, and also on a per capita basis, more electric power than West Germany and more cement, television sets and refrigerators than Britain7. But even the knowledge of these data would not have altered, in all probability, our visitor's evaluation of East German economic performance because he would still not perceive the significance of this economic achievement in the light of the tremendous handicaps faced by the East 3 It has been estimated that between 1945 and 1954, the U.S.S.R. appropriated 25% of the East German industrial output to satisfy Soviet war indemnification claims. W.Stolper: "The National Product of East Germany", International Review for Social Sciences, Vol. 12, 1959, p. 153. A detailed study of East German reparation payments to the Soviet Union indicates that East Germany (Soviet zone of occupation or German Democratic Republic - SOZ/GDR) made, during the period 1945 to 1960, reparation deliveries to the Soviet Union amounting to $ 19.3 billion in 1938 prices. Compensa tion payments of over $ 17 billion to the U.S.S. R. had already been made as early as 1953. It appears that the Soviet Union extracted from East Germany nearly double the compensation it had asked at Yalta. H. Kohler: "Economic Integration in the Soviet Bloc", New York, Praeger, 1965, p. 29. 4 H. Köhler: "Economic Integration in the Soviet Bloc", New York, Praeger, 1965, Ch. 1. See also J. E. Smith, supra, p. 85. 5 A. Grosser, supra, p. 64. 6 E.Richert: "Pas Zweite Deutschland, Ein Staat der nicht sein darf, Gütersloh, Sigbert Mohn Verlag, 1964, p. 121. 7 D. Childs: "East Germany", New York, Praeger, 1969,p.

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