SOVIET ZONE INDUSTRY; THE 'NEW DIRECTION'

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP81-01036R000100080048-1
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 2
• Document Creation Date: November 9, 2016
• Document Release Date: March 5, 1999
• Sequence Number: 48
• Publication Date: December 28, 1953
• Content Type: REPORT

FORM NO.
81?48
DEC 1461
Approved For Release 1999/09/23 : CIA-R.QP41 -0;'Q3;3R000100080048-1
U.S. Officials Only
SECRET
CENTRAL INTELLIGENCE AGENCY
INFORMATION REPORT
COUNTRY Germany (Soviet Zone)
Soviet Zone Industry; The "New Direction"
25X1A
PLACE ACQUIRED
(BY SOURCE)
DATE ACQUIRED
(BY SOURCE)
29 Oct 53
HIS DOCUMENT CONTAINS INFORMATION AFFECTING THE NATIONAL DEFENSE
OF THE UNITED STATES. WITHIN THEMEANINO OF TITLE 19, SECTIONS 795
AND 194, OF THE U.S. CODE, AS AMENDED. ITS TRANSMISSION OR REVE-
L_ ATION OF ITS CONTENTS TO OR RECEIPT BY AN UNAUTHORI'LED PERSON 19
PROWIRITrb BY LAW. TWE RFPRnQ11Q?1AN OF THIS REPORT
THIS IS UNEVALUATED INFORMATION
25X1X
25X1A
DATE DISTR. r Dec 53
NO. OF PAGES 2
NO. OF ENCLS.
SUPP. TO
REPORT NO.
1. For any evaluation of the Soviet Zone industry after the proclamation of the "new
direction" and the connected Moscow decisions to return the SAG industries and a
general cessation of reparations, it is necessary to inquire how far these steps
will result in the overcoming of the vast shortage of consumer goods and the
improvement of the standard of living. It is intended to accompany these conces-
sions with a sharpening of the terror in order to stablize the internal political
situation.
The 33 SAG industries in Soviet hands, with a nominal value of 2,700 million DM
will formally be returned to German ownership as of 1 Jan 54. The appropriate
preparations have already been made. The carrying out of the steps will be in the
hands of a mixed German-Soviet commission. Down to the present there is little in-
formation about the membership and operations of this commission. At the same time
the SAG industries remaining in Soviet hands will be partly dismantled. No details
are known as yet.
3. The Soviet directors of the returned industries are to remain at their posts after
the return to German hands, with only the difference that they will fall under
German planners.
4. A special rule is made for the uranium mines of Aue-'Oberschlema-Johanngeorgstadt.
The companies handling these will be united in a new single company, with mixed
German-Soviet heads, not yet, named. All production will continue to go to the USSR,
but will be accounted for as part of foreign commerce as of 1 Jan 54.
U.S. Officials Only
SECRET
DISTRIBUTION ? STATE
NAVY AIR
FB I QR.R E_
Approved For Release 1999/09/23 : CIA-RDP81-01036R000100080048-1
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Approved For IfileAs e,1 Q1O:t. A-RDP81-01036R000100080048-1
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5. !iith regard to the question of reparations it is to be noted that the projected
reparations cuts are being put through, and the goods delivered are being
reckoned as commerce. This is especially true with regard to reparations in the
form of shipbuilding. In the current year a number of freight, passenger,
refrigerator and coastal ships are still to be delivered during the current year.
After the end of reparation, however, all further ship deliveries will be reckoned
as commercial exchange, but with the figures of 1944 as a basis, the result of which
will be to continue reparations indirectly.
6. Similar steps. transforming direct into indirect reparations, are being taken with
regard to production from the Karl Liebkneoht heavy machine factory, Georgi Dimitroff
machine factory, Brat ThUlmarnn heavy machine factory, 7 Oktober machine factory, all
of Magdeburg, which are supposed together to deliver 200 million rubles worth of
goods by the end of 1954. These orders have been dated back to cover their real
character as reparations.
7. If there has been any alteration in the production objectives of the five year plan,
it is only with regard to the plan for 1953. The planned increase in production on
an overall basis of 14 percent during the second half of the year obviously cannot
be achieved.
8. In the area of metal foundries, the earlier planned state capital investment has
been limited to 600 million DM. This should help to overcome the current shortage
of electrical power and permit both industry and consumers to do something about the
coal shortage. Iron, rolled plate and metal wares allotted to private use are to
increase by 50 percent, electrical goods by 33 percent, leather and shoes by 35 per-
cents
9. The'.quo.tas in electric power:, brown coal. and briquettes were nowhere r e.i r, met .daring
the first quarter of 1953. Even in.hard coal.-it was impossible to me.ii-q-4atas,
although the delivery of machinery: by .the Soviets permitted the almost compietee
mechanization of the industry. ..Thy failure. in the briquette industry was due to a
shbr?ge of brown coal, to the poor quality of that delivered, and to the lack of
1 (".metal snare Darts for the presses.
10. in metal products,~ Oith the exception of raw iron and light metal products, the
quota w11be` everywhere rea,hed and in some cases exceeded in 1953
11. The insufficiency in heavy machine production is mainly due to the tact that the
capital investment in metallurgical and'electrical production was not made according
to plan. The quota will by no means be met in general machinery construction,
electrical. and optical goods. This is the more important because these industries
worked particula?ly for reparations, export and interzonal trade;
12.. In the area..of, shipbuilding, truck building and agricultural machinery the quota
will`not-be fulfilled. This is generally due to the fact that the shipyards and
factories involved. devoted so great a part , , of ; their ~ production, to armament.
13. The development of the armament Industry in general is hard to evaluate in view of
the new direction." It is hardly to be expected that such production will be halted,
only-.somewhat limited. One concrete detail is that the reconstruction of the Junkers
factory in Dessau will be dropped.
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Approved For Release 1999/09/23 : CIA-RDP81-01036R000100080048-1