ASSIMILATION OF ECONOMIC POWER BY SED IN SAXONY-ANHALT

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP82-00457R001500300004-2
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 3
• Document Creation Date: December 14, 2016
• Document Release Date: March 21, 2001
• Sequence Number: 4
• Publication Date: May 12, 1948
• Content Type: REPORT

ur.rkbz-lc..;;Allutm SECRET - - u 1
Approved For ReleasEcomumA 1l-Aacimooi5oo3000rmAT NO.
INFOi5iMA EPOT 336-roroi
CONFIDENTIAL,
TE DISTR.
? COUNTRY
SUBJECT?
Genaany (RUSBiati Zdiae)
Aceimilation of Economic Power try SED
in Saxoily-Aalvalt 25X1A
DATE OF TWO
CE GENT
LRkUB
.4)
'Sap
.
#1/1)
).4141
25X1A
12 Nay 1948
NO. OF PAGES 3
NO. OF ENCLS.
(LISTED BELOW)
5 ATTACEMENS
SUPPLEMENT TO
REPORT NO.
25X1 X
While ? ?social -rOlfolut.ionti t.suaa.ly coimnee with the aotcn
Of..:poIlticaT. power by the. revelutionary forces,. in Gsvmany
the --usual _se'venee was revere, Since .the Comiinnst forces-
the Rtssian_ Zone .wominot stror.igs "Els shown by
the. elections ...0;C 1945, to claim excluSive political pmer,
they concentrated instead on c entre 1 4ni.; the ir.;dust ria
sources-.cala through them .comAng to pelitical dominance'. In .
this they were naturally -a splyte6. by ths.. occupation power and,
to soma extent by the supine. acceptance, of the bourgeois
parties',. w:Aar- elf.fered- Insufficient resistance to Communist
effertS ?
.
The .first decisie step wae? the .resobAtion of: the Antaseist
Bloc of the province of Saxon y -lana reform, on 1-60ptembor ?
?19.450 Although. the, cooperation.. Of the bour8eois tart ie was
meant to strike ?at ?Fasasm.-,and. militarism,- it actually aided '
CoMmunist ends. At a lp fsioxil roap ?me-et Ina of . the ? M14-
?ristry...6f EconOmy. of Land Saxony-Anhalt on ?20 .February 1046,
the ? land - reform was .pvaised .by n11- funotionarles as a.m.oalas
.of aepriving.?capitalist. interosts of power and of fulfillLing
the ?COmmuni:n Manifebtoe,. .
0. Almost. at7-Ohe 3F'4M0 time the Luid reformf, another measua
in the.. indu8trial field r althan01. it ,affected only adminlatnD,-
*.;i0n.? was .roMay more 'mvolutionary beo.aue it. ray vithou
petedont TbiEl wan ths "takAn8
actual 8tatl:Atovy power of the- px,oeiclerit of tho provfinpe of
Sax.61.4". dio?f:raf3r.ichlionolloho tatsgoilloho
Vorf4gingsgc$wp1t--des Prasidenten der Vrovinz Sachse-D) Sin
-CLASSIFICATION 84ragk
STATE #1i3AVY-
?NSRB
, __
,Q1STR1 BUTION
AMMO TICE: -1111S-
'
DISTRIBUII-10N-LISTIN
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.-TUST.-BC_I-1
ARMY
Ain .
X
.
:Date: 2 'MAY in By
BaOrif PUE1.1C .RELEASE-OF--T.FILS -DOCUMENT.
CONF1 ENTIAL
c ET Extracted by H.R.
001/04/18 : e F82-00457R001500300004-2
25?(1?A
?
1t had. no logal? foundation, being introdukted.through the Division
'
of Guarantee of Edonomy, it had tu be given one later through the
'-frussian'Polite Administration Law, SNA Order Yo.-9?.on Starting
;.2:.1nduetrie5 and the .state right of neesssity.(3taatsnotreeht)..
The Original measures taken to secure enterprises left ownerless
at the capit41ation Were Unobjectionable. In the hands of the '
Communist officials Ferschlandt and Schleiffs however, and with
trace union tooperation,,they were applied as a means of -elimin-
,ating Unacceptable (thct is, nen-Communist) personnel and of
bringing many finis under the direct control of the state. Lab-
iorers and,lowerechelon plant eMpleyses wore sometimot; name
:clirectors at the suggestion of the trade unions or the head og
-theiSEDEconomic Division- ana trustees were appointed for reasons
?? otpersonal advantage. Although not exclusively aimed at des-
? ,truction of 'private ownership, such measures deprived owners
of much Of their: organizinv, tower, wl.J.e.l.was thus transferred to
? :Communist circles. Tbe trarsfer or prodcA7 to the statutory
power of cne innu president was als. oftot thr., 71ro1iminary to
sequestration .Or exoopriation. About the middle, of 1947 this
? Method was tertidnated., It had been'reeognized by the courts
Only reluctantly. Saxony-Anhalt took the lead in thin procedure.,
? followed by Thuringia, (See Attacbmiont L.)
?
.5, Another measure which had a crushi-ni; influence en the bourgeois
parties originated in,ea'nony-Anha"..,,t; the order of 17 December
1945 on confiscation of property of prfntinc: and publishing in-
? ,- stallations which had served the Nazi party. Forty-seven firms,
v,Including all the newspaper printers of the Land, were confis-
cated and if they owned 'rotary pressewere turned over to KPD
and SPD in the Lando, as restitution. Many of these firms had
? beloned for generations to the samefamily; the owners Were not
,all Nazis and in fact under Nazi 14w had no lilfluence on the? ?
_content'of,the paper. Since J,DP and ou could not claim much
in the way of?restitutioni they reeeived prattically none of the
? _,eonfidcated:reSources,. whereas IUD wac able to claim a large.
, _
, -ameurt, (See Attachment for list of firms expropriated.) ,
Only ajewmostly smaller. firms, remained in private hands and
about twelve were: eXpropriated for the benefit of the Land; the
remainder were combined in a GM:on:set up by SED for their opera-
': :ticn;,, -
6. The advantage :to the Communists was onormusi alnce Saxony-Anhalt
, had a well-devoleped printing industry. both CPU and LD1) lost
any opportunity of setting up their own nowspar plantt for some
time, CDU did succeed in obtaining a rotary press and bringing
it to Halle, but it could not, be put into operation even then be-
- . ? taUse of the shortage of spars parts.' Thu):, both parties ars
, ?dependent on SED for' printing fadllitie ven for their party
papers. BED, on the othep hands obtaiod zlo large a'printing
:? ?eatablishment that Only part of it could be used for newspapers4.
and the:. remainder, ,was devoted to books, art materials, and
bianal pUblieetiOns. In addition te the great propaganda
? 'advantage, SED thus acquired a source of income which can eon-
.: bute.considerably to party funds. An attempt of the cabinet
to provide indemutfication for ,writers was defeated by the
det?thedopposition'of the Communist Advocate-General Fischelo
%.
In4tdditieni,;'SED demanded as restitution ths entire real esi;ate4,,.
j:mathines? installationsitoelsi:and raw materials of the, '
sequestered AG 'Otto Naumann and Company in Raguhn in order to,
*tablish a paper factory on the property. The cerporation for
operating the factory (a Gmbh) had already been formed, and the
? resistance of the Ministers of Economy and Interior waa eventually ?
overcoMe under party pressure.- (So ,J Attaehmsnt
The regulation of' 22 May 1946 which perrait.1 e:propriation of
the -property of associations and coope:rabiV03 Vi.thOUt compensation
. also, offered Communist advantages. When ,,for example, the German
? , i? Lignite: Tpdttstry, Association was ordered liquidated the cabinet
warded the administration
buIld-
dustra)..union :or mining. The -
Id the MIII:J,try of Labor offices
t R d el 6 0 0 ncoMU
of,Saxony-Anhalt on 17 May 1947
, ,
418 of the association to the i
Landtag approved the '1881,8
431000M-WeVaJeApVtbdit
0441:EA1 INTMLLIMICE ?LGEtac
pproved For Release 2001/04/18 : CIA-RDP82-00457R
CO
m Rft
to-o.t dmcistve measure outs e*o -the land reform., the expro-
;
1.1:9tidnof warcriminais and the cemprohensive transfer ox
eq4estered enterprises to-the .propery of: th tte baled or,
theorder of 30 July l46;differed in Saxony from other Lands '
:On)* in that. no popular decision was obtained but the motion wao
Ott Willgeneral assembly and -accepted enfbloc 'under pressure.
Some resistance was made to the ex.prom-tation prooess, howeverp
j!.lid a right of protest was finally About 1100 pro
teats were still unsettled, ,but their procezsing in ;he ozriegenc7
Coltimttteo of the Landtag was prevented by SNA, and they wore all
rejected without conSideration in the Ministry PI: Interior.,
2;41sumerii unions also pressed thotr'clatms to valuable property.,
4,1orap141..01. the Sequestration Division refused _tile demand of
fie lOnsumers, cooperative union for the large,Wolllle store-
ouse'en the grounds that investigation shored the property not
4uestrabip-4 lie was -defamed in. the SED press, and the Central
00,0411.at of ED was Called upon " for help.- .SNA Order No. 176,
:Pbruary. 19460, .hoWeverohandel.oVer.to the consumers' coop-
040410 of Land SaxonyAnhalt 457 pieces 'of property? many
-encUmbered'o ?
new aeries of,expropriationS1 to be'Coneluded?by the middle of
rehl946.? was. introduced in February,- in the "rochock.of
'Oubtful cases." to written Order was issued hat expropriations
ere based on Order No 1240, Which was clearlyintended originally
:):TerA3ther purposes. 'The lirecheck" was not to include the 1400
protesting firms Which had appealed their expropriation orders._
A:;:graup,of the German Central Commission for Sequestration-and
',0Onfitcation, styling themselves the "Commisolon for Execution
and;Investigation,.of Order No 1241' entered many plants and in-
00.6,tedbooks and papers and held confldeutial conferences with
lactory councils; _ owners were. not consulted. Their reports were
"eSented-mostly to the Mintster of Interior and Minster Prest-
it, On3:parchiV48, the cabinet of, Saxon'Anhalt discussed
010bined list offirms to be ;expropriated, which was kept
According to statements of a participant in .the
etirig,:.of 180 firms proposed for expropriation, only 59 were.
kited:4nd ten were Still under -consideration. The enterprises
400 'were mostly small or,medium,-Sized firms which were .
capable of and About thirty percent of tho'firms still
:# private bands, including some firms -which had been'expropri-
;Jated and then returned.
25X1 X . Comment: 'This action was aimed at extending the power of
state-owneCTdustrIea (Industrie-Werke), in conjunction with
:SAPs, and thus augmenting Comunistpowor. Its effect is a.,
untonof'OED and SMA as operating forces, '
12
Proposals for the disposition of real estate Sequestered under
Orders NO. 124 and 126 were submitted to 43erlin and were con-.
:sidered in a..conTittee of the Ministry of Labor and Social
:Welfare. to representatives of the bourgeois: parties were' 1n-
eluded in the approximately. twenty sessions of this group. Of
.:the 860 properties for disposal, the majority are to bp sur-
rendered to public corporations; LDP -And the, Caritas Union a
liagdebUrg .were scheduled for one property each. ..The remainder,
.11,001Uding about fifty 0100013 of real estate fOr party purposes,
was requested: by BED. The other parties suffered here too from
,stri-rinability to claim property as rostitution,,: This distribu-
tion was accepted by the cabinet and has been, -since the end
of October 1947, in the hands ofSTIA Karishort
After--1 April 1948, the services occupi&I in col_oc!.ting, ad.
.miniaterIng, and ?evaluating sequestered prorty wero to be c
? -1Atob. into a u,nifiedidpartment'ana al?filiateq to tho Vdniotry
of Interior,. WI.Lhin the:Ea0s,- the implemor4ation of pouseio.n.
,appeared to be Increasing, as shown t4. new constructions and
? ,improvement of real estate., Under Russian pressure (from
..'Colonel Medyidov)r a sales stsreement was made with the Zeit
branch of of the Maslq, combine by which the combine acquired the
-valuable'adtinistrative building --which formerly belonged to a
ledge* ?Wasalso,t0tablished that SACS were liable, for tvxa,
tian-141 the same mm3,as'German enterprises. (See Attachment D..),
however, the SAGsittillreocive ' ' ef its As higher prices:
and subientt.ons No fixed arnoux ubVentions hare been
estabI
.I.Vie.A414114Vintii)/U/iA4:1012 t. . kt t a
ment E.
25X1A