In applying these policies accounts shall be taken, where appropriate, of varying local conditions.
[ . . . ] Allied controls shall be imposed upon the German economy but only to the extent necessary:
(a) to carry out programs of industrial disarmament and demilitarization, of reparations, and of approved exports and imports.
(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 maintain in Germany average living standards not exceeding the average of the standards of living of European countries. (European countries means all European countries excluding UK and USSR.)
(c) to ensure in the manner determined by the Control Council the equitable distribution of essential commodities between the several zones so as to produce a balanced economy throughout Germany and reduce the need for imports.
(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.
(e) to control all German public or private scientific bodies, research and experimental institutions, laboratories, et cetera, connected with economic activities.
[ . . . ]
Measures shall be promptly taken:
(a) to effect essential repair of transport;
(b) to enlarge coal production;
(c) to maximize agriculture output; and
(d) to effect emergency repair of housing and essential utilities.
The four commanders in chief of the Allied armies in Germany were responsible for carrying out the political and economic principles of the Potsdam Protocol, each in his own zone of occupation, and also jointly, in matters affecting Germany as a whole, as members of the Allied Control Council. Almost from the beginning it became evident that the Soviet representatives, Marshal Zhukov and later Marshal Sokolovsky, were determined to prevent implementation of the positive principles of the Potsdam Protocol—they would agree to principles but then refuse to implement specific proposals to carry out the concepts. Although they agreed to do so, they refused to promote German reconstruction, waging a campaign of delay and diversion. For example, in December 1945, when the U.S. and U.K. commanders proposed opening zonal borders to the travel of Germans, Marshal Sokolovsky agreed in principle but said that practical application at the moment was impossible. The United States and the United Kingdom were unable to elicit his reasons. When the Western powers asked that the Soviet place the manufactures from East Germany in a common pool to meet the cost of essential imports, as provided by the Potsdam Protocol, the Soviets did not deny the agreement but put up a successful delaying action. By such tactics the Allied Control Council was limited in scope to the negative features of the Potsdam Protocol. Numerous ACC decrees on undoing the work of the Nazis were issued, but approval of measures to rebuild Germany and reestablish a minimum economic base for survival and subsequent democratic government was denied and frustrated by the Soviet Union.
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