Page 41 - The Making of the German Post-war Economy

14 THE MAKING OF THE GERMAN POST-WAR ECONOMY

French Military Government on the other hand was unwilling to tolerate
any German government above the district level, and delayed zonal
elections. Thus municipal elections, which formed the basis for
27
consultative assemblies in the various Länder of the French sovereign
territory, were not held until September and October 1946. The emerging
constitutions in the French occupation zone were finally approved by
popular referenda with simultaneous Landtag elections in May and
October 1947.
When US Secretary of State, James F. Byrnes requested the
consolidation of the four zones at the second Conference of Allied
Ministers of Foreign Affairs in Paris between 15 June and 12 July 1946,
precisely these abovementioned differences in approaches to returning
post-war West Germany to self-government led to major dissension
which, in turn, significantly affected German economic and political
reconstruction. As for the time being only Britain and the United States
28
agreed on the amalgamation of their two zones – the French zone of
occupation was eventually integrated on 8 April 1949 – the Anglo-
American Economic Bizone or Vereinigtes Wirtschaftsgebiet (VWG), which
included 50 per cent of German territory and 39 million people
29
corresponding to 64 per cent of the total German population at that
time, was stipulated. The relevant British-American agreement signed by
30
the Ministers of Foreign Affairs Ernest Bevin and James F. Byrnes in New
York on 2 December 1946 formed the legal framework for the Bizone,
which finally became effective on 1 January 1947. The aim of the Bevin-
31
Byrnes Agreement was to implement the economic principles of the
Potsdam Agreement in order to give Germany economic autonomy by the
end of 1949. Initially, however, the bizonal agreement was supposed to
32
foster economic rather than political cooperation in order to cope with
Germany’s pressing economic needs in 1947. According to the proposals
and provisional agreements on the part of the provincial governments in
the American and British zone of occupation, five administrative
authorities each headed by an Administrative Council were set up soon
afterwards. In order to prevent any appearance of political
33
amalgamation, the various ‘ministries’ were dispersed over the area of the
Bizone: the Administration for Food and Agriculture was set up in
Stuttgart, the Transportation Unit in Bielefeld, the Head Office of Post
and Communications in Frankfurt, the German Council of Finance – the
official labelling of the Administration of Finance – in Frankfurt and later
in Bad Homburg. The Verwaltung für Wirtschaft (VfW) (Administration for
Economics) was constituted in Minden so it could organisationally
emanate from the already existing Central Office for Economics of the
British zone. After the formal economic amalgamation of the American
34