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     It is recommend that in discussion with the
British and Russians we should adopt the policies given
below as a basis for agreed action during the period
of Allied control.
 
a) We should go along with the British and Russians
in accepting large responsibilities for the
guidance and reorientation of German economic
life. It is altogether unlikely that a "hands
off" policy would be accepted and adhered to by
all major powers. Consequently, we must be pre-
pared to take all possible steps in the initial
phases of occupation to prevent development of
a chaotically unmanageable economic situation,
since this is a prerequisite to the excercise of 
effective economic control. 
 
b) Economic disarmament should include prohibition 
of the manufacture of land and naval armament
and all types of aircraft; destruction of spe-
cialized facilities used for the manufacture of 
these items; and establishment of permanent or
semi-permanent controls to detect surreptitious
preparation for rearmament, research on new
weapons and stockpiling of key materials.
 
C) In addition, consideration should be given to
selective prohibitions during the control period
upon the manufacture of a few key industrial
items, such as syntehetic gasoline, synthetic
rubber and certain types of machine tools and
precision apparatus, and general prohibitions
or restrictions on certain categories of German
exports, particularly in the field of metals,
metal products and chemicals. Sweeping measures
of economic impairment are unnecessary if effec-
tive security organization is maintained, and
are unenforceable in the absence of such security
organization. However, the heavy industry sector
of the German economy could be substantially
contracted during a control period in ways which 
will aid the recovery and industrial development
of other European countries without crippling
Germany's capacity to meet the basic needs of
her population. Within a broad range, therefore,
the problems is largely one of judging what mea-
sures will receive the support and contribute
to the solidarity of the victors.