REPORT OF WORKING PARTY ON MACHINE TOOL HOLDINGS

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP82-00373R000200070009-3
• Release Decision: RIFPUB
• Original Classification: S
• Document Page Count: 6
• Document Creation Date: December 15, 2016
• Document Release Date: April 2, 2003
• Sequence Number: 9
• Publication Date: April 14, 1948
• Content Type: REPORT

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a
14 A rij, 1948
S E C R E T
APPENDIX 'D' Tip
TG-C/1
ii.ZLiLi ff GOV.?dR:!ORS' COhF.iR]t NCE
REPORT G:L+' ,-V0RYdf,!G P,~RTY ON
1v1ACHIIIib TOOL ICLDINGS
Terms of Reference
Review of Machine Tool Holdings.
i. FRENCH PAPER
The French delegation estimated that the level.:.f'xxed for the
German economy allowed a surplus for the Western Zones of between 300,000
and 400,000 machine tools. It considered that this surplus of marine
tools would find more useful employment in those countries entitled to
reparations or participating in the Marshall Plan, than in Germany where;
it was likely to remain unused for a long time.
The technical considerations on which the French thesis was based
were submitted to the U.S. and British delegations. The essential
points are set out in Appendix A attached.
ii. BRITISH C01,1MENT
1. The British representatives are unable to accept the French
paper's calculations relating to the British Zone. Even approximate
accuracy in such calculations is impossible and reconciliation and
comparisons of various estimates is difficult since all calculations are
based on hypothesis and even statistical records vary as to the definition
of Machine Tools on which they are based.
2. So far as the British Zone is concerned the following sumiarizcs
the position: -
Present Holdings - based on census
(usable metal working DVT) 668,000
Removals effected or planned for
Reparations and Restitutions 117,000
Balance 551 ,000
,Holdings 1936 527,000 (Compared with
French estimate
385,000)
Apparent surplus over 1936
24,000
3. It should, however, be pointed out that some 190,000 of the
present Holdings (668,000) are usable only after repair - for which thu
French calculations make no allowance.
4. It is noted that the French paper takes as one of the bases of
calculation that production should be 116}0 of 1936. If this be applied
to the British estimates, it would justify the retention in the. British
Zone of 611,000 Machine Tools (116% of 527,000) instead of 551 ,000.
OSD REVIEW COMPLETED. NO
OBJECTION TO
DECLASSIFICATION AND
RELEASE
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114 April, 1948
,' ET;DIX 'D' TO
MGC F 48M16~
5. It is observed that the French estimate of Holdings necessary
for the planned level 'of industry in the Western Zones is 700,000.'
The British estimate could put this at 800,000 of which something
more than half would be in the British Zone. This difference is in
part accounted for by the foot that the French paper assumes a "post-
war" working factor of 711 as compared with a working factor of 61~ in
1936 and thus comes to the conclusion that the same machine tool
population as in 1936 can produce at 116J of the; 1936 production level.
6. On the publication of the British Zone Reparations List in
October 1947, the British Military Governor declared that apart frori
the prohibited industries, the list was final and that no individual
machine tools other than those already requisitioned would be taken
for reparations from plants not on the Reparations List.,
iii. 1 1RIC0 COMMENT
We, have reviewed the "note on machine tools" and the-add tion -1
statistical analysis submitted by the French representatives. We find
that the statistical treatment is not adequate to support the conclusion
that there is a surplus of machine tools in the U. S. Zone. The
statistical treatment in the French paper is essentially a deductive and
hypothetical adjustment of census data of earlier years based on
assumptions with regard to the efficiency of utilization. The factors
that have reduced the number of upuratiye machine t cols have n,t been
given sufficient weight. These factors include the geographical move-
ment of machine tools, bomb damage, removals as reparations and
restitution.
A determination justifying the removal of additional equipment
beyond the Bizonal Level of Industry of August 1947 would require a
machine tool census including.; an evaluation of damaged and inoperative
tools. The cost of such a survey is quite definitely beyond our me:.ns
in time and personnel. On the basis of cur. experience , we are of the
opinion that, taking into -account dam age and efficiency of utilization,
such a survey would show that the existing park of machine tools in
the U. S. Zone is no larger than required to support the agreed level of
industry. The statistics presented by the French representatives are
regarded as too hypothetical to warrant revision of present reparations
list.
In order t6 e.nc >ur.a.gu the.Gurmans..to. increase production under
the Bizenal Level of industry and to make a reel contribution to
European recovery, it has been announced that the published list of
plants to be removed As reparations would not be further increased.
z1r. FRI CH F JOI a;DER
The French :delegation c_.nsiders that the figures produced by
the British delegation do not invalidate the estimates of the French
paper taking into account the different definitions used and that
further study would enable the vari ~us estimates to be modified V
accord with a uniform definition ands that this would largely eliminate
the differences between the British and French figures. It considers
that study should be continued with view to establishing present
holdings in Western Germany for the purpose of control of industrial
production as well as possible redistribution of the holdings.
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SE CRL T
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La- April 1948 on0tzhT npendic yo to
MGC P 48)1
NIIL I'TA RY G0 Vh A N O AS' U OAF: RE iy CE
VVORKIi~is PARTY Cuv nduhIAL TOOL HOIDLNGS
French Memorandum on Machine Tools
ECOivOMIC POTS TI
The study of production capacities in the engineering In l.ustry was
made on the basis of the turnover figures of the plants. This method.
presents serious disadvantages, especially as regards the following
points:
1) The turnover figure is not a perfect indication of actual
capacity; the same equipment in the same plant can give
varying figures of turnover depending on the nature of
the products and the productive yield of the material.
2) No allowance is made for sub-contracting; two plants,
one merely assembling parts delivered by sub-contractors
and the other doing its own machining produce the same
turnover with quite different equipment.
Moreover, no account has begin taken in the studies of a large number
of. plants, and entire branches in the unrestricted industries. Those
installations possess important machine equipment having considerable
influence on the economic and military potential.
Though the study of the turnover nay furnish useful ilzformetionn :i.ri
regard to the standard of living the industrial revenue and the balance
of economy it is "16u true th_.at it does not give a precise idea of the
industrial and military potential.
On the contrary a for more aceurats estimate of this potential is
given by the amount of the stock of machine-tools. In the preparation
of their armaments programme a summary inventory was made by the Germans
in March 1935 and a complete one in May 1938. The U.S. work on
Japanese post-war requirements C! based on the same factors.
A study of the 'German machine tool stock constitutes, in our view,
the essential factor for the examination of German economic possibilities
and permits a chuck as to how f--.r the level of industry laid down for
Germany is correctly realised.
PRI~bEIVT STOCKS IN G. RMhNY
From the German statistics which have been used in our study, we have
eliminated w.ood.-working machines as being of secondary importance. Our
study is concerned only with machines for removing or forming metal and
excludes also certain accessory types which are not considered as machine
tools within the definition current in other countries.
s UA' T
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14 April 1948
SEC R E T
ldIGfC P 4b) 1
According to our study the numerical results are as follows:-
French
Zone
US UK Zone
Total for
West Zone
Total for
Germany
(excluding
Berlin)
End 1931~/ )
beginning 1935)
58,000
562,000
620,000
1,010,000
End 1936
65,000
645,000
710,000
1,150,000
May 1938
75,000
750,000
825,000
1,337,000
End 1938
80,000
795,000
875,000
1,426,000
End of hostilities
130,000
1,170,000
1,300,000
2,150,000
These latter --gures appear to tally reasonably well with the known
results of the inventories in the different zones, and even appear
to be an under-estimate.
The following graphs are annexed:
Annex I (c)
---
Breakdown of holdings
Annex I (d)
---
Age of holdings
Annex II (b) ---
Production per machine tool
Annex II (c) ---
Turnover by industrial groups
(NOTE:- One copy of each of the graph? is available to each Military Govun or).
According to German studios on the Machinenbau, the output of the
stock was rather low in 1936 - round about 65/; it rose to 90/ in.1~938, which
is confirmed by the fact that the turnover increased more rapidly than thy.
stock.
The war effort led to a considerable increase in the stock and to a
still more considerable increase in manpower employed. In 1936 and 1938 the
average number of workers per machine shows that single shift working van
the rule, whereas during hostilities double shift working was frequent,
STOCK NECESSARY FOR GERMOY
We will ignore thu eastern zone, and assume for the western zones the
production figuree called for by the US/UK Zone plan for the level of
industry, or the replies to the Marshall questionnaire.
In the restricted mechanical and Eloctro-technical industries thin
plan calls for a working capacity equivalent to 1-16'/10 of that of 1936.
In many of the non-restricted industries of the same branch, as well
as in the consa er goods industries which utilize a large proportion of
machine-tools, the Allied papers call for a production lower than that
of 1936, either on account of an aduquate supply of steel, or through
shortage of labour, or for other reasons. These figures correspond to the
data which served as the basis for the working oo:`, of the Marshall Plan.
Nevertheloss, in order to leave a margin for development we will a.-roe that
these industries will have to be able to achieve a production compexablo
to that of the restricted industries, and we will assume as a basis a
general production figure equivalent, to 116 of that of 1936.
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14th April,, 1948
.APPENDIX ' D I TO
ryp (1816
S E C R E T
On the other hand, the Working factor of 65% in 1936 is very low, and
should be replaced by a more normal factor of 75%.
This'shows that a stock of machine-tools appreciably equal to that of
19360 namely 700,000 machines for the western zones, will enable thQ
estimated production. to be achieved.
By comparison with the figure of 1,300,000 at the cessation of
hostilities, this would make it possible to remove a total of 6000000
machines from Western Germany.
Allowing for the removals already made and those which remain,to bo.
made according to the bizonal and French lists, the number of machines
to be made available for reparations would be as follows:--
War Plants according to list
60,000
Bizonal list (other plants)
60,000
French list (other plants)
15,000
Removal of isolated machines for IARA and
declarations at Moscow
50,000
Total
185,000
Even allowing for possible errors, the number certainly remains below
200,000. There would therefore remain in Western Germany a surplus of
400,000 machines in excess of its requirements.
Even if a utilization cm-efficient equal to that, of 1936, i.e. 65% is
accepted for the. future, there would still remain a surplus of 300,000
machine tools.
Against this, if one accepts for the non-restricted industries the
activity specified in the U.S. and British papers, one comes back to the
figure of 400, 000.
POSSIBILITY OF UTILIZATION
In the coming years, it will be impossible to make rational use of
the Gennan stock. Neither manpower nor transport can provide for the
normal requirements of a stock of 700,000 to 800,000 machines..
The actual figures of the report for the plan of European co-operation
show that from 1948 to 1958, the development of steel production will be
gradual and that in, the first years, its use will be very restricted.
During the whole of this period, utilization of the above-mentioned stock
will be very poor and even when normal activity is attained utilization
will still be mediocre.
Henee, the 300,000 or )+00,000 surplus machines will remain absolutely
unused.
On the other hand, the countries invaded by Geszrkm- y now have very
inadequate equipment. Spoliations have deprived them of a large number{of
machines. For 8 years they have been unable to renew their stock and
have not received any supplies of new machines, while Germany during
hostilities increased her stock by her manufacture of machines and thus
possesses an equipment the average age of which is low, in any case
incomparably lower than that of the invaded countries.
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S E C R E T
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1L1.th April, 191+-8
APPENDIX 'D' TO
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,GC 1148
At a time when the USA is obliged to help Europe by large contributions
of equipment and goods, it seems extraordinary to leave a large amount of,
equipment unused in Germany when the invaded and despoiled countries could
make excellent use of it immediately and make a larger contribution to the
recovery of Europe, as General Clay himself explained in recent statements.
One must in fact remember that the transfer of isolated machines is a spec
operation which could easily be carried out. Machines of current series
could be set up and re -employed in the places to which they were sent
in an extremely short space of time. Moreover, while the removal of
plants raises more or less difficult economic and social problems, the
removal of machines raises no question of this kind. Furthermore, the
current production of machine tools. in Germany will put a certain number
of machines on the market: a portion could remain in Germany, but lar
portion could be put at the disposal of the invaded and despoiled countrie
either as reparations or as deliveries under the European Recovery Plan.
S E C RE T
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