The conditions which now exist in Germany make it impossible for industrial production to reach the levels which the occupying powers agreed were essential for a minimum German peacetime economy.

The German people were not denied, however, the possibility of improving their lot by hard work over the years. Industrial growth and progress were not denied them.

That was the principle of reparations to which President Truman agreed at Potsdam. And the United States will not agree to the taking from Germany of greater reparations than was provided by the Potsdam Agreement.

Important as economic unification is for the recovery of Germany and of Europe, the German people must recognize that the basic cause of their suffering and distress is the war which the Nazi dictatorship brought upon the world.

It is not in the interest of the German people or in the interest of world peace that Germany should become a pawn or a partner in a military struggle for power between the East and the West.

The carrying out of the Potsdam Agreement has, however, been obstructed by the failure of the Allied Control Council to take the necessary steps to enable the German economy to function as an economic unit.