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Page 123 should permit wherever possible the reduction of costs and the decreased consump tion of raw materials, power and fuel. To this end the High Commission should, in the absence of weighty security considerations to the contrary, permit the sub- stitution of new or more efficient equipment, the rearrangement of machinery, the introduction of new processes and other technical changes even though, taking account of the disposal of capacity replaced they may involve a minor increase in the capacity of the factory or equipment in question.
(c) In applying the provisions of paragraph (a) above, capacity shall be calcu- lated in each case on the basis of the capacity the retention of which in Germany the Occupying Powers do not disapprove, to the exclusion of equipment available for reparations in accordance with the agreements entered into by the three Governments.
2. Instructions on individual industries-
(a) Steel. The plant and equipment over which control is to be maintained in accordance with paragraph 1 (a) above shall be:----
(i) Blast furnaces.
(ii) Converters and furnaces for the production of crude steel.
(iii) Equipment for the production of ferro alloys.
(iv) Equipment for the manufacture of seamless tubes of a size greater than
90 millimetres diameter.
(v) Plate mills over three metres wide and all rolling mills capable of rolling,
on a two-shift basis, more than 400,000 tons per annum.
(vi) Forging presses over 2,000 metric tons.
Henceforward the plants and equipment removed from the reparations list under the terms of paragraph VII (b) of the Petersberg Protocol of Agreements dated 22nd November, 1949, shall only be subject to the same controls as are applicable to other steel plants in Germany.
(b) Electric arc and high-frequency furnace steel.-The High Commission should study, as a matter of urgency, the limitation on electric arc and high- frequency furnace steel capacity and should report to Governments whether any changes should be made in the light of the needs of Western defence.
(c) Shipbuilding.—(i) The equipment and facilities over which control is to be maintained in accordance with paragraph 1 (a) above shall be:
(aa) Launching slipways.
(bb) Quays and wharfs.
(cc) Shipyard workshops, including essential equipment.
(dd) Floating docks, floating dock pontoons and graving docks. (ee) Ship-repairing slipways.
(ii) The prefabrication of hull sub-assemblies of vessels shall continue to be prohibited except in the shipyard in which such vessels are to be built or except pursuant to licence issued by the Military Security Board. This provision shall not preclude the procurement from any source other than the shipyard in which the ship is to be built of stern frames, rudder posts and other equipment which may normally be obtained from any such source.
(iii) In defining the essential equipment of shipyard workshops referred to in (i) (cc) above, the Military Security Board should be instructed to draw up as short a list as possible covering only those items of equipment which, if installed, would be capable of leading to a substantial increase in the output of the workshop.
(iv) The A.G. Weser (Deschimag) Shipyard, Bremen, henceforward will be permitted to construct ships and will only be subject to the same restrictions as are applicable to other shipyards in Germany.
(d) Synthetic rubber
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The High Commission may authorise the rehabilitation of plants, including the installation of new equipment, and the utilisation of new processes. However, as long as solid fuels are in short supply the High Commission may grant licences only to the extent that the additional consumption of coal and coke necessary, for the productionpcontemplated does not affect the satisfaction of the needs of the solid7 fuel-importing countries.
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ge 124.
124.
(hasnthetic petrol, oil and lubricants, produced director indirect from coal or
brown coal
As regards synthetic oil, additions to capacity of equipment primarily designed for manufacture of synthetic oil and the use of existing capacity shall be subject to licence. As long as solid fuels are in short supply the High Commission may grant licences only to the extent that the additional consumption of coal and coke necessary for the production contemplated does not affect the satisfaction of the needs of the solid fuel-importing countries. However the three Governments interpose no objection to the granting of the applications outstanding for the use of the Bergkamen, Viktor, Scholven and Ruhroel plants as soon as this Agreement is concluded.
D.-Shipping
1. The High Commission may henceforward authorise the inclusion in merchant ships ordered by NATO countries, or, with the approval of the three Governments, by other countries, of defensive features, and necessary space and facilities therefore, which are otherwise prohibited under Article VII of the Agree- ment. These shall include but not be limited to the following:
(i) Stiffening in readiness for the mounting of defensive armament.
!
(ii) Measures to reduce the vulnerability of the ship to underwater damage which would normally be experienced only in wartime (e.g., by the. upward extension of bulkheads in the shelter deck type of ship).
(iii) Measures to protect key positions against damage which would normally
be experienced only in wartime (e.g., protection of the bridge).
(iv) Provision for adequate clear space in the super-structure of the ship to
allow for the operation of the armament.
(v) Auxiliary electrical generating machinery and equipment of capacity in
excess of that normal to the type of ship.
(vi) Degaussing cable (M. coils).
E.-Machine Tools
1. The prohibition on the manufacture except under licence of the machine tools listed in Annex B to the Agreement concerning Prohibited and Limited Industries of April 1949 is not maintained in the present Agreement, but the High. Commission's attention is drawn to the significance of these machines as war potential. A system of declaration of manufacture by the producer, in which the intended destination will be given, and of periodical reports on the quantities of such machines in Germany shall be set up, or if already in existence, maintained.
2. For this purpose, a list is attached showing the tools on which reports should be required.
3. The attention of the High Commission is drawn to the desirability of con- tinuing to use the services of the Military Security Board in connection with the effective control of the export of such machine tools to countries in the East.
4. As the new Agreement does not refer to machine tools, it is suggested that the High Commission may wish to make a public announcement concerning the reporting requirements.
LIST OF MACHINE TOOLS ON WHICH REPORTS SHOULD BE REQUIRED
1. Spiral bevel gear cutters.
2. Broaching machines of the following kinds:
(a) Continuous surface type.
(b) Reciprocating type (bar-type cutter) with cutter diameter or equivalent cross section exceeding 2 in. (51 mm.), or working stroke exceeding 5 ft. (1,524 mm.), or pull capacity exceeding 35,000 lb. (15,876 kgs.).
3. General-purpose lathes of the following kinds :-
(a) Lathes of work diameter capacity (swing-over carriage) exceeding 56 in.
... (1,422 mm.).
(b) Lathes of work diameter capacity. (swing-over carriage) of from: 36 in..
(914 mm:) to 56 in. and with distance between Page 124piece exceeding 14 ft. (4,267 mm.).
een centres (length of 1 work
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