The founding of the German Democratic Republic (GDR) in October 1949 came as no surprise to the administration of President Harry S. Truman. The resolution adopted at Potsdam to set up centralized institutions in Germany had come to nothing; in summer 1947 the Russians had created the German Economic Commission in their zone, a body that wielded quasi-governmental powers in many areas; and at the Six Power conference in London in 1948, the Western Allies had resolved to create a West German state. In light of these developments, the American government fully expected the creation of a new state in the eastern part of Germany. Unclear, however, were Soviet dictator Joseph Stalin's objectives in choosing to establish a German government in the Soviet occupation zone. Whereas some observers within the American military government interpreted the founding of the GDR as the start of a radical transformation of the Soviet zone into a “German people's republic,” there were others who warned that Stalin was still pursuing ambitions for Germany as a whole, that his sights were still set on the Western occupation zones with their greater economic value, and that he would use the new GDR merely as a pawn in future negotiations on German unity. The greatest fear of the American government was that Moscow might manage to establish a noncommunist yet pro-Moscow government with aspirations for all of Germany that would extend Soviet influence to encompass the entire country.