Potsdam (pŏts´dăm), city (1994 pop. 139,262), capital of Brandenburg, E Germany, on the Havel River, near Berlin. It is an industrial center and rail junction. Manufactures include processed food, textiles, electrotechnical equipment, boats, and locomotives. The suburb of Babelsberg (incorporated into Potsdam after 1940) was known as the center of the pre–World War II German and postwar East German motion-picture industry; motion-picture studios are still there. First mentioned in the late 10th cent. and chartered in the 14th cent., Potsdam was insignificant until Elector Frederick William of Brandenburg made it a residence (1660). The city's chief development came under Frederick II of Prussia (ruled 1740–86), who made Potsdam his chief residence and who built the palace and park of Sans Souci (1745–47) and the New Palace (1763–69). Also, the Town Palace was rebuilt (c.1745; destroyed in World War II) during his reign. The royal family of Prussia (later also the imperial family of Germany) continued to favor Potsdam as a residence, and numerous palaces were added by them. Since the early 18th cent. Potsdam had stood as the symbol of Prussian militarism. Its immense parade grounds and the somewhat ponderous architecture of some of its palaces contribute to the impression, but the graceful palace and park of Sans Souci are notable exceptions. They evoke the memory of Frederick II the philosopher-king and of his cultured circle rather than that of his military achievements. During World War II, Potsdam was severely damaged, and in 1945 it was the scene of the Potsdam Conference. In addition to the numerous palaces, the city's notable structures include the Garrison Church (1731–35), where Frederick William I and Frederick II were buried until soon after World War II, when their remains were transferred to Marburg. Potsdam is the site of the observatory of the Humboldt Univ. of Berlin; the Einstein Tower, an astrophysical observatory; and part of the state archives of the German Empire.