Madame, you have a fine dog there. He's acting about as naturally as one could expect from a GSD.
Here's what I'd do:
1) Nothing to dissuade him from alerting at this point. No punishment at all. That's what you're seeing and that's also probably what you got him for.
2) As he grows older you'll see him alert with his ears and eyes and body language before he barks or growls. At that point, teach him to vocalize only on command.
It's easiest to teach him "Easy" with a gentle tap on the leash just to get his mind focused on you again instead of on someone else. He'll get the message quite quickly that he should await your command to vocalize.
3) When you ARE in a situation where there's danger and you want to the dog to not only alert but also vocalize develop a command to get him permission to do so.
4) Learn to predict the situation and the dog's response to it before it happens. Then give a command for the dog to do what you want him to do in that situation before he even knows he's in that situation. Don't let him do the thinking and deciding. You do it.
For instance, when I see someone walking alone or someone with a leashed dog who doesn't represent a threat to us, I tell command my dog "Easy". I also, generally, pull the dog aside and make him lay and stay. He gets the idea that I'm the one who determines danger.
But when we walk by a home with a dog-chewed fence where we've been almost attacked in the past I alert him to be on alert. Some won't agree with me, but I trained Zeus to respond to a low growl issuing from my throat when there's real danger or the low vocalization of the consonants "Sq" for prey (it's work for more than just "Sq"irrels).
He's instantly on alert. No one knows I gave him a command. He learns when he should alert and when not. And, he always looks to me first to give him a heads up on how he should react.
He's become a deterrent with a capital D.
Don't dissuade the dog from alerting. Just teach him to accept direction.
It took us a year and a half. But Zeus never growls or barks without command now.
Last edited by Longfisher; 06-02-2014 at 08:14 PM.