Morgenthau Plan

Political borders of post-World War II Germany (1949). West Germany is shown in blue, East Germany is shown in red, the Saar Protectorate under French economic control is shown in green. The Ruhr Area, the industrial engine of West Germany, is shown in brown as it was under the control of the International Authority for the Ruhr. Pre-war German territory east of the Oder-Neisse line is shown in gray, as it was assigned/annexed to Poland and the Soviet Union. West Berlin is shown in yellow as it was formally under occupation by the Allies until 1990.

The Morgenthau Plan (German: Morgenthau-Plan; pronounced [ˈmɔʁgəntaʊ ˌpla:n]), first proposed by United States Secretary of the Treasury Henry Morgenthau, Jr. in a memorandum entitled Suggested Post-Surrender Program for Germany, advocated that the Allied occupation of Germany following World War II include measures to eliminate Germany's ability to wage war by eliminating its armament industry, and the removal or destruction of other key industries basic to military strength. This included the removal or destruction of all industrial plants and equipment in the Ruhr.^[1]

In occupied Germany, the thinking behind the Morgenthau plan was at first reflected in the U.S. occupation directive JCS 1067^[2][3] and in the Allied Industrial plans for Germany aimed at "industrial disarmament".^[3] Compared with the Morgenthau Plan, however, JCS 1067 contained a number of deliberate "loopholes", limiting any action to short-term military measures and preventing large-scale destruction of mines and industrial plants, giving wide-ranging discretion to the military governor and Morgenthau's opponents at the War Department.^[4][5] In 1947, JCS 1067 was replaced by JCS 1779, which aimed at restoring a "stable and productive Germany" and was soon followed by the Marshall Plan.^[4][6]

Morgenthau's memorandum

Morgenthau "Germany is our problem"

The original memorandum, written sometime between January and early September 1944, signed by Morgenthau, and headed "Suggested Post-Surrender Program for Germany" is preserved at the Franklin D. Roosevelt Presidential Library and Museum. The text, and a facsimile image, can be viewed online.^[7]

The main provisions can be summarized as follows:

"1. Demilitarization of Germany. 

It should be the aim of the Allied Forces to accomplish the complete demilitarization of Germany in the shortest possible period of time after surrender. This means completely disarming the German Army and people (including the removal or destruction of all war material), the total destruction of the whole German armament industry, and the removal or destruction of other key industries which are basic to military strength.

2. Partitioning of Germany. 

(a) Poland should get that part of East Prussia which doesn't go to the USSR and the southern portion of Silesia as indicated on the attached map, (Appendix A).

(b) France should get the Saar and the adjacent territories bounded by the Rhine and the Moselle rivers.

(c) As indicated in part 3 an International zone should be created containing the Ruhr and the surrounding industrial areas.

(d) The remaining portion of Germany should be divided into two autonomous, independent states, (1) a South German state comprising Bavaria, Württemberg, Baden and some smaller areas and (2) a North German state comprising a large part of the old state of Prussia, Saxony, Thuringia and several smaller states.

There shall be a custom union between the new South German state and Austria, which will be restored to her pre-1938 political borders.

3. The Ruhr Area. 

(The Ruhr, surrounding industrial areas, as shown on the attached map, including the Rhineland, the Kiel Canal, and all German territory north of the Kiel Canal.)

Here lies the heart of German industrial power, the cauldron of wars. This area should not only be stripped of all presently existing industries but so weakened and controlled that it can not in the foreseeable future become an industrial area. The following steps will accomplish this:

(a) Within a short period, if possible not longer than 6 months after the cessation of hostilities, all industrial plants and equipment not destroyed by military action shall either be completely dismantled and removed from the area or completely destroyed. All equipment shall be removed from the mines and the mines shall be thoroughly wrecked.

It is anticipated that the stripping of this area would be accomplished in three stages:

(i) The military forces immediately upon entry into the area shall destroy all plants and equipment which cannot be removed.

(ii) Removal of plants and equipment by members of the United Nations as restitution and reparation (Paragraph 4).

(iii) All plants and equipment not removed within a stated period of time, say 6 months, will be completely destroyed or reduced to scrap and allocated to the United Nations.

(b) All people within the area should be made to understand that this area will not again be allowed to become an industrial area. Accordingly, all people and their families within the area having special skills or technical training should be encouraged to migrate permanently from the area and should be as widely dispersed as possible.

(c) The area should be made an international zone to be governed by an international security organization to be established by the United Nations. In governing the area the international organization should be guided by policies designed to further the above stated objectives.

4. Restitution and Reparation. 

Reparations, in the form of recurrent payments and deliveries, should not be demanded. Restitution and reparation shall be effected by the transfer of existing German resources and territories, e.g.

(a) by restitution of property looted by the Germans in territories occupied by them;

(b) by transfer of German territory and German private rights in industrial property situated in such territory to invaded countries and the international organization under the program of partition;

(c) by the removal and distribution among devastated countries of industrial plants and equipment situated within the International Zone and the North and South German states delimited in the section on partition;

(d) by forced German labor outside Germany; and

(e) by confiscation of all German assets of any character whatsoever outside of Germany."

The Second Quebec Conference (September 1944)

At the Second Quebec Conference, a high-level military conference held in Quebec City, September 12–16, 1944, the British and United States governments, represented by Winston Churchill and Franklin D. Roosevelt, respectively, reached agreement on a number of matters, including a plan for Germany, based on Morgenthau's original proposal. The memorandum drafted by Churchill provided for "eliminating the warmaking industries in the Ruhr and the Saar... looking forward to converting Germany into a country primarily agricultural and pastoral in its character." However, it no longer included a plan to partition the country into several independent states.^[8]

This memorandum is also referred to as the Morgenthau plan.^[9]

Roosevelt's support for the plan

Secretary of the Treasury Henry J. Morgenthau Jr. convinced Roosevelt to write to Secretary of State Cordell Hull and Secretary of War Henry L. Stimson saying that a US occupation policy which anticipated that "Germany is to be restored just as much as the Netherlands or Belgium" was excessively lenient. A better policy would have the Germans "fed three times a day with soup from Army soup kitchens" so "they will remember that experience the rest of their lives."^[10] Morgenthau was the only Cabinet member invited to participate in the Quebec Conference during which the Plan was agreed to.

Roosevelt's motivations for agreeing to Morgenthau's proposal may be attributed to his desire to be on good terms with Joseph Stalin and to a personal conviction that Germany must be treated harshly. In an August 26, 1944 letter to Queen Wilhelmina of the Netherlands, Roosevelt wrote that "There are two schools of thought, those who would be altruistic in regard to the Germans, hoping by loving kindness to make them Christians again — and those who would adopt a much 'tougher' attitude. Most decidedly I belong to the latter school, for though I am not bloodthirsty, I want the Germans to know that this time at least they have definitely lost the war."^[11]

Secretary of State Hull was outraged by Morgenthau's "inconceivable intrusion" into foreign policy. Hull told Roosevelt that the plan would inspire last-ditch resistance and cost thousands of American lives. Hull was so upset over the plan that he suffered from insomnia and eating problems and was hospitalized.^[12] He later resigned for health reasons,^[13] though there were anecdotal reports that his resignation was brought about by "the Morgenthau business".^[12]

Churchill's support for the plan

Churchill was not inclined to support the proposal, saying "England would be chained to a dead body." Roosevelt reminded Churchill of Stalin's comments at the Tehran Conference, and asked "Are you going to let Germany produce modern metal furniture? The manufacture of metal furniture can be quickly turned in the manufacture of armament."^[14] The meeting broke up on Churchill's disagreement but Roosevelt suggested that Morgenthau and White continue to discuss with Lord Cherwell, Churchill's personal assistant.

Lord Cherwell has been described as having "an almost pathological hatred for Nazi Germany, and an almost medieval desire for revenge was a part of his character".^[15] Morgenthau is quoted as saying to his staff that "I can't overemphasize how helpful Lord Cherwell was because he could advise how to handle Churchill".^[16] In any case, Cherwell was able to persuade Churchill to change his mind. Churchill later said that "At first I was violently opposed to the idea. But the President and Mr. Morgenthau — from whom we had much to ask — were so insistent that in the end we agreed to consider it".^[17]

Some have read into the clause "from whom we had much to ask" that Churchill was bought off, and note a September 15 memo from Roosevelt to Hull stating that "Morgenthau has presented at Quebec, in conjunction with his plan for Germany, a proposal of credits to Britain totalling six and half billion dollars." Hull's comment on this was that "this might suggest to some the quid pro quo with which the Secretary of the Treasury was able to get Mr. Churchill's adherence to his cataclysmic plan for Germany".^[18]

At Quebec White made sure that Lord Cherwell understood that economic aid to Britain was dependent on British approval of the plan. During the signing of the plan, which coincided with the signing of a loan agreement, President Roosevelt proposed that they sign the plan first. This prompted Churchill to exclaim: "What do you want me to do? Get on my hind legs and beg like Fala?"^[19]

Rejection of the plan

Anthony Eden expressed his strong opposition to the plan and, with the support of some others, was able to get the Morgenthau Plan set aside in Britain. In the U.S., Hull argued that nothing would be left to Germany but land, and only 60% of the Germans could live off the land, meaning 40% of the population would die.^[20] Stimson expressed his opposition even more forcefully to Roosevelt. According to Stimson, the President said that he just wanted to help Britain get a share of the Ruhr and denied that he intended to fully deindustrialize Germany. Stimson replied, "Mr. President, I don't like you to dissemble to me" and read back to Roosevelt what he had signed. Struck by this, Roosevelt said he had "no idea how he could have initialed this".^[21] The theory that Roosevelt was not truly rejecting the plan is supported by Eleanor Roosevelt, who stated that she never heard him disagree with the basics of the plan, and who believed that "the repercussions brought about by the press stories made him feel that it was wise to abandon any final solution at that time", but other sources suggest that Roosevelt "had not realized the devastating nature of the program he had initialed".^[22]

On 10 May 1945 President Truman approved JCS (Joint Chiefs of Staff policy) 1067 which directed the U.S. forces of occupation in Germany to "...take no steps looking toward the economic rehabilitation of Germany [nor steps] designed to maintain or strengthen the German economy".The net effect was that Germany wasn't allowed to realistically produce goods for export in order to purchase food;^{[23][24][25][26][27]} It took two years (1945 to 1947) of death and disease, and fears that starving Germans might "go Communist" before U.S. Secretary of State James F. Byrnes made his Stuttgart speech.^[28] Byrnes had agreed at Potsdam in July 1945 to "temporarily assign" an area of southern Silesia to "Polish Administration" which was more than the Poles and Soviets had expected to be agreed to. The British were not happy with Mr. Byrnes's maneuver.^[29]

Dismantling of West German industry ended in 1951, but "industrial disarmament" lingered in restrictions on actual German steel production, and production capacity, as well as on restriction on key industries. All remaining restrictions were rescinded on May 5, 1955. "The last act of the Morgenthau drama occurred on that date or when the Saar Protectorate was returned to Germany."^[3]

Wartime consequences

Drew Pearson publicized the plan on September 21, although Pearson himself was sympathetic to it. More critical stories in the New York Times and The Wall Street Journal quickly followed. Joseph Goebbels used the Morgenthau Plan in his propaganda. Goebbels said that "The Jew Morgenthau" wanted to make Germany into a giant potato patch. The headline of the Völkischer Beobachter stated, “Roosevelt and Churchill Agree to Jewish Murder Plan!"^[30]

The Washington Post urged a stop to helping Dr. Goebbels: if the Germans suspect that nothing but complete destruction lies ahead, then they will fight on.^[31] The Republican presidential candidate Thomas Dewey complained in his campaign that the Germans had been terrified by the plan into fanatical resistance, "Now they are fighting with the frenzy of despair."^[32]

General George Marshall complained to Morgenthau that German resistance had strengthened.^[33] Hoping to get Morgenthau to relent on his plan for Germany, President Roosevelt's son-in-law Lt. Colonel John Boettiger who worked in the War Department explained to Morgenthau how the American troops who had had to fight for five weeks against fierce German resistance to capture the city of Aachen had complained to him that the Morgenthau Plan was "worth thirty divisions to the Germans." Morgenthau refused to relent.^[34]

On December 11, OSS operative William Donovan sent Roosevelt a telegraph message from Bern, warning him of the consequences that the knowledge of the Morgenthau plan had had on German resistance; by showing them that the enemy planned the enslavement of Germany it had welded together ordinary Germans and the regime; the Germans continue to fight because they are convinced that defeat will bring nothing but oppression and exploitation.^[35] The message was a translation of a recent article in the Neue Zürcher Zeitung.

So far, the Allies have not offered the opposition any serious encouragement. On the contrary, they have again and again welded together the people and the Nazis by statements published, either out of indifference or with a purpose. To take a recent example, the Morgenthau plan gave Dr. Goebbels the best possible chance. He was able to prove to his countrymen, in black and white, that the enemy planned the enslavement of Germany. The conviction that Germany had nothing to expect from defeat but oppression and exploitation still prevails, and that accounts for the fact that the Germans continue to fight. It is not a question of a regime, but of the homeland itself, and to save that, every German is bound to obey the call, whether he be Nazi or member of the opposition.^[36]

Influence on policy

Following the negative public reaction to the publishing of the Morgenthau plan President Roosevelt disowned it, saying "About this pastoral, agricultural Germany, that is just nonsense. I have not approved anything like that. I am sure I have not. . . . I have no recollection of this at all."^[37] The president died before the end of the war, and the plan never took effect.

In January 1946 the Allied Control Council set the foundation of the future German economy by putting a cap on German steel production, the maximum allowed was set at about 25% of the prewar production level.^[38] Steel plants thus made redundant were dismantled.

Also as a consequence of the Potsdam conference, the occupation forces of all nations were obliged to ensure that German standards of living could not exceed the average level of European neighbors with which it had been at war, France in particular. Germany was to be reduced to the standard of life it had known in 1932..^[39] The first "level of industry" plan, signed in 1946, stated that German heavy industry was to be lowered to 50% of its 1938 levels by the closing of 1,500 manufacturing plants^[40]

The problems brought on by the execution of these types of policies were eventually apparent to most U.S. officials in Germany. Germany had long been the industrial giant of Europe, and its poverty held back the general European recovery.^[41][42] The continued scarcity in Germany also led to considerable expenses for the occupying powers, which were obligated to try to make up the most important shortfalls through the GARIOA program (Government and Relief in Occupied Areas). In view of the continued poverty and famine in Europe, and with the onset of the Cold War which made it important not to lose all of Germany to the communists, it was apparent by 1947 that a change of policy was required.

The change was heralded by Restatement of Policy on Germany, a famous speech by James F. Byrnes, then United States Secretary of State, held in Stuttgart on September 6, 1946. Also known as the "Speech of hope" it set the tone of future US policy as it repudiated the Morgenthau Plan economic policies and with its message of change to a policy of economic reconstruction gave the Germans hope for the future. Herbert Hoover's situation reports from 1947, and "A Report on Germany" also served to help change occupation policy. The Western powers' worst fear by now was that the poverty and hunger would drive the Germans to Communism. General Lucius Clay stated "There is no choice between being a communist on 1,500 calories a day and a believer in democracy on a thousand."

After lobbying by the Joint Chiefs of Staff, and Generals Clay and Marshall, the Truman administration realized that economic recovery in Europe could not go forward without the reconstruction of the German industrial base on which it had previously been dependent.^[43] In July 1947, President Harry S. Truman rescinded on "national security grounds"^[43] the punitive JCS 1067, which had directed the US forces of occupation in Germany to "take no steps looking toward the economic rehabilitation of Germany." It was replaced by JCS 1779, which instead stressed that "[a]n orderly, prosperous Europe requires the economic contributions of a stable and productive Germany."^[44]

The most notable example of this change of policy was a plan established by U.S. Secretary of State George Marshall, the "European Recovery Program", better known as the Marshall Plan, which in the form of loans instead of the free aid received by other recipients was extended to also include West Germany.

The Marshall Plan ... is not a philanthropic enterprise ... It is based on our views of the requirements of American security ... This is the only peaceful avenue now open to us which may answer the communist challenge to our way of life and our national security." (Allen W. Dulles, The Marshall Plan) ^[45]

JCS 1067

A Handbook for Military Government in Germany was ready in August 1944: it advocated a quick restoration of normal life for the German people and reconstruction of Germany. Henry Morgenthau, Jr. brought it to the attention of President Franklin D. Roosevelt who, after reading it, rejected it with the words:

Too many people here and in England hold the view that the German people as a whole are not responsible for what has taken place – that only a few Nazis are responsible. That unfortunately is not based on fact. The German people must have it driven home to them that the whole nation has been engaged in a lawless conspiracy against the decencies of modern civilization.

Wikisource has original text related to this article: JCS 1067

A new document was drafted, the Joint Chiefs of Staff directive 1067 (JCS 1067). Here the US military government of occupation in Germany was ordered to "...take no steps looking toward the economic rehabilitation of Germany [or] designed to maintain or strengthen the German economy" and it was also ordered that starvation, disease and civil unrest were to be kept below such levels where they would pose a danger to the troops of occupation.

The directive was formally issued to Eisenhower in the spring of 1945, and it applied only to the US zone (although attempts had been made to get the other Allies to accept it). The occupation directive remained secret until October 17, 1945. It was made known to the public two months after the US had succeeded in incorporating much of it into the Potsdam Agreement.^[46]

On May 10, 1945 Truman signed the JCS 1067.^[47] Ignoring the amendments to JCS 1067 that had been inserted by McCloy of the War Department, Morgenthau told his staff that it was a big day for the Treasury, and that he hoped that "someone doesn't recognize it as the Morgenthau Plan."^[2]

In occupied Germany Morgenthau left a direct legacy through what in OMGUS commonly were called "Morgenthau boys". These were U.S. Treasury officials whom Dwight D. Eisenhower had "loaned" in to the Army of occupation. These people ensured that the JCS 1067 was interpreted as strictly as possible. They were most active in the first crucial months of the occupation, but continued their activities for almost two years following the resignation of Morgenthau in mid-1945 and some time later also of their leader Colonel Bernard Bernstein, who was "the repository of the Morgenthau spirit in the army of occupation".^[48]

Morgenthau had been able to wield considerable influence over Joint Chiefs of Staff Directive 1067. JCS 1067 was a basis for U.S. occupation policy until July 1947, and like the Morgenthau Plan, was intended to reduce German living standards. The production of oil, rubber, merchant ships, and aircraft were prohibited. Occupation forces were not to assist with economic development apart from the agricultural sector.

In his 1950 book Decision in Germany, Clay wrote, "It seemed obvious to us even then that Germany would starve unless it could produce for export and that immediate steps would have to be taken to revive industrial production".^[49] Lewis Douglas, chief adviser to General Lucius Clay, U.S. High Commissioner, denounced JCS Directive 1067 saying, "This thing was assembled by economic idiots. It makes no sense to forbid the most skilled workers in Europe from producing as much as they can in a continent that is desperately short of everything" ^[50] Douglas went to Washington in the hopes of having the directive revised but was unable to do so.

In July 1947 JCS 1067, which had directed the U.S. forces of occupation in Germany to "...take no steps looking toward the economic rehabilitation of Germany [or] designed to maintain or strengthen the German economy", was replaced by JCS 1779 which instead stated that "An orderly, prosperous Europe requires the economic contributions of a stable and productive Germany."^[44]

It took over two months for General Clay to overcome continued resistance to the new directive JCS 1779, but on July 10, 1947, it was approved at a meeting of the SWNCC (State-War-Navy Coordinating Committee). The final version of the document "was purged of the most important elements of the Morgenthau plan."^[51]

In view of increased concerns by General Lucius D. Clay and the Joint Chiefs of Staff over communist influence in Germany, as well as of the failure of the rest of the European economy to recover without the German industrial base on which it was dependent, in the summer of 1947, Secretary of State George Marshall, citing "national security grounds," was able to convince President Harry S. Truman to remove JCS 1067, and replace it with JCS 1779.^[43] JCS 1067 had then been in effect for over two years.

The "Morgenthau boys" resigned en masse when the JCS 1779 was approved, but before they went, the Morgenthau followers in the decartelization division of OMGUS accomplished one last task in the spring of 1947: the destruction of the old German banking system.^[52] By breaking the relationships between German banks, they cut off the flow of credit between them, limiting them to short-term financing only, thus preventing the rehabilitation of German industry and with immediate adverse effects on the economy in the U.S. occupation zone.^[52]

With the change of occupation policy, most significantly thanks to the currency reform of 1948, Germany eventually made an impressive recovery, later known as the Wirtschaftswunder ("economic miracle").

Implementation

The Morgenthau Plan, in the sense of the plan drafted by Morgenthau or the plan initialled by Roosevelt, was never implemented.^[53] Germany was not made "primarily agricultural and pastoral in its character".^[22] However, some commentators, such as Gareau, extend the term to mean "any postwar program designed to effect and preserve German disarmament by significantly reducing German industrial might".^[9] JCS-1067, the April 1945 "Directive to Commander-in-Chief of United States Forces of Occupation Regarding the Military Government of Germany" specified the Allied objective as being "to prevent Germany from ever again becoming a threat to the peace of the world", including, as an essential step, "the industrial disarmament and demilitarization of Germany".^[54]

Plans for German industry

No new locomotives were to be built until 1949, most industries were to have their production halved. Automobile production was to be set at 10% of its [pre-war] 1936 level, etc.^[55]

On February 2, 1946, a dispatch from Berlin reported:

Some progress has been made in converting Germany to an agricultural and light industry economy, said Brigadier General William H. Draper, Jr., chief of the American Economics Division, who emphasized that there was general agreement on that plan.

He explained that Germany’s future industrial and economic pattern was being drawn for a population of 66,500,000. On that basis, he said, the nation will need large imports of food and raw materials to maintain a minimum standard of living. General agreement, he continued, had been reached on the types of German exports — coal, coke, electrical equipment, leather goods, beer, wines, spirits, toys, musical instruments, textiles and apparel — to take the place of the heavy industrial products which formed most of Germany's pre-war exports.^[56]

By February 28, 1947 it was estimated that 4,160,000 German former prisoners of war, by General Dwight D. Eisenhower relabeled as Disarmed Enemy Forces in order to negate the Geneva Convention, were used as forced labor by the various Allied countries to work in camps outside Germany: 3,000,000 in Russia, 750,000 in France, 400,000 in Britain and 10,000 in Belgium.^[57] Meanwhile, in Germany large parts of the population were starving^[57] at a time when according to a study done by former U.S. President Herbert Hoover the nutritional condition in countries that in Western Europe was nearly pre-war normal".^[57] German prisoners engaged in dangerous tasks, such as clearing mine fields.^[58]

In Germany shortage of food was an acute problem, according to Alan S. Milward in 1946–47 the average kilocalorie intake per day was only 1,080, an amount insufficient for long-term health.^[59] Other sources state that the kilocalorie intake in those years varied between as low as 1,000 and 1,500. William Clayton reported to Washington that "millions of people are slowly starving."^[60]

All armaments plants, including some that could have been converted to civilian operation, were dismantled or destroyed. A large proportion of operational civilian plants were dismantled and transported to the victorious nations, mainly France and Russia.

In addition to the above courses of action, there have been general policies of destruction or limitation of possible peaceful productivity under the headings of "pastoral state" and "war potential." The original of these policies apparently expressed on September 15, 1944, at Quebec, aimed at:

"converting Germany into a country principally agricultural and pastoral,"

and included,

"the industries of the Ruhr and the Saar would therefore be put out of action, closed down..."^[61]

Early U.S. plans for "industrial disarmament" included detaching the Saarland and the Ruhr from Germany in order to remove much of the remaining industrial potential.^[62]

As late as March 1947 there were still active plans to let France annex the Ruhr.^[63]

The Ruhr — The Times' article and editorial on the breach in the U.S. ranks on the subject of the Ruhr were accurate, and the latter excellent. I have been disturbed over the arena in which the debate has been carried out. Clay and Draper claim that Germany will go communist shortly after any proposal to infringe on its sovereignty over the Ruhr is carried out".^[64]

The Saar Protectorate, another important source of coal and industry for Germany, was likewise to be lost by the Germans. It was cut out from Germany and its resources put under French control. In 1955, the French, under pressure from West Germany and her newfound allies, held a plebiscite in the Saar Protectorate on the question of reunification or independence. Reunification won overwhelmingly, and on January 1, 1957, it rejoined West Germany as the Saarland.

As Germany was allowed neither airplane production nor any shipbuilding capacity to supply a merchant navy, all facilities of this type were destroyed over a period of several years. A typical example of this activity by the allies was the Blohm & Voss shipyard in Hamburg, where explosive demolition was still taking place as late as 1949. Everything that could not be dismantled was blown up or otherwise destroyed. A small-scale attempt to revive the company in 1948 ended with the owners and a number of employees being thrown in jail by the British. It was not until 1953 that the situation gradually started to improve for the Blohm & Voss, thanks in part to repeated pleas by German Chancellor Konrad Adenauer to the Allied High Commissioners.^[65]

Timber exports from the U.S. occupation zone were particularly heavy. Sources in the U.S. government stated that the purpose of this was the "ultimate destruction of the war potential of German forests."^[66] As a consequence of the practiced clear-felling, extensive deforestation resulted which could "be replaced only by long forestry development over perhaps a century.".^[67][68][69]

Over a period of years, American policy slowly changed away from this policy of "industrial disarmament". The first and main turning point was the speech "Restatement of Policy on Germany" held in Stuttgart by the United States Secretary of State James F. Byrnes on September 6, 1946.

Reports such as this by former U.S. President Herbert Hoover, dated March 1947, also argued for a change of policy, among other things through speaking frankly of the expected consequences.

There are several illusions in all this "war potential" attitude. There is the illusion that the New Germany left after the annexations can be reduced to a "pastoral state". It cannot be done unless we exterminate or move 25,000,000 people out of it. This would approximately reduce Germany to the density of the population of France.^[70]

In July 1947, President Harry S. Truman rescinded on "national security grounds"^[43] JCS 1067, which had directed the U.S. forces of occupation in Germany to "take no steps looking toward the economic rehabilitation of Germany."^[44]

In addition to the physical barriers that had to be overcome, for the German economic recovery there were also intellectual challenges. The Allies confiscated intellectual property of great value, all German patents both in Germany and abroad, and used them to strengthen their own industrial competitiveness by licensing them to Allied companies.^[71] Beginning immediately after the German surrender and continuing for the next two years, the U.S. pursued a vigorous program to harvest all technological and scientific know-how as well as all patents in Germany. John Gimbel comes to the conclusion, in his book "Science Technology and Reparations: Exploitation and Plunder in Postwar Germany", that the "intellectual reparations" taken by the U.S. and the UK amounted to close to $10 billion.^[72][73][74] During the more than two years that this policy was in place, no industrial research in Germany could take place without any results being automatically available to overseas competitors who were encouraged by the occupation authorities to access all records and facilities. Meanwhile, thousands of the best^[75] German researchers were being put to work in the Soviet Union and in the U.K. and U.S. (see also Operation Paperclip).

According to some scholars, the Marshall Plan, which was extended to also include Western Germany after it was realized that the suppression of the Western German economy was holding back the recovery of the rest of Europe,^[44] was not the main force behind the Wirtschaftswunder.^[76][77] According to them, the amount of monetary aid (which was in the form of loans) received by Germany through the Marshall Plan (about $1.4 billion in total) was far overshadowed by the amount the Germans had to pay back as war reparations and by the charges the Allies made on the Germans for the ongoing cost of occupation (about $2.4 billion per year).^[76] In 1953 it was decided that Germany was to repay $1.1 billion of the aid it had received. The last repayment was made in June 1971.^[77] In a largely symbolic 2004 resolution by the lower house of the Polish Parliament reparations of $640 billion were demanded from Germany, mainly as a weapon in an ongoing argument regarding German property claims on formerly German territory.^[78] However, at the Potsdam conference the Soviet Union undertook to settle the reparation claims of Poland from its own share of reparations from Germany. In 1953 Poland agreed to forego further reparations claims against Germany.^[79] Meanwhile, Poland was now in possession of almost a quarter of pre-war German territory, including the important industrial centers in Silesia and the richest coal fields in Europe.^[80] In addition, many ethnic Germans living within the Polish pre-war borders were prior to their expulsion for years used as forced labor in camps such as the camp run by Salomon Morel. For example, Central Labour Camp Jaworzno, Central Labour Camp Potulice, Łambinowice, Zgoda labour camp and others^[81]

In 1949 West German Chancellor Konrad Adenauer wrote to the Allies requesting that the policy of industrial dismantling end, citing the inherent contradiction between encouraging industrial growth and removing factories and also the unpopularity of the policy.^[82][83][84]

Assessment and Contemporary relevance

Historical assessments differ with regard to the nature, duration and effects of Morgenthau's plan and JSC 1067 on American and Allied policies.

The U.S. diplomat James Dobbins writes that an early draft of JCS 1067 had been written while the plan was still understood to be U.S. policy, and "[b]ecause nothing replaced the Morgenthau plan once it had been disavowed, the final version of JCS 1067 contained many of the harsh measures and all the intent of a hard peace toward Germany."^[85] However, according to Dobbin, in May 1945 – shortly after its approval in April 1945 – the newly appointed deputy military governor, General Clay, implied that the directive was unworkable and initially wanted it to be revised; after the deliberate loopholes were pointed out to him, General Clay did not press further for a revision but "took great liberties in interpreting and implementing JCS 1067". Clay's good-willed effort did meet obstacles, like General Marshall forbidding him from relax the strict non-fraternization to a more reasonable level. Dobbins remarks that the harsh punitive measures shifted toward reform over time as the US faced with the problem of feeding millions of Germans and the Soviet expansion.^[86] Gerhard Schulz mentions that the American military government was, until 1947, operating under JCS 1067, which he describes as "a framework that had its origin in the Morgenthau Plan".^[87][88] Georg Kotowski also mentions that "As far as I know the results [of the revisionist debate], it seems to me that, although plans for a policy concerning post-war Germany had been developed as early as 1941, no plan had been adopted by the president that could have served as a basis for a purposeful policy. This resulted in the German question being postponed to after the final victory over the Axis Powers and Japan. At most, the short-lived approval of the Morgenthau Plan by Roosevelt might possibly be seen as a guiding principle of his policy toward Germany, especially since important elements of this plan found their way into [JCS 1067] ".^[89] Michael Zürn talks of the policy of "Never again a strong Germany!" that found its expression in the famous JCS 1067 (which was influenced by the Morgenthau Plan), but this principle was abandoned by the USA soon after the Potsdam Conference, though it was not until 1947 that JSC 1067 was replaced by JSC 1779 and its related "European Recovery Program".^[90] Kindleberger states that "With the termination of hostilities, the mood of suppression gave way to ambivalence – in the West. Germany needed to be punished for wrongdoing, but it was also essential to revive the German economy for its necessary contribution to European recovery. The stern pronouncement of the Joint Chiefs of Staff Directive (JCS 1067) that the United States commander should do nothing to restore the German economy above the minimum level necessary to prevent such disease and unrest as might endanger the occupation forces gave way in July 1945 to an order to stimulate coal production for export delivery to Belgium, the Netherlands, and France" (which did not materialize). In May 1946, General Clay's stop-order on the dismantling of plants (for reparations) marked the first open recognition of the failure of Potsdam. After 1947, when conflicting policies began to be reconciled, economic and social conditions began to be improved.^[91] Henry Burke Wend refers to JCS 1067, as approved on 14 May 1945, as a compromise document which, "together with Truman's ascension to the presidency [in January 1945], spelled the demise of the Morgenthau Plan". Despite this, "denanification, deconcentration and dismantling had a profound, if varied, impact on German industrial recovery." Even with the introduction of the Marshall Plan, self-defeating policies that industrialised (by investing billions of dollars) and deindustrialised (through heavy dismantling of its industry) Germany at the same time continued until 1948/1949.^[92] Walter M. Hudson describes JSC 1067 as less harsh than Morgenthau's plan: while core elements of the Morgenthau Plan were incorporated in JCS 1067, it was deliberately diluted, and permitted the military government to be more flexible than envisaged by the Morgenthau Plan.^[93]

John Dietrich quotes Morgenthau's son (Henry Morgenthau III) as saying that "[i]n the summer of 1945, after Morgenthau's resignation, the Morgenthau Plan enjoyed a short afterlife implanted in ... JCS 1067", although Henry Morgenthau III also believed "without his father's guidance the directive was ignored". Dietrich opines though that "due to the large number of ex Treasury officials working as Civil Affairs officers during the early stages of the occupation, the directive was frequently carried out to the letter.", and notes that the directive was only replaced in 1947.^[94]

The German Federal Agency for Civic Education (BPD) asserts that the Morgenthau Plan was never implemented and was only briefly supported by Roosevelt,^[95] and that JSC 1067, while treating Germany as a defeated enemy state instead of a liberated nation and aiming at the dismantling of German industries, also left loopholes that allowed a military governor to later implement more lenient policies. The agency states that the purpose of JCS 1779, which replaced JCS 1067, was to increase German self-government at the regional level, limit dismantling of war industries, raise living standards, and remove dependence on subsidies.^[96][97]

German historian Bernd Greiner talks of the failure of Morgenthau and the backward-looking political minority that supported him, stating that by the end of 1945 Morgenthau's staff had returned to the USA despondent, and those then in charge were not interested in "industrial diarmament".^[98] However, according to Greiner, the "Morgenthau myth" (German: die Morgenthau-Legende) was perpetuated in West Germany by right-wing extremist historians echoing Nazi propaganda and railing against an "extermination plan" for Germany by Jews and the left-wing intelligensia in America, while in Communist East Germany the Morgenthau Plan was presented as a western imperialist plot to destroy Germany.^[99] Wolfgang Benz, director of the Center for Research on Antisemitism at the Technical University of Berlin, states that the plan had no significance for the later occupation and Germany policy, though Nazi propaganda on the subject had a lasting effect and is still used for propaganda purposes by extreme right-wing organizations.^{[53][100][101]} Benz also states that Morgenthau had romantic agrarianist ideals which might mean that the intentions of his plan could have been beyond preventing conflicts.^[102] German historian Rainer Gömmel criticises the common claim by historians, including Benz, that the Morgenthau Plan was never implemented, arguing that core elements of the plan, namely the proposals for deindustrialisation, were adopted in August 1945 and became part of Allied policy.^[103]

The Norwegian economist Erik S. Reinert, states that "The Morgenthau Plan was abruptly stopped in Germany in 1947," compares United States policies toward third-world countries at the end of the 20th century with the Morgenthau Plan (in the wider sense), arguing that they have the de facto effect of de-industrializing third-world nations; he contrasts such destructive "Morgenthau plans" with more beneficial "Marshall plans".^[104]

See also

• Industrial plans for Germany
• History of Germany since 1945
• Marshall Plan
• Monnet Plan, a 1945–1947 reconstruction plan for France that proposed giving France control over the German coal and steel areas of the Ruhr and the Saar.
• Bakker-Schut Plan
• Wirtschaftswunder ("Economic miracle," the seemingly 'miraculous' economic recovery of post-World War II West Germany)
• German reparations for World War II

Notes

Bibliography

• Beschloss, Michael R, The Conquerors: Roosevelt, Truman and the Destruction of Hitler's Germany, 1941–1945 
• Blum, John Morton (1967), From the Morgenthau Diaries: Years of War, 1941–1945, Boston 
• Gareau, Frederick H (Jun 1961), "Morgenthau's Plan for Industrial Disarmament in Germany", The Western Political Quarterly, 14 (2) 
• Greiner, Bernd (1995). Die Morgenthau-Legende: Zur Geschichte eines umstrittenen Planes [The Morgenthau Myth: The History of a Controversial Plan] (in German). ISBN 9783930908073. 
• Hull, Cordell (1948), Memories, II 
• Petrov, Vladimir (1967), Money and conquest; allied occupation currencies in World War II, Baltimore: Johns Hopkins Press 

Further reading

• Casey, Steven (2005). "The campaign to sell a harsh peace for Germany to the American public, 1944–1948". History. 90 (297): 62–92. doi:10.1111/j.1468-229x.2005.00323.x. ISSN 1468-229X. .
• Morgenthau, Henry (1945). Germany is our Problem. New York: Harper & brothers. 

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