Morgenthau Plan - Implementation

Implementation

The Morgenthau Plan was implemented, although not in its most extreme version. The Morgenthau Plan spawned the JCS-1067, which contained the ideas of making Germany a "Pastoral State". This concept's name was later changed to become "level of industry", where Germany's production was to be severely limited but not completely eliminated. 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 1936 level, etc.

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.

Morgenthau had written a book outlining the full Morgenthau Plan, Germany is Our Problem. In November 1945 General Dwight D. Eisenhower, Military Governor of the U.S. Occupation Zone, approved the distribution of one thousand free copies of the book to American military officials in Germany.

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. Meanwhile in Germany large parts of the population were starving 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". General George S. Patton opposed the forced labor, finding the practice to contravene the ideals the United States fought for in its Revolutionary and Civil wars. German prisoners engaged in dangerous tasks, such as clearing mine fields.

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. 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."

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..."

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..

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

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".

The Saar, 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, Saarland rejoined West Germany.

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.

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." As a consequence of the practiced clear-felling extensive deforestation resulted which could "be replaced only by long forestry development over perhaps a century.".

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.

In July 1947, President Harry S. Truman rescinded on "national security grounds" JCS 1067, which had directed the U.S. forces of occupation in Germany to "take no steps looking toward the economic rehabilitation of Germany." Three months earlier, the United States and France had agreed upon a German POW release program to begin releasing 20,000 prisoners per month. By July, of the 740,000 German POWs transferred to France, 290,000 had been "stricken from the rolls."

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. 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. During the more than two years that this policy was in place, no industrial research in Germany could take place, as any results would have been automatically available to overseas competitors who were encouraged by the occupation authorities to access all records and facilities. Meanwhile thousands of the best 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, was not the main force behind the Wirtschaftswunder. 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). 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. 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. 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. 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. 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

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.