Morgenthau Plan - Overview

Overview

In the original proposal this was to be achieved in three main steps.

• Germany was to be partitioned into two independent states.
• Germany's main centers of mining and industry, including the Saar area, the Ruhr area and Upper Silesia were to be internationalized or annexed by neighboring nations.
• All heavy industry was to be dismantled or otherwise destroyed.

At the Second Quebec Conference on September 16, 1944, U.S. President Franklin D. Roosevelt and Henry Morgenthau, Jr. persuaded the initially very reluctant British Prime Minister Winston Churchill to agree to the plan, likely using a $6 billion Lend Lease agreement to do so. Churchill chose however to narrow the scope of Morgenthau's proposal by drafting a new version of the memorandum, which ended up being the version signed by the two statesmen.

The memorandum concluded "is looking forward to converting Germany into a country primarily agricultural and pastoral in its character."

News of the existence of the plan was leaked to the press. President Roosevelt's response to press inquiries was to deny the press reports.

In wartime Germany, Propaganda Minister Joseph Goebbels was able to use the plan to bolster the German resistance on the Western front.

In occupied Germany, the thinking behind the Morgenthau plan was reflected in the U.S. occupation directive JCS 1067 and in the Allied Industrial plans for Germany aimed at "industrial disarmament", designed to reduce German economic might and to destroy Germany's capability to wage war by complete or partial deindustrialization and restrictions imposed on utilization of remaining production capacity. By 1950, after the virtual completion of the by then much watered-down "level of industry" plans, equipment had been removed from 706 manufacturing plants in the west and steel production capacity had been reduced by 6,700,000 tons.

Partly for the sake of lowering German standards, restrictions were also enacted on food relief imports. (See American food policy in occupied Germany)

According to some historians the U.S. government formally abandoned the Morgenthau plan as promoted occupation-policy in September 1946 with Secretary of State James F. Byrnes' speech Restatement of Policy on Germany.

Unhappy with the Morgenthau-plan consequences, former U.S. President Herbert Hoover remarked in a report dated 18 March 1947:

"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."

It is argued that it was Hoover's March 1947 statements in his report that led to the end of the Morgenthau plan and to a change in U.S. policy.

In July 1947 with the advent of the initial planning for the Marshall Plan designed to help the now deteriorating European economy recover, the restrictions placed on annual German steel production were lessened. Permitted steel production quotas were raised from 25% of pre-war capacity to 50% of pre-war capacity. The U.S. occupation directive JCS 1067, whose economic section had prohibited "steps looking toward the economic rehabilitation of Germany designed to maintain or strengthen the German economy", was replaced by the new U.S. occupation directive JCS 1779 which instead stated that "an orderly, prosperous Europe requires the economic contributions of a stable and productive Germany."

In early 1947 four million German soldiers were still being used as forced labour in the UK, France, and the Soviet Union.

In 1951 West Germany agreed to join the European Coal and Steel Community (ECSC) the following year. This meant that some of the economic restrictions on production capacity and on actual production that were imposed by the International Authority for the Ruhr were lifted, and that its role was taken over by the ECSC.

Although dismantling of West German industry ended in 1951, "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 finally rescinded on May 5, 1955. According to Frederick Gareau, noting that although U.S. policy had changed well before that; "the last act of the Morgenthau drama occurred on that date or when the Saar was returned to Germany ."

Vladimir Petrov concludes that the Allies "delayed by several years the economic reconstruction of the wartorn continent, a reconstruction which subsequently cost the United States billions of dollars."