Morgenthau Plan

• 1. Introduction

  ›

  The Morgenthau Plan began as a handwritten memorandum in 1944 and very nearly erased one of the world's great industrial nations from the map. Henry Morgenthau Jr., United States Secretary of the Treasury, titled his proposal 'Suggested Post-Surrender Program for Germany.' Its core idea was simple and stark: strip Germany of every factory, every blast furnace, every mine, and leave it a nation of farmers. The plan reached the highest levels of Allied command. Both Franklin Roosevelt and Winston Churchill initialed it at the Second Quebec Conference in September 1944. And then, almost immediately, both men began to distance themselves from it. What drove a senior cabinet official to propose such a sweeping dismantlement? How did the plan travel from one man's desk to the summit of Allied power? And what trace did it leave on the occupation of Germany once the war finally ended?

• 2. Morgenthau's Mission

  ›

  At the start of August 1944, Harry Dexter White brought Morgenthau a memorandum from the State Department while the two men were traveling in Europe. Morgenthau read it and came away alarmed. He believed the document aimed primarily at rebuilding Germany economically so that within a few years the country could pay reparations. To him, that logic led to one conclusion: in roughly ten years, Germany would be ready to start World War III.

  Back in Washington, Morgenthau told Secretary of State Cordell Hull directly: 'I appreciate the fact that this isn't my responsibility, but I'm doing this as an American citizen, and I'm going to continue to do so, and I'm going to stick my nose into it until I know it is all right.' He then went to President Roosevelt and showed him selected excerpts he knew would disturb the President, including a passage suggesting US policy was that 'Germany is to be restored just as much as the Netherlands or Belgium.' Roosevelt responded that 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.'

  Roosevelt formally created a committee of Morgenthau, Hull, and Secretary of War Henry L. Stimson to work out post-war Germany policy. The committee collapsed almost immediately. Hull called Morgenthau's intrusion into foreign affairs 'inconceivable' and warned Roosevelt the plan would stiffen German resistance and cost thousands of American lives. Hull suffered insomnia and eating problems from the strain and was hospitalized; he later resigned, with anecdotal accounts linking his departure to 'the Morgenthau business.' Stimson opposed the plan even more forcefully. Still, the committee gathered on the 6th of September 1944, to present Roosevelt with three competing memoranda from State, War, and Treasury.

• 3. Quebec and the Initialed Plan

  ›

  Hull's hospitalization removed him from the Quebec delegation at the last minute. It was only when the conference was already underway that Roosevelt invited Morgenthau to join him in Quebec City, where the Second Quebec Conference ran from the 12th to the 16th of September 1944. Churchill and Roosevelt initialed a memorandum, drafted by Churchill, that called for 'eliminating the warmaking industries in the Ruhr and the Saar' and 'converting Germany into a country primarily agricultural and pastoral in its character.'

  Churchill had not been easily persuaded. His initial reaction was that Britain would be 'chained to a dead body.' Roosevelt pushed back, questioning whether Churchill would allow Germany to produce modern metal furniture, since the manufacture of metal furniture could quickly be converted to armament production. The meeting broke up in disagreement, and Roosevelt suggested that Morgenthau and Harry Dexter White continue talks with Lord Cherwell, Churchill's personal assistant. Cherwell, described as having 'an almost pathological hatred for Nazi Germany,' proved decisive. Morgenthau later told his staff: 'I can't overemphasize how helpful Lord Cherwell was because he could advise how to handle Churchill.'

  Money also entered the picture. A September 15 memo from Roosevelt to Hull noted that Morgenthau had presented 'in conjunction with his plan for Germany, a proposal of credits to Britain totalling six and half billion dollars.' Hull observed that this 'might suggest to some the quid pro quo' behind Churchill's agreement. At the moment of signing, Churchill exclaimed: 'What do you want me to do? Get on my hind legs and beg like Fala?' Anthony Eden opposed the plan strongly enough that it was soon set aside within the British government.

• 4. When the Press Got Hold of It

  ›

  Journalist Drew Pearson publicized the plan on the 21st of September 1944. Critical stories in The New York Times and The Wall Street Journal followed almost at once. The Nazi government seized on the disclosure. Joseph Goebbels declared that 'The Jew Morgenthau' wanted to turn Germany into a giant potato patch. The Volkischer Beobachter ran the headline: 'Roosevelt and Churchill Agree to Jewish Murder Plan!'

  The propaganda had measurable military consequences. General George Marshall complained to Morgenthau that German resistance had stiffened. Lt. Colonel John Boettiger, Roosevelt's son-in-law and a War Department official, told Morgenthau that American troops who fought for five weeks to capture Aachen reported the Morgenthau Plan was 'worth thirty divisions to the Germans.' Republican presidential candidate Thomas Dewey said in his campaign that the plan had driven Germans into 'the frenzy of despair.' On the 11th of December 1944, OSS operative William Donovan sent Roosevelt a telegraph from Bern translating a recent article from the Neue Zurcher Zeitung, which argued that the Morgenthau plan had given Goebbels 'the best possible chance' and that the conviction of total defeat 'accounts for the fact that the Germans continue to fight.'

  Faced with the public backlash, Roosevelt disowned the plan entirely. He told reporters: '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.' Stimson read back to Roosevelt the text he had initialed; Roosevelt said he had 'no idea how he could have initialed this.' Eleanor Roosevelt later suggested the press reaction led him to conclude it was 'wise to abandon any final solution at that time,' though she said she never heard him actually disagree with the basics of the plan.

• 5. JCS 1067 and the 'Morgenthau Boys'

  ›

  JCS 1067, the Joint Chiefs of Staff directive approved by President Harry Truman on the 10th of May 1945, told US occupation forces to 'take no steps looking toward the economic rehabilitation of Germany.' Morgenthau had exercised considerable influence over its drafting, and he privately told his staff it was 'a big day for the Treasury' and that he hoped 'someone doesn't recognize it as the Morgenthau Plan.'

  The directive was sweeping. Production of oil, rubber, merchant ships, and aircraft was prohibited. Fraternization with Germans was forbidden, including attending church services, visiting homes, playing games, trading gifts, or shaking hands. Violators risked a fine of $65, roughly one month's pay for a US Army private, and court-martial. The directive remained secret until the 17th of October 1945, two months after the US had succeeded in incorporating much of it into the Potsdam Agreement.

  Morgenthau's direct legacy in occupied Germany took a human form known in OMGUS as the 'Morgenthau boys': US Treasury officials whom Eisenhower had loaned to the Army of occupation. Their leader, Colonel Bernard Bernstein, was described as 'the repository of the Morgenthau spirit in the army of occupation.' They continued their work for almost two years after Morgenthau himself resigned from government in mid-1945. Just before JCS 1779 replaced JCS 1067 in July 1947, the Morgenthau followers in the decartelization division of OMGUS completed a final act: destroying the old German banking system by breaking the relationships between German banks and limiting them to short-term financing only.

• 6. Starvation, Coal, and Collapse

  ›

  By August 1945, only 15% of industry in the US sector was operable, and that fraction ran at about 5% capacity. As early as the 7th of May 1945, General Lucius D. Clay was already asking for flexibility in implementing JCS 1067. Lewis Douglas, Clay's chief adviser, called the directive the work of 'economic idiots' and said it made no sense to prevent 'the most skilled workers in Europe from producing as much as they can in a continent that is desperately short of everything.'

  Food told the sharpest story. The winter of 1945-1946 was mild, but civilians did not know the government was sustaining the 1,550-kilocalorie daily ration by drawing on American supplies. By March 1946 those imported supplies would last just another 60 days. The British zone cut rations to 1,042 calories that month; the French zone to 980. According to Alan S. Milward, the average kilocalorie intake in Germany in 1946-1947 was only 1,080 per day, insufficient for long-term health. On the 27th of May 1947, William Clayton reported to Dean Acheson in Washington: 'Millions of people in the cities are slowly starving.' General Clay stated the political stakes plainly: 'There is no choice between being a communist on 1,500 calories a day and a believer in democracy on a thousand.'

  Herbert Hoover's situation reports from 1947 put the logic in plain numbers: keeping Germany in a pastoral state would require either exterminating or relocating 25 million people, which would reduce Germany to roughly the population density of France. The Potter-Hyndley Mission had warned as early as May 1945 that without urgent steps a coal famine would destroy 'all semblance of law and order' across Northwest Europe and the Mediterranean. Plans to close German mines were nullified almost immediately.

• 7. From Punishment to Recovery

  ›

  James F. Byrnes delivered what became known as the 'Speech of Hope' in Stuttgart on the 6th of September 1946. As United States Secretary of State, Byrnes repudiated the Morgenthau economic policies and signaled a coming shift toward reconstruction. In July 1947, President Truman rescinded JCS 1067 on 'national security grounds' and replaced it with JCS 1779, which declared that 'an orderly, prosperous Europe requires the economic contributions of a stable and productive Germany.' It took General Clay over two months to overcome remaining resistance before the new directive was approved at a meeting of the State-War-Navy Coordinating Committee on the 10th of July 1947.

  The intellectual property confiscation ran in parallel with physical dismantling. All German patents, both inside Germany and abroad, were seized. John Gimbel, in his book Science Technology and Reparations: Exploitation and Plunder in Postwar Germany, concluded that the 'intellectual reparations' taken by the US and UK amounted to close to $10 billion. Thousands of German researchers were simultaneously put to work in the Soviet Union through Operation Osoaviakhim and in the US and UK through Operation Paperclip.

  In 1949, West German Chancellor Konrad Adenauer formally asked the Allies to end industrial dismantling, calling out the contradiction between encouraging economic growth and removing the factories needed for it. With the Currency Reform of 1948 and the Marshall Plan, Germany's recovery eventually became known as the Wirtschaftswunder, the 'economic miracle.' In 1953 it was decided Germany would repay $1.1 billion of the aid it had received; the last repayment came in June 1971. The Saar Protectorate, whose coal and industry had been placed under French control, held a plebiscite in 1955 and voted overwhelmingly for reunification with West Germany, rejoining as the state of Saarland on the 1st of January 1957.