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Morgenthau Plan

The Nazi regime was not an excrescence on an otherwise healthy society but an organic growth out of the German body politic. Even before the Nazi regime seized power, the German nation had demonstrated an unequalled capacity to be seduced by a militarist clique offering the promise of economic security and political domination in exchange for disciplined acceptance of its leadership. What the Nazi regime did was to systematically debauch the passive German nation on an unprecedented scale and shape it into an organized and dehumanized military machine integrated by all the forces of modern technique and science.

The Morgenthau Plan was to divide Germany into little demilitarized agrarian states, in a Carthagian eternal subjugation. The problem of what was to be done with Germany after its defeat had been under consideration since at least December 1941 and the Japanese attack on Pearl Harbor. In the course of the next three years, the British, American, and Soviet leaders - not yet joined by the French - debated in a series of conferences and summits the principles that were to guide their post-war treatment of, and conduct in, the defeated country.

The problem of what was to be done with Germany after its defeat had been under consideration since at least December 1941 and the Japanese attack on Pearl Harbor. The notion of a ‘Carthaginian peace’ (similar in spirit to the settlement imposed by the Romans on Carthage), gave some shape to the vague formula of ‘unconditional surrender’.

In the course of the next three years, the British, American, and Soviet leaders—not yet joined by the French—debated in a series of conferences and summits the principles that were to guide their post-war treatment of, and conduct in, the defeated country. These deliberations shaped the course of the post-war era: Germany would be occupied, stripped of its military and industrial capabilities, and cleansed of Nazi influences. It would be asked to pay compensation to those countries who had suffered. Most importantly, it would be prevented from threatening peace and stability again.

In August 1944 the Morgenthau Plan entered the planning arena, when Henry Morgenthau, secretary of the US Treasury, prepared a comprehensive scheme on the political and economic treatment of Germany after surrender. He criticized what he perceived to be a widespread emphasis in American circles on German ‘reconstruction’. Such tendencies, he maintained, could be identified in the official memoranda. The SHAEF Handbook seemed to convey the impression that a transformation of Germany could be achieved by forbidding National Socialism and improving living conditions. If these directives were to guide American conduct, Morgenthau argued, any change of German society was going to be superficial and temporary.

Germany's participation in a third world war could not be prevented by the kind of controls that had been imposed after 1918. Experience had shown that factories converted to peacetime production could always be converted back; that the destruction of industries only had a temporary effect; and that banning Nazism would only drive it underground. Allied military governments would not be able to supervise Germany for ever. Policy in Germany would have to be fundamentally different from operations in countries liberated from Nazi control.

The key to the German problem, according to Morgenthau, lay in economics. Germany would only become peaceful if it was transformed into an agrarian society, if its industrial base was stripped away, and if the industries vital to military strength were dismantled and transported to other nations as a form of restitution. A military occupation would have to prevent their re-establishment, and would have to continue for at least twenty years. During this time Germany should receive no economic aid. In fact, the Allies should not ‘assume responsibility for such economic problems as price controls, rationing, housing, or transportation, or take any measure designed to maintain or strengthen the German economy, except those which are essential to military operations’.26 Conditions should not be allowed to be better than those prevailing in Germany's poor and war-ridden neighbors.

After spring 1943, when the ‘unconditional surrender' formula was agreed, plans focused primarily on the organization of military governments and the appointment of leading officers and their staffs. The decisions and agreements reached in Washington and London fundamentally shaped the entire occupation framework until the creation of the two German Republics in 1949, and beyond—a fact about which the Soviet and French leaders later frequently complained. Recurring themes on "the German problem", particularly the belief in a dominant and totalitarian national German character, influenced these preparations.

In August 1944 the Morgenthau Plan entered the planning arena, when Henry Morgenthau, secretary of the US Treasury, prepared a comprehensive scheme on the political and economic treatment of Germany after surrender. He criticized what he perceived to be a widespread emphasis in American circles on German "reconstruction" that seemed to convey the impression that a transformation of Germany could be achieved by forbidding National Socialism and improving living conditions.

If these directives were to guide American conduct, Morgenthau argued, any change of German society was going to be superficial and temporary. Germany's participation in a third world war could not be prevented by the kind of controls that had been imposed after 1918. Experience had shown that factories converted to peacetime production could always be converted back; that the destruction of industries only had a temporary effect; and that banning Nazism would only drive it underground. Allied military governments would not be able to supervise Germany for ever. Policy in Germany would have to be fundamentally different from operations in countries liberated from Nazi control.

The key to the German problem, according to Morgenthau, lay in economics. Germany would only become peaceful if it was transformed into an agrarian society, if its industrial base was stripped away, and if the industries vital to military strength were dismantled and transported to other nations as a form of restitution.

Poland will get parts of East Prussia while the rest to the Soviets, and the southern portion of Silesia. France will gain the Saar and the territories bounded by the Rhine to the Moselle rivers. An international zone will be created to contain the Ruhr and the major industrial zones of Germany including the Kiel canal. The remaining parts of Germany will be divided into two independent neutral states: South Germany and North Germany.

The Ruhr, surrounding industrial areas, including the Rhineland, the Kiel Canal, and all German territory north of the Kiel Canal, was the heart of German industrial power. "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.... 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 be completely dismantled and transported to Allied Nations as restitution.All equipment shall be removed from the mines and the mines closed. The area should be made an international zone to be governed by an international security organization to be established by the United Nations."

Discussions on postwar treatment of Germany took place at the Second Quebec Conference, September 11–16, 1944. The Second Quebec Conference (codenamed "OCTAGON") was a high level military conference held during World War II between the British, Canadian, and American Governments. The Conference was held in Quebec City, September 12 - 16, 1933 and was the second conference to be held in Quebec. The chief representatives were British Prime Minister Winston Churchill, Canadian Prime Minister William Lyon Mackenzie King, and President Franklin D. Roosevelt.

The leaders considered strategic plans for final victory over Germany and Japan, continued U.S. economic aid to the United Kingdom, and British naval participation in the conflict against Japan. Also discussed were the demarcation of zones of occupation in post-war Germany and overall policy for governing occupied Germany. The Roosevelt-Churchill agreement on the postwar treatment of Germany was not reached until their meeting at noon on 15 September 1944. The Morgenthau Plan for reducing Germany to an agrarian economy was tentatively approved, although it would be rejected by the President a month later.

The fate of the Morgenthau Plan is well known. Roosevelt initially supported it, but the Foreign Office, the State Department, and a series of economic advisers objected to at least some of its proposals. Reparations would have to be extracted in a more viable way, they argued, or else Germany would become a heavy burden on Allied governments and taxpayers. Although the plan was never fully or even partially implemented, a number of (primarily German) historians have ascribed to it great influence.

Harry Dexter White was a longtime Treasury Department official and assistant secretary of the Treasury under Henry Morgenthau in 1945–46, who, along with John Maynard Keynes, was a principal architect of the Bretton Woods multilateral trading system. Confessed spies and FBI informants Whitaker Chambers and Elizabeth Bentley accused White of having been a Soviet "agent of influence" while in government. The declassified VENONA decrypts of Soviet diplomatic traffic during the 1940s appear to many to confirm such charges.

Harry Dexter White, Director of Monetary Research, United States Treasury, was one of the primary creators of the Bretton Woods institutions (like the International Monetary Fund-IMF- and the World Bank). Truman appointed him as the first Director of the IMF in 1946. White also played a key role in the development of the Morgenthau Plan, which some have argued was overly pro-Soviet, and he was a “dominant influence on US international economic policy throughout World War II.” Many historians have long assumed that the Morgenthau Plan advanced the interests of the Soviets. The plan explicitly rejected reparations, which ran counter to stated Soviet demands on the German economy. This plan was really Morgenthau's own and cannot be laid at White's feet.

James Boughton explained, White’s efforts to include the Soviet Union in Bretton Woods and the IMF, and his meetings with Soviet officials, as well as his role in the Morgenthau plan, which would restrict Germany’s re-industrialization, were considered actions aimed at supporting the Soviet Union. Thus he was accused of being a communist and Soviet spy. He testified before the House Un-American Activities Committee (HUAC) in 1948 and died five days later of a heart attack.

During the war the Western allies and the Soviet Union had agreed that, when defeated, a demilitarized Germany would be occupied by the victorious powers. After V-E Day, the Soviets occupied the eastern part of the country , and the United States, Great Britain, and France occupied separate zones in the western half. Practically from the outset, Truman opposed vengeful peace terms for defeated Germany, including schemes like the Morgenthau Plan to make it a pastoral state. Having seen how the Treaty of Versailles bred political and economic conditions that brought Hitler to power, Truman favored a lenient peace that might lead to a selfsupporting, nonmilitaristic, democratic Germany. Otherwise, the administration feared that postwar impoverishment might either drive the Germans into the anns of the Soviets or else make German survival a burden on American taxpayers.