Foreign Relations of the United States, Conference at Quebec, 1944

740.00119 Control (Germany)/9–644

The Assistant Secretary of War (McCloy) to the Deputy Director of the Office of European Affairs (Matthews)

top secret

Washington, September 6, 1944.

Dear Doc: Here is a draft of our post-surrender directive to Eisenhower.¹ It is something which the Committee, I believe, in view of what has gone before, should approve. It seems to me that this is very much in line with your paper² which was discussed in the Secretary’s office yesterday. We would now be able to add, of course, a provision regarding regional movements. The directive would provide that they should not be discouraged. We are generally working on improving the language and in some cases the order of the document, but in general this is the idea. I think that if the Committee could approve it generally, without going through it with a fine tooth comb, it would leave us room in the [Combined] Civil Affairs Committee to work out the final language and the clearance with the British.

Secretary Stimson was very much disturbed this morning at the line that was taken throughout the discussion on the matter of economic repression of Germany. He felt that the last paragraph of the paper, I believe it was sub-paragraph (h),³ although objectionable in some form, could be interpreted in a way which would meet his views, but the tone of the discussion convinced him that its interpretation by those present amounted to such severe destruction of values in the case of properties and facilities and such severe limitation on the economy of the individual, that he felt he could not go along with the implications of this paragraph and has so communicated to Mr. Hull.⁴

I was not present at the discussion, so I do not know what happened. I don’t believe that the Secretary, from my long talk with him yesterday, however, is at all at variance with your and my thinking on the subject. I hope you will take a look at Mr. Stimson’s comments.

I have one other comment which I did not ask him to include because it was relatively minor. Somewhere in your paper there is a statement to the effect that Party members should not be permitted any political or civic activity. I think this must refer only to the leaders, because Party members who were only such in order to keep jobs will have to be permitted to carry on some civic activity, and possibly political activity if by political activity you mean employment in a government field. The provision as written would preclude any Party member from voting, practising law, or taking any part at all in any municipal or other governmental activity. I just do not believe that this is practicable and some modification of this language may be necessary in order to enable the military government to function.

Sincerely,

John J McCloy

[Attachment]⁵

Draft of an Interim Directive to the Supreme Commander, Allied Expeditionary Force (Eisenhower)⁶

top secret

Interim Directive to SCAEF Regarding the Military Government of Germany in the Period Immediately Following the Cessation of Organized Resistance (Post-Defeat)

1. In the event that Rankin “C” conditions obtain in Germany or that the German forces are either defeated or surrender before you have received a directive containing policies agreed upon by the three governments of the U.S., U.K. and U.S.S.R., you will be guided by the following policies, principles and instructions.

2. Your primary objectives are of short term and military character rather than of a long view governmental policy type. Germany will not be occupied for the purpose of liberation but as a defeated enemy nation. The clear fact of German military defeat and the undesirability of the results of aggression must be appreciated by all levels of the German population. The German people must bear the inevitable consequences of their own acts. Your occupation and administration will be just but firm and distant. You will strongly discourage fraternization between Allied troops and the German officials and population.

3. Military government will be established and will extend over all parts of Germany under your command. Your rights, powers and status in Germany are based upon the unconditional surrender or the complete defeat of Germany.

4. a. By virtue of your position you are clothed with supreme legislative, executive and judicial authority and power in the areas occupied by forces under your command. This authority will be broadly construed and includes authority to take all measures deemed by you necessary, desirable or appropriate in relation to military exigencies and the objectives of a firm military government.

b. You are authorized at your discretion to delegate the authority herein granted to you in whole or in part to members of your command and further to authorize them at their discretion to make appropriate subdelegations.

c. You should take the necessary measures to enforce the terms of surrender and complete the disarmament of Germany.

d. The military government shall be a military administration which, until you receive further advices, will show the characteristics of an Allied undertaking acting in the interests of the United Nations.

5. The administrative policies shall be uniform throughout those parts of Germany occupied by forces under your command subject to any special requirements due to local circumstances.

6. Representatives of civilian agencies of the U.S. or U.K. Governments or of UNRRA shall not participate unless and until you consider such participation desirable when it will be subject, as to time and extent, to decision by the Combined Chiefs of Staff on your recommendation.

7. It is contemplated that a tripartite administration by the U.S., U.K. and U.S.S.R. covering the whole of Germany will be established. You have previously received advices in this connection.

8. You are authorized as SCAEF to enter into arrangements with the U.S.S.R. military commanders as may be necessary for the occupation of Germany by the three powers.

9. Appendix “A”, Political Directive; Appendix “B”, Financial Directive; Appendix “C”, Economic Directive; and Appendix “D”, Relief Directive, are attached hereto. At Appendix “E” there is a chart⁷ suggestive of the tripartite form which military government for Germany might take. At Appendix “F” there is attached the draft instrument of unconditional surrender for Germany.⁸

Appendix “A”

Political Directive

1. The following persons will be arrested and held, pending receipt by you of further instructions as to their disposition:

(a) Adolf Hitler, his chief Nazi associates, and Nazi officials down to and including the secretaries of local party units.

(b) All persons suspected of having committed war crimes.⁹

(c) The leading officials of all ministries and other high political officials of Germany and those persons who have held high position, either civil or military, in the administration of German occupied countries.¹⁰

(d) Prominent Nazis holding important and key positions in (1) National and Gau civic and economic organizations, (2) corporations and other organizations in which the government has a major financial interest, (3) industry, (4) finance, (5) education, (6) the judiciary, (7) the press and other agencies disseminating news and propaganda.

(e) All judges, prosecutors and officials of the People’s Court.

(f) Any national of any of the United Nations who is believed to have committed offenses against his national law in support of the German war effort.

2. You will issue a proclamation dissolving the Nazi party and its affiliates throughout Germany. You will take all practicable measures to uproot and discredit Nazi doctrines. No secret organizations or societies of any kind shall be permitted. Property, real and personal, of the Nazi party and its affiliates, wherever found, will be regarded as public property.

3. You will make special efforts to preserve all records and plans of

(a) The German government

(b) German military organizations

(c) All organizations engaged in military research

(d) The Nazi party and affiliated organizations

(e) Security, criminal and ordinary police

(f) Nazi economic organizations and industrial establishments

(g) Institutes and special bureaus established in Germany, devoting themselves to race, political, or similar research.

4. You will take immediate steps to abrogate all laws, decrees, regulations or aspects thereof, which discriminate on the basis of race, color, creed, or political opinions. All persons who are detained or placed in custody by the Nazis on these grounds will be released, subject to requirements of security and interests of the individuals concerned.

5. The criminal and civil courts of Germany will be closed. After the elimination of all Nazi elements, at such time and under such regulations, supervision and control as you may determine, you may permit the courts to resume functioning. All politically objectionable courts, e.g., People’s Courts, will be abolished. All security and political police, excluding criminal and order [ordinary?] police, but including the Gestapo and Sicherheitsdienst der S.S., will be disbanded, arrested and their members disarmed and held for disposition. Criminal and ordinary police, and such others as it may be proper to retain, must be purged of Nazi or otherwise undesirable elements, who will also be arrested and held for disposition. It is imperative to arrest and hold all high police presidents and leaders.

6. No person in Germany, other than United Nations nationals as authorized by you, shall be permitted to possess arms of any character except that such local police as you may utilize to maintain order may be armed with such law enforcement weapons as you may deem appropriate.

7. You will decide whether the objectives of military government are better served by the appointment of officers of the occupation forces or by the use of the services of Germans. It shall be made clear to all other government officials and employees that their continued employment is solely on the basis of cooperation, performance and behavior satisfactory to you. The replacement of any local government officials who may be removed will rest with you. In general, the entire Nazi leadership shall be removed from all posts of authority and no person who was a member of the German General Staff or Supreme Command or the Nazi hierarchy will occupy any important govern mental or civilian position. Under no circumstances shall active Nazis or ardent sympathizers be retained in office for the purpose of administrative convenience or expediency.

8. Subject to the provisions of paragraph 11 and to the extent that military interests are not prejudiced, freedom of speech and press, and of religious worship will be permitted. Consistent with military necessity, all religious institutions will be respected and all efforts will be made to preserve historical archives, classical monuments and fine arts.

9. a. Diplomatic and consular officials of countries at war with any of the United Nations will be taken into protective custody and held for further disposition. Diplomatic and consular officials of neutrals will be dealt with in accordance with instructions to be issued by the Combined Chiefs of Staff.

b. All German diplomats and consular officials and other agents will be recalled. If their recall cannot be effected or if their recall is not practicable by reasons of nationality, their authority as agents for Germany will be terminated. All records and files of these agents and officers will be ordered returned to Germany or otherwise made available for appropriate inspection.

10. a. All practical measures will be taken to insure the health and welfare of United Nations nationals and neutral internees, including provision of employment as practicable, and repatriation should be undertaken as rapidly as military conditions permit. It shall be within your discretion to determine whether such persons should or should not be allowed to disperse, pending the completion of plans for their employment or other disposition.

b. Nationals of countries with which any of the United Nations are or have been at war (except Germany) will be identified and registered, and those whose freedom of movement would endanger the security of the armed forces or be otherwise undesirable will be interned or their activities curtailed as may be necessary under the circumstances.

11. a. Propagation of Nazi doctrines and Nazi propaganda in any form shall be prohibited. All schools and universities will be closed. Elementary schools only will be reopened as soon as possible after Nazi personnel has been eliminated and text books and curricula provided which are free of Nazi doctrines. Further guidance on German education and schools will be given to you in a separate directive.

b. No political activities of any kind shall be countenanced unless authorized by you. Unless you deem otherwise, no political personalities or organized political groups shall have any part in determining the policies of the military administration. It is essential to avoid any commitments to or negotiations with any political elements.

c. The publication of all newspapers, magazines, weeklies and other publications and the operation of all German radio stations throughout the area under your command will be suspended. Thereafter you will permit the dissemination of news or information subject to such censorship and control as you consider necessary in the interests of military security and intelligence and to carry out the principles laid down in this directive.

12. No persons shall be permitted to leave or enter the area under your command without your authority.

Appendix “B”

Financial Directive

1. United States, British and other Allied forces will use Allied Military marks and Reichsmark currency or coins in their possession. Allied Military marks and Reichsmark currency and coin now in circulation in Germany will be legal tender without distinction and will be interchangeable at a rate of 1 Allied Military mark for 1 Reichsmark. Records will be kept of the amounts of the German marks used by the forces of each nation. Reichskreditkassenscheine and other German Military currency will not be legal tender in Germany.

2. In the event, however, that for any reason adequate supplies of Allied Military marks and/or Reichsmarks are not available, the United States forces will use yellow seal dollars and regular United States coins and the British forces will use British Military Authority notes and regular British coins. Records will be kept of the amounts of currencies used by the United States and British forces.

3. If it is found necessary to use U.S. yellow seal dollars and BMA notes, the following provisions will apply to such use:

a. The rate of exchange between the U.S. yellow seal dollar and the BMA notes will be 4.035 dollars to one pound, and the two currencies will be interchangeable at that rate. The United States Treasury will make the necessary arrangements with the British Treasury.

b. You will issue a proclamation, if necessary, requiring all persons to accept U.S. yellow seal dollars and BMA notes at the decreed rates. Transactions at any other rates will be prohibited.

c. The issuance of yellow seal dollars and BMA notes will cease and Allied Military mark and/or Reichsmark currency will be used in their place as soon as available.

d. U.S. yellow seal dollars and BMA notes will be withdrawn from circulation as soon as such withdrawal can be satisfactorily accomplished.

e. Records will be kept of the amounts of such currencies used by the United States, British and other Allied forces.

4. The rate of exchange to be used only for the purpose of paying personnel of the armed forces will be——¹¹ marks to the dollar and —— marks to the pound sterling. A general rate of exchange may be furnished to you later. Holders of mark currency or deposits will not be entitled to purchase foreign exchange without special permission. They will obtain dollars or pounds, or any other foreign currency or foreign exchange credits, only in accordance with exchange regulations issued by you.

5. The Financial Division of the Civil Affairs Section for Germany will include in its functions the control of all funds to be used by the Allied Military forces within the area, except yellow seal dollars and BMA notes which will be under the control of U.S. and British forces respectively. It will maintain all the accounts and records necessary to indicate the supply, control, and movement of these currencies including yellow seal dollars and BMA notes, and other funds, as well as financial data required for the determination of expenditures arising out of operations or activities involving participation of Allied Military forces.

a. Insofar as operations relate to the provision of currencies for the pay and other cash requirements of military components of the Allied forces, the Financial Division will supply Allied Military marks from currency on hand and will record the debit against the military force concerned at the rate of exchange prescribed in paragraph 4 above.

b. Insofar as operations relate to the provision of currencies for civil administration, the Finance Division will supply Allied Military marks from currency on hand and will record the debit against the Allied Military Government.

c. If found practicable and desirable, you will designate, under direct military control and supervision, the Reichsbank, or any branch thereof, or any other bank satisfactory to you, as agent for the Financial Division of the Civil Affairs Section. When satisfied that the Reichsbank, or any branch thereof, or other designated bank, is under adequate military control and supervision, you may use that bank for official business, and, if necessary, by making credits available, place such bank or banks in a position to finance other banks and branches thereof, for the conduct of their business as approved by the Allied Military authorities.

d. The records of the Financial Division of the Civil Affairs Section established within the area will indicate in all cases in what currency receipts were obtained or disbursements made by the Financial Division.

6. You will take the following steps and will put into effect only such further financial measures as you may deem to be necessary from a strictly military standpoint:

a. You will declare a general or limited moratorium if you deem such measure to be necessary. In particular, it may prove desirable to prevent foreclosures of mortgages and the exercise of similar remedies by creditors against individuals and small business enterprises.

b. Banks should be placed under such control as deemed necessary by you in order that adequate facilities for military needs may be provided and to insure that instructions and regulations issued by military authorities will be fully complied with. Banks should be closed only long enough to introduce satisfactory control, to remove Nazi elements and other objectionable personnel, and to issue instructions for the determination of accounts to be blocked under paragraph e below. As soon as practicable, banks should be required to file reports listing assets, liabilities, and all accounts in excess of 25,000 marks.

c. You will issue regulations prescribing the purposes for which credit may be extended and the terms and conditions governing the extension of credit. If banking facilities are not available you may establish such credits or make such loans as you deem necessary for essential economic activities. These will be restricted to mark credits and loans.

d. You will close all stock exchanges and similar financial institutions for such period as you deem desirable.

e. Pending determination of future disposition, all gold, foreign currencies, foreign securities, accounts in financial institutions, credits, valuable papers and all similar assets held by or on behalf of the following, will be impounded or blocked and will be used or otherwise dealt with only as permitted under licenses or other instructions which you may issue:

(1) German national, state, provincial, and local governments, and agencies and instrumentalities thereof.

(2) Other enemy governments, the agencies and instrumentalities thereof and their nationals.

(3) Owners and holders, including neutral and United Nations Governments or national authorities, absent from the areas of Germany under your control.

(4) Nazi party organizations, including the party formations, affiliates, and supervised associations, and the officials, leading members, and supporters thereof.

(5) Persons under detention or other types of custody by Allied Military authorities and other persons whose activities are hostile to the interests of the military government.

f. No governmental or private bank or agency will be authorized to issue banknotes or currency except that, if found practicable and desirable, you may so authorize the Reichsbank and the Rentenbank when they are under adequate military control and supervision.

g. You will issue immediately a proclamation prohibiting all transfers of or other dealings in securities, other than central government securities, for such period as you may deem desirable. You may, however, prohibit or limit dealings in central government securities, but only pending resumption of service on the public debt.

7. All dealings in gold and foreign exchange and all foreign financial and foreign trade transactions of any kind, including all exports and imports of currency, will be prohibited except as permitted under such regulations as you may issue relative thereto. Except as you may otherwise authorize, local banks will be permitted to open and operate only mark accounts, but if yellow seal dollars and BMA notes are legal tender, they may be accepted at the decreed general rate of exchange and will be turned in as directed by you in exchange for mark currency at the decreed general rate of exchange.

8. Non-yellow seal U.S. dollar notes and regular British pound notes will not be legal tender. No person, agency or bank engaged in the exchange of money will acquire or otherwise deal in those notes except as you may so authorize. U.S. Army and Navy Finance Officers and British Paymasters may, however, be authorized to accept non-yellow seal U.S. dollar notes and regular British pound notes from United States and British Military or authorized personnel for con version into Allied Military mark or Reichsmark currency at the de creed general rate of exchange, after satisfying themselves as to the source of the notes.

9. All bona fide government pensions, allowances, and social security payments will continue to be paid, but steps will be taken as soon as practicable for a study of pensioners’ records with a view to nullifying all unnecessary and undesirable pensions and bonuses of Nazi inception.

10. The railways, postal, telegraph and telephone service, radio and all government monopolies will be placed under your control and their revenues made available to the military government.

11. You will, consistent with international custom and usage, maintain existing tax laws, except that discriminatory taxes introduced under the Nazi regime will be abolished. Prompt action should be taken to maintain the inflow of revenue at the highest possible level. You will resume service on the public debt as soon as military and financial conditions permit.

Appendix “C”

Economic Directive

1. You will assume control of existing German industrial, agricultural, utility, communication and transportation facilities, supplies and services, and of German domestic and foreign trade, for the purposes of

a. Assuring the immediate cessation of the production, acquisition or development of implements of war.

b. Assuring the production and maintenance of goods and services essential

(1) to prevent or alleviate epidemic or serious disease and serious civil unrest and disorder which would endanger the occupying forces and the accomplishment of the objectives of the occupation.¹²

(2) to the prosecution of the war against Japan (but only to the extent that specific directives of higher authority call for such goods or services) and

(3) to the provision of relief and rehabilitation supplies to the Allied nations and to the performance by Germany of such further acts of restitution as may be determined by the Allied governments.¹³

2. You may impose such other economic measures as you deem necessary to prevent serious civil unrest and disorder which would endanger the occupying forces and the accomplishment of the objectives of the occupation.

3. A plan should be prepared by you¹⁴ to prevent transfers of title of real and personal property intended to defeat, evade or avoid the orders, proclamations or decrees of the military government or the decision[s] of the courts established by it.

4. Substantial amounts of private property of various categories has [have] been seized, looted or otherwise improperly acquired by various Nazi officials.¹⁵ While it is contemplated that a suitable commission will ultimately deal with this problem, you should take such steps as may be practicable to collect any available information and to preserve¹⁶ any property of this kind found in the area under your control.

5. a. All property in the German territory belonging to any country with which any of the United Nations are, or have been, at war may be controlled, subject to such use thereof as you may direct.

b. Your responsibility for the property of the United Nations, other than U.K. and U.S. and their nationals, in areas occupied by Allied forces shall be the same as for the property of U.K. and U.S. and their nationals, except where a distinction is expressly provided by treaty or agreement. Within such limits as are imposed by the military situation you should take all reasonable steps necessary to preserve and protect such property.

6. You will permit the formation of democratic labor unions and other forms of free economic association, exercising safeguards necessary to eliminate Nazi labor institutions and to prevent or eradicate underground, secret, or subversive activities or organizations.

Appendix “D”

Relief Directive

1. You will be responsible for the provision and distribution of sup plies for civilian relief, to the extent defined below, in all areas of Germany under your command. In connection with this responsibility, you will make maximum use of supplies, stockpiles and resources available within Germany in order to limit the extent to which imports, if any, will be required.

2. The scale of relief to be provided will in no event exceed the minimum quantity of food, fuel, medical, sanitary and agreed essential supplies necessary to maintain the health and working capacity of the civilian population, to preserve public order, to develop local resources in order to lighten the burden on the Allied armies, and to accomplish the objectives of the occupation.

3. You will provide for importation of civilian supplies into Germany only to the extent that critical shortages of any essential items threaten clear and imminent interference with the policies set forth in paragraph 2 of this directive.

4. You will undertake measures necessary for the control, prevention and treatment of epidemic and other diseases and the promulgation of such medical and sanitation measures, including emergency shelter, as will preserve the state of public health and protect the occupying forces.

1. For a draft directive to the three Allied commanders-in-chief relating to the post-surrender period in Germany, prepared by the Planning Committee of the United States Delegation to the European Advisory Commission and dated July 12, 1944, see Foreign Relations, 1944, vol. i, pp. 244–246. In the absence of action on a tripartite basis with respect to such a directive, the Representatives of the British Chiefs of Staff, in CCS. 658, August 23, 1944 (not printed), suggested the preparation of an American-British directive to Eisenhower on the military government of Germany after Germany’s surrender. This suggestion was referred to the Combined Civil Affairs Committee for study and the War Department prepared a draft of such a directive. The draft printed below is not known to have been referred to at the Second Quebec Conference, but it formed part of the background of the discussion of German problems within the Cabinet Committee on Germany and between the Committee and Roosevelt. Following the Quebec Conference an amended version of this draft (dated September 22, 1944) was submitted to the Joint Chiefs of Staff as enclosure C to J.C.S. 1067, September 24, 1944, and was forwarded to Winant on September 27. For the covering instruction to Winant and for the text of the draft of September 22, see Foreign Relations, The Conferences at Malta and Yalta, 1945, pp. 142–154.
2. “Suggested Recommendations on Treatment of Germany From the Cabinet Committee for the President”, September 4, 1944, ante, p. 95.
3. See ante, p. 97.
4. See Stimson’s memorandum for Roosevelt, September 5, 1944, ante, p. 98, which was submitted via Hull.
5. Not filed with the ribbon copy of McCloy’s letter to Matthews, above; sup plied from Roosevelt Papers. McCloy also sent a copy of this draft to Hopkins on September 6, 1944 (Hopkins Papers), and another copy is in the Morgenthau Diary, vol. 768 (see Morgenthau Diary (Germany), vol. i, p. 509).

6. At the same time that this draft directive was in preparation, a draft Hand-hook of Military Government in Germany, prepared to provide guidance to military government officers on the objectives of military government, was under discussion in Washington. Morgenthau called Roosevelt’s attention to the Handbook and in a memorandum for the President dated August 25, 1944, quoted extracts which he considered particularly objectionable. Using the Morgenthau memorandum as a basis, Roosevelt instructed Stimson on August 26 to withdraw the Handbook. Roosevelt’s memorandum to Stimson stated:

   “It is of the utmost importance that every person in Germany should realize that this time Germany is a defeated nation. I do not want them to starve to death but, as an example, if they need food to keep body and soul together beyond what they have, they should be fed three times a day with soup from Army soup kitchens. That will keep them perfectly healthy and they will remember the experience all their lives. The fact that they are a defeated nation, collectively and individually, must be so impressed upon them that they will hesitate to start any new war.

   . . . . . . . . . . . . . .

   “There exists a school of thought both in London and here which would, in effect, do for Germany what this government did to its own citizens in 1933 when they were flat on their backs. I see no reason for starting a WPA, PWA, or a CCC for Germany when we go in with our Army of Occupation.

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

   For the text of Morgenthau’s memorandum to Roosevelt, see Morgenthau Diary (Germany), vol. i, pp. 440–442. For the full text of Roosevelt’s memorandum to Stimson, see ibid., pp. 443–445; Foreign Relations, 1944, vol. i, pp. 544–546.

7. Not attached to the source text.
8. Not attached to the source text. Concerning the drafting of the German surrender instrument, see Foreign Relations, 1944, vol. i, pp. 484 ff.
9. There is the following notation, in an unidentified handwriting, in the margin opposite this paragraph: “How many thousand?”
10. There is the following notation, in an unidentified handwriting, in the margin opposite this paragraph: “Are they to be put to work while in custody?”
11. Blanks in this paragraph appear in the source text.
12. There is a marginal manuscript notation on the source text that the following language is to be inserted in this paragraph: “and the necessity for the pro vision of civilian relief”.
13. At this point in the source text there is the following addition, in an unidentified handwriting: “(4) to contribute to the expenses of the occupation”.
14. A handwritten notation on the source text substitutes “You should take measures” for the first seven words of this paragraph.
15. The last four words of this sentence have been changed by hand on the source text to read “the Nazi Govt, its officials and nationals”.
16. The source text has been changed at this point to read “to identify, preserve and control”.