740.00119 Control (Germany)/1–445

Minutes of a Meeting of January 17, 1945 57

Participants: Mr. Morgenthau, Mr. White58 from Treasury
Mr. Stettinius, Mr. Dunn, Mr. Clayton,59 Mr. Acheson,60 Mr. Pasvolsky,61 Mr. Matthews, Mr. Riddleberger, Mr. Despres,62 Mr. Yost,63 Mr. Durbrow,64 and Mr. Raynor65 from State (Is this complete?)

Mr. Morgenthau began by stating that our three major objectives in Europe should be: (1) An economically strong and prosperous Britain, (2) development of friendly relations with Russia, not tainted by [Page 390] mutual suspicion, and (3) an economically weak Germany, incapable of further aggression.

[Here follow comments on post-war conditions in Britain and a reference to the Secretary of the Treasury’s views on relations with the Soviet Union, the latter not recorded in this document. For documentation regarding the negotiations on the extension of credit to the United Kingdom, the liberalization of world trade, and the settlement of lend-lease, see volume VI, pages 1 ff.]

With respect to Germany, Mr. Morgenthau said that although he felt confident that he and Mr. Stettinius would work as a team in the future, he thought it necessary, in order to remove any possible misapprehensions, to review the history of Treasury participation in the policy deliberations regarding Germany. Last August, while he and Mr. White were on their way to Europe, Mr. White showed him the ECEFP document on reparation.66 He was distressed by this document because it seemed to envisage the full maintenance of German productive power for the sake of securing reparation. While in England, Mr. Morgenthau looked into the plans regarding Germany, talking to General Eisenhower,67 Mr. Eden, Mr. Winant and to others at SHAEF68 and EAC. General Eisenhower expressed the view that during occupation the Germans should not be pampered but should “stew in their own juice”. Mr. Morgenthau got the impression at that time that Mr. Eden also favored a severe policy, (though this was not borne out by Mr. Eden’s later attitude at Quebec69). However, Mr. Morgenthau was greatly disturbed by the benevolently paternalistic character of the planning which was going forward at SHAEF and at EAC. Upon his return to Washington Mr. Morgenthau told Mr. Hull70 of his findings and impressions and reported them to the President. As an outgrowth of this, the President sent a memorandum71 to Secretary Stimson72 criticizing the SHAEF handbook on Germany.73 (Mr. Morgenthau has never seen this memorandum, apart [Page 391] from the excerpts printed by Drew Pearson.74) The President then set up a Cabinet Committee consisting of the Secretaries of State, War, and Treasury, and, as a member of that Committee, Mr. Morgenthau submitted a memorandum setting forth a program to weaken Germany.75 Shortly thereafter he was summoned to the Quebec Conference, where he was called upon to participate in discussion of policies toward Germany, among other matters. Mr. Morgenthau indicated that he remains deeply interested in doing what he can to see that a policy which strikes at the roots of Germany’s war making potential is adopted.

Mr. Morgenthau then outlined his views regarding treatment of Germany, which were not substantially different from those set forth in his memorandum to the President of last September.76 He said that our policy must have two central objectives: (1) to make Germany incapable of further aggression, and (2) to assure the Soviet Union that we do not look to Germany as a buffer and possible future ally against her. The only means of accomplishing both objectives is by assuring an economically weak Germany. A strong Germany would be a source of future European rivalries; Germany, by using her influence to promote divisive tendencies in Europe, could pave the way for renewed successful aggression. The people who oppose drastic economic weakening of Germany, both within and outside Government, are motivated largely by anti-Russian attitudes.

Mr. Morgenthau’s program to weaken Germany consists of elimination of the metallurgical, electrical, and chemical industries. He is opposed to any reparation, unless the removal to other countries of existing German capital equipment and supplies be considered as reparation. Germany’s loss of heavy industry might be accompanied by a further intensification of German agriculture, so that Germany might become a predominantly agrarian country. Concerning the scope of the industrial measures, Mr. Morgenthau said that he personally favored going so far as to seal up the coal mines for fifty years, but he suggested that his own advisers didn’t go along with him to this extreme point. Mr. White said that under the Treasury’s proposal Germany would still be left with some types of industry, a transportation system, utilities, etc.

Upon the conclusion of Mr. Morgenthau’s remarks, Mr. Stettinius stated that the Department was thoroughly in accord with Mr. Morgenthau’s objective of making Germany permanently incapable of [Page 392] further aggression, and all officers of the Department were of one mind about this. Mr. Morgenthau was somewhat skeptical, and Mr. Stettinius asked Mr. Riddleberger to summarize the contents of a recent memorandum on this subject.77 When Mr. Riddleberger began by saying that this memorandum had called for destruction of manufacturing facilities in armament and aircraft, Mr. Morgenthau remarked that measures against the armament industry alone were inadequate to achieve the desired result. Mr. Despres said that despite the full agreement which existed regarding the objective, there was a difference of emphasis between the State Department and the Treasury regarding the economic measures appropriate to that objective. He then said that the Department had taken the view that the depth of the cut initially taken into the German economy mattered less than sustained enforcement of whatever program for complete disarmament was adopted, and that the Department favored the program which had the best chance of being sustainedly enforced. Mr. White said that in their view both were important. Mr. Morgenthau then asked Mr. Despres whether the State Department’s recommendations regarding policy were based on a genuine desire to make Germany incapable of further aggression. Mr. Despres replied that they were, and Mr. Dunn and others joined in confirming this answer. Mr. Stettinius then designated Mr. Dunn, and Mr. Morgenthau designated Mr. White, to discuss these matters further.

  1. File copy is marked “revised draft”.
  2. Harry Dexter White, Assistant Secretary of the Treasury in charge of Monetary Research and Foreign Funds Control.
  3. William L. Clayton, Assistant Secretary of State for Economic Affairs.
  4. Dean Acheson, Assistant Secretary of State for Congressional Relations.
  5. Leo Pasvolsky, Special Assistant to the Secretary of State for International Organization and Security Affairs.
  6. Emile Despres, Adviser on German Economic Affairs.
  7. Charles W. Yost, Executive Secretary of the Joint Secretariat of the Executive Staff Committee.
  8. Elbridge Durbrow, Chief, Division of Eastern European Affairs.
  9. G. Hayden Raynor, Special Assistant to the Secretary of State.
  10. For text of the document by the Executive Committee on Foreign Economic Policy, designated ECEFP D–37/44, dated August 12, 1944, and entitled “Summary: Report on Reparation, Restitution, and Property Rights—Germany”, see Foreign Relations, 1944, vol. i, p. 287.
  11. General of the Army Dwight D. Eisenhower, Supreme Allied Commander, Allied Expeditionary Force.
  12. Supreme Headquarters, Allied Expeditionary Force.
  13. See footnote 55, p. 389.
  14. The then Secretary of State, Cordell Hull.
  15. Memorandum by President Roosevelt to the Secretary of War, dated August 26, 1944, Foreign Relations, 1944, vol. i, p. 544.
  16. Henry L. Stimson, Secretary of War.
  17. A German Country Unit which was set up as a special staff of Supreme Headquarters, Allied Expeditionary Force early in 1944 prepared a Handbook for Military Government in Germany for the use of the military government officers who would operate in occupied Germany. The third draft edition of this Handbook completed in August 1944 was the version which came into the hands of Secretary Morgenthau and was criticized by President Roosevelt. For discussions of this Handbook, see Forrest C. Pogue, The Supreme Command, in the official Army history United States Army in World War II: The European Theater of Operations (Washington, Government Printing Office, 1954), p. 353, and Harold Zink, American Military Government in Germany (New York, The Macmillan Company, 1947), pp. 19–20.
  18. See Drew Pearson’s syndicated newspaper column “Washington Merry-Go-Round” for September 21, 1944.
  19. A photographic copy of the memorandum is reproduced immediately preceding p. ix of Morgenthau, Germany Is Our Problem (first edition).
  20. See footnote 55, p. 389.
  21. Possibly the memorandum referred to here is the paper prepared by the Department of State entitled “Economic Policies Toward Germany—Summary”, not dated. For text, see Conferences at Malta and Yalta, p. 190.