Allied plans for German industry after World War II
On that basis, he said, the nation will need large imports of food and raw materials to maintain a minimum standard of living.
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.
According to Dennis L. Bark and David R. Gress in A History of West Germany the Morgenthau Plan came to be seen as inflicting undue hardship, and so the approach was shifted, over time, to one encouraging German economic expansion.
Although a large part of the occupation costs were placed on the German economy, the US and the UK were increasingly forced to supply food imports to prevent mass starvation.
[15]Worries about the sluggish recovery of the European economy (which before the war was driven by the German industrial base) and growing Soviet influence amongst a German population subject to food shortages and economic misery, caused the Joint Chiefs of Staff, and Generals Clay and Marshall to start lobbying the Truman administration for a change of policy.
[16] General Clay commissioned several expert studies about necessary changes in German economy[17] and stated There is no choice between being a communist on 1,500 calories a day and a believer in democracy on a thousand.In July 1947, President Harry S. Truman rescinded on "national security grounds"[18] the punitive occupation directive JCS 1067, which had directed the US forces of occupation in Germany to "take no steps looking toward the economic rehabilitation of Germany [or] designed to maintain or strengthen the German economy."
It was replaced by JCS 1779, which instead noted that "[a]n orderly, prosperous Europe requires the economic contributions of a stable and productive Germany.
"[19] Nevertheless, General Clay needed over two months to overcome continued resistance among his staff to the new directive, but on July 10, 1947, it was finally approved at a meeting of the SWNCC.
"[27] Germany received many offers from Western European nations to trade food for desperately needed coal and steel.
In 1948, after three years of occupation, the combined US and UK expenditure on relief food in Germany through GARIOA and other means stood at a total of close to $1.5 billion (that were charged to the Germans).
Still, according to Nicholas Balabkins, German food rations were deficient in composition and remained far below recommended minimum nutrition levels.
[30] Beginning immediately after the German surrender and continuing for the next two years the US pursued a vigorous program to harvest all technological and scientific know-how as well as all patents in Germany.
[32] In 1947 the director of the US Commerce Department's Office of Technical Services stated before congress:"The fundamental justification of this activity is that we won the war and the Germans did not.
"[32] A German report from May 1, 1949, stated that many entrepreneurs preferred not to do research under the current regulations (Allied Control Council Law No.
Although the original focus on the exploitation was towards military means, much of the information collected by FIAT was quickly adapted commercially to the degree that the Office of the Assistant Secretary of State for Occupied Areas requested that the peace treaty with Germany be redacted to protect US industry from lawsuits.
With U.S permission, as for example given in the Stuttgart speech, France expanded the borders of the Saarland by adding parts of the Rhineland and thereafter detached it as a protectorate in 1947.
This was done as the Saarland served as Germany's second largest remaining source of coal, and its detachment was therefore necessary in order to curtail German industrial capability.
The area was integrated into the French economy, and although nominally politically independent, its security and foreign policies were decided in Paris, which also maintained a High Commissioner with wide-ranging powers in the protectorate.
By August 1947 11,100 tons of equipment (including great parts of the railway tracks) had been shipped east as reparations to the Soviet Union.
Under the terms of the agreement the Soviet Union would in return ship raw materials such as food and timber to the western zones.
[46] The final limitations on German industrial levels were lifted after the European Coal and Steel Community entered into force in July 1952, though arms manufacture remained prohibited.
According to Frederick H. Gareau, noting that although US policy had changed well before that; "the last act of the Morgenthau drama occurred on that date (May 5, 1955) or when the Saar was returned to Germany (January 1, 1957).
