Foreign Relations of the United States, Diplomatic Papers, 1944, General, Volume I

740.00119 E.A.C./12–1444

Memorandum by the Chief of the Division of Central European Affairs (Riddleberger)⁹⁷

[Washington,] December 14, 1944.

The revised edition of the JCS 1067 is attached hereto.⁹⁸ It has been reworked during the past several weeks, principally by Colonel Cutter and Colonel Allen of the War Department and by Mr. Despres⁹⁹ and me of the State Department. Ambassador Winant has been informed that it is being revised to make it suitable for presentation to the European Advisory Commission, and that he will shortly receive it for that purpose.

1. General Directive

The first section of JCS 1067 has been rewritten to conform to recommendations made by the EAC, notably on control machinery for Germany, subsequent to the original preparation of the directive.

2. Political Directive

In revising this paper, the War Department representatives were obviously under categorical instructions to adhere as closely as possible to the original. This intransigent attitude was particularly noticeable in connection with the political section of the directive.

In consequence, the ad hoc committee has done little more on this section than improve the arrangement, the phrasing and the German. Substantively it is the same as drafted by the Treasury Department some months ago. The suggestions submitted by the State Department experts with respect to paragraph 1 (the arrest provisions) and paragraph 8a (the dismissal provision) of the political directive, including carefully worked out categories of Nazis for dismissal, were summarily rejected by the War Department representatives. They were rejected not on their merits but for the stated reason that they would not be pleasing to the Treasury Department. This unyielding attitude on a section of the directive which is peculiarly an affair for State Department determination is astonishing, particularly as there is no disagreement on the general proposal of the de-Nazification of Germany.

It might well be expected that the State Department’s opinion on how best to effect this political housecleaning in Germany would prevail. The Department had prepared and made available to the War Department comprehensive studies on the organization of National Socialism in Germany, which incorporated specific recommendations for effective dissolution.

There was never any real discussion of this problem in the ad hoc committee because of the unwillingness of the War Department representatives to depart from the wording of the original draft. All of the officers in CE¹ and TS² assigned to German problems are convinced that the State Department’s suggestions, both for the purpose of effective de-Nazification and in the interests of an orderly military government, are far superior to the original phraseology.

There are other matters on which the draft of the political directive is faulty. For example, paragraph 11 contains some provisions that are practically impossible of application, but I was unable to get any modification of them in the ad hoc committee. However, I do not believe that these points are important enough to belabor them further.

3. Financial Directive

The revision of the financial directive has consisted largely of detailed technical changes. The principal defects of the directive are as follows:

(a) A large part of the directive deals with matters of internal financial housekeeping of the occupation forces themselves, which should not, in general, be the subject of tripartite negotiation.

(b) Its guidance on policy matters is extremely limited. It states that banks should be placed under such control as is necessary for military needs, that banks should not be kept closed, that stock exchanges may be closed, that all financial assets of certain specified classes of holders should be blocked, and that exchange control should be established. A dollar-mark exchange rate of ten cents is fixed for pay of troops. Apart from these specified matters, the general burden of the directive is “hands off”.

In response to considerable urging, the military representatives accepted our proposals for two changes of slight importance. A new sentence has been added to paragraph 8 which envisages continued collection of most taxes. A final paragraph (10) has been added relating financial measures to the general policies set forth in the economic directive.

4. Economic and Relief Directives

The principal changes in this directive are as follows:

(a) A clause is added relating to restitution. (Economic—1f).

(b) The “hands off” note and disavowal of responsibility are made less extreme. (Economic—last two sentences of paragraph 1).

(c) The desirability of avoiding general revival of German export trade is noted. (Economic—bottom of page 1).

(d) The possible need for imports is recognized. (Economic—paragraph 2b; Relief—paragraph 2).

(e) Explicit reference is made to the inter-zonal problems resulting from regional surpluses and deficits, and this problem is assigned to the Control Council.

The above changes were made at our suggestion. The economic and relief directives leave much to be desired, but in view of the existing uncertainty over economic policy toward Germany, it is not possible to go much further.

5. Recommendation

With reference to the presentation of JCS 1067 to the EAC, it should not be forgotten that our delegation in London is convinced that the British and Soviet representatives are not going along with this procedure of an over-all directive (London’s 9851, November 11, Comea 126). If, however, for various reasons the Department thinks it must follow this procedure and approve JCS 1067 for submission to EAC,³ I strongly recommend that Winant be advised by us that he should not insist upon JCS 1067 to a point where it will unduly prolong the negotiations. If we force him to adhere too rigidly to JCS 1067 (particularly in view of its unsatisfactory nature and incompleteness) we may enter Germany with very little basic policy agreed upon by the three powers. I believe we are all of the opinion here that it is highly advisable to have as wide an area of agreement as possible with the British and Russians on the treatment of Germany before its occupation.

In conclusion, I think a word of commendation to our delegation in London is in order. Mr. Winant has now had his procedure reversed several times. He has received a minimum amount of guidance from this Government. Recriminations as to why this is the case will serve no useful purpose, but I feel we should once more urge upon the War Department the necessity of rapid replies to his urgent and repeated requests for guidance on a number of matters which are scheduled for discussion in the EAC, and on which this Department has for months been prepared to act. JCS 1067 still does not cover some of these questions and we cannot expect Ambassador Winant to operate without continuing and approved guidance from his own government.

James W. Riddleberger

97. Addressed to the Director of the Office of European Affairs (Dunn) and the Deputy Director (Matthews).
98. Not printed.
99. Emile Despres, Adviser on German Economic Affairs, Office of Economic Affairs and Office of Wartime Economic Affairs.
1. Division of Central European Affairs.
2. Division of Territorial Studies.
3. Marginal handwritten note on first page of the memorandum states: “Mr. Dunn and Mr. Matthews approved revised draft of J.C.S. 1067 and I so notified Col. Cutter in War Dept. on Dec. 16. J[ames] W. R[iddleberger].”