740.00119 Control (Germany)/7–1745

No. 849
The Secretary of War (Stimson) to the Secretary of State
top secret

Dear Mr. Secretary[:] I am enclosing herewith the original and a copy for your files of a memorandum to the President relating to the problem of the administration of Germany. This is the memorandum referred to in my note1 delivered to you yesterday evening.

At your earliest convenience I would very much like to see the [Page 754]President with you about this memorandum and the memorandum on Japan2 sent to you yesterday.

Faithfully yours,

Henry L Stimson

[Enclosure]
The Secretary of War (Stimson) to the President3
top secret

Memorandum for the President

The matters with which I am primarily concerned, namely the administration of Germany and the conduct of the war with Japan, are, upon analysis, inextricably related to the general problem of post war rehabilitation and the achievement of the strategic aims for which we have been fighting.

the condition of central europe

We have occupied Germany following a devastating conquest which has laid waste wide areas of middle Europe, extending from France to well within the boundaries of Russia, and extending from the North Sea and the Baltic to the Mediterranean. Germany, which has been responsible for loosing the forces which resulted in the two World Wars, is herself laid waste and is in the geographical center of the area of devastation.

This area in the main was a highly industrialized one, its industrialization being evidenced by the number of large and prosperous [Page 755]cities within it. All who have visited Germany and the portions of Poland and Russia overrun by the war, testify to the great destruction visited upon those cities. Almost without exception, cities large and small have been torn by explosives of greater power than have been developed in any previous wars. It may be true, as was stated before the Kilgore Committee of the Senate,4 that many of the plants could, with industry, be restored or set in motion with relatively little or no repair. But there is a great difference between the mere physical existence of a plant and its capacity to operate as a going concern. That capacity has been destroyed, at least temporarily, by the destruction of the means of communication to and from the plant, and by the general collapse following defeat. A paralysis of commerce has set in due to the lack of transportation, raw materials, and the means of trade. This paralysis is not limited to Germany, but may grip all western Europe as well.

As occupiers of portions of this area, we shall have many serious administrative problems to cope with, problems which will be greatly accentuated by lack of food and fuel. For this reason alone it should be our policy to make it possible for the people we control to work, and thus relieve us to the maximum possible extent of the burden of their idleness and want. I take it that all our objectives are included in one fundamental purpose—the achievement of security and peace under conditions which preserve to us our concepts of liberty. While it is our object to disarm Germany, it should not be our purpose to make it impossible for the German people to live and work. We should not remove their capacity for aiding in the restoration of stable conditions in Europe and the world.

On the one hand it is clear that Germany has created, and twice misused, a swollen war industry—one substantially beyond her peaceful needs, and even though this capacity has been greatly impaired by defeat, certain physical steps can and should be taken to hamper the regrowth of her industrial capacity to more than reasonable peacetime needs.

On the other hand from the point of view of general European recovery it seems even more important that the area again be made useful and productive. Considering Germany alone, the figures show that the commerce of Europe was very largely predicated upon [Page 756]her industry. There was a period, substantially before the war, when Germany became the largest source of supply to ten European countries—viz. Russia, Norway, Sweden, Denmark, Holland, Switzerland, Italy, Austria-Hungary, Roumania and Bulgaria, and the second largest supplier of Great Britain, Belgium and France. At the same time she became the best customer of Russia, Norway, Holland, Belgium, Switzerland, Italy, and Austria-Hungary, and the second best of Great Britain, Sweden and Denmark.

Germany, according to estimates we now have, will continue to have about the same number of people she had before the war, and they will have to be fed, clothed, and housed in some manner. Of her approximately 70,000,000 people (including Austria), about 25,000,000 have been supported by industrial rather than agricultural activity. England and France, at the moment, do not have sufficient production to take care of their own needs by a long measure. There will be a scarcity of products which will plague all Europe for a substantial period to come, and the effects of it are bound to be felt by the other countries of the world.

The problem which presents itself therefore is how to render Germany harmless as a potential aggressor, and at the same time enable her to play her part in the necessary rehabilitation of Europe.

the impracticability of destroying german industry

It is my view that it would be foolish, dangerous and provocative of future wars to adopt a program calling for the major destruction of Germany’s industry and resources. Not only would any reasonable prospect for the reestablishment of European industry be dissipated by such action, but such destruction would be bound to leave a focus of economic and political infection which might well destroy all hope we have of encouraging democratic thinking and practices in Europe. What elements of German industry can be destroyed or removed as unnecessary for peacetime needs is a matter of [for?] expert determination. The balance must be put to work as soon as practicable and subjected to some system of security control. It is a task requiring perseverance, application and intelligence over a long period of time, but I am certain that mere destruction is neither effective as a security measure, nor, in the light of European, including German needs, possible as an economic one.

The need of all Europe includes the prompt stimulation of production within Germany, of food, coal, clothing, and housing. Production of these items is not capable of independent development. It must be based on other items and services, in short, general industry and trade. Without freedom of internal trade and communication, no one of these items can be produced on the scale which [Page 757]will be required. It follows that we cannot afford to operate Germany as if she were four separate water tight compartments.

recommendations

Accordingly, as a first step, I would urge the adoption by the Great Powers at the Conference of a policy which would treat Germany as an economic unit so as to permit her to contribute to her own and to general European rehabilitation. To this end I would urge that the three Powers instruct their representatives in the Control Council to adopt a uniform policy in respect to such matters of nation-wide importance as transportation and communication, rationing and control of critical prices. I would urge that the Control Council also be instructed to adopt a uniform currency and a uniform fiscal and taxation system. They should also be instructed to decree a free exchange of commodities and persons, (subject to feeding and housing limitations) between the zones, and the full recognition of the principle that the cost of any imports shall be a first charge against any exports. And at the same time, in order to accomplish the future security, I would urge that the Control Council be instructed to:

(a)
Institute a system of control over imports and exports which will eliminate the importation of any article not clearly needed for peacetime necessities and commerce.
(b)
Decentralize the political authority of the Germans, giving encouragement to the local administrative units, and by the popular selection of local administrators through free but Nazi-purged elections. For the time being there should be no central political government of Germany other than the Control Council itself acting through such German administrators as it cares to select.
(c)
Completely abolish the German General Staff and submit a plan whereby the world may be assured that neither it, nor anything like it, will again become a factor in the government of Germany.
(d)
Determine and report the extent to which German industrial activity may safely be resumed, considering (1) rehabilitation needs, and (2) the necessity of reducing Germany’s overdeveloped war making powers.

The above are not all-inclusive, but I believe they are essential and would constitute a good common start toward achieving the economic and strategic objectives which we seek. I assume of course, that the process of punishment of war criminals will, in coordination with the Control Council[,] be prosecuted vigorously.5

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

Henry L Stimson
  1. Document No. 1236.
  2. See documents Nos. 732, 1212, 1236, and 1274.
  3. The following extracts from Stimson’s diary refer to the genesis and use of this memorandum:

    “[July 16:] I spent the morning with McCloy and Bundy in drafting the papers in re Manchuria [see document No. 1212], the problem of Germany, and third, the answer to the proposition of the State Department on the Ruhr, viz: protectorate by France, Belgium, and Holland, and a total excision of the Ruhr from Germany. …

    “[July 17:] I went to the ‘White House’ for a conference with Byrnes early in the morning. … I then discussed with him the papers on Germany which had been united into one paper. I very briefly outlined our position taken in the paper, but emphasized the danger of trouble which would come from the territorial excision and the denationalization of the German population of the Ruhr, pointing out that it was entirely against the historical tendency of the evolution towards nationalism which had taken place for the past one hundred and fifty years in Europe, and I contrasted this with the wiser territorial results reached in the Treaty of Versailles. Later I heard through the grapevine and McCloy that the State Department proposition had been practically abandoned. …”

    The “State Department proposition” referred to was presumably document No. 1021. While the position advanced in that paper was certainly discussed among the Department of State officials who were members of the Delegation, such a position never became the official Department of State position, as the extracts quoted above might seem to imply.

  4. i. e., the Subcommittee on War Mobilization Problems of the Senate Committee on Military Affairs (79th Congress, 1st Session). The hearings referred to are printed under the caption, Elimination of German Resources for War (Washington, Government Printing Office, 1945–1946). Cf. A Program for German Economic and Industrial Disarmament: A Study Submitted by the Foreign Economic Administration (Enemy Branch) to the Subcommittee on War Mobilization of the Committee on Military Affairs, United States Senate, April 1946 (Washington, Government Printing Office, 1946; Senate Subcommittee monograph No. 6, 79th Congress, 2d Session).
  5. For the concluding section of this memorandum, see document No. 1022.