No. 871
The Secretary of War ( Stimson ) to the President 1

Memorandum for the President

The Rehabilitation of Europe as a Whole

I am impressed with the great loss in economic values on the Continent, but even more with the loss in widespread moral values which destruction and war conditions have caused in Europe.

We have immediate interests in a return to stable conditions—the elimination of distress conditions to ease our problems of administration and the speed and success of our redeployment. But our long range interests are far greater and much more significant.

One hope for the future is the restoration of stable conditions in Europe, for only thus can concepts of individual liberty, free thought and free speech be nurtured. Under famine, disease and distress conditions, no territory or people will be concerned about concepts of free speech, individual liberty, and free political action. All the opposite concepts flourish in such an atmosphere. If democratic interests are not given an opportunity to grow in western and middle Europe, there is little possibility they will ever be planted in Russian minds.

I therefore urge that the principles stated in my paper to you on the administration of Germany of 16 July2 be kept in mind, which recommends that Germany shall be given an opportunity to live and work; that controls be exercised over the German people only in so far as our basic objectives absolutely require, and; that the ethnological and economic groupings of Germany should be disturbed only where considerations make it inescapable. We cannot be misled by the thought that because many plants, at least on our side of the line, exist in relative integrity, that German economy can readily be restored. I am satisfied that it cannot be unless there is a flow of commerce, establishment of transportation systems and stable currency. The Russian policy on booty in eastern Germany,3 if it is as [Page 809] I have heard it reported, is rather oriental. It is bound to force us to preserve the economy in western Germany in close cooperation with the British, so as to avoid conditions in our areas which, in the last analysis, neither British nor American public opinion would long tolerate.

Secondly, I urge that a completely coordinated plan be adopted for the economic rehabilitation of Europe as a whole; that in doing this, all the economic benefits which the United States can bestow, such as war surplus disposal, Export-Import bank credits, etc., be channelled through one man and one agency. Our means must be concentrated in one agency in order to use all our power to achieve our ends. Diverse policy and diverse methods of distribution lead to competition in bestowal of favors and interfere with the carrying out of the only effective and politically supportable program, namely, one of helping Europe to help herself.

There are large food, fuel and industrial sources in Europe, and, if all resources are marshalled, much can be done to achieve stability in Europe with the promptitude and in the degree necessary to preserve democratic governments. It does require a period of management in which I am convinced we have to take a part. I would recommend one United States agency as I have indicated, and I would feel that an Economic Council for Europe should be set up. The Chairman should be an American, in whose hands, subject to the authority of the President and pursuant to the directions of the central United States agency just recommended, would be vested the disposition in Europe of all benefits flowing from the United States. Other members of the Council would consist of the representatives of other contributing powers who would be similarly authorized. They should act in close liaison with the Control Council for Germany, and their duties should be, over a limited period, to assist the governments of Europe to help themselves in the restoration of stable conditions.

Interest of the War Department—The economic rehabilitation of Europe is not, of course, a matter primarily within the jurisdiction of the War Department. I am presenting this memorandum because the rehabilitation of Europe is so closely related to the immediate problems mentioned above in which the War Department is vitally concerned, and also because I feel that an economically stable Europe, with the impetus it can give to free ideas, is one of the greatest assurances of security and continued peace we can hope to obtain.

  1. Printed from an unsigned copy, described as a “proposed memorandum for the President”, transmitted by Colonel H. A. Gerhardt to Assistant Secretary of State William L. Clayton on July 24. It is indicated in Henry L. Stimson and McGeorge Bundy, On Active Service in Peace and War (New York, 1947), p. 593, however, that this memorandum was actually submitted to Truman on July 22.
  2. Enclosure to document No. 849.
  3. See documents Nos. 896, 904, 929, 940.