Matthews Files

Memorandum From the Department of the Treasury1

Memorandum

Re: Long Range Program for Germany.

1. The single objective of any long range program towards Germany is that of doing all that we can now to prevent Germany from starting a third World War in the next generation. To accomplish this objective, the following principles are clear:

(a)
Germany must be rendered weak politically, militarily and economically and must be kept weak for many years to come.
(b)
Any program which has as its purpose the building up of Germany as a bulwark against Russia and communism will inevitably lead to a third World War.
(c)
It is impossible to devise a program for Germany today which will guarantee peace in the years to come. We can not expect to find a panacea. There are certain minimum steps which we must take now. Developments in the next five or ten years may require that we take additional steps at that time. So long as the German people retain the will to wage war, we must be ever vigilant to see to it that they do not obtain the means to exercise this will.
(d)
Since the stakes are so high, our goal must be that of seeing how far we can go in making certain that Germany is unable to embark upon another war rather than trying to find a minimum program which would convince most people that we had solved the problem.

2. There are many essential facets to a long range program for Germany. Without intending at all to exclude from consideration the other essential elements of the program, it is desired at this time to emphasize the importance of dealing effectively with German heavy industry because industry represents an indispensable means by which Germany can exercise her will to wage war again. Although political, military and economic controls over Germany in the post-war period are essential, they afford no reasonable assurance that a strong industrial Germany could not within twenty to thirty years again plunge the world into war. In order to make reasonably sure that we have deprived Germany of the ability to make war again within the next generation, it is absolutely essential that she be deprived of her chemical, metallurgical and electrical industries. Although this does not mean that other measures are unnecessary, the elimination of heavy industry is one of the essential steps we must take now.

At the same time that German heavy industry is eliminated in Germany every effort should be made to build up heavy industry in the liberated countries surrounding Germany. The industrial equipment moved from Germany as well as the resources in the Rhine and Ruhr [Page 176] areas could make a real contribution toward such a program. In this way the whole balance of industrial power in Europe will be shifted so that Germany will no longer be the dominating power in Europe.

3. After careful study, we completely reject the following propositions:

(a)
The fallacy that Europe needs a strong industrial Germany.
(b)
The contention that recurring reparations (which would require immediate reconstruction of the German economy) are necessary so that Germany may be made to pay for the destruction she has caused.
(c)
The belief that the removal or destruction of all German war materials and the German armament industry would in itself prevent Germany from waging another war.
(d)
The illogical assumption that a “soft” peace would facilitate the growth of democracy in Germany.
(e)
The fallacy that making Germany a predominantly agricultural country, with light industries but no heavy industries, would mean starving Germans.

  1. Unsigned carbon copy bearing the notation in pencil: “Treasury memo”.