740.00119 Control (Germany)/3–2045
Memorandum by the Secretary of the Treasury (Morgenthau) to President Roosevelt
At a meeting at the State Department Mr. Stettinius presented to a number of us a five-page Post-hostility draft Directive for military control of Germany, dated March 10, which had your initials and those of Mr. Stettinius on it.
From many conversations that I have had with you as to how to deal with a defeated Germany, I am confident that this Directive goes absolutely contrary to your views, I would like to call your attention to some of the fundamental points contained in the March 10 Directive which seem to me to be contrary to the views you hold and the [Page 465] views that were contained in J.C.S. 1067 which I understand you collaborated on.
- (1)
- Decentralization of Germany—It requires the Control Council to “utilize centralized instrumentalities for the execution and implementation of its policies to the maximum extent possible” and requires that for this purpose “central German agencies … shall be revived or replaced as rapidly as possible.”
- (2)
- Elimination of German Heavy Industry—It allows Germany to maintain “metal, machinery and chemical industries” with controls on exports; and forbids only “aircraft, synthetic oil, synthetic rubber and light metals” industries.
- (3)
- Control of German Internal Economy—It states that “a substantial degree of centralized financial and economic control is essential” and requires the Allies to “direct, control and administer” the German economy in order to collect reparations and for other reasons. It requires the Control Council to formulate policies governing “public finance”, “prices and wages”, “rationing”, “internal commerce”, etc.
Carrying out the above directions would build up a strong central German Government and maintain and even strengthen the German economy. You, of course, would know whether or not it was decided at Yalta to move in that direction.
I strongly urge that the directive of March 10 be redrafted in accordance with the three principles indicated below which, in my opinion, reflect your views.
- 1.
- We should avoid assuming responsibility for the functioning of the internal German economy and its economic controls. The maintenance and rehabilitation of the German economy is a German problem and should not be undertaken by us in order to collect reparations or for any other reason except the security of the occupying forces.
- 2.
- We should aim at the greatest possible contraction of German heavy industry as well as the elimination of her war potential. The occupying forces should accept no responsibility for providing the German people with food and supplies beyond preventing starvation, disease, and such unrest as might interfere with the purposes of the occupation.
- 3.
- During the period of military occupation policies in the separate zones should be coordinated through the Control Council, but the actual administration of affairs in Germany should be directed towards the decentralization of the political structure.