Memorandum by the Adviser on German Economic Affairs ( Despres ) to the Assistant Secretary of State ( Clayton )
The attached memorandum from the White House21 represents the most extreme statement which I have yet seen of the Treasury doctrine with respect to economic treatment of Germany.22 It calls for pulverization of German industry, and it opposes any attempt to assume comprehensive control over the German economy. The resolution of all this with reparation is achieved by emphasizing reparation through transfer of existing wealth rather than current production. It essentially ignores the fact that the Russians are resolutely determined to get large reparation, including, of necessity, substantial reparation from current production. Moreover, the subject memorandum takes no account of the need for keeping our impositions [Page 1182] on Germany within limits which will obviate the necessity for permanent outside relief to Germany.
Mr. Stettinius, in arranging for Mr. Lubin’s appointment, emphatically took the position that he would represent the Department of State in undertaking this assignment. In conformity with this principle, it would seem appropriate that Mr. Lubin’s instructions should come from the Secretary, though with Presidential approval, rather than from the President directly. On the assumption that the letter of instruction would be prepared here, Mr. Luthringer has drafted a short policy statement for inclusion in such a letter. A copy of this draft statement is attached. It seems to me to provide much sounder guidance to Mr. Lubin than the memorandum received from the White House. I suggest that the policy statement to be contained in Mr. Lubin’s letter of instruction should be considered by your new Germany Committee23 and by Mr. Lubin.
- Supra. ↩
- For pertinent documentation on the position of the Treasury Department, see pp. 376–377, 388–392, 423, and 455–473 passim. ↩
- Reference is to the Informal Policy Committee on Germany (IPCOG); for the establishment of this committee, see memorandum by the Secretary of State to President Roosevelt, March 8, p. 433.↩
- See Conferences at Malta and Yalta, pp. 978, 982.↩