Memorandum Prepared in the Treasury Department (Sept. 4, 1944) | Memorandum by the Chief of the Division of Central European Affairs (Sept. 4, 1944) | Letter from the President’s Special Assistant (Hopkins) to the Secretary of State (Sept. 5, 1944) | Letter from the Secretary of War (Stimson) to the President (Sept. 5, 1944)

Memorandum Prepared in the Treasury Department

Top Secret
Washington
September 1, 1944

SUGGESTED POST-SURRENDER PROGRAM FOR GERMANY

It is suggested that the position of the United States should be determined on the basis of the following principles:

1. Demilitarization of Germany
It should be the aim of the Allied Forces to accomplish the complete demilitarization of Germany in the shortest possible period of time after surrender. This means completely disarming the German Army and people (including the withdrawal or destruction of all war material) and the total destruction of the whole German armament industry as well as those parts of supporting industries having no other justification.

2. Partitioning of Germany

a. Poland should get that part of East Prussia which doesn’t go to the U.S.S.R. and the southern portion of Silesia as indicated on the map.

b. France should get the Saar and the adjacent territories bounded by the Rhine and the Moselle Rivers.

c. As indicated in part 3 an International Zone should be created containing the Ruhr and the surrounding industrial areas.

d. Denmark should be given the territories between its present borders and the International Zone, north of the Kiel Canal.

e. The remaining portion of Germany should be divided into two autonomous, independent states, (1) a South German state comprising Bavaria, Wuerttemberg, Baden and some smaller areas and (2) a North German state comprising a large part of the old state of Prussia, Saxony, Thuringia and several smaller states.

There shall be a custom[s] union between the new South German state and Austria, which will be restored to her pre-1938 political borders.

3. The Ruhr
Here lies the heart of German industrial power. It should be dealt with as follows:

a. An International Zone should be created containing the Ruhr and the surrounding industrial areas. Included in the Zone should be the Kiel Canal and the Rhineland. The Zone should be governed by the international security organization to be established by the United Nations. The approximate borders of the Zone are shown on the attached map.

b. The internationalization of this area shall in no way interfere with: (a) total destruction of the German armament industry and supporting industries in the Ruhr in accordance with Part 1 of this memorandum, (b)restitution and reparations, including removal and distribution of industrial plants and equipment, in accordance with Part 4 of this memorandum.

c. Ownership and control of major industrial properties remaining shall be transferred to the international organization.

d. The international organization shall be governed by the following general principles:

i.The natural resources and the industrial capacity of the Ruhr area shall not be used or developed so as to contribute in any way to the military potential of Germany or the Ruhr area.

ii.The Zone will be a free trade area. However, the importation of capital should be discouraged.

4. Restitution and Reparation
Reparations, in the form of recurrent payments and deliveries, should notbe demanded. Restitution and reparation shall be effected by the transfer of existing German resources and territories, e.g.,

a. by restitution of property looted by the Germans in territories occupied by them.

b. by transfer of German territory and German private rights in industrial property situated in such territory to invaded countries and the international organization under the program of partition.

c. by the removal and distribution among devastated countries of industrial plants and equipment situated within the International Zone and the North and South German states delimited in the section on partition.

d. by forced German labor outside Germany.

e. by confiscation of all German assets of any character whatsoever outside of Germany.

9.German Economy
The sole purpose of the military in control of the German economy shall be to facilitate military operations and military occupation. The Allied Military Government shall not assume responsibility for such economic problems as price controls, rationing, unemployment, production, reconstruction, distribution, consumption, housing, or transportation, or take any measures designed to maintain or strengthen the German economy, except those which are essential to military operations and are indicated above. The responsibility for sustaining the German economy and people rests with the German people with such facilities as may be available under the circumstances.

Editorial Note

The following information on a meeting at the White House on September 2, 1944, with reference to Germany is taken from a memorandum of October 28, 1944, from the Chief of the Division of Central European Affairs (Riddleberger) to the Under Secretary of State (Stettinius):

“On September 1, 1944, Mr. Harry Hopkins informed the Secretary of the President’s desire to establish a Cabinet Committee on Germany and, with the Secretary’s permission, arranged for a meeting in his office on September 2 of officials of State, War and Treasury Departments. At this meeting Mr. McCloy and General Hilldring of the War Department, Dr. Harry White from the Treasury, and Mr. Matthews and Mr. Riddleberger from the State Department, and Mr. Harry Hopkins were present.

“It was at this meeting that Dr. White produced the Treasury plan for Germany and gave a lengthy interpretation of this plan which, in its general tenor, was more extreme than the memorandum itself. The plan contemplated the internalization of the Rhineland together with a strip of German territory extending through Westphalia, Hannover and Holstein to and including the Kiel Canal. Poland would receive East Prussia and Upper Silesia; France would receive the Saar and German territory bounded by the Rhine and Moselle rivers. The remainder of the Reich would be divided into two independent states. In explaining this plan, Dr. White insisted that no trade would be permitted between the proposed international zone and the rest of the Reich, and he emphasized that the productivity of this zone should not in any way contribute to German economy. No recurrent reparations deliveries would be demanded and reparations would be dealt with by transfer of territory, equipment and labor service.

“A lengthy discussion followed, in which Mr. Matthews and Mr. Riddleberger presented a State Department memorandum and explained at some length how our views fitted into the British and Russian ideas to the extent which we were aware of them. After a lengthy discussion in which Mr. McCloy pointed out the difficulties which would arise for the military authorities under the Treasury plan, he stated that on many subjects there was a large area of agreement and he suggested that Mr. Riddleberger draft a memorandum for the Cabinet Committee which would include all points on which there was obvious agreement. These points related primarily to the dissolution of the Nazi Party; the demilitarization of Germany; controls over communications, press and propaganda; and reparations. Mr. Riddleberger accordingly drafted this memorandum, which was discussed by three Secretaries on September 5.”
(862.50/9-2844)

Memorandum by the Chief of the Division of Central European Affairs

Secret
Washington
September 4, 1944

SUGGESTED RECOMMENDATIONS ON TREATMENT OF GERMANY FROM THE CABINET COMMITTEE FOR THE PRESIDENT

1. Appointment of an American High Commissioner
   It has become urgent that an American High Commissioner for Germany be appointed. Immediately upon occupation of Germany many important problems will have to be decided on a tripartite basis between the U.S., the U.K., and the U.S.S.R. These problems will have not only important military aspects but will require the working out of a common policy in the political and economic fields as well. The American High Commissioner should be an official of high political ability and considerable prestige who can speak with authority for this Government in all matters where a common policy must be worked out with the U.I. and the U.S.S.R. The appointment should be made as soon as possible.
2. American Policy for the Treatment of Germany
   The following policies for the treatment of Germany are recommended as the objectives of the United States, and for which we should seek agreement with the U.I. and the U.S.S.R.:

1. Demilitarization of Germany, including the complete dissolution of all German armed forces and all Nazi military, Para-military and police organizations, and the destruction or scrapping of all arms, ammunition and implements of war. Further manufacture in Germany of arms, ammunition and implements of war should be prohibited.
2. Dissolution of the Nazi Party and all affiliated organizations.Large groups of particularly objectionable elements, especially the SS and the Gestapo, should be arrested and interned and war criminals should be tried and executed. Party members should be excluded from political or civil activity and subject to a number of restrictions. All laws discriminating against persons on grounds of race, color, creed or political opinion should be annulled.
3. Extensive controls should be maintained over communications, press and propagandafor the purpose of eliminating Nazi doctrines or similar teachings.
4. Extensive controls over German educational systemshould be established for the purpose of eliminating all Nazi influence and propaganda.
5. No decision should be taken on the possible partition of Germany(as distinguished from territorial amputations) until we see what the internal situation is and what is the attitude of our principal Allies on this question. We should encourage a decentralization of the German governmental structure and if any tendencies toward spontaneous partition of Germany arise they should not be discouraged.
6. The American Government has no direct interest in obtaining reparations from Germanyand consequently no interest in building up German economy in order to collect continuing reparations. However, the U.I. and the U.S.S.R., together with a number of smaller states which have been victims of German exploitation, may have claims on German production which they will require for purposes of rehabilitation and reconstruction. Consequently, we should not take a fixed position on reparations at this time but should await the views of governments which have a more direct interest.
7. As the great Junker estates have provided the economic basis for the military caste in Germany, these estates should be broken up and the holdings distributedto tenants.
8. The primary objectives of our economic policy are: (1) the standard of living of the German population shall be held down to subsistence levels; (2) German economic position of power in Europe must be eliminated; (3) German economic capacity must be converted in such manner that it will be so dependent on imports and exports that Germany cannot by its own devices reconvert to war production.

Editorial Note

The Cabinet Committee on Germany (i.e., Hull, Hopkins, Stimson, and Morgenthau) held its first meeting in Hull’s office on the morning of September 5, 1944. The paper entitled “Suggested Recommendations on Treatment of Germany From the Cabinet Committee for the President,” September 4, 1944, ante, p. 95, was presented at this meeting. No official minutes of the meeting have been found, but information on the meeting is included in Hull, pp. 1608-1609; Stimson and Bundy, pp. 569-570; Morgenthau material printed in Blum, pp. 359-360, and Morgenthau Diary (Germany), vol. I, pp. 524-528; and Foreign Relations, The Conferences at Malta and Yalta, 1945, p. 161.

Letter from the President’s Special Assistant (Hopkins) to the Secretary of State

Washington
September 5, 1944

MY DEAR MR. SECRETARY: With minor reservations about language which do not affect the intent of the document, “Suggested Recommendations on Treatment of Germany from the Cabinet Committee for the President”, I approve of it.

If there be agreement on policies, then it becomes of the utmost importance for the proper Government Officials to indicate how the policies in this document are to be implemented.

Sincerely yours,

Harry L. Hopkins

Letter from the Secretary of War (Stimson) to the President

Washington
September 5, 1944

I have considered the paper entitled “Suggested Recommendations on Treatment of Germany from the Cabinet Committee for the President”, dated September 4^th, submitted to the Committee by the Secretary of State and have discussed it with my colleagues on the Committee.

With the exception of the last paragraph I find myself in agreement with the principles stated therein and they are in conformity with the lines upon which we have been proceeding in the War Department in our directives to the Armed Forces.

The last paragraph, however, is as follows:

The primary objectives of our economic policy are (1) the standard of living of the German population shall be held down to subsistence levels; (2) German economic position of power in Europe must be eliminated; (3) German economic capacity must be converted in such manner that it will be so dependent upon imports and exports that Germany cannot by its own devices reconvert to war production.

While certain of these statements by themselves may possibly be susceptible of a construction with which I would not be at variance, the construction put upon them at the discussion this morning certainly reached positions to which I am utterly opposed. The position frankly taken by some of my colleagues was that the great industrial regions of Germany known as the Saar and the Ruhr with their very important deposits of coal and ore should be totally transformed into a non-industrialized area of agricultural land.

I cannot conceive of such a proposition being either possible or effective and I can see enormous general evils coming from an attempt to so treat it. During the past eighty years of European history this portion of Germany was one of the most important sources of the raw materials upon which the industrial and economic livelihood of Europe was based. Upon the production which came from the raw materials of this region during those years, the commerce of Europe was very largely predicated. Upon that production Germany became the largest source of supply to no less than ten European countries, viz: Russia, Norway, Sweden, Denmark, Holland, Switzerland, Italy, Austria- Hungary, Romania, and Bulgaria; and the second largest source of supply to Great Britain, Belgium, and France. By the same commerce, which in large part arose from this production, Germany also became the best buyer or customer of Russia, Norway, Holland, Belgium, Switzerland, Italy, and Austria-Hungary; and the second best customer of Great Britain, Sweden, and Denmark. The production of these materials from this region could not be sealed up and obliterated as was proposed this morning, without manifestly causing a great dislocation to the trade upon which Europe has lived. In Germany itself this commerce has built up since 1870 a population of approximately thirty million more people than were ever supported upon the agricultural soil of Germany alone. Undoubtedly a similar growth of population took place in the nations which indirectly participated in the commerce based upon this production.

I cannot treat as realistic the suggestion that such an area in the present economic condition of the world can be turned into a non-productive “ghost territory” when it has become the center of one of the most industrialized continents in the world, populated by peoples of energy, vigor and progressiveness.

I can conceive of endeavoring to meet the misuse which Germany has recently made of this production by wise systems of control or trusteeship or even transfers of ownership to other nations. But I cannot conceive of turning such a gift of nature into a dust heap.

War is destruction. This war more than any previous war has caused gigantic destruction. The need for the recuperative benefits of productivity is more evident now than ever before throughout the world. Not to speak of Germany at all or even her satellites, our Allies in Europe will feel the need of the benefit of such productivity if it should be destroyed. Moreover, speed of reconstruction is of great importance, if we hope to avoid dangerous convulsions in Europe.

We contemplate the transfer from Germany of ownership of East Prussia, Upper Silesia, Alsace and Lorraine (each of them except the first containing raw materials of importance) together with the imposition of general economic controls. We also are considering the wisdom of a possible partition of Germany into north and south sections, as well as the creation of an internationalized State in the Ruhr. With such precautions, or indeed with only some of them, it certainly should not be necessary for us to obliterate all industrial productivity in the Ruhr area, in order to preclude its future misuse.

Nor can I agree that it should be one of our purposes to hold the German population “to a subsistence level” if this means the edge of poverty. This would mean condemning the German people to a condition of servitude in which, no matter how hard or how effectively a man worked, he could not materially increase his economic condition in the world. Such a program would, I believe, create tensions and resentments far outweighing any immediate advantage of security and would tend to obscure the guilt of the Nazis and the viciousness of their doctrines and their acts.

By such economic mistakes I cannot but feel that you would also be poisoning the springs out of which we hope that the future peace of the world can be maintained.

It is primarily by the thorough apprehension, investigation, and trial of all the Nazi leaders and instruments of the Nazi system of terrorism, such as the Gestapo, with punishment delivered as promptly, swiftly, and severely as possible, that we can demonstrate the abhorrence which the world has for such a system and bring home to the German people our determination to extirpate it and all its fruits forever.

My basic objection to the proposed methods of treating Germany which were discussed this morning was that in addition to a system of preventive and educative punishment they would add the dangerous weapon of complete economic oppression. Such methods, in my opinion, do not prevent war; they tend to breed war.