Talk:Wirtschaftswunder

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[edit] Band

The link for the band "Wirtschaftswunder" seems inappropriate - does anyone have any suggestions for actual references? --Onlyemarie 01:13, 10 Feb 2005 (UTC)

[edit] Talk from the "Marshall Plan

My personal take on the subject would be (should anyone care) that, as the industrial heart of Europe, Germany was necessary for European recovery. Once the U.S. stopped mucking about with lowering the German standards of living, as ordained in the occupation directive, the JCS 1067, the West Germans bootstrapped themselves and pulled the rest of Western Europe up with them. Without the JCS 1067, which was finally scrapped in July of 1947 and which explicitly forbade efforts which could help the West German economy recover, we finally have the currency reform which takes place in 1948 and gets the economy going again. The slowing down of the programme of dismantling of German factories also helps a lot. By using the Marshall plan loans to pay for the reparations they have to pay they can effectively push the reparations forward in time, until they have a functioning economy again. As General Clay, military governor of the U.S. occupation zone said: "We began to slowly wipe out JCS-1067. When we were ordered to put in a currency reform this was in direct controvention of a provision of JCS-1067 that prohibited us from doing anything to improve the German economy. It was an unworkable policy and it wasn't changed just without any discussion or anything by those of us who were in Germany. It was done by gradual changes in its provision and changes of cablegrams, conferences, and so on."[1] Still, the Germans were not very happy with the policies that remained.

  • Letter from Konrad Adenauer to Robert Schuman (26 July 1949) Warning him of the consequences of the dismantling policy.
  • Letter from Ernest Bevin to Robert Schuman (30 October 1949) Brittish and French foreign ministers. Bevin argues that they need to reconsider the Allies' dismantling policy in the occupied zones

[edit] Turning Germany into an Agricultural and Pastoral state

Proposed post surrender plan for Germany (September 1944)
Roosevelt and Churchill Signed a version of this plan at the second Quebeq conference. Churchill removed some and added the word "pastoral" to make the deal sound less brutal.
When the press got wind of it and all hell broke loose, President Roosevelt pretended it was raining and denied signing it.
Still:
General Eisenhower, military governor of the U.S. occupation zone, and later U.S. President distributed one thousand copies of it to his officers in Germany.
(Stephen Ambrose, Eisenhower: Soldier, General of the Army, President-Elect, p.422.)
Sort of a "hint, hint, nudge, nudge..."
Two years later,in early 1947, this kind of thinking was aparently still so ingrained in large parts of the U.S. administrations thinking that former U.S. President Herbert Hoover had to make this warning in one of his situation reports on Germany.

'There are several illusions in all this "war potential" attitude.

a. There is the illusion that the New Germany left after the annexations can be reduced to a "pastoral state". It cannot be done unless we exterminate or move 25,000,000 people out of it. This would approximately reduce Germany to the density of the population of France.
...' [2]

[edit] More Spam/Voices on Allied Economic policy towards Germany 1945 - 1950

  • Gunther Harkort Representative of the Federal Republic of Germany to the Economic Cooperation Administration (ECA), 1949-52.

QUESTION: At what stage, in your view, was it recognized that German recovery was essential to full European recovery?

HARKORT: The waiver of implementation of the Morgenthau Plan and its toned-down offshoots -- (Directive JCS 1067, Potsdam Conference, Industrial Plans) -- points out the beginning of the realization that without including Germany we cannot make Europe viable again. In the Harriman Report of November 1947 this is stated quite clearly (p. 117): "No part of the economic aid requested by the CEEC (the later OEEC) countries is more fundamentally necessary to the recovery of Western Europe than the aid asked for the rehabilitation of German industry, agriculture and transport."


  • Charles P. Kindleberger Chief, Division German and Austrian Economic Affairs, Department of State, Washington, 1945-48

MCKINZIE: Of course, I should explain, one reason that I keep asking you about the positions that your office was taking is that I am aware that you got documents of a kind of conflicting nature. You got the Morgenthau business from the Treasury Department on one hand, and on the other hand there was residue of all of that planning that was done in the State Department by Leo Pasvolsky’s people, which did envision a rather early return of Germany into some sort of European economy. Dean Acheson says in his book that he didn't realize that Europe without a reconstructed Germany was analogous to a body without a heart. He and other people had felt that perhaps Great Britain could assume the economic role that had been played by Germany previously, and somehow this was all your heritage or the legacy that was dumped into your office.

KINDLEBERGER: I would allow no member of my staff to use the cliche "the heart of industrial Germany" for the Ruhr. I wasn't worried about that. If Acheson did it he was out of line. No, it's true that we very quickly became aware of the role of Germany in Europe. The Germans had problems of their own. The coal question is one I spoke of. Very quickly it became the repair of mining machinery in Poland--Poland acquired Silesia, the Silesian mines.

As all the capital equipment of Europe was very far depreciated it needed to be replaced and renewed and the Poles couldn't do it. How are you going to get Polish mining going without helping the German machinery industry. And we found ourselves in this very fast.

So what we tried to do was to convert the Morgenthau doctrine in U.S. economic policy toward Germany into a statement which said, "The Germans have sinned. They have gotten way out of line and they have hurt people, therefore, we are going to pull them down quickly to the level of the neighboring countries and it's going to be short, sharp, quick, surgical," but then we let them go. Now the Russians never would agree to this as far as I know, and we had to agree that there were some industries which they could not operate. But that was the interpretation and I think that's a reasonable way to sort of thread your way. We also would add, by the way, in the spring of ‘47 when food was scarce, that the Germans were last in line. Food got terribly scarce worldwide and the Marshall plan I think was in large part a response to a very bad harvest.


  • E. Allan Lightner, Jr. Assistant Chief, 1945-47, and Associate Chief, 1947-48, of the Central European Affairs Division, Department of State

MCKINZIE: Kindleberger contends that sometime in 1946 the economic people came around to the view that there would have to be some reconstruction of German industry even above the level of industry agreement, which was being hassled around about then or had been hassled around previously.

LIGHTNER: Well, to us those months between V-E Day and mid-'46 seemed a long time. That's when much of the dismantling was taking place. It was a crucial period when much time was being lost in restoring the economy and our group in CE found that we were being opposed at every turn by those who wanted to carry out literally the provisions of JCS-l067. You know, Jimmy Riddleberger was the one who sweated out this whole business of dealing with the Civil Affairs Division of the War Department during the days of planning for the occupation of Germany, and also later on in dealing with the Kindleberger group.

MCKINZIE: You look at the period between the Morgenthau plan and the Marshall plan, one of which represents a "salted earth" policy, and the other an industrial development policy. The question of historians who are always concerned with pinning things down to precise things inevitably comes down to: what was the turning point? Was there any particular event or any absolutely crucial time period in which the change from the Morgenthau plan to the direction of the Marshall plan was made?

LIGHTNER: I think it was fairly gradual. I think the military had their directives based, as I said before, very much on the philosophy of the Morgenthau plan, the basic JCS-l067. They had to accomplish the main chores, which everyone agreed had to be done at first, the denazification and the demilitarization. Germany never was to be in a position to wage war again. But how does one prevent a modern state from ever waging war again? Easy answer -- you strip it of its industries and you make it economically unable to produce the weapons of war. But that was overlooking a whole lot of other features, which made that concept impractical and unwise, Yet that was not apparent to the proponents of the Morgenthau idea at the beginning; but they found in practice, in administering defeated Germany, that it wasn't enough to prevent "disease and unrest;" the Germans could not live on that basis in the modern world. You couldn't hold them down to that point; we weren't that kind of conquerors. Anyway, it gradually became clear to our people who had favored the Morgenthau plan that in our own interest, in terms of our ability to accomplish our political goals in Germany, you had to give them hope for the future. How could we make them a democratic country by treating them as the Romans treated the Carthaginians. I guess the turning point was Secretary Byrnes' speech in Stuttgart in September 1946. By that time after the experience of running occupied Germany for a year, the more Draconian policies of JCS-1067 were being interpreted differently. More and more people along the line were coming to see that we had to help the Germans restore their economic life, their industries and so on. We were breaking up cartels, we were shipping some reparations to the Russians (dismantled industrial equipment), but at the same time with the other hand we were helping small industries and encouraging other forms of economic activity.

One of the reasons why it took so long to get the economy of Germany going after our own policy changed, was that the Germans took some time to recover from the effects of their defeat. Furthermore, you had an untenable situation in that Germany was divided into four zones -- four economic units. Potsdam said it should be one economic unit, but that wasn't the way it worked. There were four economic units, like little countries, with barriers between them, and it was impossible for them to have a viable economy under the circumstances. So, first you had two zones getting together for economic reasons -- the British and American. And finally, in the spring of 1948 on the eve of the London negotiations which led to the decision to create the Federal Government of Germany, all three Western zones came together as trizonia. This was nearly two years after the Stuttgart speech and the economic situation in Germany was still at a very low ebb. But the big upturn, the start of the economic miracle of West Germany's recovery was in sight. At least what sparked the recovery of Germany was the currency reform, the revaluation of the currency in Western Germany on a ten to one basis in May 1948. For the first time since the end of the war the Germans began to have some confidence in their future. The stocks that they had sitting on their shelves began to move off the shelves to be sold.


  • General William H. Draper Jr. Chief, Economics Division, Control Council for Germany, 1945-46; Military Government Adviser to the Secretary of State, Moscow Conference of Foreign Ministers, 1947; Under Secretary of War, 1947; Under Secretary of the Army, 1947-49;

We were more hardboiled than anybody except the Russians. The British were the most sensible. The French were even better than we were, although they were pretty severe, too. The Russians went even beyond the Morgenthau plan. They were basing their tough attitude on the fact that their whole country had been ravaged and millions of their people killed. They had been invaded, and you have a certain point of view when that happens. They were there to take it out on Germany, I guess, and we were pretty near as bad, although we hadn't been invaded. Anyway, the level of industry was finally determined on a level that didn't last long; it wasn't realistic. It took about two years to change. It was after I was back in Washington as Under Secretary before that directive was finally officially revoked.

In the meantime, we didn't pay as much attention to it as perhaps we should from the point of view of military discipline. There were several efforts to pull me back and have me charged with not carrying out the directive.

General Clay always defended me. He knew perfectly well that such a policy couldn't last just as well as I did. We fought it out and finally persuaded Washington. General Marshall himself defended me in testimony before a Congressional Committee. So, it finally worked out. The real turning point came when the currency was devalued or revalued in 1948. At that time we gave the Russians the opportunity to do the same to revalue the mark in their sector, in their zone; they refused. I was back in Washington before this -- when they walked out of the four power council meeting -- the Kommanditura. A few days later they declared the blockade of Berlin.


  • Joseph D. Coppock Economic adviser, International Trade Policy, Department of State, 1945-53

I don't know just when the change of attitude shifted the other way, but I would guess that it came in the course of '46 or '47. That was the '46-'47 winter, which was bad; it became clear to some that you simply couldn't have a stripped down, poverty stricken Germany. Here I would say that Kennan and Nitze, and the political officers in the Department, were right. Emergency aid and then the Marshall plan were the answers.

Well, let's see, where were we?

MCKINZIE: Well, we had gotten off on the problems of Germany. I didn't want to interrupt you there.

COPPOCK: I don't know the exact timing, but certainly whatever support there had been for the pastoral Germany disappeared pretty largely during 1946, because it became very evident that the overriding question was which side Germany was going to be on in the postwar situation. The threat of the Russians was evident enough, very evident indeed to those of us who had been through the OSS experience and were in the State Department. And all this time we hoped for, but did not expect, a cooperative Russia.


  • General Lucius D. Clay Deputy to General Eisenhower, 1945; deputy military governor, Germany (U.S.) 1946; commander in chief, U.S. Forces in Europe and military governor, U.S. Zone, Germany, 1947-49; retired 1949.

MCKINZIE: It also makes it difficult, doesn't it, in matters of policy setting, because you had JCS-1067, which was as I understand it, a compromise between the War Department and the Department of State on how...

CLAY: JCS-1067 would have been extremely difficult to operate under. If you followed it literally you couldn't have done anything to restore the German economy. If you couldn't restore the German economy you could never hope to get paid for the food that they had to have. By virtue of these sort of things it was modified constantly; not officially, but by allowing this deviation and that deviation, et cetera. We began to slowly wipe out JCS-1067. When we were ordered to put in a currency reform this was in direct controvention of a provision of JCS-1067 that prohibited us from doing anything to improve the German economy. It was an unworkable policy and it wasn't changed just without any discussion or anything by those of us who were in Germany. It was done by gradual changes in its provision and changes of cablegrams, conferences, and so on.

MCKINZIE: You must have had some backstopping in Washington to be able to do that.

CLAY: At that time I happened to have been very close to Mr. Byrnes, having worked for him. I could go to Mr. Byrnes (he was very close to the President), and he would go to the President. We'd get this thing resolved in short order.

MCKINZIE: Did you discuss with Mr. Byrnes the deteriorating situation with the Soviets before he made his very famous speech, now called the Stuttgart speech, in September of 1946?

CLAY: I urged him in the first place to come to Stuttgart. I had written him a letter about my own views of the situation and it was that letter which he used as the basis for this speech. He visited me in Berlin and we went over together. He had that passage in there, "as long as any other foreign country's troops are in Germany we're going to be there," which was the most important part of the speech. He tried all of that morning to get hold of the President by telephone to get his approval, and then left word that he was going to put this in if he didn't hear anything to the contrary. I'm sure that whatever he said there he had assurance that President Truman approved.

At that time their relationships were very close.

//

MCKINZIE: In the winter of 1946-47, you were under a directive that the German standard of living couldn't be any higher than that of France, in particular. Do you recall when you began to think in terms of rebuilding Germany as a part of solving a larger problem?

CLAY: In 1946 we got authority, as we brought food into Germany, to sell it to the Germans for German marks. We could use this money as we saw fit; for our own support, but also to aid and help the German economy. When we put in the currency reform in 1948, I saw a Germany where the people were working; which was going to come back quicker than the rest of Western Europe. I, of course, saw that that would never be allowed to happen.

My interest in having a revived Western Europe came from my realization that we could not have an economic recovery in Germany unless it was done as a part of all of Western Europe. It was about this time that the congressional committee came over studying the Marshall plan, the Herter Committee. We preached this to this committee all the time. As a matter of fact, one of the members of that committee, who spent a whole month in Germany at that time, was Everett Dirksen. He came back a very strong supporter of an economic program that would apply to all of Western Europe, including West Germany. I would say that this came to me, in a reverse sense, in '46. I began to realize that we couldn't develop Germany faster than Western Europe. On the other hand, if we left an economic vacuum in Germany, Western Europe could never come back.


  • Clifford C. Matlock Economist and political officer, U.S. Dept. of State, 1946-62; Political adviser, European Coordinating Committee, London, 1949-50;


MATLOCK: Yes, the German problem was the heart of the Europe problem.

MCKINZIE: Yes.

MATLOCK: That's a quote from Churchill about 1952 and I happen to agree with it as of that date.

MCKINZIE: Until 1950 it appeared that very many people in the State Department did not particularly see it that way.

MATLOCK: You mean they didn't favor German rearmament?

MCKINZIE: They didn't favor German rearmament or German industrial redevelopment very much.

MATLOCK: That's right, the whole U.S. policy until 1950 was to hold Germany down and deny it military strength. The British were still dismantling German industry as reparations when I went to London. They were getting the stuff out. Germany was trade competition. The British always thought about trade. They don't much anymore, but they did then. So they were among the last I think to stop dismantling German industry.

Well, you know, I was just a staff man, I didn't raise any objections to the demilitarization policy. I don't remember thinking there was anything wrong with it.

MCKINZIE: There was some talk too that unless Germany were given a full part in NATO that the influence of the occupying powers would begin to decline, that there was a kind of natural life of occupation after which you get out and make friends or you...

MATLOCK: That's right. Well, there was a real issue within Draper's immediate staff, and David Bruce's staff, involving me and Tommy Tomlinson and some others. One point of view, which I espoused, was that the occupation was over. The Contractual Agreements had not been signed, but I said, "The occupation in substance is over. We have told Germany (the West German Federal Republic of course) that we want it for a partner in alliance against Russia. The occupation is therefore over,

After six months of silence from your audience I conclude that nobody cares for your personal take on German's post-war economic recovery. Cheers. -Ashley Pomeroy 14:15, 13 December 2006 (UTC)
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