The industrial plans for Germany

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The industrial plans for Germany or Level of Industry plans for Germany were the plans to lower German industrial potential after World War II. At the Potsdam conference, with the U.S. operating under influence of the Morgenthau plan[1], the victorious Allies decided to abolish the German armed forces as well as all munitions factories and civilian industries that could support them. This included the destruction of all ship and aircraft manufacturing capability. Further, it was decided that civilian industries which might have a military potential, which in the modern era of "total war" included virtually all, were to be severely restricted. The restriction of the latter was set to Germany's "approved peacetime needs", which were defined to be set on the average European standard. In order to achieve this, each type of industry was subsequently reviewed to see how many factories Germany required under these minimum level of industry requirements.

The first "level of industry" plan, signed by the Allies in March 29, 1946, stated that German heavy industry was to be lowered to 50% of its 1938 levels by the destruction of 1,500 listed manufacturing plants.[2] In January 1946 the Allied Control Council set the foundation of the future German economy by putting a cap on German steel production—the maximum allowed was set at about 5,800,000 tons of steel a year, equivalent to 25% of the prewar production level.[3] The UK, in whose occupation zone most of the steel production was located, had argued for a more limited capacity reduction by placing the production ceiling at 12 million tons of steel per year, but had to submit to the will of the U.S., France and the Soviet Union (which had argued for a 3 million ton limit). Steel plants thus made redundant were to be dismantled. Germany was to be reduced to the standard of life it had known at the height of the Great depression (1932).[4] Car production was set to 10% of prewar levels, etc.[5]

On February 2, 1946, a dispatch from Berlin reported:

“ Some progress has been made in converting Germany to an agricultural and light industry economy, said Brigadier General William Henry Draper Jr., chief of the American Economics Division, who emphasized that there was general agreement on that plan.

He explained that Germany’s future industrial and economic pattern was being drawn for a population of 66,500,000. On that basis, he said, the nation will need large imports of food and raw materials to maintain a minimum standard of living.

General agreement, he continued, had been reached on the types of German exports — coal, coke, electrical equipment, leather goods, beer, wines, spirits, toys, musical instruments, textiles and apparel — to take the place of the heavy industrial products which formed most of Germany's pre-war exports. [6]

 ”

The first plan was subsequently followed by a number of new ones, the last signed in 1949. By 1950, after the virtual completion of the by the then much watered-out "level of industry" plans, equipment had been removed from 706 manufacturing plants in the west and steel production capacity had been reduced by 6,700,000 tons.[7]

From mid-1946 American and British policy towards the German economy had begun to alter, illustrated by Byrnes's Stuttgart Speech.[8]The then current policy came to be seen as inflicting hardship (see also Morgenthau Plan, Eisenhower and German POWs), and the approach shifted, over time, to one encouraging German economic expansion, and subsequently the allowed levels were raised.[9]

After lobbying by the Joint Chiefs of Staff, and Generals Clay and Marshall, the Truman administration finally realized that economic recovery in Europe could not go forward without the reconstruction of the German industrial base on which it had previously had been dependent.[10] In July 1947, President Harry S. Truman rescinded on "national security grounds"[11] the punitive occupation directive JCS 1067, which had directed the U.S. forces in Germany to "take no steps looking toward the economic rehabilitation of Germany." It was replaced by JCS 1779, which instead stressed that "[a]n orderly, prosperous Europe requires the economic contributions of a stable and productive Germany."[12]

The dismantling did however continue, and in 1949 Adenaur wrote to the Allies requesting that it end, citing the inherent contradiction between encouraging industrial growth and removing factories and also the unpopularity of the policy.[13] (See also Adenauers original letter to Schuman, Ernest Bevins letter to Robert Schuman urging a reconsideration of the dismantling policy.) Support for dismantling was by this time coming predominantly from the French, and the Petersberg Agreement of November 1949 reduced the levels vastly, though dismantling of minor factories continued until 1951.[14] The final limitations on German industrial levels were lifted after the establishment of the European Coal and Steel Community in 1951, though arms manufacture remained prohibited.[15]

[edit] Notes

  1. ^ Frederick H. Gareau "Morgenthau's Plan for Industrial Disarmament in Germany" The Western Political Quarterly, Vol. 14, No. 2 (Jun., 1961), pp. 517-534
  2. ^ Henry C. Wallich. Mainsprings of the German Revival (1955) pg. 348.
  3. ^ "Cornerstone of Steel", Time Magazine, January 21, 1946
  4. ^ Cost of Defeat, Time Magazine, April 8, 1946
  5. ^ The President's Economic Mission to Germany and Austria, Report 3 Herbert Hoover, March, 1947 pg. 8
  6. ^ James Stewart Martin. All Honorable Men (1950) pg. 191.
  7. ^ Frederick H. Gareau "Morgenthau's Plan for Industrial Disarmament in Germany" The Western Political Quarterly, Vol. 14, No. 2 (Jun., 1961), pp. 517-534
  8. ^ Dennis L. Bark and David R. Gress. A history of West Germany vol 1: from shadow to substance (Oxford 1989) p178
  9. ^ Dennis L. Bark and David R. Gress. A history of West Germany vol 1: from shadow to substance (Oxford 1989) p179
  10. ^ Ray Salvatore Jennings "The Road Ahead: Lessons in Nation Building from Japan, Germany, and Afghanistan for Postwar Iraq May 2003, Peaceworks No. 49 pg.15
  11. ^ Ray Salvatore Jennings “The Road Ahead: Lessons in Nation Building from Japan, Germany, and Afghanistan for Postwar Iraq May 2003, Peaceworks No. 49 pg.15
  12. ^ Pas de Pagaille! Time Magazine July 28, 1947.
  13. ^ Dennis L. Bark and David R. Gress. A history of West Germany vol 1: from shadow to substance (Oxford 1989) p259
  14. ^ Dennis L. Bark and David R. Gress. A history of West Germany vol 1: from shadow to substance (Oxford 1989) p260
  15. ^ Dennis L. Bark and David R. Gress. A history of West Germany vol 1: from shadow to substance (Oxford 1989) pp270-71

[edit] See also

[edit] External links

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