William Teed April 4, 2020 HIS 315 Final Paper Henry Morgenthau Jr: The German Question On 11 May 1891, Henry Morgenthau Jr. was born to a well-known Jewish family in New York City. His father, Henry Morgenthau was a diplomat and real estate mogul and his mother was Josephine Sykes, a home maker. Morgenthau Jr. had three sisters and both of his parents were born in Germany. Morgenthau Jr. was very well educated. He attended Phillips Exeter Academy in New Hampshire, then transferred to the Dwight School in Manhattan. After high school and college prep, he studied agriculture at Cornell University in Ithaca. This man would be one of the most influential figures in the Roosevelt administration. In this paper, I’ll examine the man himself, his views and his contributions for the planning of a post-World War II Germany. He made a positive impact on the post war world, and wasn’t given credit, because his plan was debunked by many who favored it before the public found out. In 1913, Morgenthau Jr. was running a small farm near the Roosevelt estate in upstate New York. This is where Morgenthau met Franklin and Eleanor Roosevelt. Morgenthau was always fighting for farmers against the hardships they faced. In 1922, Morgenthau began to operate a magazine called the American Agriculturalist. He used the magazine as a platform to promote scientific farming, conservation, and reclamation. 1 After Roosevelt became the governor of New York he appointed Morgenthau to run the New York State Conservation Commission and Agricultural Advisory Committee. This would be the beginning of a partnership that would reach the presidency. Morgenthau while busy professionally, had a busy personal life. He married the granddaughter of Mayer Lehman, co-founder of the global finance firm Lehman Brothers. Elinor Fatman met Henry Morgenthau while teaching acting at the Henry Street Settlement on the lower east side of Manhattan. 2 They married in 1915 and bought Fish Kill Farms and grew Christmas trees. Both the Morgenthau’s and the Roosevelt’s were active in the Democratic Party. This bond would play a role in future events. Franklin Delano Roosevelt was elected President of the United States in November 1932 in the depth of the great depression. Roosevelt then asked Morgenthau to be the governor of the Federal Farm Board and later Secretary of the Treasury after William H. Woodin resigned in poor health. Morgenthau, a rigorous monetarist was overwhelmingly approved of, even by conservatives.3 His biggest success domestically was the new Social Security program, where he recommended that the program be funded by new taxes on employees instead of funding from general revenue. Morgenthau’s theories revolved around more private investment, stable currency, reduction of the national debt, and balanced budgets. Morgenthau, a close friend of the President, now became one of his closest advisors. 1 Dean May, “Morgenthau, Henry, Jr. (1891-1967), Secretary of the Treasury,” American National Biography, accessed April 5, 2020, https://www.anb.org/view/10.1093/anb/9780198606697.001.0001/anb-9780198606697e-0600452) 2 Edna S. Friedberg, “Elinor Morgenthau,” Jewish Women's Archive, accessed April 5, 2020, https://jwa.org/encyclopedia/article/morgenthau-elinor) 3 John M. Blum, From the Morgenthau Diaries. Years of Crisis, 1928-1938 (Boston, MA: Houghton Mifflin, 1959), p.74) Morgenthau’s treasury department approved the World Jewish Congress’ plan to rescue Jews by using blocked bank accounts in Switzerland. The British Foreign Office and the State Department moved slowly in this effort. In January 1944, Morgenthau went directly to Roosevelt with this issue, using the report to the Secretary on the Acquiescence of This Government in the Murder of the Jews, written by Josiah E. DuBois Jr. 4 Roosevelt approved the creation of the War Refugee Board, an executive agency charged with giving aid to civilian victims of the Axis powers. By mid-1944, Morgenthau was pleased with this agency saying, “His experience in getting the board established and in helping to oversee its operations constituted his single wartime success to that date in nurturing humanitarian purpose in American foreign policy.”5 Morgenthau’s feelings for the Germans were clear cut by this point. In the summer of 1944, he suggested to Franklin Delano Roosevelt that the top 50 or 100 German arch criminals should be shot on site when captured. By early 1945, he changed his position and believed that full trials were in order.6 Also in mid-1944, Henry Morgenthau came up with a plan out of pure hatred of the Germans. Most people hated Germany for World War I, a war they didn’t start, so they really hated Germany as World War II in Europe was ending. Morgenthau was one of those people. Both in Washington DC and London the German question was on everyone’s mind. What should happen to Germany? The Americans and the British were on similar pages. Morgenthau released 4 Irene G. Shur, Franklin H. Littell, and Marvin E. Wolfgang, Reflections on the Holocaust: Historical, Philosophical, and Educational Dimensions (Philadelphia: American Academy of Political and Social Science, 1980), p.122-139) 5 John M. Blum, From the Morgenthau Diaries. Years of Crisis, 1928-1938 (Boston, MA: Houghton Mifflin, 1959), p.227) 6 Ibid, 397 a comprehensive program for the economic and political treatment of Germany when the war was over.7 Morgenthau argued the key to the German question was economics. Morgenthau knew that transforming Germany couldn’t be achieved by improving living conditions and simply forbidding National Socialism. Any change due to these would be temporary and frivolous. Germany would be able to participate in a third world war if the controls imposed in 1918 were used again in 1945. Germany would only become a peaceful nation if it were transformed into an agricultural society and all of its industry were removed. This industrial sector would be moved to other nations as a form of restitution. Morgenthau’s plan had approximately seven major steps to make sure Germany could never wage war again. First, Germany would be completely demilitarized in the fastest time possible. Disarmament of the German Army, Navy and civilian population.8 Second, Germany would be broken up. France would receive the Saar and adjacent territories circumscribed by the Moselle and Rhine Rivers. A new international zone would be established around the Ruhr and neighboring industrial areas. The Ruhr was the pulse of German industry. Poland would get part of East Prussia which does not go to the USSR and the southern portion of Silesia. The remaining portion of Germany should be divided into two autonomous, independent states. A South German state including Bavaria, Baden, Württemberg, and a North German state comprising a large part of the old state of Prussia, Saxony, Thuringia and numerous smaller states. Also a custom union would be established between the new South 7 Jessica Reinisch, Perils of Peace: the Public Health Crisis in Occupied Germany (Oxford: OUP Oxford, 2013) “The Morgenthau Plan for Post-War Germany (1944),” The Cold War, April 7, 2018, https://alphahistory.com/coldwar/morgenthau-plan-post-war-germany-1944/ 8 German state and Austria, which will be restored to pre-1938 governmental borders. The international zone would be policed by an international security force built by the new United Nations. Ownership of all industrial properties would be placed with the security organization. Restitution and reparations wouldn’t be paid in the form of deliveries of goods or continuous payments. Payment would be in the form of existing German territories and resources, i.e. by restitution of property looted by the Germans in territories occupied by them; transfer of German private right in industrial properties, by forced German labor outside of Germany and confiscation of all German assets of any kind outside of Germany itself.9 All German universities and schools will be closed until an allied commission of education can implement a reorganization program. The education of German students at foreign universities will not be suspended. All elementary schools will be reopened when appropriate anti-Nazi teachers and text books are found. All German newspapers, radio stations and other press will be discontinued until adequate controls can be implemented. Germany, being broken up will guarantee proper partitioning and to assure its permanence military authorities, will follow established principles. First, to dismiss all officials of the Reich government and only deal with local governments. Second, reestablish state governments in each new German state and Prussian provinces as separate states. Last, the state governments in each state would be encouraged to organize a new federal government. New governments would be in the form of a confederation of states with focus on state rights and a majority of local autonomy. Lastly, the occupying military will control the German economy to simplify military occupation and ongoing operations. The allied government will not assume responsibility for economic issues like reconstruction, rationing, unemployment, price controls, production, consumption, distribution, housing, transportation or make any moves to strengthen the German 9 “The Morgenthau Plan for Post-War Germany (1944),” The Cold War, April 7, 2018, https://alphahistory.com/coldwar/morgenthau-plan-post-war-germany-1944/ economy except those needed for military operations. The overall responsibility for the German economy stays with the German people alone.10 This plan evolved into a book written by Morgenthau, Germany is our problem, in 1945 after the plan was agreed to by President Franklin Delano Roosevelt and British Prime Minister Winston Churchill at the second Quebec conference. Roosevelt agreed to Morgenthau’s plan because he wanted to appease Joseph Stalin and because he felt Germany should be treated harshly. Churchill was more reluctant to support the plan at first but was persuaded by Lord Cherwell, who was described as having “an almost pathological hatred for Nazi Germany, and an almost medieval desire for revenge was a part of his character.11 Morgenthau said later “I can’t overemphasize how helpful Lord Cherwell was because he could advise on how to handle Churchill.”12 At the Quebec Conference it was made clear to the British that all economic aid to Britain was dependent on their approval of the plan. Opposition of the plan was widespread especially from the Secretary of State Cordell Hull, who was outraged by Morgenthau’s “inconceivable intrusion” into foreign policy. Hull felt the plan would cause the Germans to fight longer costing thousands of American casualties. Hull was so angry about the plan, he was hospitalized and later resigned. Many felt Morgenthau was the reason why.13 Hitler’s propaganda minister Joseph Goebbels used the Morgenthau plan to scare the German civilian population. General George Marshall complained to Morgenthau that 10 ibid John Wheeler Wheeler-Bennett and Anthony James Nicholls, The Semblance of Peace: the Political Settlement after the Second World War (New York: St. Martins Press, 1972), p.179) 12 John M. Blum, From the Morgenthau Diaries. Years of Crisis, 1928-1938 (Boston, MA: Houghton Mifflin, 1959), p.373) 13 Thomas Fleming, The New Dealers War: FDR and the War within World War II (New York: BasicBooks, 2001), p.432) 11 the Germans had a stronger resolve now not to lose the war. This was seen during the battle of Aachen, where it took American troops five weeks to capture the city. After the Morgenthau plan was published, the reaction from the public was overwhelmingly negative. President Roosevelt renounced it saying “About this pastoral, agricultural Germany, that is just nonsense. I have not…I have no recollection of this at all.”14 On 12 April 1945, President Franklin Delano Roosevelt died at Warm Springs, Georgia. Vice President Harry S. Truman took over and finished Roosevelt’s term and then was elected his own term in 1948. The Morgenthau plan was essentially scrapped. However, out of the Morgenthau plan came Joint Chiefs of Staff directive 1067 or JCS 1067. This document ordered the United States military government of occupation in Germany to take no steps looking toward the economic rehabilitation of the German economy. Also, it ordered that starvation, civil unrest, and disease were to be kept at a level that wouldn’t pose a threat to the troops of occupation. Truman signed JCS 1067 on 10 May 1945 and the directive was issued to Dwight D. Eisenhower. It was applied to the US zone of occupation directly but was also given to the other allies to try and get them to agree to it. This directive was top secret until 17 October 1945. It was made public after the US had included most of it into the Potsdam Agreement in August 1945.15 Morgenthau told his staff in the treasury department that this was a major victory and that he hoped that “someone doesn’t recognize it as the Morgenthau plan.”16 Morgenthau had been able to wield substantial influence over JCS 1067. In occupied Germany, 14 Michael R. Beschloss, The Conquerors: Roosevelt, Truman and the Destruction of Hitlers Germany (New York: Simon & Schuster, 2003), p.149) 15 James Paul. WARBURG, Germany-Bridge or Battleground (Pp. xi. 386. William Heinemann: London, Toronto; U.S.A., 1947), p.279) 16 Michael R. Beschloss, The Conquerors: Roosevelt, Truman and the Destruction of Hitlers Germany (New York: Simon & Schuster, 2003), p.233) Morgenthau had a legacy through what in the office of military government, United States called the “Morgenthaus’ Boys.” These were treasury officials who Eisenhower “loaned” to the army of occupation and ensured that JCS 1067 was strictly adhered to. They were very active in the first few months of the occupation, but continued their work long after Morgenthau resigned in 1945.17 JCS 1067 was replaced by JCS 1779 in 1947 because of concerns over communism in Germany, and how the rest of the European economy didn’t recover without Germany’s industrial production base, on which it was dependent. Secretary of State George C. Marshall in the summer of 1947 convinced President Truman that because of national security concerns that JCS 1779 was the correct move. The Morgenthau boys in Germany resigned when JCS 1779 was implemented, but not before accomplishing the total destruction of the old German banking system. Ending the relationships between the German banks, breaking the flow of credit between them, only allowing short term financing, keeping the reestablishment of German industry with negative effects on the economy in the US occupation zone. Germany would make a full recovery eventually with the Marshall Plan and currency reform in 1948. Morgenthau devoted the rest of his life after his resignation to Jewish philanthropies and was a financial advisor to Israel for a time. He died in Poughkeepsie, New York in 1967. Henry Morgenthau’s involvement in post-war planning for Germany transformed the process established by the bureaucrats at war and state. Historians have focused on the disruption 17 Vladimir Petrov, Money and Conquest: Allied Occupation Currencies in World War II (Baltimore, MD: The John Hopkins Press, 1967), p.228-29) and not the cause or the results. Analysts have looked for reasons that Morgenthau shouldn’t have been involved rather than understanding the full context of his efforts on behalf of Roosevelt, his personal and professional experiences, and the greater certainty that his proposals would achieve the main objective of preventing another German war. His actions were an important contribution to American post-war planning. Bibliography May, Dean. “Morgenthau, Henry, Jr. (1891-1967), Secretary of the Treasury.” American National Biography. Accessed April 5, 2020. https://www.anb.org/view/10.1093/anb/9780198606697.001.0001/anb-9780198606697e-0600452. Friedberg, Edna S. “Elinor Morgenthau.” Jewish Women's Archive. Accessed April 5, 2020. https://jwa.org/encyclopedia/article/morgenthau-elinor Blum, John M. 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