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Morgenthau Final Paper

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.
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)
Edna S. Friedberg, “Elinor Morgenthau,” Jewish Women's Archive, accessed April 5, 2020,
John M. Blum, From the Morgenthau Diaries. Years of Crisis, 1928-1938 (Boston, MA: Houghton Mifflin, 1959),
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
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)
John M. Blum, From the Morgenthau Diaries. Years of Crisis, 1928-1938 (Boston, MA: Houghton Mifflin, 1959),
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
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,
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
“The Morgenthau Plan for Post-War Germany (1944),” The Cold War, April 7, 2018,
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
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)
John M. Blum, From the Morgenthau Diaries. Years of Crisis, 1928-1938 (Boston, MA: Houghton Mifflin, 1959),
Thomas Fleming, The New Dealers War: FDR and the War within World War II (New York: BasicBooks, 2001),
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,
Michael R. Beschloss, The Conquerors: Roosevelt, Truman and the Destruction of Hitlers Germany (New York:
Simon & Schuster, 2003), p.149)
James Paul. WARBURG, Germany-Bridge or Battleground (Pp. xi. 386. William Heinemann: London, Toronto;
U.S.A., 1947), p.279)
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
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
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.
May, Dean. “Morgenthau, Henry, Jr. (1891-1967), Secretary of the Treasury.” American
National Biography. Accessed April 5, 2020.
Friedberg, Edna S. “Elinor Morgenthau.” Jewish Women's Archive. Accessed April 5,
2020. https://jwa.org/encyclopedia/article/morgenthau-elinor
Blum, John M. From the Morgenthau Diaries. Years of Crisis, 1928-1938. Boston, MA:
Houghton Mifflin, 1959.
Penkower, Monty Noam (1980). "Jewish Organizations and the Creation of the U.S. War
Refugee Board". Annals of the American Academy of Political and Social Science. 450
(1): 122–139.
Shur, Irene G., 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.
Reinisch, Jessica. 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.
Wheeler-Bennett, John Wheeler, and Anthony James Nicholls. The Semblance of Peace:
the Political Settlement after the Second World War. New York: St. Martins Press, 1972.
Fleming, Thomas. The New Dealers War: FDR and the War within World War II. New
York: BasicBooks, 2001.
Beschloss, Michael R. The Conquerors: Roosevelt, Truman and the Destruction of Hitlers
Germany. New York: Simon & Schuster, 2003.
Warburg, James Paul. Germany-Bridge or Battleground. Pp. xi. 386. William
Heinemann: London, Toronto; U.S.A., 1947.
Petrov, Vladimir. Money and Conquest: Allied Occupation Currencies in World War II.
Baltimore, MD: The John Hopkins Press, 1967.
Erbelding, Rebecca. Rescue Board: the Untold Story of Americas Efforts to Save the
Jews of Europe. New York: Anchor Books, 2019.