The Morgenthau Plan was a proposal advocated by Henry Morgenthau Jr., U.S. Secretary of the Treasury, toward the end of WWII. The plan’s objective was to keep post-war Germany from regaining its pre-WWII military strength by partitioning the country into several smaller states, destroying its heavy industry and turning the country into an agrarian society. No industry – no war.

While the plan did influence Allied occupation policies, it was never fully implemented. In keeping with the Morgenthau Plan, a large proportion of operational civilian plants were dismantled and transported to the victorious nations, and large quantities of timber were exported from the U.S. occupation zone to reduce German war potential. But during the ensuing Cold War, the Western Allies changed their stance because the extreme poverty in Germany delayed the general European recovery. Besides, the Western Allies did not want to lose Germany to the communists. As General Lucius D. Clay put it, “There is no choice between becoming a communist on 1,500 calories a day and a believer in democracy on 1,000 calories.” The Morgenthau Plan was toned down accordingly.

Former US Secretary of the Treasury, Henry Morgenthau Jr. (1891-1967), originator of the Morgenthau Plan. photo courtesy of Wikipedia. www.walled-in-berlin.com

Goals of the Morgenthau Plan

In the original plan of 1944, Henry Morgenthau proposed to eliminate Germany’s ability to wage war by eliminating its arms industry and by removing or destroying key industries important to military strength. In particular, the industries in the Ruhr and Saar regions (Germany’s key industrial and coal-producing regions) were to be destroyed. He wanted Germany to keep its rich farmlands in the east and become a pastoral society. However, Stalin insisted on the Oder-Neisse border, which ceded those farmlands to Poland. As a result, the original version of the proposal needed to be modified.

At the Second Quebec Conference on 16 September 1944, President Roosevelt and Secretary Morgenthau met with British Prime Minister Winston Churchill, The initially reluctant British leader agreed to a narrowed scope of the Morgenthau Plan. Both statesmen signed a memorandum that called for the elimination of the heavy industry in the Ruhr and Saar and conversion of Germany into a country primarily agricultural and pastoral in character. But the memorandum no longer included partitioning the country into several independent states.

Critics of the Morgenthau Plan

U.S. Secretary of State Cordell Hull argued that the Morgenthau Plan would leave nothing but land to the German population, and since only about 60% of the Germans could live off that land, 40% of the population would perish. Stimson expressed his opposition even more forcefully. Former U.S. President Herbert Hoover opposed the plan and so did British Foreign Secretary Anthony Eden. General George Marshall complained that German resistance had strengthened because German Propaganda Minister Joseph Goebbels used the plan as part of his propaganda to convince the German people to persevere in the fighting so that their country would not be turned into a “potato field”.

The modified Morgenthau Plan

Although U.S. occupation policies aimed at industrial disarmament, they contained a number of deliberate “loopholes”, which in the end prevented large-scale destruction of mines and industrial plants. On 10 May 1945, President Harry S. Truman signed the U.S. occupation directive JCS 1067, which directed U.S. forces not to take any steps toward an economic rehabilitation of Germany. The directive remained in effect for over two years and was replaced in 1947 by JCS 1779. The latter stressed that “an orderly, prosperous Europe requires the economic contributions of a stable and productive Germany.” Soon thereafter, the Marshall Plan went into effect.

Henry Morgenthau’s Background

In 1891, Henry Morgenthau, Jr. was born into a prominent Jewish New York City family. In 1913, he befriended Franklin D. and Eleanor Roosevelt. In 1933, Roosevelt appointed him governor of the Federal Farm Board. And in 1394, Roosevelt appointed Morgenthau Secretary of the Treasury. Henry Morgenthau was a proponent of balanced budgets, stable currency, reduction of the national debt, and the need for more private investment. Along with the President and the Chairman of the Federal Reserve, he kept interest rates low during the depression to finance massive public spending, and later supported rearmament and U.S. participation in WW II.

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