JCS 1067
A Handbook for Military Government in Germany was ready in August 1944, it was an occupation document which advocated a quick restoration of normal life for the German people and reconstruction of Germany.
Henry Morgenthau, Jr. brought it to the attention of President
Franklin D. Roosevelt who after reading it rejected it with the words:
"Too many people here and in England hold the view that the German people as a whole are not responsible for what has taken place that only a few Nazis are responsible. That unfortunately is not based on fact. The German people must have it driven home to them that the whole nation has been engaged in a lawless conspiracy against the decencies of modern civilization." A new document was drafted, the
Joint Chiefs of Staff directive 1067 (JCS 1067). Here the US military government of occupation in Germany was ordered to "take no steps looking toward the economic rehabilitation of Germany [or] designed to maintain or strengthen the German economy" and it was also ordered that starvation, disease and civil unrest were to be kept below such levels where they would pose a danger to the troops of occupation.
The directive was formally issued to Eisenhower in the spring of 1945, and it applied only to the US zone (although attempts had been made to get the other Allies to accept it). The occupation directive remained secret until October 17, 1945. It was made known to the public two months after the US had succeeded in incorporating much of it into the
Potsdam Agreement.
[43]
On March 20, 1945 President Roosevelt was warned that the JCS 1067 was not workable: it would let the Germans "stew in their own juice". Roosevelt's response was "Let them have soup kitchens! Let their economy sink!" Asked if he wanted the German people to starve, he replied, "Why not?"
[44]
On May 10, 1945 Truman signed the JCS 1067.
[45] Morgenthau told his staff that it was a big day for the Treasury, and that he hoped that "someone doesn't recognize it as the Morgenthau Plan."[6]
In occupied Germany Morgenthau left a direct legacy through what in
OMGUS commonly were called "Morgenthau boys". These were U.S. Treasury officials whom
Dwight D. Eisenhower has "loaned" in to the Army of occupation. These people ensured that the JCS 1067 was interpreted as strictly as possible. They were most active in the first crucial months of the occupation, but continued their activities for almost two years following the resignation of Morgenthau in mid 1945 and some time later also of their leader Colonel
Bernard Bernstein, who was "the repository of the Morgenthau spirit in the army of occupation".
[46]
Morgenthau had been able to wield considerable influence over
Joint Chiefs of Staff Directive 1067. JCS 1067 was a basis for U.S. occupation policy until July 1947, and like the Morgenthau Plan, was intended to reduce German
living standards. The production of
oil,
rubber, merchant ships, and aircraft were prohibited. Occupation forces were not to assist with economic development apart from the agricultural sector.
In his 1950 book
Decision in Germany, Clay wrote, "It seemed obvious to us even then that Germany would starve unless it could produce for
export and that immediate steps would have to be taken to revive industrial production".
[47] Lewis Douglas, chief adviser to
General Lucius Clay, U.S. High Commissioner, denounced JCS Directive 1067 saying, "This thing was assembled by economic idiots. It makes no sense to forbid the most skilled workers in
Europe from producing as much as they can in a continent that is desperately short of everything"
[48] Douglas went to
Washington in the hopes of having the directive revised but was unable to do so.
The U.S. Senate Judiciary Committee asserted: "During the first two years of the Allied occupation the Treasury program of industrial dismantlement was vigorously pursued by American officials."
[49]
In July 1947 JCS 1067, which had directed the U.S. forces of occupation in Germany to "...take no steps looking toward the economic rehabilitation of Germany [or] designed to maintain or strengthen the German economy", was replaced by
JCS 1779 which instead stated that "An orderly, prosperous Europe requires the economic contributions of a stable and productive Germany."