Chapter  3             The Material Cost of Vengeance

Leaving Berlin on the airlift in September and arriving in the United States zone, I felt I had traveled farther in time than in space.  In Berlin, in spite of the gross inequalities between the Germans and ourselves in sacrifice, privation, and danger, we were standing shoulder to shoulder in resisting Soviet aggression.   But in Bizonia we still seemed to be fighting the last war.  Here we were acting as if Germany, not Soviet Russia, now menaces the peace of the world and the freedom of Europe.  We were still dismantling German industry, and in general carrying out the Yalta and Potsdam agreements as if Soviet Russia had never broken them, and with an almost total disregard of the Marshall Plan and the Truman Doctrine which Americans at home imagined were now the basis of United States policy.

    Large shipments of “reparations and restitutions” were still going to Russia, Czechoslovakia, Poland, Yugoslavia, and other countries behind the Iron Curtain, not only from the British and French zones but also from the American.
Following the start, in June, of Soviet Russia’s blockade of Berlin, such shipments from Bizonia and the French zone to the countries behind the Iron Curtain, instead of being stopped, had been doubled in quantity.  The bulk of the shipments to the Soviet Union in July 1948 and subsequent months went from the British zone, and deliveries from the United States zone direct to Russia had been stopped.  But the United States had continued to give aid and comfort to the Communists by supplying the Czechs, Poles, and Yugoslaves with 5,790 tones of German machinery and other assets in that one month.  At the end of October, when bad weather was endangering the lives of American pilots on the air lift and the Berlin population was already shivering in its unheated homes, the total reparations and restitutions shipments to the countries behind the Iron Curtain from Bizonia and the French zone combined, had been stepped up to nearly nine thousand tons, from the six and a half thousand sent before Stalin started the blockade of Berlin.
Factories were being dismantled in Western Germany to the detriment of the whole European economy, and with a cynical disregard of the needs of the German people and the danger of losing Western Germany to the Communists while attempting to save Berlin from them.
The cost to the United States taxpayer of subsidizing a pauperized Germany, and a Europe deprived of the products of German industry, was apparently also being disregarded not only by our Western allies, but by the American authorities responsible for our German policy.
In spite of the fact that it had been announced that Germany was to participate in the rebuilding of Europe under the Marshall Plan, the United States and Britain were implementing the 1947 “Revised Level of Industry Plan,” which severely limits Germany’s capacity to produce in most major industries and was drawn up with no provision for German exports of steel, machinery, and other goods most urgently required for European reconstruction.
From the British point of view dismantlement makes sense, since it helps to reduce Germany’s competitive power on the world market.  Originally the British authorities had held out for a higher level of industry than the United States was willing to allow.  They understood that Western Germany could not be self-sustaining if the reparations program were carried through; and so long as they were themselves financially responsible for feeding the industrial population of their zone, they pursued a more enlightened policy than the United States.  But since the merging of the British and American zones and the United States’ commitment to meet the deficits of Bizonia, Britain’s competitive motive has had free rein, and the British now oppose revision of the dismantlement program.  In their frantic efforts to free themselves from dependence on dollar subsidies, they have abandoned the policy of wisdom and restraint toward defeated enemies which formerly made Britain great and strong.
Today the British are sacrificing their long-term interests by themselves exporting airplanes and capital goods to Soviet Russia, and by alienating the Germans and weakening Continental Europe by shipments of large quantities of dismantled German machines to Stalin’s empire.  According to figures given in a British Military Government communique, published in “Die Tat,” on February 6, 1949, out of a total of 598,000 tones of machinery and other materials taken from German factories, 163,896 tons had been delivered to Russia, 18,618 tons to Czechoslovakia, 1,789 to Albania, and 45,135 to Yugoslavia.  The British had had no scruples even in delivering armament factories to Russia.   On December 20, 1948, the London Times reported that the Borbeck-Krupps Armaments Works was in process of being shipped to the Soviet Union.
In the French zone one could hardly have imagined that there is such a thing as a Communist danger, a Marshall Plan or any such question as the defense of Western Europe.  The blindness of the French, their obsession with a past danger, and seeming unawareness of the lively present danger of Soviet aggression, their squeezing of their German zone to subsidize their own mismanaged economy, and their futile parade of the trappings of a nonexistent military might before the cowed but secretly mocking German population, require a separate chapter.  Here I shall be concerned only with Bizonia, as the partially merged British and American zones are called.
Whereas both the British and French treatment of the Germans is easy to understand, if not to condone, American policy is incomprehensible.  America has nothing to gain, and everything to lose economically, politically, and militarily by dismantlement.  Yet the United States has exerted no strong pressure to bring it to an end in the British and French zones, and has continued to carry it out even in the American zone.

The comfortable assumption in America that the Marshall Plan has replaced the Morgenthau Plan is, I quickly perceived, a delusion.  The spirit of Morgenthau, although it no longer dominates our German policy, still inspires it.  The fact that there is now a Marshall Plan looking toward the integration of a revived and democratic Germany in a reconstructed and self-supporting Europe means that we are busy repairing with our right hand the damage done by our left hand.  It is as if one team of Americans were rebuilding a bombed dwelling while another team is destroying the foundations.
It would have been funny, were it not so tragic, to witness the unending struggle between those Americans who had been sent to Germany to revive industry and trade, and those whose orders to destroy the German economy.  The conflict between the destroyers and the rebuilders was even more acrimonious and bitter than that between competitive Washington departments.
In Frankfurt, Essen, and Stuttgart, I have smiled to hear American coal, steel, and railway experts plotting, or pleading, to stop dismantlement of the factories producing the mining, railway, and other equipment without which coal production could not be increased or the railways restored.  I heard revealing conversations between American and German authorities in which the former warned the latter about which Americans were on the constructive side and which on the destructive.
If there was some sort of collaboration between the Germans and those Americans who are engaged in restoring the German economy and furthering the Marshall Plan, there was naturally a far closer relationship between the American “destroyers” and the British Military Government.  The United States experts endeavoring to increase coal and steel production and to reconstruct transportation facilities were dependent on the British, since not only the mines and the iron and steel works are in the British zone, but also most of the factories producing mining equipment and railroad supplies.  He predicament of the American experts can be understood if one notes the fact that the dismantlement list includes forty-seven factories making mining equipment and thirty-two specializing in the production of supplies for the German railways.

Fortunately there were some enlightened British officials also, who were anxious to revive the German economy, so the conflict between the constructors and the destroyers was not as unequal as it might otherwise have been.  The British official in charge of the Bizonal Iron and Steel office in Dusseldorf, for instance, worked in complete harmony with his American counterpart, and in 1948 they succeeded in bringing about an astonishing increase in steel production.   On the other hand, while $24,000,000 worth of American mining equipment had been earmarked for Germany by ECA, the British insisted on continuing to dismantle the German factories which could have supplied this machinery.   Among others there dismantling the plants producing 90 per cent of the pneumatic mining tools produced in the Western zone.
Obviously the British, in view of their dependence on American subsidies, could have been induced to stop the dismantlement of German factories, the loss of whose production had to be made good by ECA allocations.  The trouble was that some United States Military Government and Washington officials were still pursuing a camouflaged Morgenthau line of policy.
Whether or not the contradictory and self-defeating nature of American activities in Germany was due more to individual sentiments or to Washington’s desire to win votes by being all things to all men, both the American destroyers of the German economy and its rebuilders could claim they were only doing their duty.  Both were carrying out the orders they had received.
The situation was aptly summarized by oneUnited States official who told me:
“We are caught between opposing policies and are unable to move forward.  The forces of destruction, born of war hysteria, and set in motion by the Morgenthau Plan, are still in operation, while the constructive forces which the Marshall Plan was intended to release are stymied for lack of new directives from Washington.”
“The American people,” he continued, “are only now beginning to realize that unconditional surrender and total victory force them to assume the same responsibilities in Germany as the inheritor of a property.  Although the bills are rolling in, and America has to pay them, we still fail to understand fully that we must stop the destruction of Germany’s assets if the United States is not to go bankrupt.  At present the old destructive policy is merely overlaid by the new constructive one.”
Some American officials were in the awkward position of holding positions with the destroyers and the reconstructors at the same time.  Major Holbrook, for instance, whom I met in Stuttgart, was both Reparations Officer for Wurttemberg and Governor LaFollette’s Chief of Industry and Commerce.  While he had to fulfill the dismantlement orders which came to him from the Reparations Division of Military Government in Berlin, he also had to endeavor to increase production in his province.   This he had managed to do with considerable ingenuity. 

In the United States zone machinery is classified as already dismantled when the bolts attaching it to the floor have been unscrewed and it has been placed on wooden blocks.  By allowing the Germans to continue using it in this condition, Major Holbrook had not only lightened the load of the American taxpayer by enabling more Germans to earn their own living than would otherwise have been possible; he had also kept the “dismantled” machinery in good working order for use in other countries when the time came to ship it.  Elsewhere, particularly in the British zone, I saw piles of rusty factory equipment long since dismantled which was gradually becoming unusable as it lay in the open air or in unheated damp depots.  For it is the British practice to dismantle machinery even when no country entitled to receive reparations wants it.  Hence the tremendous waste entailed by the Revised Level of Industry program, which is implemented with the primary objective of depriving the Germans of the capacity to produce, rather than helping other countries to reconstruct their economies with German reparations.  Were the latter the real aim, new and better machinery could be supplied to them in far less time by stopping dismantlement and allowing the Germans to work to produce reparations.

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