Industrial plans for Germany

Industrial plans for Germany

Discussion
Ask a question about 'Industrial plans for Germany'
Start a new discussion about 'Industrial plans for Germany'
Answer questions from other users
Full Discussion Forum
 
Encyclopedia

The Industrial plans for Germany were designs the Allies considered imposing on Germany in the aftermath of World War II
World War II
World War II, or the Second World War , was a global conflict lasting from 1939 to 1945, involving most of the world's nations—including all of the great powers—eventually forming two opposing military alliances: the Allies and the Axis...

 to reduce and manage Germany's industrial capacity.

Background


At the Potsdam conference
Potsdam Conference
The Potsdam Conference was held at Cecilienhof, the home of Crown Prince Wilhelm Hohenzollern, in Potsdam, occupied Germany, from 16 July to 2 August 1945. Participants were the Soviet Union, the United Kingdom, and the United States...

, with the US operating under influence of the Morgenthau plan
Morgenthau Plan
The Morgenthau Plan, proposed by United States Secretary of the Treasury Henry Morgenthau, Jr., advocated that the Allied occupation of Germany following World War II include measures to eliminate Germany's ability to wage war.-Overview:...

, the victorious Allies decided to abolish the German armed forces as well as all munitions factories and civilian industries that could support them. This included the destruction of all ship and aircraft manufacturing capability. Further, it was decided that civilian industries which might have a military potential, which in the modern era of "total war" included virtually all, were to be severely restricted. The restriction of the latter was set to Germany's "approved peacetime needs", which were defined to be set on the average European standard. In order to achieve this, each type of industry was subsequently reviewed to see how many factories Germany required under these minimum level of industry requirements.

Level of Industry plans



The first "level of industry" plan, signed by the Allies on March 29, 1946, stated that German heavy industry was to be lowered to 50% of its 1938 levels by the destruction of 1,500 listed manufacturing plants. In January 1946 the Allied Control Council
Allied Control Council
The Allied Control Council or Allied Control Authority, known in the German language as the Alliierter Kontrollrat and also referred to as the Four Powers , was a military occupation governing body of the Allied Occupation Zones in Germany after the end of World War II in Europe...

 set the foundation of the future German economy by putting a cap on German steel production capacity: the maximum allowed was set at about 5,800,000 tons of steel a year, equivalent to 25% of the prewar production level. The UK, in whose occupation zone most of the steel production was located, had argued for a higher limited reduction by placing the production ceiling at 12 million tons of steel per year, but had to submit to the will of the US, France and the Soviet Union (which had argued for a 3 million ton limit). Steel plants thus made redundant were to be dismantled. Germany was to be reduced to the standard of life it had known at the height of the Great Depression
Great Depression
The Great Depression was a severe worldwide economic depression in the decade preceding World War II. The timing of the Great Depression varied across nations, but in most countries it started in about 1929 and lasted until the late 1930s or early 1940s...

 (1932). Car production was set to 10% of prewar levels, etc.

On February 2, 1946, a dispatch from Berlin reported:
Timber exports from the US occupation zone were particularly heavy. Sources in the US government admitted that the purpose of this was the "ultimate destruction of the war potential of German forests." Extensive deforestation due to clear-felling resulted in a situation which could "be replaced only by long forestry development over perhaps a century.".

The first plan was subsequently followed by a number of new ones, the last signed in 1949. By 1950, after the virtual completion of the by-then much watered-down "level of industry" plans, equipment had been removed from 706 manufacturing plants in the west and steel production capacity had been reduced by 6,700,000 tons.

Moderation of policy


Beginning in mid-1946 American and British policy towards the German economy began to change, illustrated by Byrnes's September speech restatement of policy on Germany
Restatement of Policy on Germany
"Restatement of Policy on Germany" is a famous speech by James F. Byrnes, the United States Secretary of State, held in Stuttgart on September 6, 1946.Also known as the "Speech of hope" it set the tone of future U.S...

 (also known as the "Stuttgart speech" or "Speech of hope"). According to Dennis L. Bark and David R. Gress in A history of West Germany The Morgenthau Plan
Morgenthau Plan
The Morgenthau Plan, proposed by United States Secretary of the Treasury Henry Morgenthau, Jr., advocated that the Allied occupation of Germany following World War II include measures to eliminate Germany's ability to wage war.-Overview:...

 came to be seen as inflicting undue hardship, and so the approach was shifted, over time, to one encouraging German economic expansion. As part of this, the allowed levels of industrial capacity were raised.

According to Vladimir Petrov in Money and conquest: allied occupation currencies in World War II the reason for the change in US occupation policy was almost exclusively based on economic considerations. Although a large part of the occupation costs were placed on the German economy, the US and the U.K were increasingly forced to supply food imports to prevent mass starvation. According to some historians the US government abandoned the Morgenthau plan as policy in September 1946 with Secretary of State
United States Secretary of State
The United States Secretary of State is the head of the United States Department of State, concerned with foreign affairs. The Secretary is a member of the Cabinet and the highest-ranking cabinet secretary both in line of succession and order of precedence...

 James F. Byrnes
James F. Byrnes
James Francis Byrnes was an American statesman from the state of South Carolina. During his career, Byrnes served as a member of the House of Representatives , as a Senator , as Justice of the Supreme Court , as Secretary of State , and as the 104th Governor of South Carolina...

' speech Restatement of Policy on Germany
Restatement of Policy on Germany
"Restatement of Policy on Germany" is a famous speech by James F. Byrnes, the United States Secretary of State, held in Stuttgart on September 6, 1946.Also known as the "Speech of hope" it set the tone of future U.S...

. Others have argued that credit should be given to former US President Herbert Hoover
Herbert Hoover
Herbert Clark Hoover was the 31st President of the United States . Hoover was originally a professional mining engineer and author. As the United States Secretary of Commerce in the 1920s under Presidents Warren Harding and Calvin Coolidge, he promoted partnerships between government and business...

 who in one of his reports from Germany
The President's Economic Mission to Germany and Austria
The President's Economic Mission to Germany and Austria was a series of reports commissioned by US President Harry S. Truman and written by former US President Herbert Hoover....

 in 1947 argued for a change in occupation policy, amongst other things stating:
"There is the illusion that the New Germany left after the annexations can be reduced to a 'pastoral state'. It cannot be done unless we exterminate or move 25,000,000 people out of it."

Worries about the sluggish recovery of the European economy (which before the war was driven by the German industrial base) and growing Soviet influence amongst a German population subject to food shortages and economic misery, caused the Joint Chiefs of Staff
Joint Chiefs of Staff
The Joint Chiefs of Staff is a body of senior uniformed leaders in the United States Department of Defense who advise the Secretary of Defense, the Homeland Security Council, the National Security Council and the President on military matters...

, and Generals Clay
Lucius D. Clay
General Lucius Dubignon Clay was an American officer and military governor of the United States Army known for his administration of Germany immediately after World War II. Clay was deputy to General Dwight D. Eisenhower, 1945; deputy military governor, Germany 1946; commander in chief, U.S....

 and Marshall
George Marshall
George Catlett Marshall was an American military leader, Chief of Staff of the Army, Secretary of State, and the third Secretary of Defense...

 to start lobbying the Truman
Harry S. Truman
Harry S. Truman was the 33rd President of the United States . As President Franklin D. Roosevelt's third vice president and the 34th Vice President of the United States , he succeeded to the presidency on April 12, 1945, when President Roosevelt died less than three months after beginning his...

 administration for a change of policy. General Clay stated
"There is no choice between being a communist on 1,500 calories a day and a believer in democracy on a thousand".

In July 1947, President Harry S. Truman
Harry S. Truman
Harry S. Truman was the 33rd President of the United States . As President Franklin D. Roosevelt's third vice president and the 34th Vice President of the United States , he succeeded to the presidency on April 12, 1945, when President Roosevelt died less than three months after beginning his...

 rescinded on "national security grounds" the punitive occupation directive JCS 1067, which had directed the US 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." It was replaced by JCS 1779, which instead noted that "[a]n orderly, prosperous Europe requires the economic contributions of a stable and productive Germany." Nevertheless, General Clay needed over two months to overcome continued resistance among his staff to the new directive, but on July 10, 1947, it was finally approved at a meeting of the SWNCC
SWNCC
The State-War-Navy Coordinating Committee was a United States federal government committee created in December 1944 to address the political-military issues involved in the occupation of the Axis powers following the end of World War II....

. The final version of the document "was purged of the most important elements of the Morgenthau plan."

The restrictions placed on German heavy industry production were thus partly ameliorated, as permitted steel production levels were raised from 25% of pre-war capacity to a new limit placed at 50% of pre-war capacity.

Economic consequences


The reduction in steel production that resulted from the first and the second level of industry plans meant that a steel production bottleneck ensued which forced other parts of the German industry to fall below their own permitted production levels. The economy of the Bizone
Bizone
The Bizone, or Bizonia was the combination of the American and the British occupation zones in 1947 during the occupation of Germany after World War II. With the addition of the French occupation zone in March 1948, the entity became the Trizone...

 finally hit rock bottom early in 1948 as a consequence of this.

Compounding the problems in the steel industry and their effects on the German economy as a whole was the prohibition against importing high-grade Swedish iron ore. Until that was lifted in 1948, German steel plants had to rely on low quality local ore which required almost twice the amount of coal to process. Moreover, the Germans were also forced to sell their steel at wartime prices until April 1, 1948, which meant large losses for the industry. Additionally, attempts to "decartelize" the German steel industry also contributed to the low output.

The Allied Control Council
Allied Control Council
The Allied Control Council or Allied Control Authority, known in the German language as the Alliierter Kontrollrat and also referred to as the Four Powers , was a military occupation governing body of the Allied Occupation Zones in Germany after the end of World War II in Europe...

 set the price for German coal at half what it cost to produce it. From May 1945 until September 1947 the US, UK, and France exported German coal for $10.50/tonne, while the world price hovered closer to $25–$30 per tonne. During this period the Allies thus took roughly $200,000,000 out of the German economy from this source alone. In September 1947 the export price was raised but remained set at $5–$7 below world-market prices.

In Germany the shortage of food was an acute problem. According to the UNRRA in 1946–47 the average kilocalorie intake per day was estimated to be 1,800, which according to Alan S. Milward was an amount insufficient for long-term health. Other sources state that the kilocalorie intake in those years varied between as low as 1,000 and 1,500. William L. Clayton
William L. Clayton
William Lockhart "Will" Clayton was an American business leader and government official.-Early life and career:...

 reported to Washington
Washington, D.C.
Washington, D.C., formally the District of Columbia and commonly referred to as Washington, "the District", or simply D.C., is the capital of the United States. On July 16, 1790, the United States Congress approved the creation of a permanent national capital as permitted by the U.S. Constitution....

 that "millions of people are slowly starving."

Germany received many offers from Western European nations to trade food for desperately needed coal and steel. Neither the Italians nor the Dutch could sell the vegetables that they had previously sold in Germany, with the consequence that the Dutch had to destroy considerable proportions of their crop. Denmark offered 150 tons of lard
Lard
Lard is pig fat in both its rendered and unrendered forms. Lard was commonly used in many cuisines as a cooking fat or shortening, or as a spread similar to butter. Its use in contemporary cuisine has diminished because of health concerns posed by its saturated-fat content and its often negative...

 a month; Turkey offered hazelnuts; Norway offered fish and fish oil; Sweden offered considerable amounts of fats. However, the Allies disallowed the Germans to trade.

The UNRRA charter allowed it to operate in Germany to assist non-ethnic German displaced persons, but did not permit it to assist ethnic Germans. In 1948, after three years of occupation, the combined US and UK expenditure on relief food in Germany through GARIOA
GARIOA
Government and Relief in Occupied Areas was a program under which the US after the 1945 end of World War II from 1946 onwards provided emergency aid to the occupied nations, Japan, Germany, Austria. The aid was predominantly in the form of food to alleviate starvation in the occupied...

 and other means stood at a total of close to $1.5 billion (that were charged to the Germans). Still, according to Nicholas Balabkins, German food rations were deficient in composition and remained far below recommended minimum nutrition levels. Officials in authority admitted that the distributed rations "represented a fairly rapid starvation level". (see also American food policy in occupied Germany
American food policy in occupied Germany
American food policy in occupied Germany refers to the food supply policies enacted by the U.S., and to some extent its dependent Allies, in the western occupation zones of Germany in the first two years of the ten-year occupation of Western Germany following World War II.Food relief shipments to...

).

Reparations and exploitation



Contrary to common myth the US did in fact take "reparations", parts of it by John Gimbel called "plunder and exploitation", directly from Germany. The US for instance took a 8.9% share of dismantled Western German industry.

The Allies also confiscated large amounts of German intellectual property (patent
Patent
A patent is a form of intellectual property. It consists of a set of exclusive rights granted by a sovereign state to an inventor or their assignee for a limited period of time in exchange for the public disclosure of an invention....

s and copyright
Copyright
Copyright is a legal concept, enacted by most governments, giving the creator of an original work exclusive rights to it, usually for a limited time...

s, but also trademark
Trademark
A trademark, trade mark, or trade-mark is a distinctive sign or indicator used by an individual, business organization, or other legal entity to identify that the products or services to consumers with which the trademark appears originate from a unique source, and to distinguish its products or...

s). Beginning immediately after the German surrender and continuing for the next two years the US pursued a vigorous program to harvest all technological and scientific know-how as well as all patents in Germany. John Gimbel comes to the conclusion, in his book "Science Technology and Reparations: Exploitation and Plunder in Postwar Germany", that the "intellectual reparations" taken by the US (and the UK) amounted to close to $10 billion
1000000000 (number)
1,000,000,000 is the natural number following 999,999,999 and preceding 1,000,000,001.In scientific notation, it is written as 109....

. The US competitors of German firms were encouraged by the occupation authorities to access all records and facilities. In 1947 the director of The US Commerce Department's Office of Technical Services stated before congress: "The fundamental justification of this activity is that we won the war and the Germans did not. If the Germans had won the war, they would be over here in Schenectady and Chicago and Detroit and Pittsburgh, doing the same things." A German report from May 1, 1949 stated that many entrepreneurs preferred not to do research under the current regulations (Allied Control Council Law No. 25) for fear of the research directly profiting their competitors. The law required detailed reporting to the Allies of all research results.

The patents, drawings and physical equipment taken in Germany included such items (or drawings for) as electron microscopes, cosmetics
Cosmetics
Cosmetics are substances used to enhance the appearance or odor of the human body. Cosmetics include skin-care creams, lotions, powders, perfumes, lipsticks, fingernail and toe nail polish, eye and facial makeup, towelettes, permanent waves, colored contact lenses, hair colors, hair sprays and...

, textile machinery, tape recorders, insecticides, a unique chocolate-wrapping machine, a continuous butter-making machine, a manure spreader, ice skate grinders, paper napkin machines, "and other technologies-almost all of which were either new to American industry or 'far superior' to anything in use in the United States."

The British took commercial secrets too, by abducting German scientists and technicians, or simply by interning German businessmen if they refused to reveal trade secrets.

Konrad Adenauer
Konrad Adenauer
Konrad Hermann Joseph Adenauer was a German statesman. He was the chancellor of the West Germany from 1949 to 1963. He is widely recognised as a person who led his country from the ruins of World War II to a powerful and prosperous nation that had forged close relations with old enemies France,...

 stated "According to a statement made by an American expert, the patents formerly belonging to IG Farben
IG Farben
I.G. Farbenindustrie AG was a German chemical industry conglomerate. Its name is taken from Interessen-Gemeinschaft Farbenindustrie AG . The company was formed in 1925 from a number of major companies that had been working together closely since World War I...

 have given the American chemical industry a lead of at least 10 years. The damage thus caused to the German economy is huge and cannot be assessed in figures. It is extraordinarily regrettable that the new German inventions cannot be protected either, because Germany is not a member of the Patent Union. Britain has declared that it will respect German inventions regardless of what the peace treaty may say. But America has refused to issue such a declaration. German inventors are therefore not in a position to exploit their own inventions. This puts a considerable brake on German economic development."

In JCS 1067 there were provisions allowing German scientists be detained for intelligence purposes as required. Although the original focus on the exploitation was towards military means much of the information collected by FIAT was quickly adapted commercially to the degree that the office of the Assistant Secretary of State for Occupied Areas requested that the peace treaty with Germany be redacted to protect US industry from lawsuits.

The US made no attempt to evaluate the value of what was taken from Germany, and in the contracts that led to sovereignty for West Germany in 1955 the West Germans had to formally renounce all claims to possible compensation for all types of assets taken, including scientific and technical know-how. Gimbel notes that this made a later accounting practically impossible.

The property taken in Germany was without regard to the rules of the Hague Convention
Hague Conventions (1899 and 1907)
The Hague Conventions were two international treaties negotiated at international peace conferences at The Hague in the Netherlands: The First Hague Conference in 1899 and the Second Hague Conference in 1907...

, which prohibits the seizure of enemy private property "unless it is susceptible of direct military use", but there are legal arguments that the Allied occupation of Germany was not bound by Hague Conventions, because if the German state no longer existed (see Debellatio
Debellatio
Debellatio designates the end of a war caused by complete destruction of a hostile state....

), and the convention only applied to the occupation of territory belonging to one of the Contracting Powers then it did not cover the territories of Germany post war. The Legal status of Germany
Legal status of Germany
The issue of the downfall or continuation, and thereby the legal status of the German Reich, arose out of the military occupation of Nazi Germany by the allied forces in 1945; it became current once again when the German Democratic Republic reunified with the Federal Republic of Germany in...

 under occupation is however unclear, particularly as debellatio in general involves the complete dissolution and annexation
Annexation
Annexation is the de jure incorporation of some territory into another geo-political entity . Usually, it is implied that the territory and population being annexed is the smaller, more peripheral, and weaker of the two merging entities, barring physical size...

 of the defeated state, which did not take place and indeed in the Berlin Declaration (1945)
Berlin Declaration (1945)
By way of the Berlin Declaration of June 5th, 1945, , the victors of World War II assumed...

 it was categorically denied that Germany was annexed. (although the Allies did later indeed annex the eastern quarter of Germany and expel its population
Expulsion of Germans after World War II
The later stages of World War II, and the period after the end of that war, saw the forced migration of millions of German nationals and ethnic Germans from various European states and territories, mostly into the areas which would become post-war Germany and post-war Austria...

).

Occupation costs


The costs of the occupation were charged to the Germans, about $2.4 billion per year, however, this was offset by the fact that Germany did not have to pay for its own defense spending during this time. One estimate for the year 1948 placed this cost to the German economy, through requisitions of goods, materials and direct payments, to be 46 percent of local tax receipts. The Germans were charged for such costs as "one ton of water bugs to feed a U.S. general’s pet fish, a bedspread of Korean goatskin, thirty thousand bras
Brassiere
A brassiere is an undergarment that covers, supports, and elevates the breasts. Since the late 19th century, it has replaced the corset as the most widely accepted method for supporting breasts....

".

Marshall plan


With the Western Allies eventually becoming concerned about the deteriorating economic situation in their "Trizone"; the US Marshall Plan
Marshall Plan
The Marshall Plan was the large-scale American program to aid Europe where the United States gave monetary support to help rebuild European economies after the end of World War II in order to combat the spread of Soviet communism. The plan was in operation for four years beginning in April 1948...

 of economic aid to Europe was extended also to Western Germany in 1948 and a currency reform, which had been prohibited under the occupation directive JCS 1067, introduced the Deutsche Mark and halted rampant inflation. Though the Marshall Plan is regarded as playing a key role in the German recovery, its role was more of a psychological than economic nature.
Libertarians, particularly, stress the role of Erhard's economic policies
Social market economy
The social market economy is the main economic model used in West Germany after World War II. It is based on the economic philosophy of Ordoliberalism from the Freiburg School...

, and point out to the detraction of the monetary significance of the Marshall plan that besides simultaneously demanding large reparations payments "the Allies charged the Germans DM 7.2 billion annually ($2.4 billion) for their costs of occupying Germany".

Germany received roughly $1.4 billion in total from the Marshall plan over the years, as loans. However, in 1953 it was decided that Germany was to repay only $1.1 billion of the aid it had received (through Marshall and the previous GARIOA). The last repayment was made in June 1971.

The Ruhr


The Ruhr Agreement was imposed on the Germans as a condition for permitting them to establish the Federal Republic of Germany
West Germany
West Germany is the common English, but not official, name for the Federal Republic of Germany or FRG in the period between its creation in May 1949 to German reunification on 3 October 1990....

. By controlling the production and distribution of coal and steel (i.e. how much coal and steel the Germans themselves would get), the International Authority for the Ruhr in effect controlled the entire West German economy, much to the dismay of the Germans. They were however permitted to send their delegations to the authority after the Petersberg agreement
Petersberg agreement
The Petersberg Agreement is an international treaty that extended the rights of the Federal Government of Germany vis-a-vis the occupying forces of Britain, France, and the United States, and is viewed as the first major step of Federal Republic of Germany towards sovereignty...

. With the West German agreement to join the European Coal and Steel Community
European Coal and Steel Community
The European Coal and Steel Community was a six-nation international organisation serving to unify Western Europe during the Cold War and create the foundation for the modern-day developments of the European Union...

 in order to lift the restrictions imposed by the IAR, thus also ensuring French security by perpetuating French access to Ruhr coal, the role of the IAR was taken over by the ECSC.

The Saar


With US permission, as for example given in the Stuttgart speech, France expanded the borders of the Saarland
Saar (protectorate)
The Saar Protectorate was a German borderland territory twice temporarily made a protectorate state. Since rejoining Germany the second time in 1957, it is the smallest Federal German Area State , the Saarland, not counting the city-states Berlin, Hamburg and Bremen...

, after the Ruhr Germany's largest remaining source of coal, by adding parts of the Rhineland and thereafter detached it as a protectorate in 1947. The area was integrated into the French economy, and although nominally politically independent its security and foreign policies were decided in Paris, which also maintained a High Commissioner with wide ranging powers in the protectorate.

The Soviet Union


In accordance with the agreements with the USSR shipment of dismantled German industrial installations from the west began on March 31, 1946. By August 1947 11,100 tons of equipment had been shipped east as reparations to the Soviet Union.

Under the terms of the agreement the Soviet Union would in return ship raw materials such as food and timber to the western zones. In view of the Soviet failure to do so the US temporarily halted shipments east (although they were never resumed). However, it was later shown that although the shipments stop was utilized for cold war propaganda reasons, the main reason for halting shipments east was not the behavior of the USSR but rather the recusant behavior of France.

Material sent to the U.S.S.R. included equipment from the Kugelfischer
Kugelfischer
Kugelfischer is the name for a mechanical fuel injection pump. It was produced by FAG Kugelfischer and later by Robert Bosch GmbH...

 ball-bearing plant at Schweinfurt
Schweinfurt
Schweinfurt is a city in the Lower Franconia region of Bavaria in Germany on the right bank of the canalized Main, which is here spanned by several bridges, 27 km northeast of Würzburg.- History :...

, the Daimler-Benz
Daimler-Benz
Daimler-Benz AG was a German manufacturer of automobiles, motor vehicles, and internal combustion engines; founded in 1926. An Agreement of Mutual Interest - which was valid until year 2000 - was signed on 1 May 1924 between Karl Benz's Benz & Cie., and Daimler Motoren Gesellschaft, which had...

 underground aircraft-engine plant at Obrigheim
Obrigheim
Obrigheim is a town in the district of Neckar-Odenwald-Kreis, in Baden-Württemberg, Germany....

, the Deschimag shipyards
Deutsche Schiff- und Maschinenbau AG
Deutsche Schiff- und Maschinenbau Aktiengesellschaft was a cooperation of eight German shipyards in the period 1926 to 1945...

 at Bremen
Bremen
The City Municipality of Bremen is a Hanseatic city in northwestern Germany. A commercial and industrial city with a major port on the river Weser, Bremen is part of the Bremen-Oldenburg metropolitan area . Bremen is the second most populous city in North Germany and tenth in Germany.Bremen is...

, and the Gendorf powerplant.http://germanhistorydocs.ghi-dc.org/docpage.cfm?docpage_id=3403,http://images.library.wisc.edu/History/EFacs/GerRecon/omg1946n039/reference/history.omg1946n039.i0007.pdf

End of dismantling


The dismantling of German industry continued, and in 1949 Konrad Adenauer
Konrad Adenauer
Konrad Hermann Joseph Adenauer was a German statesman. He was the chancellor of the West Germany from 1949 to 1963. He is widely recognised as a person who led his country from the ruins of World War II to a powerful and prosperous nation that had forged close relations with old enemies France,...

 wrote to the Allies requesting that it end, citing the inherent contradiction between encouraging industrial growth and removing factories and also the unpopularity of the policy. (See also Adenauers original letter to Schuman, Ernest Bevins letter to Robert Schuman urging a reconsideration of the dismantling policy.)
Support for dismantling was by this time coming predominantly from the French, and the Petersberg Agreement
Petersberg agreement
The Petersberg Agreement is an international treaty that extended the rights of the Federal Government of Germany vis-a-vis the occupying forces of Britain, France, and the United States, and is viewed as the first major step of Federal Republic of Germany towards sovereignty...

 of November 1949 reduced the levels vastly, though dismantling of minor factories continued until 1951.

In 1951 West Germany agreed to join the European Coal and Steel Community
European Coal and Steel Community
The European Coal and Steel Community was a six-nation international organisation serving to unify Western Europe during the Cold War and create the foundation for the modern-day developments of the European Union...

 (ECSC) the following year. This meant that some of the economic restrictions on production capacity and on actual production that were imposed by the International Authority for the Ruhr
International Authority for the Ruhr
The International Authority for the Ruhr was an international body established in 1949 by the Allied powers to control the coal and steel industry of the Ruhr Area in West Germany....

 were lifted, and that its role was taken over by the ECSC.

The final limitations on German industrial levels were lifted after the European Coal and Steel Community entered into force in 1952, though arms manufacture remained prohibited. The Allied efforts to "de-concentrate and reorganize" the German coal, iron and steel industry were also continued.

Although dismantling of West German industry ended in 1951, "industrial disarmament" lingered in restrictions on actual German Steel production, and production capacity, as well as on restriction on key industries. All remaining restrictions were finally rescinded on May 5, 1955. According to Frederick H. Gareau, noting that although US policy had changed well before that; "the last act of the Morgenthau drama occurred on that date (May 5, 1955) or when the Saar
Saar (protectorate)
The Saar Protectorate was a German borderland territory twice temporarily made a protectorate state. Since rejoining Germany the second time in 1957, it is the smallest Federal German Area State , the Saarland, not counting the city-states Berlin, Hamburg and Bremen...

 was returned to Germany (January 1, 1957)."

Vladimir Petrov concludes that the Allies "delayed by several years the economic reconstruction of the wartorn continent, a reconstruction which subsequently cost the United States billions of dollars." (see Marshall Plan
Marshall Plan
The Marshall Plan was the large-scale American program to aid Europe where the United States gave monetary support to help rebuild European economies after the end of World War II in order to combat the spread of Soviet communism. The plan was in operation for four years beginning in April 1948...

)

See also

  • Morgenthau Plan
    Morgenthau Plan
    The Morgenthau Plan, proposed by United States Secretary of the Treasury Henry Morgenthau, Jr., advocated that the Allied occupation of Germany following World War II include measures to eliminate Germany's ability to wage war.-Overview:...

  • American food policy in occupied Germany
    American food policy in occupied Germany
    American food policy in occupied Germany refers to the food supply policies enacted by the U.S., and to some extent its dependent Allies, in the western occupation zones of Germany in the first two years of the ten-year occupation of Western Germany following World War II.Food relief shipments to...

  • Forced labor of Germans after World War II
    Forced labor of Germans after World War II
    Forced labour of Germans after World War II refers to the Allied use of German civilians and captured soldiers for forced labor in years following World War II ....

  • History of the Ruhr District
    History of the Ruhr District
    The actual boundaries of the Ruhr district differ slightly according to the source but a good working definition is to define the Lippe and Ruhr as the northern and southern boundaries respectively, with the Rhein the western boundary, stretching to the East as far as Hamm.In the Middle Ages, local...

  • History of Germany since 1945
    History of Germany since 1945
    As a consequence of the defeat of Nazi Germany in World War II Germany was split between the two global blocs in the East and West, a period known as the division of Germany. While seven million prisoners and forced laborers left Germany, over 10 million German speaking refugees arrived there from...

  • Monnet plan
    Monnet Plan
    The Monnet plan was proposed by French civil servant Jean Monnet after the end of World War II. It was a reconstruction plan for France that proposed giving France control over the German coal and steel areas of the Ruhr area and Saar and using these resources to bring France to 150% of pre-war...

  • Wirtschaftswunder
    Wirtschaftswunder
    The term describes the rapid reconstruction and development of the economies of West Germany and Austria after World War II . The expression was used by The Times in 1950...

  • Operation Paperclip
    Operation Paperclip
    Operation Paperclip was the Office of Strategic Services program used to recruit the scientists of Nazi Germany for employment by the United States in the aftermath of World War II...

     (part of the effort to acquire German intellectual property)
  • Soviet invasion of Manchuria (1945) – similar war looting and removal of factories in Manchuria occurred

External links