The President's Economic Mission to Germany and Austria


The President's Economic Mission to Germany and Austria

"The President's Economic Mission to Germany and Austria" was the title of a series of reports commissioned by U.S. President Harry S. Truman and written by former U.S. President Herbert Hoover.

Based on Hoover's previous experience with Germany at the end of World War I, in January 1947 President Harry S. Truman selected Hoover to do a tour of Europe, focusing on Germany and Austria in order to ascertain the food situation of the occupied nations. Hoover toured what was to become West Germany in Field Marshall Herman Goering's old train coach and produced a number of reports sharply critical of U.S. occupation policy.

The economy of Germany had "...sunk to the lowest level in a hundred years". [Michael R. Beschloss, The Conquerors: Roosevelt, Truman and the Destruction of Hitler's Germany, 1941-1945 (2002) pg.277]

Hoover proposed a changed economic occupation policy in his reports, if nothing else but for the sake of sparing the American taxpayers the burden of supporting Central Europe indefinitely.

Report No. 3 - The necessary steps for promotion of German exports, so as to relieve American tax payers of the burdens of relief and for economic recovery of Europe

It has been suggested that Herbert Hoovers March 1947 economic report helped end the execution of the Morgenthau plan, particularly through the paragraph which stated: "There is the illusion that the New Germany left after the annexations can be reduced to a 'pastoral state'. It can not be done unless we exterminate or move 25,000,000 people out of it." [Erik S. Reinert, "Globalization, Economic Development, and Inequality: An Alternative Perspective", 2004 Edward ISBN 1858988918. p.158]

(A scanned image of the [http://www.trumanlibrary.org/whistlestop/study_collections/marshall/large/documents/index.php?pagenumber=14&documentid=22&documentdate=1947-03-24&studycollectionid=mp&nav=OK paragraph in question] is available from the Truman Presidential Library)

General Lucius Clay was of the opinion that the German economy was vital for European recovery, and had tried to use loopholes in the occupation directive JCS 1067 to pursue a less harsh de-industrialization policy in the U.S. occupation zone than others in the U.S. desired. [Michael Wala, "The Council on Foreign Relations and American Foreign Policy in the Early Cold War", 1994, Berghahn Books, ISBN 157181003X pp.104-105]

Hoover's conclusions were similar to those of the Council on Foreign Relations and those of General Clay when Hoover stated: "The whole economy of Europe is interlinked with German economy through the exchange of raw materials and manufactured goods. The productivity of Europe cannot be restored without the restoration of Germany as a contributor to that productivity." [Michael Wala, "The Council on Foreign Relations and American Foreign Policy in the Early Cold War", 1994, Berghahn Books, ISBN 157181003X pp.104-105]

The findings of Hoovers report that Germany should be made the engine of European recovery were endorsed by general Clay and the US War Department, but were resisted by the State Department which drafted a paper that fiercely attacked the report. The State Department position was that priority should be given to the economic and security requirements of Germany's neighbors. [Michael J. Hogan "The Marshall Plan: America, Britain, and the Reconstruction of Western Europe, 1947-1952", 1987, Cambridge University, ISBN 0521378400 pp.34-35] President Trumans assistant John R. Steelman expressed fear about reviving the "German colossus". Edwin W. Pauley, who had been industrial and commercial adviser to the Potsdam Conference and until 1947 President Trumans representative to the Allied Reparations Commission, expressed his strong dislike for the report. Pauley stated that to follow Hoovers recommendations would entail a "major reversal" of U.S. policy and warned about future German domination of Europe. [Michael J. Hogan "The Marshall Plan: America, Britain, and the Reconstruction of Western Europe, 1947-1952", 1987, Cambridge University, ISBN 0521378400 pp.34-35 (the citation is further referred to: Steelman undated memorandum for the president, Truman Papers, PSF, General File: Hoover, Herbert C. and also to: Pauley letter to Truman, April 15, 1947, john W. snyder Papers (Truman Library), alphabetical file: Germany general, 1946-1951.)]

Nevertheless, despite the fierce debate it had generated Hoovers report had made it very obvious to the U.S. leadership that a new policy was needed; ""almost any action would be an improvement" on current policy." [Michael J. Hogan "The Marshall Plan: America, Britain, and the Reconstruction of Western Europe, 1947-1952", 1987, Cambridge University, ISBN 0521378400 pp.34-35 (the citation is further referred to: Steelman undated memorandum for the president, Truman Papers, PSF, General File: Hoover, Herbert C.) ]

The other Hoovers report

Roughly 18 months earlier a similar report by another Hoover, Professor Calvin Hoover, had faced similar opposition.

In mid October 1945 the U.S. Military Government in Germany submitted a 15 page report to the Allied Control Council. The report contained a lenient interpretation of the Potsdam conference policy and advocated partial economic reconstruction. [ [http://www.time.com/time/magazine/article/0,9171,778431-1,00.html Trouble in Germany] Time Magazine Monday, Oct. 22, 1945]

Edwin W. Pauley labeled the proposal partly lessening the capacity restrictions on German steel production "ridiculous". General Eisenhower pointed out that it was an unofficial report and proceeded to criticize the critics of it for having "accepted it as policy". Eisenhower stated his position to the press as "...I say let Germany find out what it means to start a war." [ [http://www.time.com/time/magazine/article/0,9171,778431-1,00.html Trouble in Germany] Time Magazine Monday, Oct. 22, 1945]

The U.S. public at the time held the (partly erroneous) belief that the decision at Potsdam had been to completely pastoralize Germany, with the exception for the occasional factory. The U.S. public was relieved by the sharp critique and debunking of Professor Calvin Hoovers suggestion that the Potsdam policy be more leniently interpreted and German economy partly reconstructed. [ [http://www.time.com/time/magazine/article/0,9171,778431-1,00.html Trouble in Germany] Time Magazine Monday, Oct. 22, 1945]

Notes

External links

* [http://www.trumanlibrary.org/hoover/documents.php?page=3 Truman library document collection]
* The President's Economic Mission to Germany and Austria [http://www.trumanlibrary.org/whistlestop/study_collections/marshall/large/documents/index.php?pagenumber=1&documentid=24&documentdate=1947-02-28&studycollectionid=mp&nav=OK (Report No.1)] , [http://www.trumanlibrary.org/whistlestop/study_collections/marshall/large/documents/index.php?pagenumber=1&documentid=22&documentdate=1947-03-24&studycollectionid=mp&nav=OK (Report No.3)]

ee also

*Restatement of Policy on Germany
*A Report on Germany
*Industrial plans for Germany


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