Morgenthau Plan

Morgenthau Plan, scheme for the post-war pastoralization of Germany which was proposed in 1944 by the secretary of the US Treasury, Henry Morgenthau Jr. (1891–1967).

Morgenthau was highly successful—he raised and spent more money than all his 51 predecessors combined, and he took a leading role at the Bretton Woods conference in July 1944—but his plan should never have seen the light of day. However, at the time Roosevelt's intimate adviser, Harry Hopkins, was out of favour and Morgenthau's ideas were influential. The plan envisaged Germany being divided into two states, northern and southern, after being stripped of the territory it had acquired. No financial reparations would be demanded, as this would have meant keeping part of Germany's industrial strength operational to pay for them. Instead, all industrial machinery would be dismantled and transported to Allied nations, mostly to the USSR, ‘as restitution’. In its original form no help was to be offered, and a deindustrialized Germany was to be left, as one official history comments, ‘to stew in her own juice for a long time’.

The president adopted the scheme enthusiastically and asked Morgenthau to present it at the second Quebec conference in September 1944 (see OCTAGON) when Germany seemed on the verge of collape. Though Churchill later said he disliked it, he wanted Morgenthau's agreement for further financial credit, and both he and Roosevelt initialled it. When their advisers strongly opposed the plan it was put on one side, but it remained extant until more realistic policies were adopted at the Potsdam conference in July– August 1945 (see TERMINAL). This made it difficult for SHAEF's civil affairs division to formulate a policy for the military government of Germany (see Allied Control Commissions).

When the plan was revealed in the American press it was seized upon by German propaganda as evidence of what unconditional surrender meant, and may have contributed to bolstering German resistance during the last months of the war.