2) Germany's main centres of mining and industry, including the Saar area, the Ruhr area and Upper Silesia were to be Internationalised or annexed by neighbouring nations.

3) All heavy industry was to be dismantled or otherwise destroyed.

***

Text of the Morgenthau Plan:

TOP SECRET
Program to Prevent Germany from starting a World War III

1. Demilitarization of Germany.
It should be the aim of the Allied Forces to accomplish the complete 
demilitarization of Germany in the shortest possible period of time after surrender. This means completely disarm the German Army and people (including the removal or destruction of all war material), the total destruction of the whole German armament industry, and the removal or destruction of other key industries which are basic to military strength.

2. New Boundaries of Germany.
(a) Poland should get that part of East Prussia which doesn't go to the U.S.S.R. and the southern portion of Silesia.
(b) France should get the Saar and the adjacent territories bounded by the 
Rhine and the Moselle Rivers.
(c) As indicated in 4 below an International Zone should be created containing the Ruhr and the surrounding industrial areas.

3. Partitioning of New Germany.
The remaining portion of Germany should be divided into two autonomous, 
independent states, (1) a South German state comprising Bavaria, Wuerttemberg, Baden and some smaller areas and (2) a North German state comprising a large part of the old state of Prussia, Saxony, Thuringia and several smaller states. There shall be a custom union between the new South German state and Austria, which will be restored to her pre-1938 political borders.

4. The Ruhr Area. (The Ruhr, surrounding industrial areas, as shown on e map, including the Rhineland, the Kiel Canal, and all German territory north of the Kiel Canal.) Here lies the heart of German industrial power. This area should not only  be stripped of all presently existing industries but so weakened and controlled that it can not in the foreseeable future become an industrial area. The following steps will accomplish this:
(a) Within a short period, if possible not longer than 6 months after the cessation of hostilities, all industrial plants and equipment not destroyed by military action shall be completely dismantled and transported to Allied Nations as restitution. All equipment shall be removed from the mines and the mines closed.
(b) The area should be made an international zone to be governed by an 
international security organization to be established by the United Nations. In governing the area the international organization should be guided by policies designed to further the above stated objective.

5. Restitution and Reparation.
Reparations, in the form of future payments and deliveries, should not be  demanded. Restitution and reparation shall be effected by the transfer of existing German resources and territories, e.g.,
(a) by restitution of property looted by the Germans in territories occupied by them;
(b) by transfer of German territory and German private rights in industrial property situated in such territory to invaded countries and the international organization under the program of partition;
(c) by the removal and distribution among devastated countries of industrial plants and equipment situated within the International Zone and the North and South German states delimited in the section on partition;
(d) by forced German labor outside Germany; and
(e) by confiscation of all German assets of any character whatsoever outside of Germany.

6. Education and Propaganda.
(a) All schools and universities will be closed until an Allied Commission of Education has formulated an effective reorganization program. It is contemplated that it may require a considerable period of time before any institutions of higher education are reopened. Meanwhile the education of German students in foreign universities will not be prohibited. Elementary schools will be reopened as quickly as appropriate teachers and textbooks are available.
(b) All German radio stations and newspapers, magazines, weeklies, etc. shall be discontinued until adequate controls are established and an appropriate program formulated.

7. Political Decentralization.
The military administration in Germany in the Initial period should be carried out with a view toward the eventual partitioning of Germany. To facilitate partitioning and to assure its permanence the military authorities should be guided by the following principles:
(a) Dismiss all policy-making officials of the Reich government and deal primarily with local governments.
(b) Encourage the re-establishment of state governments ineach of the states (Lander) corresponding to 18 states into which Germany is presently divided and in addition make the Prussian provinces separate states.
(c) Upon the partitioning of Germany, the various state governments should be encouraged to organize a federal government for each of the newly partitioned areas. Such new governments should be in the form of a confederation of states, with emphasis on states" rights and a large degree of local autonomy.

8. Responsibility of Military for Local German Economy.
The sole purpose of the military in control of the German economy shall be to facilitate military operations and military occupation. The Allied Military Government shall not assume responsibility for such economic problems as price controls, rationing, unemployment, production, reconstruction, distribution, consumption, housing, or transportation, or take any measures designed to maintain or strengthen the German economy, except those which are essential to military operations. The responsibility for sustaining the German economy and people rests with the German people with such facilities as may be available under the circumstances.

9. Controls over Development of German Economy.
During a period of at least twenty years after surrender adequate controls,  including controls over foreign trade and tight restrictions on capital imports, shall be maintained by the United Nations designed to prevent in the newly-established states the establishment or expansion of key industries basic to the German military potential and to control other key industries.

10. Agrarian program.
All large estates should be broken up and divided among the peasants and the system of primogeniture and entail should be abolished.

11. Punishment of War Crimes and Treatment of Special Groups.
A program for the punishment of certain war crimes and for the treatment of Nazi organizations and other special groups is contained in section 11.

12. Uniforms and Parades.
(a) No German shall be permitted to wear, after an appropriate period of time following the cessation of hostilities, any military uniform or any uniform of any quasi military organizations.
(b) No military parades shall be permitted anywhere In Germany and all military bands shall be disbanded.

13. Aircraft.
All aircraft (including gliders), whether military or commercial, will be confiscated for later disposition. No German shall be permitted to operate or to help operate any aircraft, including those owned by foreign interests.

14. United States Responsibility
Although the United States would have full military and civilian representation on whatever International commission or commissions may be established for the execution of the whole German program, the primary responsibility for the policing of Germany and for civil administration in Germany should be assumed by the military forces of Germany's continental neighbors. S pecifically these should include Russian, French, Polish, Czech, Greek, Yugoslav, Norwegian, Dutch and Belgian soldiers.Under this program United States troops could be withdrawn within a relatively short time.

***

The author of this Plan, Henry Morgenthau Jr. (1891-1967) 

was the grandson of a German Jewish immigrant. His grandfather, Lazarus, arrived in New York in 1866 on the verge of bankruptcy. As the promoter of his own consistently unsuccessful inventions, which included among other things a label machine and a tongue scraper, Lazarus Morgenthau was ultimately a failure in America. That his grandson Henry Morgenthau, Jr. rose to a position of such prominence in American politics had much to do with the determination of Henry's father Henry/Heinrich (1856-1946), who had graduated from Columbia Law School, gone on to make a fortune in real estate, and though he never was given the place in President Woodrow Wilson's cabinet he had fought so hard for, had nonetheless been appointed Ambassador to Turkey.

His son's path to high office was easier. Henry Morgenthau Jr. left Cornell University without graduating and, deciding to become a farmer, bought 1,000 acres of land in Dutchess County, New York. As it turned out, the Morgenthaus were now neighbors of the Roosevelts, and the two families became close friends. When Roosevelt became governor of New York in 1928, he appointed Morgenthau the chairman of his agricultural advisory commission. When Roosevelt was elected President in 1932, Morgenthau became his Treasury Secretary. Morgenthau, nine years younger than Roosevelt, wanted to be his Secretary of Agriculture. He was, in fact, considered for the job and rejected as too Eastern and too Judaic.

Morgenthau and Roosevelt met on a regular basis and Morgenthau kept a record of these meetings in his diary. At the end of 1938, realizing that Congress was becoming increasingly unyielding on the number of immigrants who could enter the country, he went to the President with the suggestion that the United States acquire British and French Guiana to settle the Jews and in return cancel whatever Britain and France still owed the United States on loans from World War I. According to Morgenthau's diary, Roosevelt was not impressed. "It's no good," the President reportedly said. "It would take the Jews five to 50 years to overcome the fever."

In December 1942, President Franklin Roosevelt surprised Morgenthau by saying he had a plan that would lead to the creation of a Jewish state in Palestine. That evening Morgenthau recorded this conversation in his diary. The entry is dated December 3, 1942. Morgenthau writes that after discussing financial matters, Roosevelt broached the subject of Palestine. Roosevelt said the he had pretty well made up his mind on what he was going to do. "What I think I will do is this. First, I would call Palestine a religious country. Then I would leave Jerusalem the way it is and have it run by the Orthodox Greek Catholic Church, the Protestants, and the Jews -- have a joint committee to run it. They are doing it all right now and we might as well leave it that way."

Then the president went on and said, "I actually would put a barbed wire around Palestine, and I would begin to move the Arabs out of Palestine." Morgenthau asked Roosevelt how he would do that, saying, "Would you have the Jews buy up the land?" Roosevelt answered, "No, but I would provide land for the Arabs in some other part of the Middle East, and I know there are plenty of places. Each time we move out an Arab we would bring in another Jewish family." Morgenthau asked Roosevelt, "Would you propose that the majority should be Jews in Palestine?"

Roosevelt said, "Yes, 90% of them should be Jews, but I don't want to bring in more than they can economically support." Morgenthau asked, "Well, what kind of place would it be?" Roosevelt said, "It would be an independent nation just like any other nation -- completely independent. Naturally, if there are 90% Jews, the Jews would dominate the government." He added, "There are lots of places to which you could move the Arabs. All you have to do is drill a well because there is this large underground water supply, and we can move the Arabs to places where they can really live." Morgenthau ends this entry by writing, "I was surprised to find that the President was studying this thing with so much interest and had gone as far as he had in making up his mind on what he wants to do. It was most encouraging to me and most heartening."  

In 1944, President Franklin Roosevelt asked the War Department to devise a plan for bringing war criminals to justice. Before the War Department could come up with a plan, however, Henry Morgenthau sent his own ideas on the subject to the President's desk. This proposal came to be known as the Morgenthau Plan (see above). Harry Dexter White, the son of Lithuanian Jewish immigrants, was the principal architect behind the Morgenthau Plan. White was probably the most important agent to have spied for Stalin. This has prompted some to draw the conclusion that the real purpose of the plan was to further communist expansion in Central and Western Europe after the war.

Roosevelt is quoted as saying to Morgenthau that "We have got to be tough with Germany and I mean the German people not just the Nazis. We either have to castrate the German people or you have got to treat them in such a manner so they can't just go on reproducing people who want to continue the way they have in the past". Morgenthau himself had the following suggestion regarding Germany's young people. "Well, if you let the young children of today be brought up by SS Troopers who are indoctrinated with Hitlerism, aren't you simply going to raise another generation of Germans who will want to wage war?" he noted in his diary. "Don't you think the thing to do is to take a leaf from Hitler's book and completely remove these children from their parents and make them wards of the state, and have ex-US Army officers, English Army officers and Russian Army officers run these schools and have these children learn the true spirit of democracy?"   

Morgenthau didn't remain long in public office after Roosevelt's death. After leaving the Treasury Department in July of 1945, he spent much of the rest of his life working with Jewish philanthropies.

***

Development of the Morgenthau Plan

The Second Quebec Conference

The Morgenthau plan did face at least some mild level of opposition in Roosevelt's 
government, as evidenced by this excerpt of a note to the president from Henry L. Stimson, Secretary of War, dated September 5, 1944. "We contemplate the transfer from Germany of ownership of East Prussia, Upper Silesia, Alsace and Lorraine (each of them except the first containing raw  materials of importance) together with the imposition of general economic controls. We also are considering the wisdom of a possible partition of Germany into north and south sections, as well as the creation of an internationalized State in the Ruhr. With such precautions, or indeed with only some of them, it certainly should not be necessary for us to obliterate all industrial productivity in the Ruhr area, in order to preclude its future misuse. Nor can I agree that it should be one of our purposes to hold the German population "to a subsistence level" if this means the edge of poverty."

A slightly toned down version of the Plan, turning Germany into "a country primarily agricultural and pastoral in its character", and lacking the requirement for the destruction of the Ruhr mines, was signed by U.S. President Franklin D. Roosevelt and the British Prime  Minister Winston Churchill at the Second Quebec Conference, September 12, 1944 - 16, 1944. Morgenthau was the only Cabinet member invited to participate in the Quebec Conference during which the Plan was agreed to. Morgenthau convinced Roosevelt to write to Secretary of State Cordell Hull and Secretary of War Henry L. Stimson saying that a U.S. occupation  policy which anticipated that "Germany is to be restored just as much as the Netherlands or Belgium" was excessively lenient. A better policy would have the Germans "fed three times a  day with soup from Army soup kitchens" so "they will remember that experience the rest of their lives." 

At the beginning of the Quebec Conference, Churchill was not inclined to support the Morgenthau proposal, saying "England would be chained to a dead body". Roosevelt reminded Churchill of Stalin's comments at the Tehran Conference in late 1943, when Stalin had proposed that at least 50,000 and perhaps 100,000 German officers should be murdered, and Roosevelt remarked that perhaps 49,000 should be enough. At that time Churchill became enraged at these comments, and Stalin quickly assured him that they were joking. However, at the Yalta Conference in February 1945, when Roosevelt said that he was feeling "very much more bloodthirsty towards Germany" than earlier and indicated that he hoped Stalin would again "propose a toast to the execution of 50,000 officers of the German army", and when Churchill told Stalin that he favored execution of captured Nazi leaders, Stalin answered, "In the Soviet Union, we never execute anyone without a trial."   

The Quebec meeting broke up on Churchill's disagreement but Roosevelt suggested that  Morgenthau and White continue to discuss with Lord Cherwell, Churchill's personal assistant. Lord Cherwell has been described as having "an almost pathological hatred for Nazi Germany, and an almost medieval desire for revenge was a part of his character". Morgenthau is quoted as saying to his staff that "I can't overemphasize how helpful Lord Cherwell was because he could advise how to handle Churchill". In any case, Cherwell was able to persuade Churchill to change his mind. Churchill later said that "At first I was violently opposed to the idea. But the President and Mr Morgenthau from whom we had much to ask were so insistent that in the end we agreed to consider it". Some have read into the clause "from whom we had much to ask" that Churchill was bought off, and note a September 15 memo from Roosevelt to Hull stating that "Morgenthau has  presented at Quebec, in conjunction with his plan for Germany, a proposal of credits to Britain totalling six and half billion dollars." Hull's comment on this was that "this might suggest to some the quid pro quo with which the Secretary of the Treasury was able to get Mr Churchill's adherence to his cataclysmic plan for Germany".

At Quebec White made sure that Lord Cherwell understood that economic aid to Britain was  dependent on British approval of the plan. During the signing of the plan, which coinsided  with the signing of a loan agreement, President Roosevelt proposed that they sign the plan  first. This prompted Churchil to exclaim: "What do you want me to do? Get on my hind legs and beg like Fala?" An excerpt from the minutes of the Quebec meeting, taken down by George M. Elsey Commander, U.S. Naval Reserve, and duty officer, reads as follows: "And the President and the Prime Minister agreed on a policy towards Germany. This program for eliminating the warmaking industries in the Ruhr and the Saar is looking forward to converting Germany into a country primarily agricultural and pastoral in its character. The Prime Minister and the President were in agreement on this program." Further details:


Modification of the Plan: Joint Chiefs of Staff Directive 1067

The British Foreign Secretary Anthony Eden expressed his strong opposition to the plan and, with the support of some others, was able to get the Morgenthau Plan set aside in Britain. In the US, Hull argued that nothing would be left to Germany but land and only 60% of the Germans could live off the land, meaning 40% of the population would die. Stimson expressed his opposition even more forcefully to Roosevelt. According to Stimson, the President grinned and "looked naughty", before finally saying that he just wanted to help Britain get a share of the Ruhr and denied that he intended to deindustrialize Germany. Stimson replied, "Mr President, I don't like you to dissemble to me" and read back to Roosevelt what he had signed. Struck by this, Roosevelt said he had "no idea how he could have initialled this" 

Drew Pearson publicized the plan on September 21, although Pearson himself was 
sympathetic to it. More critical stories in the New York Times and Wall Street Journal quickly followed. Joseph Goebbels made extensive use of the Morgenthau Plan, and General George Marshall complained to Morgenthau that German resistance had strengthened. Lt Col John Boettiger said the Morgenthau Plan was "worth thirty divisions to the Germans". On December 11, 1944 President  Roosevelt was given a translated synopsis of a recent article in the Neue Zürcher Zeitung. "So far, the Allies have not offered the opposition any serious encouragement. On the contrary, they have again and again welded together the people and the Nazis by statements published, either out of indifference or with a purpose. To take a recent example, the Morgenthau plan gave Dr. Goebbels the best possible chance. He was able to prove to his countrymen, in black and white, that the enemy planned the enslavement of Germany. - The conviction that Germany had nothing to expect from defeat but oppression and exploitation still prevails, and that accounts for the fact that the Germans continue to fight. It is not a question of a regime, but of the homeland itself, and to save that, every German is bound to obey the call, whether he be Nazi or member of the opposition."

On the basis of the  results of the Quebec meeting, and after quite a lot of back and forth , a "Directive to the Commander-in-Chief of the United States Forces of Occupation Regarding the Military Government of Germany (JCS 1067)" was drafted by the "Joint Chiefs of Staff (JCS)" early 1945. The JCS was the principal United States agency during the war for  coordination between the Army and the Navy. On March 20, 1945 President Roosevelt was warned that this Directive 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?" After the death of President Roosevelt on April 12, 1945, the new President Truman signed the JCS 1067 on May 10, 1945.  

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." Morgenthau's ideas permeated much of American thinking and planning, especially in the Treasury and the War Department. They lead to a number of offshoots. The most notable amongst these offshoots is the:

Potsdam Conference

The Potsdam Conference was held at Cecilienhof in Potsdam, Germany, from July 17 to August 2, 1945. The participants were the Soviet Union, the United Kingdom, and the United States. The three nations were represented by Communist Party General Secretary Joseph Stalin, Prime Minister Winston Churchill and later Clement Attlee, and President Harry S. Truman. At the end of the conference, the Three Heads of Government agreed on the following actions:

* Issuance of a statement of aims of the occupation of Germany by the Allies: demilitarization, denazification, democratization and decartelization.
* Division of Germany and Austria respectively into four occupation zones (earlier agreed in principle at Yalta), and the similar division of each's capital, Berlin and Vienna, into four zones.
* Agreement on the prosecution of Nazi war criminals.
* Reversion of all German annexations in Europe after 1937, these included Sudetenland, Alsace-Lorraine, Austria and the westmost parts of Poland
* Germany's eastern border was to be shifted westwards to the Oder-Neisse line, effectively reducing Germany in size by approximately 25% compared to her 1937 borders. The territories east of the new border comprised East Prussia, Silesia, West Prussia, and two thirds of Pomerania. These areas were mainly agricultural, with the exception of Upper Silesia which was the second largest centre of German heavy industry.
* Expulsion of the German populations remaining beyond the new eastern borders of Germany.
* Agreement on war reparations to the Soviet Union from their zone of occupation in Germany. It was also agreed that 10% of the industrial capacity of the western zones unnecessary for the German peace economy should be transferred to the Soviet Union within 2 years. Stalin proposed and it was accepted that Poland was to be excluded from division of German compensation to be later granted 15% of compensation given to Soviet Union (this has never happened)[citation needed].
* Ensuring that German standards of living did not exceed the European average. The types and amounts of industry to dismantle to achieve this was to be determined later. (see The industrial plans for Germany)
* Destruction of German industrial war-potential through the destruction or control of all industry with military potential. To this end, all civilian shipyards and aircraft factories were to be dismantled or otherwise destroyed. All production capacity associated with war-potential, such as metals, chemical, machinery etc were to be reduced to a minimum level which was later determined by the Allied Control Commission. Manufacturing capacity thus made "surplus" was to be dismantled as reparations or otherwise destroyed. All research and international trade was to be controlled. The economy was to be decentralized (decartelization). The economy was also to be reorganized with primary emphasis on agriculture and peaceful domestic industries. In early 1946 agreement was reached on the details of the latter, Germany was to be converted into an agricultural and light industry economy. German exports were to be coal, beer, toys, textiles, etc — to take the place of the heavy industrial products which formed most of Germany's pre-war exports.

These actions largely correspond to what had been advocated by Morgenthau, however transgressing by far the suggested territorial annexations in the East (see below). 

 
Further Development

Morgenthau had written a book outlining the full Morgenthau Plan, "Germany is Our Problem". In November 1945 General Eisenhower, Military Governor of the U.S. Occupation Zone, approved the distribution of one thousand free copies of the book to American military officials in Germany.

The Morgenthau Plan spawned the JCS-1067, which contained the ideas of making Germany a "Pastoral State". JCS 1067 was the basis for US Occupation policy until July 1947, and was intended  to reduce German living standards. Most of the Morgenthau Plan was implemented, and some came very close to being  implemented. This concept's name was later changed to become "level of industry", where Germany's production was to be severely limited but not completely eliminated. No new locomotives were to be built until 1949, most industries were to have their production halved. Automobile production was to be set at 10% of its [pre-war] 1936 level, etc. 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 January 1946 the Allied Control Council set the foundation of the future German economy by putting a cap on German steel production, the maximum allowed was set at about 25% of the prewar production level. Steel plants thus made redundant were dismantled. Also as a consequence of the Potsdam conference, the occupation forces of all nations were obliged to ensure that German standards of living were lowered to the level of its European  neighbours with which it had been at war with, France in particular. Germany was to be reduced to the standard of life it had known at the height of the Great depression (1932). 

The first "level of industry" plan, signed in 1946, stated that German heavy industry was to be lowered to 50% of its 1938 levels by the destruction of 1,500 manufacturing plants. The problems brought on by the execution of these types of policies were eventually apparent to most U.S. officials in Germany. Germany had long been the industrial giant of Europe, and its poverty held back the general European recovery. The continued scarcity in Germany also led to considerable expenses for the occupying powers, which were obligated to try and make up the most important shortfalls through the GARIOA program (Government and Relief in  Occupied Areas). As Germany was allowed no airplane production nor any shipbuilding capacity to supply a merchant navy, all facilities of this type were destroyed over a period of several years. A typical example of this activity by the allies was the Blohm & Voss shipyard in Hamburg, where explosive demolition was still taking place as late as 1949. Everything that could not be dismantled was blown up or otherwise destroyed. A small-scale attempt to revive the company Blohm & Voss in 1948 ended with the owners and a number of employees being thrown in jail by the British.

On February 2, 1946, a dispatch from Berlin reported:“Some progress has been made in converting Germany to an agricultural and light industry economy, said Brigadier General William H. Draper, Jr., chief of the American Economics Division, who emphasized that there was general agreement on that plan. He explained that Germany’s future industrial and economic pattern was being drawn for a population of 66,500,000. On that basis, he said, the nation will need large imports of food and raw materials to maintain a minimum standard of living. General agreement, he continued, had been reached on the types of German exports — coal, coke, electrical equipment, leather goods, beer, wines, spirits, toys, musical instruments, textiles and apparel — to take the place of the heavy industrial products which formed most of Germany's pre-war exports. 

Lewis Douglas, chief advisor to General Lucius Clay, US High Commissioner, denounced the JCS 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". 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". Douglas went to Washington in the hopes of having the directive revised but was unable to do so. E. Allan Lightner, Jr. Assistant Chief, 1945 to 47, and Associate Chief, 1947 to 48, of the Central European Affairs Division, Department of State summed it up as follows: "As early as the Quebec Conference he [the President] had bought Secretary Morgenthau's ideas: The Morgenthau Plan is to do everything  possible to prevent the Germans from regaining the strength ever again to wage war, by requiring them to exist on an agrarian economy. Then gradually the President pulled back from that extreme position. Yet those ideas permeated much of American thinking, especially in the War Department, right up to the time of Secretary [James F.] Byrnes' important Stuttgart speech in [September of] 1946. They were reflected in the basic directive for the occupation of Germany, which was a kind of Bible for all that was done during the early days of the occupation, the paper known as JSC-1067. They also affected Roosevelt's thinking on the question of whether to split up Germany.

The US Senate's Judiciary Committee asserted: "During the first two years of the Allied occupation the Treasury program of industrial dismantlement was vigorously pursued by American officials." Vladimir Petrov, an expert on the financial aspects of the occupation, wrote: "By forbidding the American Army to maintain price, wage, and market controls, it (JCS 1067) literally decreed, as a State Department official put it, economic chaos."

Conditions in Germany reached their lowest point in 1947. Living conditions were considered  worse in 1947 than in 1945 or 1946. At an average ration of 1040 calories a day malnutrition  was at its worst stage in post-war Germany. Herbert Hoover asserted that that ration was hardly more than the ration that caused thousands in the Nazi concentration camps to die from starvation. Vladimir Petrov concluded: "The victorious Allies delayed by several years the economic 
reconstruction of the war torn continent, a reconstruction which subsequently cost the US billions of dollars."

By February 28, 1947 it was estimated that 4,160,000 German former prisoners of war, by General Eisenhower relabeled as Disarmed Enemy Forces in order to negate the Geneva Convention, were used as forced labor in work camps outside Germany: 3,000,000 in Russia, 750,000 in France, 400,000 in Britain and 10,000 in Belgium. 

Meanwhile in Germany  large parts of the population were starving at a time when the "nutritional condition in those [neighbouring] countries is nearly pre-war normal". (See also The U.S. and the refusal to feed German civilians after the war).
All armaments plants, included some that could have been converted to civilian operation, were dismantled or destroyed. A large proportion of operational civilian plants were dismantled and transported to the victorious nations, mainly France and Russia.

Change of policy: Cold War 

The change was heralded by Restatement of Policy on Germany, a famous speech by James F. Byrnes, then 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. policy as it repudiated the Morgenthau Plan economic policies and with its message of change to a policy of economic reconstruction gave the Germans hope for the future. Reports such as this by former U.S. President Herbert Hoover, dated March 1947, also argued for a change of policy, among other things through speaking frankly of the expected consequences. "There are several illusions in all this "war potential" attitude. 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. This would approximately reduce Germany to the density of the population of France." 

In 1947 the U.S. Congress warned that the continuation of the present policies
can only mean one of two things, (a) That a considerable part of the German 
population must be "liquidated" through diseases, malnutrition, and slow 
starvation for a period of years to come, with the resultant dangers to the rest of 
Europe from pestilence and the spread of plagues that know no boundaries; or 
(b) the continuation both of large occupying forces to hold down "unrest" and 
the affording of relief mainly drawn from the United States to prevent actual 
starvation.

In view of increased concerns by General Lucius D. Clay and the Joint Chief of Staff over communist influence in Germany, as well as of the failure of the rest of the European economy to recover without the German industrial base on which it was dependent, in the summer of 1947 Secretary of State General George Marshall, citing "national security grounds" was finally able to convince President Harry S. Truman to remove JCS 1067, and replace it with JCS 1779 which instead stressed that "An orderly, prosperous Europe requires the economic  contributions of a stable and productive Germany." JCS 1067 had then been in effect for over two years. With the change of occupation policy Germany eventually made an impressive recovery, later known as the "Wirtschaftswunder".

The most notable example of this change of policy was a plan established by U.S. Secretary  of State George Marshall, the "European Recovery Program", better known as the Marshall  Plan, which in the form of loans instead of the free aid received by other recipients eventually  was extended to also include the newly formed West Germany in 1949." The Marshall Plan is not a philanthropic enterprise. It is based on our  views of the requirements of American security. This is the only peaceful avenue now open to us which may answer the communist challenge to our way  of life and our national security." (Allen W. Dulles, The Marshall Plan) 

By 1949, when the Marshall Plan was extended to cover the western half of Germany, the Morgenthau Plan and its effects had started to be deliberately forgotten and suppressed, especially by its former proponents. Also by 1949 the West Germans had become confident enough to protest against the ongoing  Allied policy of reducing German industrial potential through factory dismantling. The 
Western Allies finally had to halt dismantling in 1950.

Quelle: Internet