Washington, D.C. May 10, 1945

On this date in 1945 President Harry S. Truman signed the Joint Chiefs of Staff Directive 1067. The person behind the direc­tive was Henry Morgen­thau, Jr., Presi­dent Franklin D. Roose­velt’s former Trea­sury Secre­tary who had long advo­cated that post­war German occu­pa­tion include mea­sures to eli­mi­nate Germany’s abil­ity to wage war for a third time—the first two times being the First and Second World Wars. JCS 1067 applied only to the U.S. zone of occu­pa­tion, not the British, Soviet, and later French zones. Truman did, however, suc­ceed in incor­po­rating much of JCS 1067 (and its inspi­ra­tion, the 1944 Morgen­thau Plan) into the Pots­dam Agree­ment, a “com­muni­qué” that the victo­ri­ous powers hashed out during their meeting in a Berlin suburb between July 17 and August 2, 1945.

Under the Potsdam provisions, U.S. occupa­tion efforts focused mainly on denazi­fi­ca­tion, German dis­arma­ment and demili­ta­ri­zation, the prose­cution of German war crimi­nals, and the reduc­tion or destruc­tion of all civil­ian heavy indus­try that might have a mili­tary poten­tial. Production of loco­motives, mer­chant ships, and air­craft, for instance, was prohib­ited and banks were restricted in their lending. What was left of the German eco­nomy was to be restructured toward light industry and agriculture in accordance with Germany’s “approved peace­time needs.” For example, steel produc­tion was to be capped at 25 per­cent of pre­war produc­tion, and car produc­tion to 10 per­cent of pre­war levels. Coal, coke, elec­trical equip­ment, leather goods, alcohol, toys, musical instru­ments, textiles, and clothing were to take the place of the heavy industrial products that had formed most of Germany’s prewar exports.

Following the Agreement’s implementation, German living stan­dards declined and mal­nu­tri­tion and death rates rose above pre­war levels. To prevent mass star­va­tion the Amer­icans and British were increas­ingly forced to import food­stuffs to the tune of $1.5 billion by 1948, which was paid for by Germany. (In 1946–1947 the average daily caloric intake was esti­mated to be 1,080, which was far below recommended minimum nutrition levels.) Beginning in mid-1946 many obser­vers came to see the Morgen­thau Plan and JCS 1067 as inflicting undue hard­ship on Germans and limiting the abil­ity of their coun­try to recover from the devas­ta­ting effects of the past dozen years now com­pounded by the resettle­ment in the Allied occu­pa­tion zones of enormous num­bers of ethnic Germans (12–14 mil­lion by 1950) expelled from Poland, Czecho­slo­vakia, Hun­gary, Roma­nia, and the Soviet Union. Truman’s Secre­tary of State, retired Gen. George C. Marshall, citing national (i.e., U.S.) secu­rity con­cerns following an eye-opening fact-finding visit to Western Europe, was able to con­vince the presi­dent to rescind the puni­tive occu­pa­tion directive JCS 1067 in 1947, months after the Morgen­thau Plan had been abandoned as offi­cial U.S. policy by Marshall’s predecessor at the State Department.

In April 1948 a new Economic Recovery Program was in place, infor­mally named after Marshall. The $13 billion, four-year Marshall Plan helped Euro­pean eco­no­mies (apart from those of the Soviet satel­lites trapped behind the Iron Curtain) quickly recover and mod­ern­ize their indus­trial and busi­ness prac­tices along Amer­i­can lines. Besides instilling a sense of hope and self-reliance in war-weary Euro­peans, the aid plan also sti­mu­lated the poli­ti­cal recon­struc­tion and eco­nomic inte­gra­tion of West­ern Europe. (Today’s Euro­pean Union of 27 mem­ber states can be traced back to the Euro­pean Coal and Steel Com­munity (1951), the Treaty of Paris (1951), and later the Treaties of Rome (1958), which estab­lished the Euro­pean Eco­no­mic Com­munity.) In 1953 Marshall was awarded the Nobel Peace Prize for his postwar work.

Marshall Plan: Restoring the Infrastructure and Economies of Post-World War II Europe

Marshall Plan: Hungerwinter Demonstration, Germany, March 31, 1947Marshall Plan: 1997 West German Marshall stamp

Left: Between 1946 and 1948 food produc­tion in Ger­many was still two-thirds the pre­war level. Not until the end of 1949, after the Marshall Plan had kicked in, did indus­trial pro­duc­tion reach pre­war levels. During the winter of 1947, thou­sands of West Ger­mans took to the streets to pro­test the disas­trous housing, food, and dis­placed per­sons situ­a­tion in their country. In this street demon­stra­tion, the handheld placard reads: “We want COAL. We want BREAD.” Over the course of the Plan, West Germany received $1.7 billion, which the coun­try invested primarily in capital and infra­structure, paying the way for the Wirt­schafts­wunder, the post­war econo­mic miracle that turned that country into the Euro­pean manu­fac­turing power­house it is today. Great Britain, by con­trast, received $2.7 billion, but used only about a third as much Marshall money in capital investment.

Right: 1997 West German stamp com­mem­o­rating the 50th anni­ver­sary of the Marshall Plan. Marshall dele­gated the design of the multi­billion-dollar self-help hand­out to his subor­di­nates, using his pres­tige as the organ­izer of vic­tory in World War II to gar­ner the requi­site support in the U.S. Con­gress for its pas­sage. The Marshall Plan hand­out is equi­va­lent to a trillion dollars today and up to 15 percent of the U.S. federal bud­get. It is credited with accelerating Western Europe’s recovery by 10 or more years.

Marshall Plan: 1960 West German Marshall stampMarshall Plan: Time Magazine’s 1947 Man of the Year

Left: 1960 West German stamp honoring George Marshall (1880–1959). As U.S. Secre­tary of State (1947–1949), Marshall laid the ground­work for the Euro­pean Recov­ery Pro­gram (1947–1951), the Marshall Plan’s for­mal name; the Berlin Airlift (June 1948–May 1949); the crea­tion of the North Atlantic Treaty Organi­za­tion (NATO) (1949); and the estab­lish­ment of the German Federal Republic (West Germany) (1949).

Right: Marshall was the first profes­sional sol­dier to win the Nobel Peace Prize (1953) and was twice named Man of the Year by Time magazine (1943 and 1947).

George C. Marshall, American Soldier and Statesman (Part 1 of 2)