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The Material Cost of Vengeance

LEAVING BERLIN ON THE AIRLIFT EARLY IN SEPTEMBER AND ARRIVING in the United States zone, I felt I had traveled arther in time than in space. In Berlin, in spite of the gross inequalities between the Germans and ourselves in sacrifice, privation, and danger, we were standing shoulder to shoulder in resisting Soviet aggres- sion. But in Bizonia we still seemed to be fighting the last war. Here we were acting as if Germany, not Soviet Russia, now menaces the peace of the world and the freedom of Europe. We were still dismantling German industry, and in general carrying out the Yalta and Potsdam agreements as if Soviet Russia had never broken them, and with an almost total disregard of the Mar- shall Plan and the Truman Doctrine which Americans at home imagined were now the basis of United States policy.

Large shipments of “reparations and restitutions” were still going to Russia, Czechoslovakia, Poland, Yugoslavia, and other countries behind the Iron Curtain, not only from the British and French zones but also from the American.

Following the start, in June, of Soviet Russia’s blockade of Ber - lin, such shipments from Bizonia and the French zone to the countries behind the Iron Curtain, instead of being stopped, had been doubled in quantity. The bulk of the shipments to the Soviet Union in July 1948 and subsequent months went from the British zone, and deliveries from the United States zone direct to Russia had been stopped. But the United States had continued to give aid and comfort to the Communists by supplying the Czechs, Poles, and Yugoslavs with 5,790 tons of German machinery and other assets in that one month. At the end of October, when bad weather was endangering the lives of American pilots on the air lift and



the Berlin population was already shivering in its unheated homes, the total reparations and restitutions shipments to the countries behind the Iron Curtain from Bizonia and the French zone com- bined, had been stepped up to nearly nine thousand tons, from the six and a half thousand sent before Stalin started the blockade of Berlin.

Factories were being dismantled in Western Germany to the detriment of the whole European economy, and with a cynical disregard of the needs of the German people and the danger of losing Western Germany to the Communists while attempting to save Berlin from them.

The cost to the United States taxpayer of subsidizing a pauper- ized Germany, and a Europe deprived of the products of German industry, was apparently also being disregarded not only by our Western allies, but by the American authorities responsible for our German policy.

In spite of the fact that it had been announced that Germany was to participate in the rebuilding of Europe under the Marshall Plan, the United States and Britain were implementing the 1947 “Revised Level of Industry Plan,” which severely limits Germany’s capacity to produce in most major industries and as drawn up with no provision for German exports of steel, machinery, and other goods most urgently required for European reconstruction.

From the British point of view dismantlement makes sense, since it helps to reduce Germany’s competitive power on the world market. Originally the British authorities had held out for a higher level of industry than the United States was willing to allow. They understood that Western Germany could not be self-sustaining if the reparations program were carried through; and so long as they were themselves financially responsible for feeding the industrial population of their zone, they pursued a more enlightened policy than the United States. But since the merging of the British and American zones and the United States’ comm itment to meet the deficits of Bizonia, Britain’s competitive motive has had free rein, and the British now oppose revision of the dismantlement program. In their frantic efforts to free themselves from dependence on dollar subsidies, they have abandoned he policy of wisdom and t restraint toward defeated enemies which formerly made Britain great and strong.

Today the British are sacrificing their long-term interests by themselves exporting airplanes and capital goods to Soviet Russia,


and by alienating the Germans and weakening Continental Europe by shipments of large quantities of dismantled German machines to Stalin’s empire. According to figures given in a British Military Government communique, published in “Die Tat,” on February 6, 1949, out of a total of 598,000 tons of machinery and other mate- rials taken from German factories, 163,896 tons had been delivered to Russia, 18,618 tons to Czechoslovakia, 1,789 to Albania, and 45,135 to Yugoslavia. The British have had no scruples even in delivering armament factories to Russia. On December 20, 1948, the London Times reported that the Borbeck-Krupps Armaments Works was in process of being shipped to the Soviet Union.

In the French zone one could hardly have imagined that there is such a thing as a Communist danger, a Marshall Plan or any such question as the defense of Western Europe. The blindness of the French, their obsession with a past danger, and seeming un- awareness of the lively present danger of Soviet aggression, their squeezing of their German one to subsidize their own mismanagedz economy, and their futile parade of the trappings of a nonexistent military might before the cowed but secretly mocking German population, require a separate chapter. Here I shall be concerned only with Bizonia, as the partially merged British and American zones are called.

Whereas both the British and French treatment of the Germans is easy to understand, if not to condone, American policy is incom- prehensible. America has nothing to gain, and everything to lose economically, politically, and militarily by dismantlement. Yet the United States has exerted no strong pressure to bring it to an end in the British and French zones, and has continued to carry it out even in the American zone.

The comfortable assumption in America that the Marshall Plan has replaced the Morgenthau Plan is, I quickly perceived, a delu- sion. The spirit of Morgenthau, although it no longer dominates our German policy, still inspires it. The fact that there is now Marshall Plan looking toward he integration of a revived and t democratic Germany in a reconstructed and self-supporting Europe means that we are busy repairing with our right hand the damage done by our left hand. It is as if one team of Americans were re- building a bombed dwelling while another team is destroying the foundations.

It would have been funny, were it not so tragic, to witness the unending struggle between those Americans who had been sent to


Germany to revive industry and trade, and those whose orders were to destroy the German economy. The conflict between the de- stroyers and the rebuilders was even more acrimonious and bitter than that between competitive Washington departments.

In Frankfurt, Essen, and Stuttgart, I have smiled to hear Ameri- can coal, steel, and railway experts plotting, or pleading, to stop dismantlement of the factories producing the mining, railway, and other equipment without which coal production could not be in- creased or the railways restored. I heard revealing conversations between American and German authorities in which the former warned the latter about which Americans were on the constructive side and which on the destructive.

If there were some sort of collaboration between the Germans and those Americans who are engaged in restoring the erman economy and furthering the Marshall Plan, there was naturally far closer relationship between the American “destroyers” and the British Military Government. The United States experts endeavor- ing to increase coal and steel production and to reconstruct trans- portation facilities were dependent on the British, since not only the mines and iron and steel works are in the British zone, but also most of the factories producing mining equipment and railroad supplies. The predicament of the American experts can be under- stood if one notes the fact that the dismantlement list includes forty-seven factories making mining equipment and thirty-two specializing in the production of supplies for the German railways.

Fortunately there were some enlightened British officials also, who were anxious to revive the German economy, so the conflict between the constructors and the destroyers was not as unequal as it might otherwise have been. The British official in charge of the Bizonal Iron and Steel office in Düsseldorf, for instance, worked in complete harmony with his American counterpart, and in 1948 they succeeded in bringing about an astonishing increase in steel production. On the other hand, while $24,000,000 worth of Ameri- can mining equipment had been earmarked for Germany by ECA, the British insisted on continuing to dismantle the German fac- tories which could have supplied this machinery. Among others they were dismantling the plants producing 90 per cent of the pneumatic mining tools produced in the Western zone.

Obviously the British, in view of their dependence on American subsidies, could have been induced to stop the dismantlement of German factories, the loss of whose production had to be made


good by ECA allocations. The trouble was that some United States Military Government and Washington officials were still pursuing a camouflaged Morgenthau line of policy.

Whether or not the contradictory and self-defeating nature of American activities in Germany was due more to individual senti- ments or to ashington’s desireWto win votes by being all things to all men, both the American destroyers of the German economy and its rebuilders could claim they were only doing their duty. Both were carrying out the orders they had received.

The situation was aptly summarized by one United States official who told me:

“We are caught between opposing policies and are unable to move forward. The forces of destruction, born of war hysteria, and set in motion by the Morgenthau Plan, are still in operation; while the constructive forces which the Marshall Plan was intended to release are stymied for lack of new directives from Washington.” “The American people,” he continued, “are only now beginning to realize that unconditional surrender and total victory force them to assume the same responsibilities in Germany as the inheritor of a property. Although the bills are rolling in, and America has to pay them; we still fail to understand fully that we must stop the destruction of Germany’s assets if the United States is not to go bankrupt. At present the old destructive policy is merely overlaid by the new constructive one.”

Some American officials were in the awkward position of holding positions with the destroyers and the reconstructors at the same time. Major Holbrook, for instance, whom I met in Stuttgart, was both Reparations Officer for Württemberg and Governor LaFol- lette’s Chief of Industry and Commerce. While he had to fulfill the dismantlement orders which came to him from the Reparations Division of Military Government in Berlin, he also had to endeavor to increase production in his province. This he had managed to do with considerable ingenuity.

In the United States zone machinery is classified as already dis- mantled when the bolts attaching it to the floor have been un- screwed and it has been placed on wooden blocks. By allowing the Germans to continue using it in this condition, Major Holbrook had not only lightened the load of the American taxpayer by en- abling more Germans to earn their own living than would ther- wise have been possible; he had also kept the “dismantled” ma - chinery in good working order for use in other countries when the


time came to ship it. Elsewhere, particularly in the British zone, saw piles of rusty factory equipment long since dismantled which was gradually becoming unusable as it lay in the open air or in unheated damp depots. For it is the British practice to dismantle machinery even when no country entitled to receive reparations wants it. Hence the tremendous waste entailed by the Revised Level of Industry program, which is implemented with the primary objective of depriving the Germans of the capacity to produce, rather than helping other countries to reconstruct their economies with German reparations. Were the latter the real aim, new and better machinery could be supplied to them in far less time by stopping dismantlement and allowing the Germans to work to pro- duce reparations.

Major Holbrook had also restored production in many of the factories from which reparations had een taken, by scouring Württemberg for unused machines which could have been taken in the first place, had the Berlin Military Government authorities not preferred to interrupt production and waste German labor by taking reparations from factories actually working instead of from those closed down.

Before I visited Stuttgart toward the end of October, I had be- lieved that the various statements made by General Marshall and other representatives of the State Department in Washington, and by General Clay and his subordinates in Germany, meant that dis- mantlement had been completed or stopped in the United States zone. I was as bewildered as the Germans when I found that the expected arrival of the ECA’s “Humphrey Committee” experts — sent to Germany in accordance with the 1948 Foreign Aid Act to ascertain which plants on the dismantlement list could better con- tribute to European recovery by being left in Germany— far from stopping reparations deliveries had led to a speed-up in shipments of machinery out of he United States zone. Evidently it was not only the British and French who were anxious to confront Paul Hoffman’s Committee with a fait accompli. The United States Reparations Office at Military Government headquarters in Berlin had issued orders to crate and ship out immediately the machinery which had hitherto been permitted to continue operating in its “dismantled” condition on account of the great need of its products in Germany or for export.

The Germans had been led to assume that the arrival of the ECA revision committee meant a halt in reparations deliveries. The


Württemberg-Baden Ministry of Economics had been informed, in a letter written by the United States chief of the Commerce and Industry Group of the Bipartite Control Office in Frankfurt n October 11, that removal of equipment from five plants in that area would be held in abeyance until completion of the ECA re- view. But a week or two later orders had come to crate and rush shipment of this same equipment out of Germany in record time. I was told that the United States official in Berlin who had given these orders had said on the telephone that the European Recovery Program might or might not be a good thing, but that in any case it had nothing to do with him. Nor had he any interest in he contrary orders given by the United States Commerce and Industry authorities in Frankfurt.

The Germans, in addition to their impotent resentment at being deprived of their means of livelihood, could not but reflect that this democracy, which we told them was such a good and just thing, could not be trusted, since the official promises made by one set of United States authorities were not honored by others.

One of the factories which came under the hammer as a result of the determination of the Berlin Reparations Office of Military Government to forestall the ECA, was the Kiefer Works. In Stutt- gart I visited this plant which produces ventilation and heating equipment for factories and hospitals. Although the only factory in Bizonia producing air-conditioning equipment for hospitals, it was to be shipped to Greece. The Greek mission which had visited the factory had told the Germans that they had neither the market, nor the raw materials, nor the technical experts to make use of it. The machinery would, no doubt, end up on the scrap heap but it was “on the list.” Its main equipment had been shipped and the Germans were trying to carry on production by cutting sheets by hand and nailing instead of soldering the parts.

I also saw the Zaiser Works in Stuttgart, now stopped from pro- ducing elevators and electric cranes, although the dismantlement by the Russians of the Flohr Works in Berlin and Vienna had left Germany with only five plants of this type, one of which was also being dismantled; and although British dismantlement of a multi- tude of cranes in the Ruhr had led to a large demand for new cranes which could not be met. Nor was there any hope of Zaiser’s being able to acquire new machines: most of those they required are produced only in the Russian zone. I visited several other fac- tories in Stuttgart, none of which could be classified either as po-


tential armament factories or as “surplus” to Bizonia’s needs, but all of which were having their machinery taken away, presumably to forestall any action to save them by the ECA authorities.

All over the United States zone the same thing was happening. One case brought to my notice was that of the Frank factory in Birkenau in Hesse, which produced artificial eyes for the blind, measuring instruments for the textile industry, and fine optical in- struments. It should presumably never have been put on the dis- mantlement list. After representations to the Military Government by the owners, they had been informed that dismantlement would be halted pending review by the Humphrey Committee. But in the second week of October, orders came from Berlin to start crating and shipping the machinery at once. By October 22, before the ECA experts could arrive, the whole plant had been stripped and carried off.

Another example is that of the Gendorf factory in Bavaria which produced chlornatrium, a chemical required by the artificial fiber industry, which the Germans have been told is to be built up into one of their major export industries. The other major producer of chlornatrium in Western Germany, at Rheinfelden in the French zone, was long ago stopped from working. In September the United States Military Government ordered the Gendorf plant dismantled and shipped to Czechoslovakia.

The outstanding example of the determination of someone, somewhere, to sabotage the Marshall Plan, and strengthen the Communists, was the order given on October 4 to dismantle the power plant of the Norddeutsche Hütte at Bremen and ship it to Czechoslovakia.

Bremen is America’s only large port in Germany and the gate of entry of all United States Army and ERP supplies. The hasty ship- ment to a Soviet satellite country of its main power plant at a time when Berlin was being blockaded and after an announcement that shipments of reparations from the Western zones would be halted pending the ECA review of the dismantlement list, could, it seemed, have no other explanation than the influence of the “Mor - genthau boys” in Berlin or in Washington.

Dismantlement of the Bremen power plant caused an immediate drastic cut in the supply of current to the town and port, and one of the ECA experts informed me that it might be necessary to use United States Navy vessels operating off shore to supply the defi- ciency. While the United States Air Force had to be used to supply


blockaded Berlin, the United States Navy might have to be called in to make good our voluntary curtailment of Bremen’s power sup - ply for the benefit of Communist Europe.

Under military government it is always difficult to fix responsi- bility. It is therefore impossible to say whether Washington or General Clay’s economic advisors were responsible for the curious decision to ship as much machinery as possible out of the United States zone before the ECA could stop it. To the Germans it seemed that it was impossible to trust any American promises. The hopes raised by various official pronouncements that the dismantle- ment program was to be reviewed and shipments halted pending the ECA investigation were dashed. The assurances given that Germany was to participate in the Marshall Plan for European reconstruction could no longer be believed, since the Military Gov- ernment had given orders to rush shipments even of the machinery recognized as vital to the minimum requirements of the economy of Bizonia.

When the German Economic Administration ventured to pro- test, it was forbidden by both British and United States military governments to approach the ECA authorities directly. In a letter sent on September 21, 1948, to Dr. Pünder, head of Bizonia’s Eco - nomic Administration, and signed jointly by Mr. Wilkinson, economic advisor to General Clay, and Sir Cecil Weir, who holds the same position in the British Military Government, it was written :

“It is not appropriate for you to communicate directl y with ECA, since the Military Governors, as the supreme authorities, are responsible for the relations of the Bizonal areas with the ECA.”

ECA’s representatives in Germany never admitted that they were precluded from any direct contact with the Germans. n- fortunately, however, Paul Hoffman, when he paid a flying visit to Germany in November, spent only twenty minutes with the German Economic Administration representatives who had come to meet him at Frankfurt. The latter were able to hand him the printed report they had drawn up on “The Effect of Envisaged Dismantling on Germany’s Economic Situation and Her Role in European Reconstruction, but they were given no opportunity to discuss their case. Hoffman spent weeks in Paris, but either never had time to study the German situation, or was unwilling to chal- lenge the Military Government’s claim to exclusive power by


conference with the German representatives of Bizonia, or with German industrialists and labor leaders.

The Germans hate waste. These economical, hard-working and practical people simply cannot understand why, in the British zone, huge quantities of dismantled machinery lie rusting in the open or in unheated warehouses; why so much unallocated machinery is dismantled and converted into scrap; why the Germans are not allowed to work to repair the damage done by the Nazis in the countries they occupied instead of being converted into paupers supported by an American dole.

“We can understand the justice of demanding that we make reparations to he countries whicht suffered from German aggres- sion,” I was told over and over again in the British zone by German officials, workers, executives, and factory owners. “But we cannot understand the decision to destroy factory equipment taken from peacetime industries. This is not reparation; it is just waste.”

Of course, not all the machinery taken from German factories in the British zone is thrown on the scrap heap. But even in the case of machinery shipped abroad the huge gap between its eco- nomic value in Germany, and its “residual value” after dismantle - ment, as listed on the reparations account, is a measure of the waste entailed. If the cost of labor involved in the dismantlement and re-erection process is also taken into account the whole repara- tions program appears ridiculous.

The far-reaching effects of dismantlement on the German econ- omy are obscured by the method adopted in valuing the machinery. This is done by first establishing its value in 1938 and then deduct- ing not only war damage but a fixed yearly rate of depreciation which takes no account of repairs and improvements. This fre- quently results in machinery being valued at nothing, although prior to dismantlement it was working full time. From the German point of view it seems wholly unjust that a good proportion of the machinery they lose through dismantlement is not even booked to their credit on the reparations account.

This method of reckoning the value of the machinery taken as reparations is of no help in determining the effect of dismantle- ment on the German economy. The replacement cost of the ma- chinery, or its “economic value” — capitalization according to the net profits obtained before dismantlement— would be much fairer methods of calculating the loss.


According to figures furnished by the United States Military Government in October 1948, the value of the factory equipment already dismantled was as follows in 1938 value Reichsmarks:

U. S. zone 187 factories — 212 million marks British zone 496 factories — 600-700 million marks French zone* 84 factories — 150-200 million marks

This makes a total of only about a billion prewar Reichsmarks, equivalent to $400,000,000. According to German calculations, however, the 1938 value of the plants already dismantled in the Western zones was about $1,800,000,000 and would cost far more to replace today.

According to an estimate made by Senator Harmssen of Bremen, the 1938 value of the machinery and equipment already taken from rump Germany is as follows:

Russian zone 1.6 billion Reichsmarks French zone 1.2 billion Reichsmarks Bizonia 3.5 billion Reichsmarks Berlin 1.5 billion Reichsmarks

This calculation, although it may be exaggerated, gives a truer picture of the losses the Germans have suffered, than the “residual value” figures of the Military Government which obscure the effect of dismantlement on the German economy.

The value of the 335 plants still to be dismantled in the Western zones is about two billion dollars, according to German estimates, but appears as only a fraction of this sum on the reparations ac- count which gives its residual value. The cost of replacement of the dismantled machinery is reckoned by the Germans as ten times its residual value.

Since correct total estimates cannot be obtained, the best method of ascertaining the loss to the European economy through dis- mantlement is to consider individual cases of dismantled factories, concerning which precise details can be obtained.

In the great G.H.H. (Good Hope) Works in the Ruhr, which I visited after their dismantlement, the cost of moving the ma- chinery and of shipping it to the eleven nations to whom it had been allocated, amounted to between 800 and 1,000 marks a ton.

* Exclusive of the machinery taken by the French for their own use without reference to the Inter-Allied Reparations Authority.


The cost of producing and installing new machinery for delivery as reparations would have been only 400. This plant could have “reproduced itself,” that is to say, manufactured new machinery for delivery as reparations, in less time than it took to dismantle it. It had had a big export trade but its products had been lost for years, perhaps forever, since it was unlikely that the various nations to whom its equipment had been sent would ever be able to make use of the “bits and pieces” they received.

Nowhere was the waste entailed by dismantlement better illus- trated than here. The Yugoslavs, who had received the lion’s share, had got the press and hammer works and other shipbuilding ma- chinery, and had insisted on shipment also of the bricks and girders and wharves. The Greeks had received the boiler house, including its roof which had been built in 1871. The Australians had been awarded a five-thousand-ton press for pressing steel in- gots which they had no place to house— it was lying on some rail- way siding. England had taken an old freight wagon and some molds as scrap. Pakistan had received a crane capable of lifting 125 tons which it probably had no use for; India received the equip- ment which should have gone with the crane. A press, a pump, and an accumulator taken out of one department of the works had each been sent to a different nation.

Prior to the dismantlement the G.H.H. Works had export orders on their books for a million D marks of oil-burning machinery, and the Germans believed it had been torn down by the British to eliminate its competition with their less efficient industry.

Fifteen thousand workers had lost their jobs through the dis- mantlement of this one plant.

In the case of the Hörde Iron and Steel Works at Dortmund the estimated cost of dismantling its 16.5-foot rolling mill was 1,000,000 D marks and the minimum cost of re-erecting it, including the building, foundations, and the furnaces that served it, was 13,000,-

000. But the residual value as tated on the reparations account s was only 2,200,000.

In the case of the famous Thyssen Works in the Ruhr, dis- mantlement costs were calculated at 65,000,000 marks, while the residual value came to only 40,000,000. The cost of “putting Humpty Dumpty together again” abroad was estimated to be 263,000,000 marks. Thus, if allowed to retain the plants, the Ger- mans could easily have supplied new machinery in less time and worth far more than the equipment removed.


Rubble and steel scrap represent the end result of dismantling blast and open-hearth furnaces. Huge rolling mills and presses can- not be moved because their weight or size are too great for bridges or for rail clearances. Hydraulic piping, steam lines, electric con- duits, automatic controls, and some other equipment cannot be economically dismantled and are a complete loss.

The State Department, in November 1947, said that the cost in labor and materials involved in the dismantling process is “rela - tively negligible.” But the ECA experts I talked o in Germany estimated that the dismantlement program would cost about ninety thousand man-years of labor in Germany, and that at least the same amount of labor would be needed in the recipient countries to get the machines set up and working. In sum, their view was that the dismantlement program is wasteful, inefficient, and im- practical. They said that if the high cost of moving the equipment, the time losses, and the production losses due to the separation of the tools and dies from machinery as well as the cost of replacing them, are all counted in, the value actually realized by the Euro- pean economy through the recipient nations is negligible, when measured against either the cost of European recovery or the cost to the United States of meeting the eficit in Germany’s balance of payments.

Whatever the exact cost, a telling argument was made in a New York Times editorial of November 13, 1947, which said:

Having poured out billions to aid Europe in place of the reparations that Germany did not pay [the United States] is entitled to ask that these billions be counted against German reparations at least to the extent of preventing an increase in American expenditures through eco- nomic strangulation and destruction in Germany. Let the plants stand and get to work. The United States has more than paid for them.

(Italics added.)

Although every American taxpayer is bearing a share of the bur- den of supplying food and other essential imports to a semipauper- ized Germany, the connection between our German policy and high taxes is recognized by few. The cost of the vengeance wreaked on Germany in the first years of the occupation is not a subject which most politicians and journalists care to dwell upon. It is nevertheless essential to realize it, if Americans are not to pay as heavily in the future as up to date for the Morgenthau concepts


which shaped our original occupation policies, and still color them in spite of assurances to the contrary.

The ignorance of the American public concerning the huge waste entailed by dismantlement is to be ascribed to a variety of reasons. In the first place, the Germans have neither a government, nor a free press, nor representatives abroad to present their case. In the second place, most American journalists, Congressmen and Senatorial committees take their information entirely from Mili- tary Government sources. Lastly, there is the fact that every one of the reports written by the experts sent out by the War and State departments and ECA have been suppressed. The Wolf Report, the Keenan Report, and most recently, the report of the ECA’s Humphrey Committee, have all been kept secret. They are withheld both from the press and from most members of Congress.*

The Germans had imagined that, since the United States is democracy, all these visits and investigations would result in the American voters’ learning the facts of the situation. Over and over again I was asked what had been the reaction in America to the reports of the United States experts who had carefully surveyed the situation, and had to inform them that no one knew what these reports contained nor what had been recommended.

My own method of investigation in Germany was first to go to the German authorities for information and then to see for my- self on the spot whether or not what they said seemed to be true. After this I asked the Military Government for its answer to the German contentions and its explanation for what I had seen. This was apparently a novel method of procedure, and I found myself regarded, if not with suspicion, at least as unorthodox in my method of investigation, since it was unusual for journalists to listen first, if at all, to what the Germans had to say. There was goodly number of United States officials, however, who were as anxious as I as to have the truew facts concerning the effects of dismantlement presented to the American public. This was par- ticularly true of the ECA authorities who told me their door was open to any German who had facts to give them or representations to make which concerned the European Recovery Program. So it

* The Humphrey Committee report was not made public until April 1949, after Congress had already voted the ECA appropriations demanded, without knowledge of the extent to which dismantlement is responsible for high taxes in America.


was with the knowledge that I was not alone in my desire to stop what former President Hoover has called “Destruction at our Ex - pense,” that I advised the Germans in the British, United States, and French zones to visit the ECA officials in Frankfurt and lay before them the facts relating to the retarding of European re- covery through dismantlement.

Herr Nolting, the Minister of Economics for North-Rhine West- phalia, which comprises the Ruhr, told me in Düsseldorf that when the dismantlement list was handed to the Germans in October 1947, they had said to the British: “Look, you can have all the machines you ask for; only let us decide where they are to be taken from. If you will let us select the machines, present production need not be interrupted and our whole economy disorganized; if you will leave it to us to deliver what you ask for, we will also be able to ensure that the burden of reparations is equally distributed. Surely you can see the injustice of mining some employers and workers while letting others go scot free.”

The British had refused, although acceptance of the German plea would have saved much time and labor as well as creating confidence in democratic justice.

The fact that the British, instead of taking general-purpose ma- chinery, insisted on dismantling specialized factories whose pro- duction could not be compensated for by others, strengthened the impression that the objective was not reparations but the elimina- tion of German competition.

In September 1948, after the announcement of the Marshall Plan had given hope to the Germans that the program of destruc- tion of Germany’s industrial capacity would be stopped, Nolting had had an interview with Brigadier Noel, the top British repara- tions official in he Ruhr. The German

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