A Report on Germany

from Wikipedia, the free encyclopedia

A Report on Germany is an economic report with successfully applied recommendations for the economic revitalization of the three western zones of Germany after the Second World War and a basis for the economic constitution of the Federal Republic of Germany.

Client and authors

Lewis H Brown (1894-1951)

A Report on Germany was commissioned by Lucius D. Clay , the military governor of the American zone of occupation in Germany , to solve the economic difficulties after the Second World War. Author was Lewis H. Brown (1894-1951), the president of the asbestos manufacturer Johns-Manville Corporation and co-founder of the American Enterprise Institute . A section on the decision-making processes of American policy towards Germany from the 1942 Atlantic Charter to the hope speech by the American Foreign Minister James F. Byrnes on September 6, 1946 is a summary of the essay by the banker James P. Warburg (1896–1969) Germany - Nation or No -man's-land. The chapter The German Situation Today was prepared by William C. Bober, an economist from Johns-Manville, as a memorandum for Lewis H. Brown.

Economic misery after the Second World War and remedy

Impenetrable zone borders Germany 1947

In the winter of 1947 there were fears of starvation in the cities. Germany should therefore be given the opportunity to increase industrial production and manufacture export goods in order to be able to use the proceeds to pay for the food and other imported goods it needs. This was a departure from the previous policies of the Allied Control Council and the United States. Their aim was to keep consumption in Germany as low as possible, imports too, and surpluses only to be sent to the occupying powers, displaced persons and prisoners of war, and the victorious powers as reparations. The standard of living should not be higher than in neighboring countries. In Germany, there was an upturn in production from autumn 1945, which came to a halt at the end of 1946. Germany faced a collapse of the transport system in mid-1947 because locomotives and freight cars were nothing but junk. 48 million people west of the Iron Curtain were without enough food because they were cut off from the grain areas of the east. The "Level of Industry Plan" of the Allied Control Council of March 28, 1946 prescribed goals for demand-oriented industrial production that could never be achieved because the zone boundaries were impermeable. In addition, the “Level of Industry Plan” was contradicting itself. With 39% of the steel production, 11.4% of the machine tool production and 67% of the truck production and 80% of the agricultural machinery production of 1936 should be produced. Instead of the need-based production of industrial goods, there were only a number of bottlenecks. The war damage was not responsible for this, because 70% of the war damage was repairable. To escape the expected famine, production was to be restarted so that from 1948 goods worth $ 1.5 billion could be exported instead of the $ 250 million expected for 1947.

The European vicious circle

In Brown's view, all of Western Europe was threatened with bankruptcy and Germany was already bankrupt. Western Europe must be put back on its feet economically in order not to have to be funded by the USA in the long term. That is why Germany must be restored, because Germany is the key country in Western Europe. If Germany is not restored, Western Europe cannot be restored either. The German problem is the crucial and most urgent one for Western Europe, Great Britain and the United States. The approach of the report is to get the wheels of production going again in Europe, because economic promotion on the basis of a wish list according to the watering can principle will not be possible. However, it is possible to uncover and interrupt vicious circles of underproduction in the key sectors.

The German vicious circle

Man passed out in Düsseldorf because of hunger

48 million people live in western Germany, of which 20 million are non-farmers who depend on food imports from western countries because western Germany is cut off from the grain production of eastern and central Germany. Because of the lack of artificial fertilizers, seeds and agricultural machinery, West Germany only produces 30% of the pre-war grain production. West German agriculture can only provide half of the food it needs. This roughly corresponds to the fact that only half of pre-war coal production is achieved. The coal shortage in turn leads to a steel shortage. The steel shortage causes a shortage of locomotives, freight wagons, transport ships for inland navigation and spare parts. The Ruhr coal, which is already in short supply, will not be able to be transported in the winter of 1947 and will therefore lead to a further reduction in industrial production. Therefore the export of industrial products will decrease. The proceeds will be missing if grain has to be imported from western countries. West Germany will depend on American grain.

Plan for the restoration of the German economy

A single high command should be created for the three western zones, similar to the supreme headquarters of the Allied forces for the invasion of 1944. To restore an industrial society, the JCS Directive 1067 , the Level of Industry Plan and the rest of the ideas of the Morgenthau Plan should be removed . The Germans should be given full responsibility; that would also give the military government incentive and hope. West Germany should be able to export twice as much as before the war. From August 1947 onwards, no more repairs were to take place through dismantling. The initially urgent denazification has meanwhile slipped to the extreme and should no longer be allowed to lead to work bans, especially for technicians, engineers, chemists and commercial executives. Advertisements should only be possible within an exclusion period of one month. Denazifications and reparations should no longer distract the Germans from the main goal of production. Production restrictions and controls should be lifted with the exception of ammunition and aircraft.

The vicious circle of coal

At the beginning and the end of the German vicious circle is coal. In Europe, coal makes the difference between life and death. Great Britain funded 77% of the pre-war production in 1946, West Germany only 38.6%. The most important brown coal deposits in Germany, including those south of Halle and Leipzig, were located in the Soviet occupation zone and were not available to Western Europe. The occurrences between Aachen and Cologne were small and incoherent. Because of this, German coal exports fell drastically. The low exports were a drag on the fertilizer and steel industries.

Reasons for the low coal production in the Ruhr area

In short supply: axle box for plain bearings with oil filler neck

The poor nutritional situation in the Ruhr area was the most difficult problem, because the miners received only 1,550 kcal a day instead of the required 4,000 kcal. There were as many miners as there were before the war, namely 400,000. However, there was a lack of well-trained miners and there was a surplus of old men, apprentices and young, not yet fully trained miners. Housing was scarce, so commutes to work were long; often up to 60 km in irregularly moving, unheated trains. The machinery, such as conveyor systems and compressed air generators, were partly destroyed in the war and partly poorly maintained. There was a transport crisis. The number of usable locomotives remained stable in 1947, but the number of usable freight cars decreased. The cause was a lack of repair material, such as wood, steel, asbestos and grease pads for the axle bearings of the freight cars, and missing roof tiles for the repair shops. The wood required was exported to Great Britain for the coal mines there and building houses. Here Brown recommended that American light locomotives and freight wagons be made available to the Ruhr area after the 1947 harvest. In traffic with the Soviet zone, the conclusion of contractual penal agreements should ensure that no damaged goods wagons are returned if repaired goods have been handed over at the zone border. 175,000 military trucks were to be made available immediately to the communities to transport wood and coal for the winter.

Plan to break the coal cycle

Every day 220,000 tons of hard coal were mined on the Ruhr. It was worth striving for 345,000 tons. In order to increase production, prisoners of war German miners should first be released because their productivity in France was low. The miners should receive better nutrition and additional food receipts for every additional tonne of coal extracted. The coal mined should not have to be exported to Germany, but should be used domestically for steel production, so that the German factories can be restored, which are used for the production of export goods. With the proceeds, Germany could buy the food that was previously produced in East and Central Germany.

The coal exports that were no longer leaving Germany were to be replaced by British coal exports. This would reduce the unnaturally long rail transports, as more could be transported by ship. Britain is able to export more coal. The obstacle was the five-day week that had been won in labor disputes until May 1947. When the Marshall Plan aid is used , the miners should be given food stamps in a special color for additional tons on working days and in another color for tons on Saturdays. America should make its aid on a future second loan to Britain conditional on coal miners receiving additional food and consumer goods as coal production increases. The vicious circle of insufficient coal production in Germany could be interrupted if Great Britain extracts an additional 15 million tons and thus relieves Germany of exports for a year. The United States could provide crude steel and conveyor belts to the UK as a boost. The vicious circle of coal is the same as in West Germany.

Food plan

Daily ration in the Ruhr area

More food should be provided than what is urgently needed, since poor diet will keep productivity low. In 1947, one billion dollars in food had to be imported, of which Germany could raise 250 million dollars on its own. The United States should therefore provide food aid worth $ 750 million. These services should be provided gradually over the next five years until Germany can feed itself entirely from its exports. Old farm machinery from the United States could also be made available as emergency aid.

Abolition of export restrictions

The export restrictions would have to be lifted. As long as Germany does not yet have a currency that is accepted in world trade, exchange transactions would have to be allowed in the event of a lack of foreign currency. Foreign exchange should be made available on a loan basis for trips abroad by German sales representatives, as there is no resentment against German goods in Europe.

Central bank, central government, new currency

A central government should be created for the three western zones. What is needed is a strong central bank , less decentralized than the US central banks and capable of a balanced monetary policy. There are enough capable monetary theorists in Europe . A new currency is also required, since the Reichsmark has had too much money due to the lack of food. The new currency should be printed on different paper and in a different color in the western zones, because too much money is flowing into the western zones from the Soviet zone. However, the new currency should only be introduced when more products worth buying, especially food, are available or at least when an increase in production gives rise to reasonable hope.

meaning

The remediation recommended in the report by removing selected bottlenecks began in 1947 and had the predicted effect that production could be resumed in the same year. The principle that Germany should import as little as possible has been replaced by the principle that imports and exports are permitted to the extent that the needs of the three western zones can be met without outside help. From August, CARE packages were issued to the Ruhr miners. The planned socialization of the Ruhr mining industry was postponed by five years and then finally ceased. The repair program for the damaged freight wagons was completed in October. The coal heaps that had grown in the Ruhr area could be driven off to the steel producers and other processors. In good time before the Marshall Plan deliveries arrived, the breakthrough came with steady and high growth rates in production. The report and the picture of the breaking of a vicious circle were received in a friendly manner. At first glance, it was astonishing that an avalanche of grievances could be rectified with just a few measures. The surprise lay in the simplicity of the solutions presented in this way, which nobody had expected.

literature

  • Werner Abelshauser : German Economic History since 1945 . Munich 2004.
  • Lewis H. Brown: A Report on Germany . New York 1947.
  • JCS 1067 : US Directive to General Eisenhower on Military Rule of Germany , October 17, 1945.

Individual evidence

  1. ^ Lewis H. Brown: A Report on Germany . New York 1947, pp. 7-26.
  2. ^ Foreign Policy Association Headline Series No. 60.
  3. ^ Lewis H. Brown: A Report on Germany . New York 1947, foreword p. VI.)
  4. ^ Lewis H. Brown: A Report on Germany . New York 1947, pp. 27-54.
  5. ^ Lewis H. Brown: A Report on Germany . New York 1947, p. 40
  6. ↑ a b Hope speech by James F. Byrnes
  7. ↑ JCS 1067 U.S. Directive to General Eisenhower on Military Rule of Germany , October 17, 1945, No. 21
  8. ^ Werner Abelshauser : German economic history since 1945 . Munich 2004, p. 109.
  9. ^ A b Lewis H. Brown: A Report on Germany . New York 1947, p. 32.
  10. ^ Lewis H. Brown: A Report on Germany . New York 1947, p. 7.
  11. ^ Lewis H. Brown: A Report on Germany . New York 1947, p. 243.
  12. ^ Lewis H. Brown: A Report on Germany . New York 1947, pp. 243-246.
  13. ^ Lewis H. Brown: A Report on Germany . New York 1947, p. 36.
  14. ^ Lewis H. Brown: A Report on Germany . New York 1947, p. 29.
  15. ^ Lewis H. Brown: A Report on Germany . New York 1947, p. 59.
  16. ^ Lewis H. Brown: A Report on Germany . New York 1947, p. 55.
  17. ^ Lewis H. Brown: A Report on Germany . New York 1947, p. 102.
  18. ^ A b Lewis H. Brown: A Report on Germany . New York 1947, foreword p. IX.
  19. ^ Lewis H. Brown: A Report on Germany . New York 1947, preface SX
  20. ^ Lewis H. Brown: A Report on Germany . New York 1947, preface SV
  21. ^ Lewis H. Brown: A Report on Germany . New York 1947, p. 155.
  22. ^ Lewis H. Brown: A Report on Germany . New York 1947, p. 165.
  23. ^ Lewis H. Brown: A Report on Germany . New York 1947, pp. 65-67.
  24. ^ Lewis H. Brown: A Report on Germany . New York 1947, p. 77
  25. ^ Lewis H. Brown: A Report on Germany . New York 1947, p. 63.
  26. ^ Lewis H. Brown: A Report on Germany . New York 1947, pp. 81-91.
  27. ^ Lewis H. Brown: A Report on Germany . New York 1947, p. 92.
  28. ^ Lewis H. Brown: A Report on Germany . New York 1947, pp. 204-205.
  29. ^ Lewis H. Brown: A Report on Germany . New York 1947, p. 219.
  30. ^ Lewis H. Brown: A Report on Germany . New York 1947, p. 208.
  31. ^ Lewis H. Brown: A Report on Germany . New York 1947, pp. 210-225.
  32. ^ Lewis H. Brown: A Report on Germany . New York 1947, pp. 224-230.
  33. ^ Lewis H. Brown: A Report on Germany . New York 1947, p. 115.
  34. ^ A b Lewis H. Brown: A Report on Germany . New York 1947, pp. 93-94.
  35. ^ Lewis H. Brown: A Report on Germany . New York 1947, p. 117.
  36. ^ Lewis H. Brown: A Report on Germany . New York 1947, p. 94.
  37. ^ Lewis H. Brown: A Report on Germany . New York 1947, pp. 165-166.
  38. ^ Lewis H. Brown: A Report on Germany . New York 1947, p. 97.
  39. ^ Lewis H. Brown: A Report on Germany . New York 1947, pp. 102-105.
  40. ^ Lewis H. Brown: A Report on Germany . New York 1947, pp. 107-110.
  41. ^ Lewis H. Brown: A Report on Germany. New York 1947, p. 41.
  42. ^ Lewis H. Brown: A Report on Germany . New York 1947, pp. 126-128.
  43. ↑ JCS 1067 US Directive to General Eisenhower on Military Rule of Germany , October 17, 1945, No. 21st
  44. ^ Revised Plan for Level of Industry (August 29, 1947)
  45. ^ Werner Abelshauser : German economic history since 1945 . Munich 2004, pp. 117–119.