a minimum standard of living in Germany.” Of course, “we should feed the German people to prevent them from starving”; perhaps we could develop “soup kitchens for feeding the German people.” An army representative asked if Roosevelt would accept the idea that the occupation should take measures to prevent “disease and unrest,” and Roosevelt said he had no objection.
In general, though, he remained uncertain. “We [have] to get into the country first and take a look and see what [is] possible and impossible.”44
With Roosevelt fading, Morgenthau pressed his views aggressively forward. In the end, he managed to include in the official instructions for military government much of what he wanted (even if the instructions often contained caveats based on maintaining security and civil order). True to his own bureaucratic expertise, he also knew that a lot depended on which military officer would run the occupation. It was a foregone conclusion that Eisenhower would be in charge initially. So, in August of 1944, Morgenthau went to Europe to try and commit Eisenhower to a “hard” peace.45 As it turned out, he found a receptive listener. Eisenhower told Morgenthau that “following the conclusion of hostilities … the German people must not be allowed to escape a sense of guilt, of complicity in the tragedy that has engulfed the world.… The warmaking power of the country should be eliminated.”46 Eisenhower “was perfectly willing to let them stew in their own juices”—a phrase Morgenthau often quoted in arguing his point with War Department officials.47
Still, everyone in Washington also knew that Eisenhower did not want to be military governor. Indeed, he did not want military government.48 So the question turned to who would replace him in that role. Initially, both Harry Hopkins and the head of the War Mobilization Office, James Byrnes, looked like possibilities, but both opted out.49 A number of other names floated to the top of the list. Roosevelt ultimately approached John J. “Jack” McCloy, Stimson’s assistant secretary of war. But McCloy thought someone who had come up through the army might command more respect from the troops and other Allied military leaders. He also thought the person should have experience in logistics. He suggested Lucius Clay. Roosevelt agreed.50
Clay fit all the right criteria. Politically, Clay had made friends with all the right people. He was an able administrator. Still, Morgenthau wanted to know where Clay stood. So before Clay left for Germany, the two men spoke. “You know that our attitude is pretty tough towards Germany,” Morgenthau said.
“Yes,” Clay replied.
“Well, are we together?”
“I think we are,” said Clay, much to Morgenthau’s approval.51
Confident that Clay would be tough on the Germans, Morgenthau finally “felt good” about the future of Germany.52 Indeed, as victory over Germany neared, Morgenthau had managed two very important achievements in shaping the postwar: he had crafted a new global framework for postwar finance and a tough policy for postwar Germany.
Fresh on the heels of these victories and just weeks after Germany’s surrender, Morgenthau appeared before the Senate Committee on Banking and Currency, where Robert Taft, the son of William Howard Taft, decided to ask about these two victories. Taft had joined the Senate in 1939 and had subsequently become one of the Roosevelt administration’s chief Republican antagonists. He assumed, based on the Bretton Woods agreements, that the administration wanted to “increase international trade.” But, he asked, “Is the purpose affected by the fact that Japan and Germany are practically out of international trade? Didn’t they have a very large volume of international trade before the war?”
“No,” Morgenthau replied. “That is a general misunderstanding, if you don’t mind my saying it.… continental Europe can so easily pick up Germany’s export and import trade that the disappearance of it will never be noticed.”
Taft seemed unsure. “Well, it seems to me—I don’t know—I have no particular view as to what ought to be done with Germany or Japan, but it seems … that whatever increase we might get in international trade by [the Bretton Woods agreements] … is going to be more than balanced by what we lose in international trade figures after completely eliminating Germany and Japan.” In short, “we say we have to make these people prosperous so they can buy our goods, but in Germany we say that we must make them absolutely flat so that they cannot buy our goods. It seems to me the two policies are practically contradictory.”
“If Germany is to be deindustrialized, as I hope she will,” Morgenthau explained, “all of the studies which we have made show that her former position in world trade, in the export and import fields, could so readily be absorbed by just continental Europe.”
Taft was confused. “I cannot see how you can take 150,000,000 people of the most highly industrialized nations in the world … and just bar them … from all international trade without substantially contradicting and to a large extent nullifying any good that may come from the other agreements.”
“If you had the time to spend an afternoon or an evening I would be very glad to come to your office and put all these figures before you,” Morgenthau said.53
Taft thanked Morgenthau for the offer but did not follow up. Still, he spotted a central paradox in the postwar strategy coming out of the Roosevelt administration. Morgenthau found himself arguing that this new global economic framework would protect the United States from precisely those nations that had not attacked it, while the two nations responsible for the war would be excluded from it.
In the meantime, Clay prepared to leave for Germany to become Eisenhower’s successor as military governor of the U.S. zone. On the last day of March 1945, he went to see Roosevelt to get the president’s “blessing” before leaving for Europe. At the meeting, Roosevelt suggested that Clay think about “a giant TVA for Germany and all of Europe,” as “something that would have great meaning, great significance.”54 But otherwise, Roosevelt did not ask any questions, nor did Clay. The meeting seemed somber and a bit awkward. As Clay left the president’s office, he turned to James Byrnes (who had accompanied him) and said, “Mr. Byrnes, we’ve been talking to a dying man.”55 Byrnes didn’t believe it. He had spent a great deal of time with Roosevelt over the preceding months and saw no reason for worry. But less than two weeks later Roosevelt had passed away.
Chapter 5
“This Thing Was Assembled by Economic Idiots”
“Lucius, come on up here to Reims.”
General Walter Bedell Smith, Eisenhower’s chief of staff, had just tracked down Lucius Clay in Paris on a busy May afternoon in 1945. “There’s something interesting going to take place.” Reims had become the temporary headquarters for the Allies; a commandeered technical college provided offices for Eisenhower, Smith, and the other tactical commanders, along with Clay and a few military government officials.
“Bedell, I’ve got all sorts of appointments for tomorrow,” he complained.
“Lucius, you’ll be sorry all your life if you don’t come up.”
Wondering what could be so important, Clay eventually scrounged up a “liaison airplane” (a small aircraft that could land on almost anything) and flew himself to Reims. Arriving between six and seven o’clock, he went directly to his office. When he opened the door, there was a “very immaculately dressed German General behind my desk.” He couldn’t believe it. He couldn’t believe Smith had dragged him back from Paris just to play
