Destroying weapons of coal, air and water [Elektronische Ressource] : a critical evaluation of the American policy of German industrial demilitarization 1945 - 1952 / vorgelegt von Oliver Haller

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Destroying Weapons of Coal, Air and Water: A Critical Evaluation of the American Policy of German Industrial Demilitarization 1945-1952 Inauguraldissertation zur Erlangung des Grades eines Doktors der Philosophie dem Fachbereich Gesellschaftswissenschaften und Philosophie der Philipps-Universität Marburg vorgelegt von Oliver Haller aus Kitchener, Ontario, Kanada 2005 Vom Fachbereich Gesellschaftswissenschaften und Philosophie als Dissertation angenommen am: 07. Dezember 2005 Tag der Disputation: 05. Juli 2006 Gutachter: Prof. Dr. Dr. h.c. Wilfried von Bredow Prof. Dr. Theo Schiller ACKNOWLEDGEMENTS I am grateful for the help given me by numerous persons. Like every author, I am indebted to many librarians and especially the archivists in Bonn, Berlin, and elsewhere. The Social Sciences and Humanities Research Council of Canada helped me financially. My advisor granted much needed assistance. But I would like to thank Claudia above all others. All errors are my own. December, 2006 TABLE OF CONTENTS ACKNOWLEDGEMENTS............................................................................................. ii LIST OF TABLES ............................................................................................................ vi INTRODUCTION ............................................................................................................. 1 0.1 Opening and Thesis Statements.......

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Destroying Weapons of Coal, Air and Water: A Critical
Evaluation of the American Policy of German Industrial
Demilitarization 1945-1952




Inauguraldissertation
zur Erlangung des Grades eines Doktors der Philosophie
dem Fachbereich Gesellschaftswissenschaften
und Philosophie
der Philipps-Universität Marburg




vorgelegt von
Oliver Haller
aus Kitchener, Ontario, Kanada
2005 Vom Fachbereich Gesellschaftswissenschaften
und Philosophie als Dissertation angenommen am: 07. Dezember 2005

Tag der Disputation: 05. Juli 2006

Gutachter: Prof. Dr. Dr. h.c. Wilfried von Bredow
Prof. Dr. Theo Schiller ACKNOWLEDGEMENTS


I am grateful for the help given me by numerous persons. Like every author, I am indebted to
many librarians and especially the archivists in Bonn, Berlin, and elsewhere. The Social
Sciences and Humanities Research Council of Canada helped me financially. My advisor
granted much needed assistance. But I would like to thank Claudia above all others. All
errors are my own.

December, 2006 TABLE OF CONTENTS


ACKNOWLEDGEMENTS............................................................................................. ii

LIST OF TABLES ............................................................................................................ vi

INTRODUCTION ............................................................................................................. 1
0.1 Opening and Thesis Statements................................................................................. 1
0.2 Historiography and Methodology.............................................................................. 4
0.3 The Interrelationship of Civilian and Military Industries....................................... 17
0.4 A Note on Sources .................................................................................................... 22

CHAPTER 1: Dual-Use Industry and Prewar Military Mobilization.................... 23
1.1 Introduction ............................................................................................................... 23
1.2 American Civilian Industry and Rearmament ........................................................ 24
1.3 German War Industries and Rearmament............................................................... 29
14 Misperceptions of Prewar German Mobilization .................................................... 37
1.5 The Failure of German Industry in War.................................................................. 43
1.6 Conclusion................................................................................................................. 48

CHAPTER 2: Strategic Bombing and Industrial Demilitarization ........................ 50
2.1 Introduction 50
2.2 Strategic Bombing Origins and the Demilitarization Panacea............................... 50
2.3 Bombing Operations in Wartime............................................................................. 56
2.4 The United States Strategic Bombing Survey and Industrial Disruption.............. 61
2.5 The Impact of Strategic Bombing on Industrial Capacities ................................... 69
2.6 Urban Bombing and the Misunderstanding of the "Wasteland" ........................... 78
2.7 Conclusion 85

CHAPTER 3: The Origins of Industrial Demilitarization........................................ 88
3.1 Introduction ............................................................................................................... 88
3.2 Franklin D. Roosevelt’s Policies and the German Future...................................... 88
3.3 The Hard Soviet Peace and German Pastoralization.............................................. 93
3.4 The Liberal-Capitalist Nature of Early American Occupation Policy .................. 99
3.5 The Morgenthau Plan: An Attempt at Policy Clarification.................................. 107
3.6 Directive J.C.S. 1067: The “Technical” Compromise ......................................... 114
3.7 The Yalta Shock: The Masked Incongruity of Allied Positions.......................... 119
3.8 Conclusion 125

CHAPTER 4: The Collapse of Dismantling as a Method ....................................... 127
4.1 Introduction ............................................................................................................. 127
4.2 The Revisionist Portrayal of Harry S. Truman ..................................................... 127
4.3 Truman’s Views Concerning the Soviet Union and Germany............................ 133
4.4 The Blanket Soviet Seizure of Reparations........................................................... 142
4.5 Reparations at Potsdam and Reactions to Soviet Moral Abandon ...................... 145
4.6 Conclusion............................................................................................................... 157

CHAPTER 5: The Early Stages of Industrial Demilitarization............................. 160
5.1 Introduction ............................................................................................................ 160 iv
5.2 The Contradictions of Demilitarization Policy ..................................................... 160
5.3 The Level of Industry Plan and Clay’s Reparations Stop ................................... 171
5.4 Paperclip, Safehaven and Hidden Reparations 186
5.5 An Imprecise Policy of Industrial Demilitarization in Action ............................. 192
5.6 Feeding Workers as a Structural Constraint.......................................................... 198
5.7 Conclusion............................................................................................................... 206

CHAPTER 6: The Militarization of Policy and Views of German Industry....... 207
6.1 Introduction ............................................................................................................. 207
6.2 The Joint Intelligence Committee and Washington’s Perceptions of Conflict... 208
6.3 The American “Shift” and the Impact on Demilitarization.................................. 214
6.4 Byrnes' Speech and the Official Change of Heart ............................................... 225
6.5 Conclusion............................................................................................................... 227

CHAPTER 7: The Marshall Plan and the End of Demilitarization...................... 230
7.1 Introduction 230
7.2 George C. Marshall and the Solidification of the New Course ........................... 232
7.3 The Truman Doctrine ............................................................................................. 240
7.4 The Moscow Foreign Minister's Conference of March 1947.............................. 244
7.5 The Harvard Speech, Marshall Plan and Soviet Rejection .................................. 252
7.6 Policy Revision: The Incongruity of Demilitarization with Recovery................ 258
7.7 Conclusion............................................................................................................... 262

CHAPTER 8: Explaining the German Productivity Boom.................................... 264
8.1 Introduction ............................................................................................................. 264
8.2 The Dismantling of Rheinmetall Borsig-Alkett and Intervention ....................... 265
8.3 The Joint Logistics Committee and Dual-Use Calculations ................................ 274
8.4 The Demilitarization-Marshall Plan Contradiction .............................................. 280
8.5 The Marshall Plan and Western German Industrial Recovery ............................ 287
8.6 Conclusion 294

CHAPTER 9: Military Radicalization ....................................................................... 296
9.1 Introduction ............................................................................................................. 296
9.2 The Berlin Blockade and Other Disasters ............................................................. 297
9.3 Perceptions of the Soviet Military and Stalin’s Plans for War ............................ 304
9.4 The Military Defense Assistance Program............................................................ 314
9.5 The Atlantic Military Alliance System and American Designs .......................... 324
9.6 The National Security Council Memorandum No. 68 and the German Role .... 329
9.7 Conclusion............................................................................................................... 333

CHAPTER 10: Rearmament and Military Industrial Capacities......................... 335
10.1 Introduction ........................................................................................................... 335
10.2 Konrad Adenauer and the Issue of German National Security.......................... 336
10.3 The Korean War and the 1950s War Scare......................................................... 342
10.4 Domestic and Foreign Pressures against Visible Remilitarization.................... 347
10.5 The German Perspective on Dual-Use Matters .................................................. 353
10.6 Conclusion............................................................................................................. 361

CONCLUSION .............................................................................................................. 363
11.1 The Characteristics of American Industrial Demilitarization Policy ................ 363 v
11.2 The End Results of Industrial Demilitarization .................................................. 369
11.3 The Mechanisms that Spoiled Industrial Demilitarization................................. 371
11.4 “Dual-Use” Industry as a Component of the Cold War Origins Calculus........ 375

ABBREVIATIONS........................................................................................................ 381

ENDNOTES.................................................................................................................... 382

BIBLIOGRAPHY.......................................................................................................... 475
1. Primary Document Collections................................................................................ 475
2. Published Documents ............................................................................................... 475
3. Memoirs and Interviews ........................................................................................... 479
4. Monographs............................................................................................................... 480
5. Articles and Book Sections ...................................................................................... 497 vi
LIST OF TABLES


1. Capacities of Principle German Chemical Plants Prior to 1 May 1944...................... 34

2. Battle of France 1940: Relative Strength of Major Combatants................................. 42

3. German Munitions Output............................................................................................. 77

4. Allied Aerial Bombardments of the Seven Largest German Cities............................ 78

5. Liquidation of German War and Industrial Potential................................................. 173

6. Estimated Production of Soda Ash ............................................................................. 277

7. 1948 World Consumption of Primary Antimony ...................................................... 278

8. 1949 World Rayon Production by Areas and Leading Countries............................. 279

9. Gross Industrial Fixed Assets in the Western Zones 1936-48 .................................. 283

10. British Category B Reparations at 31 May 1952 ..................................................... 286

11. Distribution of the Marshall Plan Credits Granted by the USA.............................. 289

INTRODUCTION


Still, if you will not fight for the right when you can easily win without bloodshed, if
you will not fight when your victory will be sure and not so costly, you may come to
the moment when you will have to fight with all the odds against you and only a
precarious chance for survival. There may be a worse case. You may have to fight
when there is no chance of victory, because it is better to perish than to live as slaves.

Winston Churchill


0.1 Opening and Thesis Statements
The governments of Britain, France, the Soviet Union and the United States
endeavoured after 1945 to create a new Germany out of the ruins of Adolf Hitler’s Reich.
Never again should German military formations resolve regional disputes by force of arms
or penetrate the frontiers of neighbouring states in pursuit of national aggrandizement. This
peacemaking or peacebuilding principle, one that terminated a perceived German
predilection of violence based on an almost unnatural European distribution of industrial
1power , represented the starting point of a postwar pacification process. The policymakers
targeted both the material and the immaterial elements of military power. But these men
most importantly sought a new era of peace built on the disappearance of all military
industrial capacities from the German body politic. This revolutionary concept redefined
the geopolitical weight of the central European state and thereby represented a significant
departure from the traditions of international relations and all previous approaches to the
“German question”. The victors no longer sought power containment. They instead
advocated the creation of a gigantic vacuum.
Flanked by the smouldering ruins of the German capital, a sight that appeared to
inaugurate this new course, the Allies met at Potsdam to repeat and anchor their
determination to remould the defeated state. The victors on the surface appeared unified in
these negotiations. Despite the difficulties involved in welding together a policy derived by
officials from widely disparate political regimes, the diplomats, specialists and politicians
formulated a common policy at Potsdam that emphasized denazification, decentralization,
deindustrialization, democratization and demilitarization. Industrial demilitarization, a
2fusion of deindustrialization and demilitarization, stood at the top of this policy list. A new
meaning of disarmament had therefore appeared. The Allies focused on the creation of a
straightforward plan that aimed to close and dismantle the facilities of war built during
Hitler’s reign of terror. This plan strongly resembled the conceptions of the strategic 2
bombing pundits during the 1920s and 1930s by accepting the possibility of imposing a
state of powerlessness on the enemy’s industrial system through selective destruction.
This sharp separation between the civilian and military segments of modern
industry and the virtual dismissal of borderline dual-use industries purported a reality that
did not accord with the economic and later military theories of the period. The experience
of the bomber crews during the war cast serious doubt on the feasibility of allying state
belligerence through the wreckage or paralysis of military industry. This strategy, one that
predated the deliberations concerning industrial demilitarization and emerged after 1918,
dictated that airpower alone could demolish the enemy's military center of gravity or the
military industrial manufacturing system during wartime. The strategic bombers of the
combined American-British air fleets, designed and equipped to systematically destroy the
enemy’s industrial system, pounded German cities and factories during World War II. The
Allied “B-17s” and “Lancasters” dropped 2,690,000 metric tons of explosives and
incendiaries on a long list of targets in hopes of fatally wounding armaments manufacturers.
Any notion of a strict theoretical separation between civilian and military targets vanished
during the war. The awareness of a complex symbiotic relationship between military
productive power and all areas of modern industry instead took hold. The pundits even
strove to negatively influence civilian morale and reduce productive output by killing the
worker.
The Volkswagen plant in Fallersleben represented one such dual-use industrial
target. The “vehicle industry”, Allied policymakers constantly repeated during this period,
3“is a major force for war”. This factory had for example switched production of the
civilian “KdF-Wagen” or “Käfer” to the military “Kübelwagen” used by the Wehrmacht
after 1939. The plant retained the highest capacities for the production of motor vehicles in
4Nazi Germany and was endowed with considerable industrial equipment. Yet the
devastating air raids against these facilities only smashed the factory walls and more
5devastatingly burned much of the surrounding city to a cinder. The civilians of
Fallersleben, true of so many German and European cities and villages, fared less well.
Over two-thirds of the factory itself, the outer shell protecting the machine-tools from the
elements, burned in the fires of war. The sinews of industrial power nevertheless remained
largely unaffected. Labour gangs had moved machinery to protected areas and repair crews
worked diligently to mend what the bombs had battered.
The military significance of Volkswagen evaporated after 1945 despite official
policy and subsequent formulations. The same crews that laboured under the tensions of
3
war to repair the bombing damage continued their efforts in the immediate postwar. These
men and women, under the watchful eyes of Anglo-American military government
officials, largely rebuilt the Fallersleben plant and generally repaired the industrial
equipment in the months after defeat. The dictates of the occupation determined that the
American military officials in Germany cut themselves loose from official policy in order to
cope with the economic problems that gripped the country. The policy succeeded.
Volkswagen returned to production and managed to build 10,000 automobiles by the end of
1946. Output soared even higher during the next year and long before the economic
6miracle gripped Germany. The millionth “Käfer” rolled off the production lines in 1954.
Western German automobile manufacturers had surpassed the production levels of Hitler’s
Reich by the end of the 1940s. The dual-use capacities in this important case—automobile
manufacturing representing a “major force for war”—remained intact despite aerial
bombing and official Allied policies of industrial restructuring.
This dissertation examines the postwar plan and course of industrial
demilitarization in Germany after 1945. The pages of this inquiry therefore search for the
specific formula used by the Allied military governments to try to create a unique and
unprecedented industrial form known as the demilitarized industrial state. The Fallersleben
contradiction demonstrates that the meaning of the program changed dramatically between
the war years and 1950. The struggle to produce a meaningful definition of dual-use
potential ultimately proved exceedingly difficult. Economic realities fuelled this process.
The chapters of this dissertation in fact demonstrate that the Allied policy goal of a pacified
Germany suffered from a serious if not insurmountable dilemma. Industrial items required
for the prosecution of war, ranging from fixed nitrogen to machine-tools, included all those
essential to the civilian economy. The effective American administration of a defeated
Germany required a postwar policy that balanced national security concerns with sound
economic policy. Washington’s devotion to western European economic regeneration, a
policy that hoped to resurrect markets for American export, also helped transform
perspectives concerning the defeated state. A new policy emerged that advocated the
retention and even expansion of the German dual-use industrial base. The widening breach
between Washington and Moscow after 1945 only refocused attention on the military
possibilities of the reactivation of existing German industrial capacities. These residual
dual-use capacities later escalated or increased Cold War tensions as Washington scrambled
to protect this industrial core from Soviet encroachment. The survival of dual-use potential