Reconstruction of West Germany (1945-1949)
The reconstruction of West Germany after World War II is the story of an unprecedented economic boom. In an amazingly short period of time, the Federal Republic of Germany (FRG) managed to recover from the starving, physically and psychologically devastated country it was in 1945.
In the 1950s the world witnessed a stunning “economic miracle” (Wirtschaftswun- der) that was made possible mainly by two developments: a major shift in U.S. occupation policy due to the emerging cold war and, on the German side, a resolute will to exploit this newly found opportunity to literally rebuild the country.With average daily rations not higher than 1,300 calories per person in the first three postwar years, Germany was starving. The great influx of refugees from the East contributed to the serious shortage of housing, jobs, fuel—of almost everything except poverty and misery. While the British had, since the Potsdam Conference, been in favor of higher German production figures, official American occupation policy in the economic sector had originally been more restrictive. Afraid of Germany’s allegedly inherent bellicose national character, France, the Soviet Union, and the United States were initially not interested in allowing Germany to become an economically powerful nation because this would only lead to a new war. Immediately after the end of hostilities, measures were introduced to weaken the economic capacity of Germany to assure that it would never start a war again. The Allies agreed on the dismantlement of the most advanced German technology: the production of military and civil airplanes was strictly forbidden. In most other sectors, the production was limited to a statistical average of some 55 percent of the 1938 level, while the production of steel was cut even more severely and fixed at 25 percent of the prewar level. Furthermore, an internationalization of the coal-rich Ruhr and Saar areas was discussed.
All German intellectual property and foreign investment was confiscated. The United States in particular was very successful in luring away Germany’s most prominent scientists. About 650 researchers, among them the famous rocket pioneer Wernher von Braun, more or less willingly left for the United States.Lucius D. Clay, deputy military Governor of the Office for Military Government (United States) in Germany, saw very early the negative consequences that the purely “corrective” treatment would have, not only on Germany but also on the whole of Europe. Accordingly, often in conflict with the U.S. State and War departments, he tried his best to water down the provisions of the punitive directive JCS 1067 and foster German economic development instead. While JCS 1067 prohibited positive measures in the economy, the import of food and fertilizers was allowed “to avert the spread of diseases and unrest,”
A military government official speaks at a railroad station near the Czech border during ceremonies marking the delivery of 75 new freight cars in Furth Im Wald, Germany, November 1948. The sign above the speaker reads: "America helps to rebuild Europe. These freight cars were delivered through the Marshall Plan." (Bettmann/Corbis)
a loophole that Clay exploited. In July 1947 the change in policy already exerted by Clay became officially sanctioned by the promulgation of directive JCS 1779. Although it confirmed some of the negative measures, such as the dissolution of trusts and dismantlement of industrial capacities, it was more positive in tone and propagated a healthy and generally less restricted economy; for example, steel production was elevated from 5.8 to 11.1 million tons. Most importantly, JCS 1779 provided the model of the market economy that the FRG was later to adopt.
Already one year earlier, on September 6, 1946, the American secretary of state, John Byrnes, made a speech in Stuttgart that outlined a reversal of American occupation policy.
The reasons for this change in the U.S. occupation policy were threefold. First, the Truman administration realized that a lasting peace and a healthy reconstruction of Europe needed the cooperation of an economically active and stable Germany. Second, Great Britain and the United States agreed that they did not want their taxpayers to finance the enormous food imports that Germany so desperately needed and, more generally, the costs of occupation for an unforeseeable future. Third, the shift in U.S. policy was further caused by the growing antagonism between the Western powers and the Soviet Union. A poverty-stricken Germany, it was feared, might look eastward for help. American foreign policy thus first aimed at preventing West Germany from falling into the Communist orbit and ultimately at making it an ally in the containment of the Soviet bloc. To reach these ends, it was necessary to bolster not only West Germany’s confidence but also its economic and political institutions.
The American effort to foster Western European and German reconstruction culminated in the European Recovery Program (ERP) announced by the secretary of state, George C. Marshall, at Harvard University on June 6, 1947. Between 1948 and 1952, the United States provided the enormous sum of $13.4 billion for European reconstruction, which was the equivalent of some 2 percent of its annual GDP Germany was to be included in the scheme and, surpassed only by the United Kingdom and France, received about 10 percent of the total ERP fund. Initially, German ERP funds consisted mainly of loans that were to be used to buy American products. Only later was this policy reversed and the share of grants was increased. In spite of these considerable sums, however, the psychological effect of the ERP was of much greater importance. The German people were no longer seen as an international pariah but recognized as worthy of American help and support. In the aftermath of the war, more than 9 million CARE parcels were sent to the defeated nation by Americans.
By this act of sympathy with their former enemy the American population laid the foundations of an evolving German American friendship.Ulrich Schnakenberg
See also Braun, Wernher von; Cooperative for American Remittance to Europe/Council of Relief Agencies Licensed for Operation in Germany; Foreign Policy (U.S., 1949— 1955) Influence of West Germany on
References and Further Reading
Buchheim, Christoph. Die Wiedereingliederung Westdeutschlands in die Weltwirtschaft 1945—1958. Munchen: Oldenburg, 1990.
Diefendorf, Jeffry M. American Policy and the Reconstruction of West Germany, 1945—1955. Washington, DC: German Historical Institute, 1993.
Herbst, Ludolf, ed. Vom Marshallplan zur EWG: Die Eingliederung der Bundesrepublik Deutschland in die westliche Welt. Munchen: Oldenburg, 1990.
Krippendorff, Ekkehart. The Role of the United States in the Reconstruction of Italy and West Germany: 1943—1949. Berlin: John F. Kennedy-Institut, 1981.