More immediately, enforcing poverty would be incredibly difficult. “I do not believe that is humanly possible,” Stimson told Roosevelt. “Even if you could do this,” he asked, is it “good for the rest of the world either economically or spiritually?”42 Stimson drew support from the British who agreed that “an indefinitely continued coercion of [millions of] … technically advanced people … would at best be an expensive undertaking” and would never guarantee “real security.” The British added that “there exists no convincing reason to anticipate that the victor powers would be willing and able indefinitely to apply coercion.” In fact, “the best guarantee of security, and the least expensive, would be the German people’s repudiation of militaristic ambitions and their assimilation, as an equal partner, into a cooperative world society.”43
Roosevelt listened to the various viewpoints throughout 1944 and zigzagged back and forth without making up his mind. He favored Morgenthau’s position initially, only to slowly come around to Stimson’s. In the meantime, his health began to fail. He found it harder to make difficult decisions. In his last real conversation about postwar policy for Germany, Roosevelt explained to Morgenthau and representatives from State and the army that he “did not hold extremist views on the subject.” He “would let the Germans retain such industries as machine tools and locomotives manufacture.” At the same time, he felt “we should not be responsible for maintaining 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