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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 a prank.

“What’s going on in my office,” he barked at the first officer he saw.

“That’s General Jodl,” the officer said to a disbelieving Clay. “He’s here to surrender.” Clay was stunned. “Jodl can’t sign until he gets permission,” the officer added. They had no place to put Jodl while he waited—except in Clay’s empty office. Jodl watched awkwardly as Clay made sense of the situation.

After hours of waiting, General Alfred Jodl signed the surrender. It went quickly while Clay and the others witnessed. The one person not in the room was Eisenhower. Ever since he had seen the concentration camps, Eisenhower refused to meet with any Germans. Even upon becoming military governor, he avoided them, taking many years to overcome his horror at becoming a witness of the Holocaust.¹

Nearly everyone in Washington assumed Eisenhower would become the military governor of the American zone in Germany. The only exception to that rule was Eisenhower himself, who consistently argued that civilians should control the military even in an occupation government. He expressed his views to Roosevelt as early as December 1942, as the American army struggled to govern the newly liberated parts of North Africa.² By January 1944 he had become emphatic. In a private meeting he “urged, again, that occupied territories be turned over, as quickly as possible, to civil authority.” He also expressed his “objection to dividing Germany into ‘national sectors.’” He worried that a divided Germany might lend itself to dividing the Allies.³

Eisenhower wanted to avoid the responsibility in large measure because his experience abroad with America’s external state had taught him how much could go wrong in an occupation. Indeed, something of a consensus existed on this point within the army which sought to avoid the obligations of military government after the war.⁴ Yet Roosevelt, while sympathetic, had few options. For one thing, Cordell Hull insisted that the State Department (the other logical choice) couldn’t handle the responsibility.⁵ No other bureaucracy had emerged in the first decades of the century to govern territory outside the United States. Moreover, the other Allies planned on using military government in their occupation zones. Thus, upon German surrender, Eisenhower found himself “demoted,” as it were, from supreme allied commander in charge of French, British, and American troops to one military governor among four.

Eisenhower and Clay both worried that whoever served as military governor would get blamed no matter what. “If he tried to help [the Germans], he was going to be damned for too much sympathy for an enemy; and if he didn’t and it [became] … the vacuum that would help to destroy all of Europe, then he would be equally damned.” No one could “win on this.” Clay at least supported Eisenhower’s wish to go back to the States as early as possible. “I couldn’t see where [Eisenhower] could get any additional appreciation of his work and his services by remaining in this disaster-stricken chaotic country.”⁶

Yet Eisenhower and Clay also agreed that military government had an opportunity to bridge the divide between the two emergent superpowers. Clay called postwar Germany an “experiment in international cooperation,” and Eisenhower thought it a “laboratory for the development of international accord.”⁷ In that spirit in August 1945, Clay and Eisenhower traveled to the Soviet Union as special guests of Joseph Stalin. On the flight to Moscow, the pilot flew close to the ground, navigating by landmarks. “I did not see a house standing between the western borders of the country and the area around Moscow,” Eisenhower wrote. Everything had been destroyed.⁸ Because they could see the damage done in Russia, both Eisenhower and Clay always doubted that the Soviets would initiate war with the West over the next decades. “Throughout my stay in Germany I had scoffed at the possibility of war with Russia and had been one of the principal supporters of the viewpoint that war, if not impossible, was most unlikely,” explained Clay.⁹

Despite their hopes of working constructively with the Soviets, they often worked at loggerheads. The first misunderstanding had to do with money. Throughout the war the army struggled to find a simple solution to the problem of currency in liberated areas. “Within a few days or weeks after invasion of any enemy occupied territory,” the occupation “authorities would have to administer … a sound monetary, banking and fiscal order” in that territory.¹⁰ On the one hand, the army wanted to have a currency it could use to buy supplies from the locals. On the other, “if the unfortunate should happen, and we should be defeated in the invasion and thrown out, we didn’t want a usable large stock of U.S. currency to fall into German hands.” Military planners wanted to ensure that the United States could “repudiate the [currency] without damaging the circulation of regular U.S. currency.”¹¹ Eventually, Treasury worked out a system for using military scrip at easily converted exchange rates for use in occupied territory.¹²

The planning for Germany was more complicated for two reasons: first, it would be occupied rather than liberated (meaning the scrip would probably be used for an extended period); second, all the occupying armies would need to use the same scrip, including the British, French and Soviets. The British and French assented to letting the Americans print and distribute scrip in their zones. The Soviets, however, insisted on having their own printing plates for use in their own zone. Treasury officials felt “it would have a very nice effect upon the German people if we all used the same type of currency” and would show “evidence of cooperation between the [Allied] nations.” More to the point, American officials realized that in the absence of the American plates, the Soviets would simply “embark upon a currency of their own … and establish a rate of exchange of their own and also establish monetary and financial programs of their own.” The result would jeopardize “the likelihood of developing a uniform and coordinated Allied pattern of action towards Germany.”¹³ Thus, on April 18, 1944, “the Soviet Ambassador was furnished with glass negatives and positives of plates for the use of the Soviet Government in the printing of Allied military marks.”¹⁴ By the time the American army stood ready to enter Germany, the Treasury Department told Eisenhower that “for the purposes of pay of troops and your internal accounting … you will use a rate of 10 [German Reichsmarks] to the dollar and 40 marks to the pound sterling.”¹⁵

By spring 1945, American and Soviet troops began to bump into each other as they advanced upon the collapsing German Wehrmacht. One surprising result of this contact came in the generosity the Soviet soldiers showed the Americans. Eisenhower radioed home that the “Russians, using their printings of identical AM [Allied military] marks, [are] giving same to United States troops … as gifts.” Unfortunately, the generosity created a “new problem.” Eisenhower noted the “amounts involved” and worried that the Soviets had been “issuing AM marks to their troops in large quantities” since “they place little value on them.”¹⁶ After lengthy discussions, the Treasury, State, and War Departments agreed that the matter could become problematic and recommended that it be resolved through the Allied Control Council (or ACC—the official policymaking forum for the four occupying powers).¹⁷