Industrial Plans For Germany - Reparations and Exploitation

Reparations and Exploitation

Further information: German reparations for World War II

Contrary to common myth, the US did in fact take "reparations"; parts of it by John Gimbel called "plunder and exploitation", directly from Germany. The US for instance took a 8.9% share of dismantled Western German industry.

The Allies also confiscated large amounts of German intellectual property (patents and copyrights, but also trademarks). Beginning immediately after the German surrender and continuing for the next two years the US pursued a vigorous program to harvest all technological and scientific know-how as well as all patents in Germany. John Gimbel comes to the conclusion, in his book "Science Technology and Reparations: Exploitation and Plunder in Postwar Germany", that the "intellectual reparations" taken by the US (and the UK) amounted to close to $10 billion. The US competitors of German firms were encouraged by the occupation authorities to access all records and facilities. In 1947 the director of the US Commerce Department's Office of Technical Services stated before congress: "The fundamental justification of this activity is that we won the war and the Germans did not. If the Germans had won the war, they would be over here in Schenectady and Chicago and Detroit and Pittsburgh, doing the same things." A German report from May 1, 1949 stated that many entrepreneurs preferred not to do research under the current regulations (Allied Control Council Law No. 25) for fear of the research directly profiting their competitors. The law required detailed reporting to the Allies of all research results.

The patents, drawings and physical equipment taken in Germany included such items (or drawings for) as electron microscopes, cosmetics, textile machinery, tape recorders, insecticides, a unique chocolate-wrapping machine, a continuous butter-making machine, a manure spreader, ice skate grinders, paper napkin machines, "and other technologies - almost all of which were either new to American industry or 'far superior' to anything in use in the United States."

The British took commercial secrets too, by abducting German scientists and technicians, or simply by interning German businessmen if they refused to reveal trade secrets.

Konrad Adenauer stated: "According to a statement made by an American expert, the patents formerly belonging to IG Farben have given the American chemical industry a lead of at least 10 years. The damage thus caused to the German economy is huge and cannot be assessed in figures. It is extraordinarily regrettable that the new German inventions cannot be protected either, because Germany is not a member of the Patent Union. Britain has declared that it will respect German inventions regardless of what the peace treaty may say. But America has refused to issue such a declaration. German inventors are therefore not in a position to exploit their own inventions. This puts a considerable brake on German economic development."

In JCS 1067 there were provisions allowing German scientists be detained for intelligence purposes as required. Although the original focus on the exploitation was towards military means, much of the information collected by FIAT was quickly adapted commercially to the degree that the office of the Assistant Secretary of State for Occupied Areas requested that the peace treaty with Germany be redacted to protect US industry from lawsuits.

The US made no attempt to evaluate the value of what was taken from Germany, and in the contracts that led to sovereignty for West Germany in 1955 the West Germans had to formally renounce all claims to possible compensation for all types of assets taken, including scientific and technical know-how. Gimbel notes that this made a later accounting practically impossible.

The property taken in Germany was without regard to the rules of the Hague Convention, which prohibits the seizure of enemy private property "unless it is susceptible of direct military use", but there are legal arguments that the Allied occupation of Germany was not bound by Hague Conventions, because if the German state no longer existed (see debellatio), and the convention only applied to the occupation of territory belonging to one of the Contracting Powers then it did not cover the territories of Germany post war. The legal status of Germany under occupation is however unclear, particularly as debellatio in general involves the complete dissolution and annexation of the defeated state, which did not take place and indeed in the Berlin Declaration (1945) it was categorically denied that Germany was annexed. However, the eastern quarter of Germany was later annexed and its German inhabitants expelled).