Hans-Georg Sachs Oral History Interview

Notice
This is a transcript of a tape-recorded interview conducted for the Harry S. Truman Library. A draft of this transcript was edited by the interviewee but only minor emendations were made; therefore, the reader should remember that this is essentially a transcript of the spoken, rather than the written word.

Numbers appearing in square brackets (ex. [45]) within the transcript indicate the pagination in the original, hardcopy version of the oral history interview.

RESTRICTIONS
This oral history transcript may be read, quoted from, cited, and reproduced for purposes of research. It may not be published in full except by permission of the Harry S. Truman Library.

Opened August, 1966
Harry S. Truman Library
Independence, Missouri

[1]

DR. PHILIP C. BROOKS: This is a project, Dr. Sachs, that was suggested by Averell Harriman. Among other things he said, he thought it would be desirable to talk to some people here who could tell us what the Germans thought of the Truman Administration, and of the Marshall Plan and the way it was handled. May I ask what you were doing at the time?

DR. HANS-GEORG SACHS: Yes, from the very beginning,

[2]

when I came back into the administration after the war, it was in the French zone of occupation. The three German Länder governments had set up a common central office, a small office, which served as a liaison on the one hand to the French authorities which were handling governmental affairs at that time in their zone; and on the other hand, to the ECA Mission in Frankfort. They had a liaison office also in Baden-Baden. And I was acting as a liaison man between the three Länder governments (I was on their payroll) and with the Americans who were handling the ECA program in the French zone, and with the French authorities. Later on, when the Federal Republic of Germany was established, after the elections late in 1949, I came to Frankfort and until the very end of the Marshall Plan program in Germany in the middle of the year in 1952 I was in that ministry as

[3]

one of the responsible officials. I have been connected with these problems in my daily work for quite a number of years. Of course, that was quite a time ago and you will understand that I do not remember all the details.

The decisive turning point in Germany, as seen by the man in the street, so to speak, was the currency reform. The currency reform was a drastic one on the one hand, you see, because all savings were practically reduced to a very small amount, a percentage of 6 ½. But I remember very well that this currency reform alone could not have brought about the economic swing we were glad to note shortly afterwards. Even in the first months after the currency reform, there were some doubts whether the new Deutsche mark would be really hard currency. You remember that people in the light of their experience were rather suspicious. But

[4]

at the same time, the ECA finance program set in with full speed, and from that time on, the situation changed drastically in Germany. I would venture to say that the Marshall Plan action was one of the really decisive factors in our economic reconstruction after the war. It was not the only one, as it was accompanied by the currency reform -- which was what put us back again on a sound financial basis -- and it was accompanied, of course, by the energy and the will of the German people to rebuild the country. But that financial backing and that generous gesture from the nation with which we had been at war only a short time ago, was really the fundamental, the sound basis on which we could build. You see how important this development can be judged from the fact that after the First World War, the atmosphere was poisoned for decay, with all the bad

[5]

political consequences that followed here in Germany. Economically, we were grappling with the difficulty (in spite of the fact that the Americans didn't ask for any reparations) that the whole tendency of the victorious powers at that time was to get the money back they had spent in the war themselves. Now, we realized after this war, and it's one of the decisive facts in world history I should think, that the economic welfare of all our neighbors, of all countries, is so closely interconnected in the modern world, that we cannot think that we do not care what's going on in the neighboring country, and look only after our own interests. This very fact, that the American statesmen have realized so very soon, is something which is quite a new event in world history -- I would go so far as to say this.

[6]

BROOKS: Would you credit that more to the American statesmen than to the British and the French, for example?

SACHS: Well, the magnitude of the American program was, of course, much greater than what the others could do. I have to admit that France itself was in a difficult position. She had been occupied, and she had to support a financial burden, and the country had been the theatre of war twice. So it's understandable that they, at that time, were not able to make any substantial contributions.

The English did make a financial contribution within their possibilities. It was not comparable to what the Americans did, but they did what they could at the time.

BROOKS: Well, of course, many people have called my attention to the fact that Mr. Bevin moved

[7]

very rapidly after the Marshall speech of June 1947 to organize the whole program.

SACHS: You see, we have to make a distinction, I think, between those programs which had been organized in order to fight directly against disease and hunger, these so-called GARIOA, government relief programs, which were in the initial phase financed both by American funds and by the British Government. They were, so to speak, the predecessors of the well-organized program that came afterwards.

BROOKS: The first thing I wanted to ask you was how they differed.

SACHS: This was a preliminary program, so to speak, which was very important in order as a first phase, but it was more intended to help people to survive, I would say. In size, it was not enough to stimulate economic activity. And,

[8]

at that time, it was not accompanied by the currency reform, so I think something was lacking on the German side. They're closely tied together, but I think this program was a rather valuable one. Of course, you will realize, we had, later on, years later, in the early fifties -- we had a settlement of prewar and postwar debts at the London debts conference. I was a member of the delegation, and we declared our readiness to repay part of the funds we had gotten within the framework of the ECA program. Only part of it, and I'm frank to admit, on favorable conditions. That was a financial burden which we were able to carry, and you realize it has not caused any major damage to our financial system or to our economy. So that was a very fair offer we got from the side of our now Western allies. I think this conference in London, which also included settlement

[9]

of these postwar debts, which had been financed out of public funds beside the private debt, was one of the major steps in order to consolidate our financial position. It was, so to speak, a peace treaty between the Western powers and Germany in the economic and financial field.

BROOKS: You were, yourself, with an organization known as the CRALOG Büro?

SACHS: I was in CRALOG before, yes.

BROOKS: That was essentially a relief organization, was it not?

SACHS: It was a relief organization. CRALOG was a central body, a partner for the American military government. It was easier for the American Government to handle all these affairs if they had one partner. So the scheme was

[10]

that all the American welfare agencies of whatever religion or belief worked together in a loose form in that organization. I had the privilege of serving in the office in Baden-Baden, and before that in the Office of Activities in the French zone of occupation, but this was relief work.

BROOKS: Yes, but you were there at the time the Marshall speech was made, were you not?

SACHS: I was in Germany at that time, but not in the American zone; I was in the French zone.

BROOKS: Were people all over Germany pretty conscious of the Marshall speech and of the Marshall Plan? Was it something that aroused the public interest?

SACHS: It certainly stirred up a lot of interest because, after all, it had a two-fold aspect. One of them was the bilateral aspect between

[11]

the governments of the United States and Germany; on the other hand, it had a wider scope, because it was intended to help rebuild Europe as an economic unit. It was a European reconstruction program. Germany was -- and this was not just a friendly gesture of the Western powers -- we were admitted from the very beginning to these international bodies in Paris which were handling this program. So the Marshall Plan did not only serve a purely national target. It made it possible for Europe to bring down economic barriers which prevented a free exchange of goods and services so far. So, I think it has a two-fold aspect and both of them were extremely successful.

BROOKS: Do you think most of the Germans thought, Dr. Sachs, that this was going to lead to economic union, to a common market or something

[12]

like that?

SACHS: It is difficult to remember, of course, what the Germans at that time really thought. I must admit that the idea of some kind of European unity was very attractive for Germany from the very beginning. We were always in favor of some new form of political and economic cooperation in Europe which should improve what has existed in prewar times. We were only too conscious of the disadvantages of the national system which, after all, had led into a dead end road -- into a blind alley.

BROOKS: But it was quite a striking change from previous policy -- this was a matter of international cooperation.

SACHS: It was bold, new initiative, and I'm pretty sure it was recognized as such, because the effects of it were so visible. It was not only

[13]

that speeches were made, but the practical consequences were immediate and tangible.

BROOKS: Well, there was a speech of Secretary Byrnes, for example, in Stuttgart which was from the day it was made considered to be a major turning point in American postwar policy in regard to Germany.

BROOKS: I don't think most Americans realized how significant it was.

SACHS: It really was. It is probably difficult for you to remember, now that you have come back to Germany, a prosperous and booming country, rebuilt and in full economic swing, it is difficult to remember sometimes how tragic and desperate the situation was at the time. I was working on a German body where we tried to find out what the economic prospects for the next years to come would be. And quite honestly,

[14]

and I'm pretty sure that our views were shared by many foreign observers at that time, we came to the conclusion that particularly after the loss of the agrarian provinces in the East which could feed our population, after the loss of all the assets we had abroad, and with all the devastation that had remained in Germany because of the war, we were fully convinced and quite honestly of the opinion that it would take the life of several generations to rebuild Germany. We would never have dreamt of the idea that within a comparatively short period, we would not only stand on our own feet again, but -- as I heard just yesterday in Paris in an international body -- Germany is nowadays the strongest unit in Western Europe, with a grand nat