by Benn Steil
GEORGE MARSHALL, NEVER AT EASE with small talk, briefly returned Stalin’s pleasantries, recalling “with great interest” their previous meeting at the Tehran Conference in 1943, where “amphibious and cross-river operations” had been discussed.
“Yes,” Stalin interjected, “the second front.”70
Marshall had wished to remind Stalin of the two countries’ recent historic collaboration, but the “second front” held different meanings for the two men. From Stalin’s perspective, it had been deliberately, devastatingly, and unforgivably late. America and Britain, he believed, delayed launching it for years in order that Germany and the Soviet Union might first grind each other into rubble and impotence. Stalin, of course, had also used this tactic—letting Germans slaughter the Warsaw Poles in August 1944.
Marshall steered the meeting toward business.
He would, he advised Stalin, speak frankly—not as a diplomat, but as he had been trained, as a soldier. He explained that he was “very concerned,” even “somewhat depressed at the extent and depth of misunderstandings and differences . . . revealed at this conference.” The Soviet Union, he said, had been held in high esteem among the American people at the end of the war. But since that time, the Soviet government had not kept faith with agreements and was hindering progress on new ones.
The American Lend-Lease arrangement with the Soviet Union, Marshall reminded Stalin, “had been the most generous of all,” and the unwillingness of the Soviets to settle their obligations—such as the return of merchant ships and war vessels—was having “a very bad effect on the United States Congress and on public opinion.” Now, here in Moscow, an atmosphere of “suspicion and distrust [was making] agreement virtually impossible.”71
Marshall was indeed speaking frankly; even brutally, as he later termed it.
Impassive, Stalin puffed a cigarette; looking down, to the side, occasionally into Marshall’s eyes as he listened to the American and his translator. A red pen in his right hand throughout, he doodled wolves’ heads on a notepad, in plain sight of his guests—a practice he was known to have cultivated some time ago for the purpose of disconcerting them. Harriman had experienced it in his first audience with him at the beginning of the war.72
Marshall turned to the main issue dividing Washington and Moscow: Germany. They were not making progress on any of the central matters: demilitarization, reparations, or the country’s future economic and political architecture.
Germany had brought the Soviet Union and the United States together in a common cause, from 1941 to 1945, but now that it was caged between the eastern and western halves of the continent, each under the effective control of their respective militaries, it served only to magnify the consequences of their clashing ideologies and geostrategic interests. Little of substance, or even of clear meaning, regarding Germany’s future had been decided among FDR, Churchill, and Stalin at Yalta two years prior, in spite—or because—of it being by far the most consequential issue the three governments would have to resolve. Stalin had at the time been content to wait; he expected “the correlation of forces” to move in his favor, as they did when the Red Army beat Eisenhower to Berlin.
Now, here in Moscow, Marshall said, there was a misconception that the United States “intended to dismember Germany.” But his government “did not have any such intention”; it “in fact desired the opposite.” It wanted the country unified economically, allowing the more industrial west to exchange goods freely with the agricultural east. But it also believed that a powerful central German government “would constitute a real danger for the peace of the world.”73 Marshall further believed, yet did not say, that the main source of this danger was the Kremlin-controlled KPD (Kommunistische Partei Deutschlands) German Communist Party, which had held power in the east since forcibly absorbing and dismantling the SPD Social Democratic Party in 1946.
Marshall now directed his frustration at his interlocutor for the past six weeks. “Mr. Molotov,” he said, “had charged that the British-American bi-zonal arrangement was in violation of Potsdam.” But it “was as plain as this table that the United States and Great Britain had been forced to take this action in defense of their own taxpayers, by reason of the failure to establish economic unity in Germany.”
As for reparations, Marshall continued, Molotov was exaggerating what the United States had received from the American zone, while refusing himself even to provide any figures as to what the Soviet Union had received. The two delegations had, further, reached “an impasse on the demilitarization treaty.”
There was also the wider context, Marshall added: Europe. “We are,” he said, “frankly determined to do what we can to assist those countries which are suffering from economic deterioration.” If “unchecked, [this] might lead to economic collapse and the consequent elimination of any chance of democratic survival.”74
Trying to close on a positive note, Marshall reiterated his “desire to rebuild the basis of cooperation that had existed during the war.” He had, he said, “come to Generalissimo Stalin with that hope, feeling that if they cleared away some of the suspicion it would be a good beginning for the restoration of that understanding.”75
Stalin nodded. Marshall, he said, was “quite right, that only on the basis of frankness and sincerity could cooperation and friendship be developed.”
“As to lend lease,” he confessed, “there was occasional sloppiness in the operation of the Soviet Government.” It was “very busy here because [we] suffered such great losses in the war. . . . This might be the reason for the delays.” But “there was another side to the lend lease question,” he told Marshall: “namely the credits which had been linked to lend lease.”
Two years ago, Stalin explained, in response to Ambassador Harriman’s question regarding what orders the Soviet government was prepared to place in the United States, and what credits it needed to settle them, his government had submitted a memorandum requesting three to six billion dollars. Six billion, Stalin said, had been “long promised.” Now, after two years had passed, “no reply [had yet] been received.” This was, he suggested pointedly, “possibly due to sloppiness on the part of the United States.”
Novikov was stunned. Six billion? “I only knew of a promise of a one billion dollar loan,” he later recorded. And “I was not the only one struck by Stalin’s bitter reproach.” Marshall was whispering in Smith’s ear as Stalin spoke; Smith scribbled furiously. He reached across the table and handed Novikov a note.
“Mr. Novikov!” it read, “you know too well that it’s not so. Six billion have never been promised. Please, explain it to Mr. Stalin.” Novikov translated and handed the message to Molotov. “Without moving a brow,” Molotov “put the sheet into a folder.” He “did not say a word” to Stalin, whose “strange memory lapse . . . haunted me,” Novikov noted. “[W]hat I saw was an elderly, very elderly, tired man, who, likely, was carrying his great burden of responsibility with great difficulty.”76 Stalin would correct himself, but only to the extent of conceding that “one year” had passed rather than two.
Stalin moved on to Germany. “The [Council of Foreign Ministers],” he said, “had no authorization to repeal . . . the agreements entered into by the three governments.” He looked at Bohlen.
“Mr. Bohlen must remember those conversations” at Yalta, where he translated for FDR, when “all the Americans, including President Roosevelt, [Secretary of State Edward] Stettinius and Hopkins had said they thought [the Soviet demand for $10 billion in reparations] was very small.” And spread “over twenty years this would not be hard for the Germans.” But “now there was apparently a different point of view,” that despite the Soviet Union having removed “barely two billion dollars” worth of assets no more reparations would be permitted—not even from current production. “This the Soviet Union could not accept.” The Soviet people, Stalin said, had suffered terribly at the hands of the Germans. He had “no pity, sympathy, or love for them.” Reparations were right and necessary.<
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As for “the subject of German unity,” the Soviet Union “stood like the British and Americans for economic unity.” But that was not enough, Stalin said; economic unity was not “feasible without political unity.”
“[We] are against a strong centralized German government,” Stalin clarified; we want only one that “should stand above and not below the Länder [state] governments.” But “[we] must not repeat the same mistakes as Napoleon, who set up scattered German governments.” He thereby gained “a tactical advantage from a temporarily weakened Germany,” but strengthened the hand of “German militarists” who dreamed of reuniting Germany. “Napoleon’s action in effect gave birth to Bismarck and the Franco-Prussian war.”
If these errors were now repeated, the Soviet Union risked “losing control of the instrument of German unity and handing it over to the militarists and chauvinists.” The German people would then soon follow another dangerous and bellicose leader down the path of reconsolidation.77
HOWEVER INCOHERENT ITS ELEMENTS, THE contours of Soviet policy toward Germany had been largely settled for a year now. Stalin had no inclination to reopen it. In May 1946, thirty-eight top Soviet officials, including General Georgy Zhukov and Deputy Foreign Minister Solomon Lozovsky, had submitted their conclusions on Byrnes’ proposal for German demilitarization and great-power security guarantees in Europe. They were unequivocal: Moscow must reject it. The United States, they argued, was trying to drive the Soviet Union out of Germany to secure its “economic domination of that country” and “to preserve [its] military potential [in Europe] as a necessary base for carrying out their aggressive aims in the future.” Stalin concluded that Washington was reneging on Roosevelt’s Tehran commitment to withdraw U.S. troops within two years of the war’s end, seeking instead Soviet “sanction for the U.S. playing the same role in European affairs as the U.S.S.R.” And once Soviet troops were out of Germany, Zhukov warned, the Americans would “demand a withdrawal . . . from Poland”—a critical military corridor with Germany—“and ultimately from the Balkans.” Within a few years, there will be “a German-Anglo-American war against the USSR.”78
In this light, Marshall’s calls to rebuild Germany and to end reparations were two sides of the same coin. America intended to take over Germany, rearm it, and turn it against Russia. Marshall might as well have been pushing on a closed door from the inside; Stalin would oppose any plan that precluded Soviet control over the western half of Germany. “All of Germany must be ours,” Stalin told Bulgarian and Yugoslav leaders in 1946. “That is, Soviet, Communist.”79 Stalin kept talking to Marshall only because he wanted Washington “to shoulder the responsibility for Germany’s division,” if such could not be avoided.80
Yet Stalin had, in fact, supported dismembering Germany before he opposed it. Stalin was, in 1941, the first of the Allied leaders to press for it, wanting Germany, according to a Molotov cable to Maisky in London, “divided into a series of more or less independent states so as to provide a guarantee for the peace of European states in the future”—a message that Maisky relayed to a skeptical Eden. At Yalta Stalin had with him specific proposals from his advisers for a division of the country into four, five, and seven states, but pressed only for the word “dismemberment” to be added to the German surrender formula. With American support, the Soviets prevailed over British concerns that it would rouse German nationalism and resolve to fight.
After Yalta, however, Stalin did an about-face. Fearing that the absence of a central authority in Germany might hinder his ability to extract reparations from the industrialized west of the country, he ordered his delegation to the March 1945 meeting of Allied foreign service officials in London to take the line that dismemberment was only to be a last resort, if Germany could not be brought into line through other means. Thereafter, he and Molotov would publicly blame the Americans and the British for championing it.81
In the final months of the war, meanwhile, Stalin groomed Walter Ulbricht and his KPD Communist Party to organize the Soviet occupation zone in Germany. The diminutive, Lenin-bearded fifty-one-year-old Ulbricht had risen through the Communist hierarchy in the 1920s, fleeing Germany in 1933 and settling in Moscow, via Paris and Prague, in 1938. There, he avoided the fate of so many less adroit Communist Party members and activists by backing Stalin’s every move, from show trials to the Nazi-Soviet Pact. Politburo member Lavrentiy Beria, master of the Soviet internal-security system, called him “the greatest idiot” he had ever seen, but Stalin found him a most useful one after the war’s end.82
Thanks to the treachery of British MI6 intelligence agent Kim Philby, the Soviets were also able to identify, and then capture or murder, most of eastern Germany’s Catholic wartime anti-Nazi—and anti-Communist—resistance leaders.83 So Stalin was well prepared for the present stalemate with the Americans, who had few natural allies in the east. What he was unprepared for was the role his own actions would play in hardening the hostilities between eastern and western Germany, making impossible the progressive unification under Communist leadership that he was now seeking.
While telling Ulbricht in early 1946 that he wanted Germany to be “democratic,” allowing approved non-Communist parties to participate, he also demanded a “purge of the state administration, public ownership of enterprises . . . expropriation of big landowners” and obedience to directives from Moscow.84 In April he forced a merger of the KPD and the Social Democratic SPD into the KPD-dominated Socialist Unity Party (Sozialistische Einheitspartei Deutschlands—SED). This only increased anti-Russian anger in Germany, where Berliners referred to Communists as “SEDisten”—Sadists.85
Facing a huge anti-Communist electoral turnout on October 20 of that year, particularly in Soviet-occupied East Berlin, Stalin now stiffened his opposition to Washington’s federalization proposals, which would have strengthened local control and weakened his own. And in the wake of the crushing defeat—the SED finishing third, with under 20 percent of the vote—he became ruthlessly pragmatic. To the shock and dismay of SED leaders who met with him in January 1947, he pressed them to abandon their “policy of elimination . . . in order to avoid a scenario in which all former fascists are pushed into the adversarial camp.”
“The Soviet zone has its own fascists,” Stalin said. “Can they not organize their party under a different name?” He did not mean “persuading [them] to the side of the SED; they would not be willing.” But just “to not push them all to the Americans.”
The SED chairmen were appalled. “Nazis are in administrative positions in the western zones,” Otto Grotewohl said, “but such a course of action from us would not be understood to the masses working in the west.” Wilhelm Pieck nodded; what Stalin was asking was “impossible.”
“Impossible?” Stalin asked. “It seems possible to me.”
Pieck was incredulous: the SED had to continue “the struggle . . . against active Nazis,” he insisted.
But “what about distinguishing not-very-active Nazis from very-active Nazis?!,” Stalin put back.86 The goal, he explained, was “winning over” the population in the west.87 To that end, the first task was to get the Allies to agree to a nationwide plebiscite on some carefully worded question related to German unity—one that would assist Communist expansion.88 “If we succeed in completing this first stage, that will be well and good.” And “if we don’t, we’ll accept the consolidation of German administration in the Soviet zone.”89 The critical matter was ensuring that “the cause of German unity [not] be transferred from our hands to the hands of the bourgeoisie.”90 This suggested Stalin was willing to suffer western Germany remaining under Allied control if it proved necessary to ensuring that the east stayed communist.
As for Washington’s policy on Germany, it had, since 1945, lurched just as radically as Moscow’s. The Truman administration was now in revolt against the Morgenthau mind-set that had held sway, however tenuously, in Washington a mere two and a half years prior, which viewed a united, industrially revived Germany as
a continued threat to Europe. FDR’s State Department never supported Morgenthau’s plan for deindustrialization and dismembership, believing it “would provide a ready-made program for nationalistic agitators”; instead it supported only decentralization, or federalization, as a means of containing German nationalism and militarism. Once Truman became president, he condemned Morgenthau’s “meddling” and put the State Department back in control of foreign policy.91
Europe’s economic crisis now made Morgenthau’s ideas look reckless. Real gross domestic product (GDP) in Britain was tumbling (down 2.6 percent for the year), while inflation in the United States was soaring (14.4 percent for the year), pushing up British import costs. “Production,” concluded a widely circulated report by former president Herbert Hoover, following a European trip in February, was “the one path to recovery in Europe.” And “the whole economy of Europe,” he insisted, “is interlinked with the German economy.” His ally Vandenberg called Germany “the core of the whole European problem.”92
Despite the massive wartime damage Germany sustained, reflected in the destruction of 40 percent of its housing stock, a remarkable 80 percent of the country’s industrial plant capacity remained intact. Germany exited the war with a greater functioning machine tool stock than it had on entering it—much of it new (one third of industrial equipment was less than five years old, up from one tenth in 1939). Only raw material shortages and political uncertainty held back its recovery—and Europe’s. The United States could, therefore, Hoover concluded, “keep Germany in these economic chains, but it will also keep Europe in rags.”93