Priming the German Economy: American Occupation Policies, 1945-1948

Abstract

As you and your associates gather to discuss ways to improve our penetration of the Iron Curtain, I give full endorsement to your efforts. I learned the importance of truth as a weapon in the midst of battle. I am sure that to win the peace, we must have a dynamic program of penetration designed to accomplish our objectives to bring freedom to those who want it, and lasting peace to a troubled world. Dwight D. Eisenhower(1) In the beginning of his presidency, Dwight D. Eisenhower took several steps to raise the stakes in the propaganda struggle with the Soviet Union in Europe. He created, for example, a special committee to revamp U.S. propaganda operations and introduced a plan to establish a Volunteer Freedom Corps composed of Eastern European anti-Communist military units. Furthermore, he appointed C. D. Jackson, a vice president of Time-Life, as his special assistant for psychological warfare. Jackson had been involved in Eisenhower's presidential campaign as a speech writer, constantly pushing for a more dynamic U.S. foreign policy aimed at the of Eastern Europe, including East Germany. At the same time, however, Eisenhower sought to balance a more aggressive posture vis-a-vis the Soviet Union with defensive actions that corresponded to the containment doctrine of the Truman administration. Thus he was quick to reinforce his support for the European Defense Community (EDC), the framework for the political and military integration of West Germany into the Western Alliance. These two conflicting impulses were nowhere more clear than in Eisenhower's German policy during his first year in office. Four major events occurred during this period that had a direct bearing on the German question: Stalin's death, the East German uprising, the West German election campaign, and the Berlin four-power conference on German reunification. Within the German context, the purpose here is to show how the growing tension between the offensive and defensive elements of U.S. Cold War strategy forced the Eisenhower administration to commit itself more firmly to the containment doctrine. C. D. Jackson symbolized , in many ways, the basic problem of Eisenhower's divided strategy(2): it could heighten tensions with the Soviet Union and drive a wedge between the United States and its Western European allies. With the adoption of the New Look strategy in late 1953, the Eisenhower administration did not abandon its aim of gaining the initiative in the Cold War. But it was not going to risk a major confrontation with the Soviet Union in the nuclear age or to ignore Western European opposition to unilateral American psychological warfare and other nonmilitary propaganda operations in Eastern Europe. Jackson's involvement in U.S. clandestine activities began during World War II: developing close cooperation with Eisenhower, he served in Allied psychological warfare divisions in North Africa and England. With the emergence of the Cold War, Jackson focused his attention on U.S. propaganda operations in Eastern Europe. He was one of the founders of Radio Free Europe in 1949 and served as the president of the National Committee for a Free Europe in 1951 and 1952.(3) Together with most members of the Psychological Strategy Board (PSB)--the agency that coordinated U.S. propaganda actions--Jackson favored a specifically American foreign policy compatible with the liberation rhetoric. In contrast, John Foster Dulles and the State Department usually downplayed the need for psychological warfare and opposed U.S. unilateralism in Europe. As it turned out, Eisenhower was basically sympathetic toward both views, but while he had a strong desire to expand psychological warfare operations, he did not want them to dictate U.S. foreign policy.(4) The chief of the cold war, as the Communist propaganda apparatus called C. D. Jackson,(5) joined the Eisenhower administration for one year and participated actively in the internal debate over the direction of the administration's foreign policy, in spreading its propaganda around the world, in efforts to help Chancellor Konrad Adenauer in the West German election campaign, and in developing the response to the East German uprising. …