Martin Lorenz-Meyer. Safehaven: The Allied Pursuit of Nazi Assets Abroad. Columbia: University of Missouri Press, 2007. xii + 384 pp. $49.95 (cloth), ISBN 978-0-8262-1719-6.
Reviewed by Frank Buscher (Department of History, Rhodes College)
Published on H-German (March, 2008)
Neutrality Has Its Price
At first glance, it may be difficult to discern this study's relevance to scholars of German Studies. After all, the program whose history it presents was an Allied, primarily an American, creation. Discussions regarding the policy preoccupied primarily officials within various United States government agencies, their Soviet, British, and French counterparts, and the representatives of several neutral countries. (The Germans had to wait until after the establishment of the Federal Republic to make their case.) Moreover, the assets in question were located outside Germany, and their collective value was not particularly impressive. Even so, Martin Lorenz-Meyer's carefully researched, well-written monograph will without doubt pique the interest of scholars who are primarily concerned with German history. For historians of the postwar years it represents another valuable piece of the complex puzzle that was the Allied occupation. The book also adds to the mountain of evidence that the year 1945 was anything but Stunde Null for both victor and vanquished. It further contributes to the growing historiography on the loss of Germany's markets and investments abroad resulting from the war and total defeat. Moreover, it enhances our knowledge of how the Cold War impacted Germany's relations with the Allies and the neutral countries.
Safehaven originated in May 1944 in the United States as a program to persuade the major European neutral nations--Sweden, Switzerland, Spain, Portugal, and Ireland--to seize German assets in those countries and surrender them to the Allies. Employing the methodology and style of administrative and diplomatic historians, the author devotes the lion's share of his study (Chapters 2-7) to the policy's difficult evolution in the face of competing agencies in Washington and the controversy it created among the Allies. To demonstrate how Safehaven worked on the ground, he dedicates the remaining two chapters to its effect on Sweden. In that effort, he relies extensively on U.S. and British, and, to a lesser degree, on German primary sources. No evidence suggests that he consulted Swedish documents. In light of his focus on Sweden at the end of the book, this omission must be considered a weakness. At the same time, the very solid bibliography underscores Lorenz-Meyer's extensive knowledge of the appropriate published primary and secondary sources.
From the outset, Safehaven created controversy. Initiated by the U.S. Foreign Economic Administration (FEA), it soon drew the attention of five government agencies, including the powerful Departments of State and the Treasury. An international conference meeting in July 1944 at Bretton Woods, New Hampshire, provided the necessary legal basis by calling on neutral countries to control and ultimately surrender assets looted by Nazi Germany. A few weeks later, the State Department instructed its embassies in six neutral countries to report on the status of and future plans for enemy assets in those nations. The British government soon issued similar instructions. Instead of moving Safehaven forward, however, the Washington agencies spent the remaining war months and the immediate postwar period fighting for control of the program. Treasury officials, including Secretary Henry Morgenthau, went so far as to claim that the Germans had placed assets in neutral states to finance a Nazi redoubt in the Alps and to start another world war. Although such claims indicate that U.S. policy was guided more by fear than solid evidence, the secretary did succeed in putting the issue on the political front burner. Indeed, the Morgenthau Plan called for the confiscation of all German external assets, which set off another round of infighting among Washington officials regarding the treatment of postwar Germany. Treasury sought to control German external assets ostensibly to prevent World War III; State advocated that they be used as reparations.
At the same time, bickering persisted among the major Allies, as the treatment of German external assets became part of the debate regarding German reparations. Unable to come to an agreement at Yalta and at the Moscow foreign ministers conference in July 1945, the Allies once again addressed the issue at Potsdam. At the last conference of the Big Three, "external assets [finally] played a crucial role" (p. 113). It was agreed to divide such assets between East and West along a line that largely foreshadowed the Iron Curtain. Hence, assets in neutral countries fell within the sphere assigned to the western Allies and could be used by the latter as reparations. The Potsdam decision helped clarify the role of Safehaven. From now on the program was to concentrate on locating and identifying German assets in the neutral countries so that they could be claimed by the western Allies. Such efforts had been underway for some time, but with mixed results. The Swiss, for example, agreed to take stock of German assets in their country, but seemed intent on maintaining control themselves. Sweden froze and ordered a census of German assets in July 1945, but rejected several other Allied demands.
With respect to German assets in neutral countries, the United States and Great Britain soon developed different priorities. The Truman administration wanted to seize German investments abroad as reparations. The British also wished to use such assets as a form of reparations, but they were even more interested in destroying the traditionally strong commercial relations between Germany and the neutrals. In short, Safehaven offered an opportunity to eliminate an unwanted competitor in international trade. The United States and Great Britain also differed on how to approach uncooperative neutrals. The former was willing to apply economic sanctions, an approach the British rejected as counterproductive. In May 1946, the major western Allies began their Safehaven negotiations with Sweden. By then, Safehaven's priorities had changed "from a program focusing on flight capital to one that predominantly concentrated on eliminating all German economic influence in the neutral countries" (p. 232). But the Swedish government also had an interest in the German assets to satisfy its own claims against Germany. The two sides reached agreement, but the issue had to be revisited after the establishment of the Federal Republic. The Adenauer government proved quite aggressive in its efforts to either recapture German property that had escaped liquidation or extract compensation for the owners of property that had been liquidated. The Federal Republic negotiated somewhat similar agreements with the other Safehaven countries. Meanwhile, the western Allies were increasingly on the sidelines during this later phase. Eager to integrate the Federal Republic in the West, they were ready to rid themselves of the war's remaining, troublesome legacies.
In the end, Safehaven may have been a case of much ado about very little. Sweden, Switzerland, Portugal, and Spain made payments of less than $130 million; more than half of this sum came from Stockholm. The amount fell several hundred million dollars short of U.S. estimates. Despite the disappointing yield, Lorenz-Meyer insists that, "the United States achieved its goal of collecting most of its reparations in German external assets" (p. 336). But even the most hawkish supporters of the Morgenthau Plan must have realized that such a small sum did not lend itself to a revival of German military ambitions. Instead, the risks inherent in Safehaven appear to have exceeded its monetary promise. After all, here was yet another issue causing disagreement among the Allies, especially Britain and the United States. Moreover, the program's legality under international law was questionable, at least in the opinion of the neutrals' governments. As a result, the United States resorted to rather heavy-handed measures to pressure neutral countries to sign the Safehaven accords, a move that called into question U.S. respect for the sovereignty of other states. The United States further caused confusion and resentment by calling for the restoration of free trade and capitalism soon after the end of the war, while insisting on economic controls in the case of the neutrals. Similarly, the use of Safehaven agreements to eliminate German commercial influence must have caused doubts about the western Allied commitment to truly free markets.
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Citation:
Frank Buscher. Review of Lorenz-Meyer, Martin, Safehaven: The Allied Pursuit of Nazi Assets Abroad.
H-German, H-Net Reviews.
March, 2008.
URL: http://www.h-net.org/reviews/showrev.php?id=14331
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