10 November 2010
In my last post, I wrote about an excellent new book, Otherwise Occupied, by Michael Howard who, as a young man in occupied Germany after the war, worked as Intelligence Officer for T-Force, the secret British army unit which obtained material: equipment, documents and technical know-how, from Germany to benefit the British economy.
The book raises the intriguing question of how much the material removed by T-Force was worth in monetary terms. The difference between what Michael Howard and his colleagues thought the value was at the time, and later official estimates, is striking.
In the book, Michael Howard claimed that an internal report, compiled in 1949 by staff who had worked for T-Force, proposed the extraordinary figure of £2,000 million as the total value of material removed by T-Force. He made a similar point in his review, in the RUSI Journal, of Sean Longden’s history of T-Force, regretting that although Longden discussed the issue in his book, he did not ‘hazard a view’ as to the correct amount. An article in the Daily Express, on 9 October 1946, had suggested that the total value of property obtained by T-Force, then less than half-way into its programme, was the lower, but still substantial, amount of £100 million. Longden referred to an interview with a British official, who had said this figure was ‘niggardly’ and at the very bottom end of the scale of what had actually been achieved. This suggests a total figure for the whole programme of well into the hundreds of millions of pounds, if not quite as high as the two billion pounds estimated by Michael Howard’s former colleagues in 1949.
Figures quoted by historians for the total value of reparations obtained by Britain from Germany are very much lower than this. UK official receipts for reparations from Germany after the Second World War totalled just over £30 million. Alan Bullock quoted a similar figure of £29 million, in his biography of Ernest Bevin, the British Foreign Secretary.
There would seem to be four possible reasons for this discrepancy.
Firstly, like was not compared with like. Most of the material removed by T-Force by-passed the official system which allocated reparations from Germany among the western allies. This was co-ordinated by an organisation known as IARA, the ‘Inter Allied Reparations Agency’, created on 14 January 1946, consisting of representatives from 18 countries claiming a share in reparations from Germany.
Material obtained on the battlefield was classified as ‘booty’, rather than as reparations, and could be unilaterally removed by the victors for their own use. As John Farquharson has described in an article in the Journal of Contemporary History, the victorious allies failed to agree on exactly what comprised ‘booty’ or a ‘battlefield’ in modern warfare, but eventually accepted the fairly wide definition that booty consisted of: ‘any material of whatever nature and wherever situated’ intended for use in war. In March 1946 a more narrow definition of ‘booty’ was adopted by the British. According to Farquharson:
‘There is no doubt that up to that date [March 1946] large amounts of information, technical research facilities and prototype machines were confiscated as booty by the British authorities in Germany, and that some of what disappeared did not come under the heading of purely military usage. Until 1 January 1946 the war against Japan validated (at least in theory) such actions, but confiscation continued even after that date. … However, it is true that whatever industrial machinery found its way to Britain under this rubric prior to March 1946, thereafter booty excluded such material. Unilateral removals of industrial prototypes and so on were now carried out as reparations, chargeable to Britain at IARA.’
Eventually an official figure of £48,000 was produced, in 1951, for the value of material removed as ‘booty’ (but excluding anything removed before 1 January 1946, when no satisfactory records had been kept). This figure is tiny; less than 1,000th of the £100 million quoted in the Daily Express on 9 October 1946 as the total value of property obtained by T-Force, which suggests that either the value of material removed as ‘booty’ was actually very much higher than this, or there were other reasons for the discrepancy.
A second possible explanation is that the figure quoted in the Daily Express, and the report Michael Howard recalled seeing in 1949, may both have assumed a much higher value for intangibles, (such as documents, patents and know-how transmitted by German scientists recruited by T-Force to work in Britain), than later official estimates, which did not include figures for ‘intellectual reparations’.
During the war there had been a massive expansion in industrial capacity in Britain, to manufacture arms and equipment to support the war effort, so there was no great need for additional industrial equipment such as machine tools. Quality and know-how was a different matter. According to an article in The Times on 10 December 1946, a vast quantity of information was compiled by 10,000 investigators working in Germany for BIOS, the British Intelligence Objectives Sub-Committee, supported by Michael Howard and his colleagues in T-Force. 1,400 reports were produced by BIOS on a wide range of industries including agriculture, fisheries, electrical and mechanical engineering, glass and ceramics, metals, mineral, optical and mechanical precision instruments, rubber, textiles and clothing. Industrialists were encouraged to make use of ‘Germany’s war-time advances in science and heavy industry’ at an exhibition, organised by the Board of Trade, which opened in London on 9 December 1946, and then toured the country. According to The Times, 460,000 copies of the reports had already been circulated to various institutions and 490,000 copies sold to individuals. All material was freely available so there was ‘no question of infringement of patent rights by British manufacturers.’
Given the scale of this operation, it is easy to imagine a high value could be placed on the information obtained. From an accounting perspective, however, the intangible nature of these assets and the lack of patent protection could make it difficult, if not impossible, to provide an accurate monetary assessment of how much the material obtained in this way was worth.
A third possible reason for the discrepancy, was that it was in the interest of the British government to minimise the value of reparations booked to their own account, so as not to have to share these with the 17 other Western Allies or with the Soviet Union, which, according to the Potsdam Agreement, was entitled to 25% of the total value of reparations obtained from the British Zone (in addition to 100% of the reparations from their own zone). In his article, John Farquharson described how both IARA and the Soviet Union were suspicious of the official figures produced by the British. IARA expressed ‘grave concerns’ over unaccounted removals by the occupying powers (ie Britain, France, the US and the Soviet Union) and ‘fictitious figures’ were given by the British government to the Soviet Union, at the March 1947 meeting of the quadripartite Council of Foreign Ministers.
Michael Howard was quite forthright in his review in the RUSI Journal as to what he considered had happened. Whatever the correct number was for the value of material obtained by T-Force, he wrote: ‘it was one that His Majesty’s Government intended to conceal…’
‘The parallel operations of the Russians, who were not members of the IARA in Brussels, but took whatever they wanted by way of unilateral reparations as well as booty, were on a scale calculated to have been ten times that of T-Force. As the British had been openly critical of the Russian wholesale sacking of any territory under their control, public disclosure of any definitive figure for our own calculations would have made us appear embarrassingly hypocritical. Any unilateral reparations taken by the British were meant to be declared to the IARA in Brussels and deducted from their multilateral reparations entitlement. In the 1961 final report of the IARA, the British total was shown as $180 million, equivalent at the rate of exchange prevailing in 1946-48 to £45 million. It had already reached that sum by the end of 1946, as shown in their annual report for that year. This meant either that they had not declared much of what had been taken, or that they had declared absurdly low values, or both. If the total suggested in 1949 [by his former colleagues] had been published, they were at risk of being found out in a deception.’
Fourthly, the official figures may have been broadly correct and the estimates by the Daily Express and Michael Howard’s former colleagues exaggerated. This is the conclusion John Farquharson reached at the end of his article, writing that: ‘Britain's tangible gains from Germany did not amount to any great worth … How far the gap was covered by intellectual reparations cannot be determined with any accuracy’ he continued, as patent information was generally published and made available to all and it was not reasonable to expect to UK to book a financial benefit for something that was shared with others. In the same way, he argued, the UK received no royalty payments for the discovery of penicillin or Whittle’s work on jet engines, as the work on both of these was undertaken in the UK, but the benefits shared with other countries. In addition, he wrote, British payments to its own zone in Germany totalled £140 million by April 1947, far in excess of the official receipts from reparations of around £30 million.
Michael Howard, Otherwise Occupied: Letters Home from the Ruins of Nazi Germany, (Tiverton: Old Street Publishing, 2010)
Sean Longden, T-Force: the Race for Nazi War Secrets, 1945 (London: Constable, 2009)
John E. Farquharson, ‘Governed or Exploited? The British Acquisition of German Technology, 1945-48’, Journal of Contemporary History, Vol.32, No.1, (1997), pp 23-42
Michael Howard, ‘Review of Sean Longden, T-Force: the Race for Nazi War Secrets 1945’, RUSI Journal, (December 2008), pp 108-110