Take It Away

An American, a Russian and a Briton, conferring in Moscow, had agreed on what to do about German reparations. Last week their plan was ready for the Big Three at Potsdam (see above).

Oilman Edwin Pauley, U.S. member of the three-power Reparations Commission, either had sold a lot of his ideas to Russia's Ivan Maisky and Britain's Sir Walter Monckton, or had found them in substantial agreement with him from the start. The commission's plan read like a Pauley blueprint.

The plan's prime point was that Germany should pay first of all with the bone & sinew of German industry--machines, stocks, tools, practically everything except factory buildings. Collecting in this way, the victors would simultaneously recover some of their war losses and weaken Germany's potential for future war.

At least on paper, and for reparations purposes, the commissioners had agreed to treat defeated Germany as one economic entity--in itself a big step toward the unified occupation policy which President Truman would like to have.

This drastic scheme did not mean that Germany would be a goat pasture, with no industry whatsoever. The commissioners proposed to allow Germany the minimum absolutely necessary to sustain a workable German economy.

But they also proposed to avoid the pitfalls of World War I reparations policy: the demands for huge payments in finished goods, the building up of German industry to supply the goods, and a flood of foreign loans to finance the whole thing. In the end, Germany got more out of it than the victors did.

Continental Dilemma. Stating the new policy was one thing; making it work would be another. Several sources reported last week that one of the secret Yalta agreements included a promise to allow Russia some 50% of all reparations. Russia had been busily practicing what the commission now preached, uprooting whole factories and moving them eastward by the train load. Could the Russian zone, partly stripped, actually be treated as "a single entity" with the British and U.S. areas, where no such confiscation had been planned? Would the Russians want to collect from the other zones as well, or would Moscow consider its bill as paid?

German industry, damaged locally but by no means destroyed in the air war, was still an enormous part of Europe's industry. Could Europe, seeking to forestall another German threat, find a way to do without the German industry which had always armed the threat? That was still the $64 reparations question.

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