Trouble in Germany

Like every other soldier, General Ike was thinking about going home. He knew that he was to be the U.S. Army's next Chief of Staff, a job big enough to take any soldier's mind off the dreary chores of occupation. But last week he still had a big job and plenty of trouble on his hands in Germany.*

Speaking to the press, General Eisenhower vigorously defended his Army against growing criticism from back home. The bulk of the occupation job had been done well, he snapped. Mistakes had been made, but they would be corrected. Nazis would be weeded out, would not be permitted to vote in the coming German elections. Growled Eisenhower: "A Nazi is a Nazi, and I hate Nazis."

Question Reopened. But there was more at stake than the U.S. Army's efficiency in getting rid of Nazis. In the Allied Control Council's debate on reparations, the whole question of What To Do With Germany suddenly seemed wide open again.

Most people had the notion that Potsdam once & for all had turned Germany into a country of fields and pastures, with a factory here & there to relieve the bucolic monotony. Actually, under the general terms of the Potsdam Agreement, Germany could have a substantial light industry. The Potsdam objective was to slash Germany's heavy industrial war potential. The Germans were to live at a level "not exceeding" the European average. Potsdam specifically provided for German imports to meet "Germany's approved postwar peacetime needs." What were the approved needs? What was the average living standard? Obviously the Potsdam policy needed interpretation.

Last week U.S. Military Government experts published an "interpretation" which might well wreck the policy itself.

In a 15-page report to the Allied Control Council, owlish Professor Calvin Hoover argued: 1) a minimum German living standard equal to the European average was required (not merely allowed) by the Potsdam terms; 2) in order to maintain this standard, Germany must import food and raw materials, export industrial products; 3) Germany's industrial exports must be in the same categories (steel, chemicals) as her prewar exports. On these premises, Hoover's report first proposed an annual German steel production of 6.8 million tons, later raised this to 10 million. The British are willing to see Germany produce 11 million tons; the Russians propose 3 million. (Germany produced only 5.6 million tons in 1932, rose to a wartime peak of some 24 million.) A 10 million-ton output would require all existing steel capacity in Germany's west, and some of the destroyed plants would have to be rebuilt.

Odor in Moscow. Soviet tempers and suspicions flared. The Russians did not see why Germany's welfare should be considered first, and reparations second. They understood Potsdam to mean: take anything out of Germany you need, then worry about how much the Germans will eat and see to it that they do not eat more than the rest of Europe.

Russians noted that Economist Hoover's colleagues included: Rufus J. Wysor, ex-president of Republic Steel; Elis S. Hoglund, prewar head of G.M.'s Opel works in Germany, and their boss, A.M.G.'s Brigadier General William H. Draper Jr., former partner of Dillon, Read & Co. Sensitive Soviet noses smelled a capitalist plot to rebuild Germany as a bastion against Communist Russia.

U.S. Representative William M. Colmer and his traveling Congressional Committee aggravated the suspicion by recommending a reconstructed Germany that could be "a factor in America's world trade."

Edwin W. Pauley, President Truman's representative on the Allied Reparations Commission, called the 10 million-ton steel proposal "ridiculous," spoke darkly of revived German cartels. The crucial question: did the Hoover report represent the official U.S. position?

Eisenhower, speaking in Frankfurt, had the answer: no. He criticized critics who seized on a single, unofficial report and "accepted it as policy." Said he: "I would not stay here for five minutes if I thought that for expediency it would be up to me to modify the Potsdam Agreement. . . . I say let Germany find out what it means to start a war."

U.S. public opinion, still confused, was somewhat soothed. But the week's give & take had made it all too clear that Berlin, until lately one place where Big Power relations were good, had become a focal point of international bad temper.

*For news of the General in lighter vein, see PEOPLE.

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