Evening star., 1945-09-02
Controls on Economics
Alone Are insufficient

TuOu1C NIC CIIISuIIISISUV
Military and Political Steps Must
Also Be Taken
By Raymond Moley.
Second thoughts on the conditions
imposed on Germany ought to provide
| better formula for pacifying Japan.
For we have already learned enough in
Europe to suggest what can and what
cannot be done in keeping q country
| industrially harmless.
We are learning, once more, what we
should have known in the 20 years of
blunders before 1885, Economic sanctions
are useless In coercing a nation over a
| period of time French, British and
American policies toward Germany in
the 20s merely drove that country
into hot, resentful and, finally, malig-
nant unity. The non-Axis countries
failed in their efforts to suppress Mus
solini through economic pressure The
efforts Of the United States to stop
japanese imperialism by economic meas
ures were like nothing so much as stick
| 4AAS boIy PAAio lllCO d ldLtlESIldkc.
In the period from 1919 to 1928, the
Control Commission for the Disar-
mament OF Germany faced some of the
problems now before the Allies. That
commission, backed by rapidly cooling
public opinion in Allied countries,
decided that to enforce the letter of the
treaty would reduce Germany to the
level OF devastated country Hence, it
spared every factory which had been
converted to peace production. And, as
Brig Gen. J. H. Morgan, British rep
resentative on the commission, saws,
The result was that Germany was left
with every lathe that ever turned
shell"
The overall picture now, of course, Is
| quite different. There will be no snug
| Cling of arms, as there was then. The
industrial plant is devastated In the
| Russian zone it has been carried away
to Russia and Poland In the West it
is badly battered by bombing. Under
| the Potsdam plan the Allies, not the
Germans, will do the disarming. And
occupation will be general and lasting.
| But number of hard facts emerge
from the Potsdam conditions, which
ought to dampen our enthusiasm for
economic controls.
In the current issue of Barrons. DR..
julius Hirsch points out the "unexpect-
ed" consequences of Potsdam. Dr. Hirsch
is an American citizen who occupied
many governmental and university posts
In Germany prior to the rise of Hitler,
and whose knowledge of German
economics is profound and detailed.
DR.. Hirsch says that Germany's total
industrial assets in 1885 were worth less
than $4,000 900 900. There were addi-
tions to this in war years, but there
have been subtractions, too. It can be
assumed that, considering the size and
population OF Germany, three quarters
of what remains there will be needed
for the peacetime production promised
at Potsdam. The amount taken away
for reparations in the West will not be
more than very few billions.
The Russians, meanwhile, have strip
ped the eastern zone. That means that
President Truman's figure of s1o,o0o,-
100000 in reparations in kind from the
western zones of occupation is very
much too high.
DR.. Hirsch further predicts that the
United States will have to contribute
$500 10000 or more in food for some
years. Ultimately, he says, Germany
will build up, through agricultural de-
velopment, complete -sufhciency and
an ''ersatz" economy.
AS final result, Germany's potential
for war will not disappear but reappear
and increase through the years. And
our contribution to this will be more
than all the reparations we can exact.
The lesson of all this is not the mel
ancholy conclusion that another war
is inevitable. 1t is that we cannot buy
insurance through economic methods.
The necessities of peaceful economy,
the changing character of what raw
materials are essential because of pro-
gress in chemistry. the simple fact that
an inventive people, in relatively short
time, can build an industrial system
from the humble beginnings of single
lathe make all preparations now in
the economic field wholly inadequate
for control
Real insurance against future wars
must be political and military. We must
avoid, as far as possible, rivalries and
distrust among the victorious nations
We must build up the organization Of
the United Nations with all speed. We
must put teeth in the provisions under
the Charter which look to the easing of
small frictions that may grow into big
wars. And, meanwhile, we must main
tain among the so-called "peace-loving"
nations actual military power, with all
the scientific improvements that human
ingenuity can devise. Let us not be put
to sleep again by the sedative theory Of
economic controls.
Our course with Japan must be
guided by the same principles. Japan's
weak economic system must not lead
us to believe that mere control of raw
materials will suffice. Peace in eastern
Asia depends on vigilance and unity
among the four dominant powers there.
The Sino-Soviet Treaty is a good start.
The maintenance of American naval
power with adequate bases will help.
And international determination to pre-
vent war must grow with the years.