Evening star., 1945-12-09
German Economic Future
Presses for Clarification
Russia, Britain, France and u. S. All Hold
Differing Views on Proper Interpretation
of Potsdam Declaration
By Joseph Hanlon

0y JOSef
1t Is becoming increasingly evident
that there must soon be a Qualification
OF just what the United States and the
other Allied powers propose to do with
Germany-what level of economic life
is contemplated under the Potsdam dec
laratio ion, which laid down only the
broad outline.
The Potsdam declaration has come to
mean one thing to Russia, another to
Great Britain, another to the United
States and still something else to France,
which was not one of the signatories.
The Potsdam declaration contem-
plates the elimination or control of all
German industry which could be used
for military production. 1t specifies
the elimination of all arms, ammuni-
ton, implements of war, sea-going
ships, aircraft and facilities for their
maintenance or production
But production Of metals, chemicals
machinery and other items that are
directly necessary to a war economy"
are to be ''rigidly controlled elm
mated. Imports are to be reduced" and
excess productive capacity removed"
Chance for Disagreement.
1t is here, on the question of what
is to be removed" and what is to be
controlled" that prolific sources of dis
agreement have arisen among the four
Allies, and within the American group
itself. Control involves the matter of
deciding what German plants are to be
permitted to resume production, and to
what extent. Only the most general
guide for determination of these ques-
tions is contained in the Potsdam dec
laration. One of the control criteria,
for instance, sets up the objective of an
equitable distribution of essential COM
modities between the several occupation
zones, so as to produce a balanced
economy throughout Germany and re-
duce the need for imports.
In practice it is easy to see how diff
ferences of opinion may arise among
honest men over how much of what is
essential at what level the German
economy is to be balanced and how
far imports, and therefore exports, are
to be reduced.
In the broadest sense the division
probably finds on one side advocates
of hard" peace, and on the other pro-
ponents OF soft" peace, although this
oversimplifles the question.
On that basis, however, the Russians
are the hard" peace exponents and
seem to have proceeded ruthlessly to
remove or destroy German industry in
their zone of occupation. The British
are at the other extreme, tending toward
a relatively lenient treatment of the
defeated enemy. The American group,
divided among itself as it is, falls some
where between these extremes, and the
French have plan of their own-inter-
naturalization Of the Ruhr and the
Rhineland, where most of Germany s
industrial potention is concentrated.
Holds Foreign Trade Essential.
The uncertainty in the American
group is well illustrated by the So
called Draper-Hoover report, which 1t.
Gen. Lucius D. Clay said, on a recent
visit to Washington, had been submitted
to our Allies for consideration of "prin-
ciples and methods" In nutshell, that
report, not yet adopted as policy, holds
that the Potsdam formula won't work
that Germany must have an export
trade about equal to that which she had
before ch &c TO
minimum standard of living and meet
the costs of Allied occupation.
The group which prepared that report
was headed by Calvin Hoover, Duke
University economist who was until
recently economic adviser to Brig. Gen.
William H. Draper, chief of the eco
nomics division Of the United States
Group Control Council Gen. Draper
was formerly member of the New
York investment firm, Dillon, Read g.
Co., which, after the first World War,
participated in financing rebuilding of
the German steel industry. Among
members of Hoover's committee were
Col. Maurice r. Scharff, in civilian life
utilities engineer; Rufus J.. Wysor
former president of the Republic Steel
Corp, and Peter Hoaglund, who before
the war headed General Motors Corp. S
Opel works in Germany.
Those within the American group
who lean toward the Russian or hard
peace view are apprehensive about the
presence Of such men as these in high
places in the American Group Control
Council. Some, in both civilian and mill
tary branches of government, who have
returned to Washington in recent weeks,
have discussed the situation with this
writer and while unwilling to speak for
publication have expressed alarm about
the influence exerted by Americans as
sociated with big" industry, particu-
larly industries which have German
investments.
The subcommittee of the Senate Mil
itary Affairs Committee, headed by
Senator Harley M. Kilgore, Democrat
OF West Virginia, which has been inves-
tigating means of eliminating German
resources for war, intends to reopen its
hearings soon and take up the question
OF what part Americans with German
financial and industrial interests have
had In carrying out the Potsdam agree
ment.
$420, ,60O, 900 Invested.
The Kilgore committee has received
information that III American firms
have investments totaling $420, SOC, 900
In 27S German enterprises. Conversely,
German industrialists, seeking safe
haven for their funds, have sent in
vestments abroad. the amount OF which