The Wilmington morning star., 1947-02-13
Lesson In
Naturalization
By CHARLES H. HARGROVE

BY CHARLES H. HARGROVE
PARIS The other day there was offered
to the public by the government a document
entitled, ''1nvenlory Of the FINANCIAL eltua-
ZION l913-l946.' Its purpose was to clear up the
mystery of the national finances show why.
they have fallen INTO confusion and now VIDE
spread and deep the confusion IS.
But the inventory does more than spotlight
the confusion in the national accounts. II is
also an amazing revelation OF the multi
farious activities of the state. Before the 1lrst
world war its business role was limited 10 the
management of mail and wire communications
and the supplying and distribution OF tobacco.
which was d state monopoly
Between the Two world wars the state
branched out in many directions as producer,
distributor and carrier. II undertook me eX-
ploitation of the potash mines which iell INTO
its hands with the recovery OF Alsace. IL De-
came interested il the oil fields OF the Middle
East. When the French Line was threatened
with financial collapse, the state began 10 play
an active role in merchant shipping. MOI long
before the second world war broke out 1t &C
uuireu ownership of various plants Tor the con-
structlon OF military planes. and at the Same
time It financed the development OF CONNER
cial aviation. 1t set up sclentltlc research IN
~stitutes Of many kinds and financed colonial
development schemes. Finally it assumed own
ership and operation OF the entire french rail-
road system.
During the second world war state activities
were exttnoed to control OF imports, exports,
production and distribution. After the liberia
ton the government invaded the field Ct prl-
vate enterprise with giant strides. In purSu-
ance of a policy of Matchmaking key indus
tries, government became owner OF Inc ma
tons coal fields. all its large branch BANKING
institutions as we'll as the central bank, all
big insul ance companies and the entire sys-
1870 e -l,,+; ,nl liStrlhl1tinn of cleo
tricity and gas.
Furthermore It's inheritance of German in
terests in the French dye corporations gives
the stale a leading role in the chemical mous-
try. 1t is also d shareholder IN a great Varle-
tv of enterprises which issued stock to II IN
payment of me levy on wartime increase Oh
wealth. II owns and operates South American
cables ana also the biggest automoolle-Ilanu'
featuring plant in France.~Renault. because he
nault was aoJudged guilty of collaboration with
the enemy. 1t has assumed a dominating posi-
ton in the motion picture field. and. as be-
fore the war, it has its own publclly ana
news gathering and distributing organizations
All this is shown IN the inventorv's 6l PAGES
What is also shown there is that the state IS
finding il difficult to digest all that 1t mas
swallowed. IT is significant that none nj the
three major political parties which backed the
naturalization program talks about more ma
lamentations. The nationa1i7ed concerns tend
10 rtn at a loss and become a burden On the
treasury. Only the other day one OF the state
airplane construction corporations demanded a
loan of 600 million francs to save 1t from H.
solvency. The operation of the coal flelds mas
piled up a considerable deficit. In general.
however, there has been no publicity about
the working of the state corporation. Only
one. Renault. has produced a report so lar.
Finance Minister Schuman, to whom the in
ventory is due, makes it the occasion for point
ing out that several problems arise where the
state wholly or partially owns Industrial or
commercial enterprises. One is how they are
to raise capital for current operations or re-
neWals and improvements, especially where
they are working at a loss. Another is how to
obtain efficient directors and managers with
due representation OF the state, the workers
and the consumers or general public. A third
is how to secure some uniformity in their
working and accounting and regular publica-
ton of their results.
There are still other problems. For instance,
in a state corporation the wages are apt to
be much higher than those paid in the regu-
lar civil service, and this makes the civil serv-
ice disconnected. On the other hand, the state S
industrial employees expect the same 9uaran-
tees DIS to promotion. stability of employment.
etc.. as those enjoyed by the civil servants.
Furthermore the Minister notes that in a
period of scarcity like the present. national
industrial plants outbid private plants for ma
terial needed for their activities and sometimes
entice workers away from private plants by
offering better wages. Their manage
ments don't keep the same eye On expenses
as those OF private plants, and the result is
that the treasury finds operating costs rising
unduly. At the same time it loses revenue
from taxation where national factories make
little or no profits.
But the Minister'S most significant remark
concerns the danger of diminution OF d.sap.
pearance of a sense Of responsibility on the
part of the arrangements of nationallzed con-
Germs. He suggests that regard for the national
interest should not exclude the working at a
profit of French nationalized OF seml-natlon-
allied undertakings. He wants to see me ma,
tons new industrial and commercial assets
I exploited on a business basis.
l For anybody who reads between me lines
it is easy to see how putting the state into
industry is one thing on paper ana ahorher in
practice. Something has to replace tne profit
motive Mathematical miners nave somehow go
Y to be mad to realize that cheap coa' is as
O vital to the nation as high vases are vita
. to themselves. Nationali7ed bankers nave 90
to forget that the treasury is not mere mpl,
to cover losses incurred by their oanks.-Wal