Evening star., 1948-10-14
German Repurutions

The mucn-oebaCed problem or German
reparations has again been emphasized by
the brief trip to Paris and London of Paul
G.. Hoffman, Economic Cooperation Ad-
miniStrator. It Is understood that MIR.
Hoffman made this quick transatlantic
flight to hold first-hand conferences with
the French and British Foreign Ministers
on the best way to iron out Emergencies of
viewpoint on the subject. AS matters
stand, our Government favors a reduction
of the reparations program, whereas the
British and French desire it to be main
tanned, at least in principle. The practical
aspects of this issue are far-reaching. They
involve the whole problem of European
recovery and American aid in that
endeavor.
Altered concepts regarding German rep
arations reflect the profound changes in
the attitudes and policies of the victorious
great powers since the close of the late
war. The original idea was to make de-
feated Germany indemnify the victims of
its aggression more efficiently than after
its defeat in World War l. At Versailles,
Germany was assessed bill for damages
expressed in terms of money. This bill
was not only far in excess of Germany's
ability to pay but ran into insurmountable
difficulties of exchange and transfers. The
result was German bankruptcy with rela-
lively slight material gains for its creditors.
Mindful of that melancholy precedent,
the victors in World War II determined
that Germany should pay this time in
tangibles, especially industrial plants and
machinery, which should be dismantled
and shipped abroad ON a predetermined
basis. Originally, the victors were agreed
that Germany's industrial stature should
be much reduced, which left wide margin
for reparations out Of its vast industrial
structure. But a number of factors soon
entered the picture which worked against
the carrying out of the full program.
Russia and Poland unilaterally seized Ger
many's eastern provinces, including the
great industrial center of Silesia. Also,
they and other eastern countries expelled
many millions Of Germans to the shrunken
Reich. Again, Russia exploited its zone
of occupation without consulting its West
ern allies, though claiming share OF
reparations from the western zones. All
this, together with Russias refusal to live
up to the Potsdam agreement for treating
occupied Germany as an economic unit,
paralyzed Germany's industrial life, reduc-
ing Europe's former industrial heart to
the depths of depression which, in turn,
crippled economic recovery in all Ger
many's neighbors.
This became increasingly important to
America when we assumed the burden,
first of maintaining our own zone, then
part of the British zone, and finally of
aiding all Western Europe under ERP. It
Is the American contention that a reduce
ton OF transfers Of productive equipment
from Germany is needed II Germany Is
to be put on a viable economic basis and
the recovery of Western Europe is not to
be gravely hampered.
France and Britain dissent from this
contention, though for somewhat different
reasons. French opposition Is the stronger,
France fearing any notable revival of Ger
man heavy industry. It is to be antici-
pated, therefore, that Britain may be more
amenable. Yet the issue requires con-
structive handling, consistent with our
interest as the country carrying the bulk
of the load.