Europe

THE ATLANTIC REPORT

ON THE WORLD TODAY

IN the writing of the German peace treaty every nation in Europe is aware that its future, its safety, its economic well-being, and the destiny of the Continent are involved. Sharp debates are raging about proposals for general European federation, or the Churchill plan for a Western bloc, or the scheme for economic reconstruction which the Economic and Social Council of the United Nations has under discussion.

The German settlement will also affect the future of nations outside Europe. As the Allies approach their task, they are setting the scenery, establishing the psychological atmosphere, and fixing the mood for the final treaty-making with Tokyo.

In drafting the satellite treaties, former Secretary of State Byrnes could count heavily upon periodic support from most states outside the orbit of Russian influence. He could demonstrate majorities again and again for his point of view. But now the smaller Allies are bringing pressure for the right to share directly in the formulation of the treaty with Germany.

It was possible on occasion to ignore the demands of the smaller Allies in the making of treaties for Germany’s satellites. But it will be impossible to ignore such demands as Holland and Belgium put forth now. Close, friendly relations with the Low Countries is a tradition in British foreign policy. To alienate these Continental states by denying them concessions they deem essential to survival would cripple British influence in Europe.

What shall we do with Germany?

The smaller Allies are firmly opposed to the reestablishment of an industrially powerful Germany — an objective which seems to dominate the diplomatic thinking of both Washington and London. What the French think is shown by the violence of their reaction against any plan to organize Europe around a regenerated German industrial state.

Experience and time appear to have tempered Russia’s earlier ideas about a federal Germany. But it is still too early to conclude that she has abandoned her original aim of strongly centralized political and economic power within the new Reich. The great powers have to decide the degree to which a federal Germany shall be integrated. Shall it be fully integrated, as the Russian plan would have it, or shall the new Germany be an extremely loosejointed affair, as the French insist?

The answer to that question may decide several other matters, such as Germany’s eventual industrial strength, the question of making reparations payments from production, and the new Reich’s relationship to the rest of Europe.

Winston Churchill’s scheme for organizing a Western bloc against the Soviet Union and calling it a “United States of Europe" has run into strong opposition. Rejected by the alert French, who see in it a proposal to subordinate their security and bitter experience to the imperatives of Mr. Churchill’s conception of power politics, it is equally outlawed by the British Labor Executive, which pronounces it a plan for drawing up sides for another war. Furthermore, Russia and every nation bordering Russia would shy away from it. This would subtract Poland, Czechoslovakia, and much of the Balkans.

Equally dubious is the proposal to organize merely the Western European nations in a group that would include a restored Germany. These nations, even including Holland, which depends upon a prosperous German hinterland for its own economic health, see in this scheme a new threat of eventual German domination.

Germany’s poor relation

Despite inevitable squabbling over some aspects of the Austrian treaty, the Big Four should accomplish this part of their task with reasonable dispatch. Wartime agreements among Russia, the United States, and Great Britain paved the way for this treaty, when Austria’s special status as an involuntary victim of German power was recognized. Austria’s “liberation” was pledged, foreshadowing her reappearance on the European scene as an independent sovereignty. There is little excuse for dawdling over execution of these pledges.

The one dangerous issue, represented by new possibilities of an Austrian merger with the German nation, seems to have been settled more definitely than ever because of ill-advised suggestions put forth by Dr. Kurt Schumacher, leader of the German Social Democrats in the British zone, when he visited London last fall. The implications of his remark that the problem of Anschluss is still open have elicited a series of blasts from every Allied capital on the Continent. As a result, the Austrian treaty will carry a specific ban on any future move toward an Austro-German union.

It is well to remember that a similar provision was written into the peace treaties following World War I. The breakdown of that ban was one of the earliest moves of Hitler in his march to power in Europe. If the stricture against a new Anschluss is to stand the test of time, the Allies will have to help Austria achieve a sound economy.

Any attempt to aid Austrian economy will affect Italy, Hungary, Bulgaria, and Rumania. Austria’s economic relations with Yugoslavia are a matter of transcendent importance to that country. So is the Allied agreement governing Danubian traffic.

Austria’s strategic position makes her the key to the whole Balkan area from the west. How important this aspect of the Austrian problem is may be judged from the clause in the new Hungarian treaty, which authorizes Russia to maintain troops in Hungary, regardless of the ninety-day limit for withdrawal of occupational forces. The Russian Army proposes to maintain military communications with its forces in Austria until a final settlement is agreed upon. This implies, also, a line of Russian troops extending from Hungary back to the Russian frontier.

In the negotiation of the Austrian treaty, Russia accordingly holds a trump. A settlement which provides for evacuation of Austria by the four occupying powers becomes a matter of great urgency for the British, the Americans, and the French. It means not only Russian retirement from Austria, but also the withdrawal of the Russian Army across the whole stretch of Southern Europe.

Nazi renaissance

Truculence, self-pity, a swelling sense of superiority, outspoken contempt for the victors, and growing determination to outwit them — these are characteristics of the present German mood. A report of the International Committee for Study of European Questions, compiled after months of investigation in Germany, warns bluntly that efforts to inculcate democratic principles have made little headway, that the tides of German nationalism are once more on the make, and that the underground network of a renascent Nazism is growing rapidly.

This movement is not limited to occupied Germany. It has spread across Europe and into Latin America, amply buttressed with financial resources and staffed by skilled Nazi agents. Veteran British and American correspondents bear out these facts.

Throughout Western Germany the ranks of the agitators for the doctrine of the Herrenvolk have been augmented by the return of young German prisoners of war, by amnestied officers, and by the impact of inflation upon the populace. The inflation provides an excellent talking point for agents of the underground cadres. Some 2,000,000,000 marks were printed by the British for the whole occupation period. Money in circulation was supposed to be limited to 219,000,000 marks, for the three Western zones; but the circulation has got out of hand.

The financial controls instituted to keep German economy in order are limited to a relatively small number of consumer items. As a result, manufactured articles which are not subject to controls are soaring in price. This situation is made worse by a system of “underground industry” set up by the resourceful Germans, which accounts, according to the London Times, for nearly 30 per cent of all production in Western Germany.

To evade Military Government restrictions, these industries — as well as most industries operating under official controls — keep two sets of books: one for the MG officials, the other carrying the real record of production. Defiance in the economic realm is further illustrated by the problem of absenteeism among workers, involving close to 25 per cent of the potential working force.

Coached by the Nazi underground, the farmers have left large areas of arable land fallow, and withhold their harvests. This increases the pressure of hunger in the industrial centers. It is partly responsible for food shortages, which are made up by imports from the United States. The aim is to make occupation unworkable and costly.

Abrupt shifts and reversals of policy which mark the course of the military governments in Western Germany also aid the Nazi revival. Last October, Prime Minister Ernest Bevin announced plans for the nationalization of basic German industries in the British zone: coal, steel, chemicals, and engineering. What has happened to that policy? Coal and steel are under Allied control, but their actual nationalization has not taken place. Chemical and engineering industries remain untouched.

The merger of the British and American zones in January appears to have dropped a new monkey wrench into Mr. Bevin’s program. Dr. Schumacher has declared that the delays were attributable to the fact that the new Economic Executive Council, which would deal with problems of nationalization in the Anglo-American zone, has been loaded with stooges for the German industrial barons.

Last autumn the British announced a program for breaking up the large landed estates owned by the Junkers. The objectives were, first, to uproot Junker influence, and second, to speed up agricultural production in the British zone. Nothing has been done to implement this policy, and the Junkers continue to hold their properties under custodians appointed by the Military Government.

In January, a Military Government listing of plants for dismantling showed 444 in the British zone, 167 in the American zone, and 56 in the French zone — according to the Manchester Guardian. Only a fraction of this assignment has been carried out in the British zone. The Americans announce that theirs will be completed in July. France has done little, and the Russians, having exceeded all reasonable limits, are now compelled to rehabilitate a part of what they carried off.

Germany resists denazification

That the denazification program is a failure in Western Germany is now indisputable. It has broken down partly because of the sheer inability of the occupying forces to handle it, but chiefly because the majority of the German people themselves refuse to support it. Notorious supporters of Hitler, including men who helped to finance his rise to power, like Dr. Hugenberg of Stahlhelm fame, occupy key posts in German industry.

The attitude of the rank and file of German officials operating under the provincial regimes is illustrated by the reception given this winter to some 1500 prisoners of war returning from England. These young Germans had been carefully screened. They were considered promising champions of the democratic idea by British authorities, and had been given long training and indoctrination.

Upon their arrival at a dispersal camp in Bavaria they were warned by German camp guards that their records were known, and that they would receive short shrift if they attempted to discuss democratic ideas in Bavaria. As a foretaste of what they might expect, many were badly beaten up by other Germans. This incident, which received much attention in the British press, obtained little across the Atlantic.

On January 1 there were still some 3,000,000 cases of alleged Nazism in the American zone. Charges had been filed against only 220,000. In innumerable instances, the judges and prosecutors of the German courts themselves have Nazi records. Daily bombardments of threatening letters from the Nazi underground moderate the zeal of court officials.

An identical epistolary method of pressure is employed against German-language editors and radio spokesmen. The hostility of the German press toward the British in their zone since January has startled even the conservative press in England.

Will Germany refuse to sign?

Coupled with the campaign of intimidation against officials holding provincial offices is the implicit threat conveyed by the Germans to the Allied deputies working on the peace treaty at London. The warning is that no central German government will sign a peace treaty, because those who sign will be assassinated. Here is a direct repetition of the tactics employed by the notorious Feme following World War I under the Weimar Republic. The proposal is to substitute a “statute” for a peace treaty imposed by the victors.

The majority of the Allied deputies have rejected this scheme as an obvious endeavor to set up an alibi useful to German nationalism in the future. This rebuff has not prevented Dr. Schumacher from demanding that the Allies “admit their war guilt,”and from issuing still another warning that Germany will refuse to sign a treaty she dislikes.

German notables, lay and clerical, all representing the best German nationalist tradition, have begun to flit across the Atlantic to soften up American public opinion as a preliminary to the peacemaking. Simultaneously, a letter-writing campaign has been inaugurated — also addressed to American attention. This propaganda stresses the favorite theme of Hitler: solidarity for a coming war with Russia. Pre-Munich strategy, which proved so useful with Neville Chamberlain, has been streamlined. But it is the same strategy still.