Paris

on the World Today

WHILE the Foreign Ministers and their delegations were gathering in Paris for a Four-Power Conference which optimists hoped would bring about, significant changes in the present political structure of Germany, little seemed to have changed in the various European capitals to warrant such hopes. Moscow was as belligerently anti-Western as ever. Pravda gave prominence to an article by Marshal Sokolovsky, recently returned from Berlin, denouncing the Western powers, while the movie theaters of the capital were showing a new film on the Battle of Stalingrad, in which the Western Allies were represented as delaying the war effort, and Churchill and Harrtman portrayed as anti-Russian conspirators.

In Berlin the railroad strike virtually renewed the blockade, after barely two weeks of peace and plenty which had seen the cafés and foodshops of the metropolis blossom out with a fabulous assortment of vegetables and fruits, oranges, lemons, smoked salmon and other fish, éclairs, pastries, chocolates, coffee with cream, and liqueurs.

And in Vienna, on the eve of the Conference, Foreign Minister Karl Gruber delivered what was, even for him, an unusually forthright speech. If the Foreign Ministers could not come to an agreement on the Austrian problem, he warned, Austria would take matters into its own hands, refuse to pay any further occupation costs, organize an army to defend its national territory, and request the occupying forces to leave Austria or be haled before the United Nations as aggressors.

The affable Vishinsky

In Paris, however, everything—at least on the surface—was rosy. To many Parisians there seemed to be something symbolically reassuring in the site chosen for the meetings: the Palace of Pink Marble, owned by the Duchesse de Talleyrand, the American wife of a descendant of the great French diplomat.

To almost everyone’s surprise, Andrei Vishinsky distinguished himself at the start of the Conference by an extraordinary, almost suspicious affability. The “Battle of the Order of the Day” was decided in little over two hours, almost a record for a Foreign Ministers Conference. It was agreed to discuss the problems of German unification, Berlin, a German peace treaty, and an Austrian peace treaty in that order.

There were no fulminations against the Western powers. For once, Vishinsky seemed to have come to negotiate, not to propagandize, He proposed that the Four Powers return to the quadripartite rule of the Potsdam decisions. He was obviously not out to win German favor, as he has so often tried to do before, by demagogic proposals. But his offer was nonetheless unacceptable.

Before deciding to resume quadripartite rule, the Foreign Ministers must agree on what kind of Germany the Four Powers are to control. As Robert Schuman remarked, one can’t build the roof before one builds the house. But on this point, East and West are as far apart as ever. The Western powers are determined to uphold the Bonn Constitution in their zones, while the Russians are equally determined to maintain the Communist grip on the Eastern zone. The inevitable result is deadlock.

The problem of Berlin did not present any better prospect of solution on the political plane for the simple reason that it is the historic, capital of Germany, and therefore a prize which neither East nor West is ready to relinquish to the other. As the Conference continued, it became more evident every day that it was utopian to believe that, the Four Powers could reach a final German or even Berlin settlement, at the present time.

Quadripartite rule has never worked in Germany, and the probability is that it never will, unless the Russians agree to give up the principle of unanimity. This they cannot afford to do, for it would serve as a precedent which would have embarrassing consequences for them in the United Nations.

Russia needs Western trade

The only possible agreement at the present, time is n temporary mod ns Vivendi, whereby trade between the Eastern and Western zones can resume its natural course. For the Russians this has become a necessity.

The Eastern zone of Germany, although Vishinsky tried to hide the truth behind a curtain of fantastic figures, is in a state of economic collapse. To cite one example, in April one quarter of the locomotives of the Eastern zone were out of action or undergoing repairs, for lack of the spare parts which must come from Western Germany. The counterblockade has ended all talk of the Communist two-year plan in the Eastern zone.

For the moment, the diplomatic initiative in the battle for Germany is indisputably with the West. Russia’s aggressive policy in Germany has been a monumental failure. The extraordinarily high antiComnumist vote in the May plebiscite in the Eastern zones has consummated the growing confusion in German Communist ranks. So desperate has the Communist position become that Walter Ulbricht, the party chief and the trusted agent of Moscow, has at last thrown all caution to the winds and announced that even Nazis will be welcomed into the party. But Russia still has a diplomatic ace in the hole — the purchasing power of Eastern Europe.

Europe needs Balkan markets

According to the calculations of Marshall Plan experts, by 1952 Western Germany should be producing 110 per cent of the level of 1936 production. The question which has not yet been answered is: Who is going to buy the sizable industrial surplus that this production is bound to create? Western Europe is already feeling the pinch of vigorous economic competition. If Germany is allowed to enter the zone of Western competitive trade unrestrained, she will end by stealing markets from her European neighbors, a situation which is certain to create a major economic crisis in Western Europe.

The easiest way for Western Germany to maintain the high level of industrial production that she must reach in order to be self-sufficient is to sell to Eastern Europe. Before the Second World War, the Balkan countries were Germany’s major customers. No one is more aware of this than Moscow.

If Russia can keep the muzzle on the industrial appetites of its satellites for another two or three years, she will find herself once again in a powerful bargaining position. For sheer economic survival Western Germany will be forced to grovel before Moscow for Eastern European trade. She will then have to meet the terms which Moscow has to offer. At such a moment Andrei Vishinsky will not be showing the affability he displayed at the beginning of the Four-Power Conference.

The iron curtain of diplomatic secrecy which descended around the Foreign Ministers during the closing sessions of the Conference kept the outcome in doubt until the very end. A last-minute request from Moscow for further precision on a minor detail of the Austrian agreement dramatically illustrated that Vishinsky throughout the Conference was no more than a Kremlin echo.

The accord, while it solved no fundamental problems, did make two distinct contributions toward future settlements. First, it specified that in Germany each occupation power is henceforth responsible for maintaining railroad, water, and telegraph communication between its zone and Berlin and between its zone and other zones. If this provision is faithfully carried out, the Russians cannot resume the blockade. Second, it further defines the basis of the Austrian treaty and makes it possible for the treaty to be drawn up in the autumn at the next round of the diplomatic boxing match.

“Great machines for losing money”

Meanwhile, on the other side of the Seine, in the Chamber of Deputies, Henri Queuille, the French Premier, has managed to find a temporary solution to problems of a more immediate nature. The trouble, as usual, was over the budget.

On May 21 the Assembly’s Financial Committee reported a budgetary deficit of 83 billion francs. It was found that military expenses were going to be 33 billion francs more, and those of the nationalized French railway system 21 billion (later amended to 27 billion) more, than had been anticipated.

To increase taxes, which have already been raised to a very high point, particularly for French industry, was clearly out of the question. French Finance Minister Maurice Petsche therefore proposed to meet the increased costs by effecting certain economies in the budgets of various governmental departments and by raising the price of gasoline. For motorists who have had priority status under rationing the price would continue to be 55 cents per gallon; for the rest it would be 73 cents.

The proposal created an uproar, both in the Assembly and in the Paris press. For some time the newspapers have been putting pressure on the government to abolish the gas rationing system which has made possible the continued flourishing of the biggest black market in France. But, for all the hullabaloo, the gasoline problem was essentially a secondary affair.

There was one man in the Chamber who was fully aware of this, He was Paul Reynaud, former Premier, admittedly one of the clearest financial heads in the Assembly. When the debates began, he brushed aside the gasoline issue, to call in quest ion the management and even the principle of nationalized industry. The nationalized industries, he said, are nothing but “great machines made for losing money.” Reductions here and there, as Petsche proposed, would not do. A complete overhaul of the nationalized French industrial structure was needed, beginning with the railroads. In fact, though he did not actually say so, Reynaud was advocating a largescale return to private enterprise.

An army of parasites

The principles involved have been debated for years. But the facts speak for themselves, and they support Reynaud’s statement that the nationalized industries have become bureaucratic, spendthrift monsters.

The French National Railroads, the largest single industry in France, employ 475,000 workers and must in addition support 325,000 ex-railway men on pension. Since 1938, technical improvements in railway equipment have made possible a reduction of 37 percent in the working personnel, but during the same period the administrative personnel has increased by 27 per cent. In 1947 the nationalized railways paid out 101 billion francs in salaries and pensions out of a total of 142 billion francs of total expenses.

Because the French railways have the lowest retirement age in all Europe (50 for the active worker, 55 for the office worker), they must pay out every year a fantastic sum for pensions. If is estimated at around 80 percent of the sum that goes to wages. Nor are the railways an exception. For the nationalized electric industry the figure has been put at 77 per cent; for the nationalized coal industry, 78 per cent.

In simple terms, this means that the French government is supporting an army of parasites. How much longer can it keep it up? Paul Reynaud is of the opinion that the time has come to shake up the whole structure of nationalized industries and social security in order to restore the French Treasury to a state of solvency. Otherwise the huge financial burden which the state is bearing will end by sinking the government.

Paul Reynaud’s opposition to the government’s budgetary proposals is dangerous for Henri Queuille because Reynaud is the spokesman for a group of independent right-of-center deputies whose support the government, must have. At the end of May, Reynaud had a private conference with Queuille, and when the budget vote came, the independents voted for it. That meant a new lease of life for the government, at least until the autumn. The government had once again solved its difficulties in the classic French parliamentary manner — by putting off until tomorrow the fundamental decisions it must take.

For the moment, strikes are rare in France. The steady improvement in the French economy, and particularly in the food sit nation, has brought with it a period of relative social and economic peace. Industrial production has passed the 1929 level, the highest ever reached before, and French agriculture has already attained the level of output foreseen for the year 1950 by the Monnet Plan. Several weeks of rain put an end to the serious spring drought and saved the crops.

The Order of the Tourist

France is also busily welcoming an army of tourists estimated at 300,000 strong. At a conference in Vichy the hotelkeepers of Franco decided to form a Society of Tourist Restaurants, including 1000 restaurants all over the counlry, offering fixed prices for different categories of meals, for the orientation of the harassed tourist.

And in official recognition of the importance of the tourist trade for France, Premier Queuille recently created a new Order of Touristic Merit for those who have faithfully served the tourist cause, with the grades of Chevalier, Officer, and Commander. The ribbon of the Order is blue with two green stripes and one red.

Two hours after the official announcement, the General Commissariat of Tourism had received fifty applications for consideration. The new Order seems likely to keep a few bureaucrats busy for at least a few months, and to give pleasure to those Frenchmen (and they are fewer and fewer) who do not already possess the Legion d’Honneur.