ECONOMICS: Corrective Lurch

The 16 Marshall Plan nations (plus Western Germany) are charged not only with building the framework of European cooperation but with allocations of U.S. help among themselves. If they had shown themselves unable to cope with the problem, the Marshall Plan would have bean in extremely grave peril. In Paris last week, with a sort of corrective lurch like that of a man who slips and regains his balance on an icy sidewalk, the negotiators reached agreement on allocations.

There was some resentment among some Europeans because the U.S. had been called on to intervene. But “Robert Marjolin, secretary general of the OEEC (Organization for European Economic Cooperation), happily burbled: “No one can underestimate the magnitude of this accord.”

The toughest question had been the share of Bizonia (the merged U.S. and British zones of Germany). The first figure arrived at by OEEC was $364 million, less $90 million in export contributions to Europe, leaving a net of $274 million. General Lucius Clay, who considers Western Germany all-important to European recovery, angrily decided that the figure was too low, that Bizonia was being treated as OEEC’s ugly duckling. Lawrence Wilkinson, Clay’s man in Paris, flatly refused to ratify the draft agreement.

The other nations then called for help to W. Averell Harriman, the Marshall Plan’s top man in Europe, who in any case was getting frantic wigwags from EDAdministrator Paul Hoffman in the U.S. Harriman visited the top economic brass in Brussels and London, and finally persuaded Lucius Clay that German-needs, however important, must be subordinated to the interests of the whole. Clearly, however, the first OEEC figure would have to be raised. The final figure agreed on for Bizonia was $414 million, less $10 million in contributed exports.*

With its prestige secure, the Marshall Plan forged ahead. In France and most other OEEC countries (notably excepting Italy and Greece), the end of the “dole” phase was in sight and the productive phase had begun in earnest. Western Germany was smiling and flexing its muscles as a result of strengthened currency and tempting food to buy with it—Italian tomatoes, Mexican canned beef, Portuguese beans, U.S. lard. Production was up 20% in the last two months; Ruhr iron & steel set postwar records. In Frankfurt, a mechanic named Johann Schaeffer broke his three-year habit of saying “schreck-lich” (frightful) when anyone asked him how things were going. Last week Johann was saying: “Today, yes, we can count ourselves fortunate.”

*Chief other allocations: Britain, $1,263,000,000; France $989,000,000; Italy, $601,000,000.