Hot Spot

Rumania continued last week to occupy the hottest neutral spot in Europe as Germany and the Allies continued to high-pressure her over oil. A Rumanian statesman once said, "Better give them oil than blood." But by last week Rumanian statesmen almost wished Rumania had no oil. It was beginning to smell of blood.

In London, Rumania's Minister, Dr. Viorel Virgil Tilea, called on Lord Halifax at the Foreign Office to try to answer two searching British questions: 1) Was Rumania planning to increase the oil quota for Germany which Britain thought reasonable when, with France, she guaranteed Rumania's borders? 2) If so, was Rumania planning to force oil companies financed by Allied money to provide this added supply?

Evidently Minister Tilea's replies were reassuring, for presently it was reported that Lord Halifax's Government had lifted its ban, suddenly applied earlier in the week, upon shipments of war materials to Rumania. Such a ban, plus cash money, plus their promise to protect Rumania, are the Allies' most potent weapons against their Rumanian oil antagonist, Dr. Karl Claudius, economic field marshal for Adolf Hitler. Last week Dr. Claudius was coaxing Italy to give up part of her contracted share (hitherto 15%) in Rumania's oil output so that Germany might have it. At the same time Italy asked Rumania to increase her share 30%. Out of 130,000 tons Germany was supposed to get in January, she got only 30,000 tons. Full fury of the oil war is reflected in prices, which now stand around $44 a ton as against $18 for U. S. oil, $17 for Rumanian before the war.

The position Rumania is trying to assume on oil is one of complete neutrality and self-interest. Professor Gheron Netta, the new oil "dictator," explains to both sides that, with Rumanian production falling off (from 8,700,000 tons in 1936 to 6,200,000 tons last year), his country needs more of her total output for her own army and industry. Since 90% of production is foreign-owned, obviously some of their output must be commandeered to supply the Rumanian state, and this was provided for legally in a statute of 1924 placing all oil at the Government's call in an emergency. Allied suspicion is that Professor Netta means to meet his German commitments out of the Government's reserves thus augmented.

Elsewhere on the economic front last week, other developments in the great war-behind-the-war were visible:

>Russian workmen were working fast to move one rail 3 1/2 inches outward on each of nine roadbeds across the east of old Poland, to make them wide enough for Russian rolling stock bringing supplies to Germany. (Standard gauge was kept on the line from Przemysl through Lwow down to Cernauti, Rumania, over which oil reaches Germany, now under German guard.)

> Prime Minister Chamberlain successfully resisted an effort in Parliament to set up a superministry of War Economics under a dictatorship like Hermann Goering's in Germany. Mr. Chamberlain said he would not like to subordinate his Chancellor of the Exchequer to any other official, and besides, such an economic dictatorship would leave the Prime Minister little to do. Instead of a Goering he named a consultative council of financial and industrial leaders under Sir Andrew Rae Duncan, new President of the Board of Trade. Prime object: to increase British exports to -L-600,000,000 a year (up 37%, from 1939).

>Because their Government is now buying Turkish and Greek tobacco, instead of U. S., to increase its popularity in the Balkans, the British public is now urged to buy and like such cigaret brands as Balkan Soubraine, Sunripe, Spinet, Benson & Hedges. It is proposed that retail prices for Turkish cigarets be pushed down from $2.50 per hundred to half that. In the last war, when the Eastern supply was cut off, everybody was supposed to switch to Virginia and Carolina tobacco.

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