The Price to Pay

The Crimea Conference's stern decision on German reparations--to exact payment in kind--had left the U.S. people waiting for a more detailed picture of official U.S. policy. Last week, although there was still no detailed statement of policy, they got a strong hint that Franklin Roosevelt was minded to go along with the Russians and, presumably, the British, in demanding a strict accounting for German destruction in Europe.

The President had turned the problem over to two of his sharpest troubleshooters.

Secretary of State Edward R. Stettinius Jr. appointed small, sharp-eyed Dr. Isador Lubin, White House factfinder and economic adviser, to represent the U.S. on the Reparations Commission. This week Dr. Lubin was preparing for a trip to Moscow, where the Commission will sit. At the same time, Elder Statesman Bernard M. Baruch was expected in London to explore Germany's postwar economics, talk with Winston Churchill about what should be exacted from Germany.

Washington knew that 75-year-old Bernard Baruch favored a stern peace for Germany, although short of Henry Morgenthau's reported plan to eliminate German industry. Baruch was for a long occupation of the Reich and stripping down all German war industries.

Isador Lubin, who recently toured occupied areas in Germany, was known to favor a strict settlement by which Germany would pay heavily in raw materials and even food.

The Envoys. Tall, white-haired "Bernie" Baruch, veteran adviser to Presidents, is no stranger to the heady reparations problem. As an adviser on reparations, he went with Woodrow Wilson to the Versailles Peace Conference, jousted with Clemenceau and Lloyd George.

He was against reparations to the extent imposed at Versailles because he was sure Germany could never pay and that the economic burden would breed another war. By Washington account, Elder Statesman Baruch will join this time in the proposition that if reparations are heavy enough, Germany will never be able to go to war again.

Greying, 49-year-old Dr. Lubin, who has an intimate knowledge of White House operations, also has experience in world economics. In 1918 he was economic expert for the U.S. Food Administration; he held the same post the following year with the U.S. War Industries Board. Since 1933, when he went into the Roosevelt administration as Commissioner of the Bureau of Labor Statistics, he has been busy as a New Deal figure-man and statistical expert.

When the war started, he was borrowed by the White House and officially titled chief of the statistical and analysis division of the Munitions Assignment Board. His real assignment: solution of all manner of war problems dumped on his desk by Franklin Roosevelt and Harry Hopkins.

The Policy. While neither of Franklin Roosevelt's envoys had anything to say last week, the general outlines of U.S. reparations policy had begun to take form. To Washington insiders it seemed clear that proponents of the Morgenthau plan for Germany, rather than having lost everything at Yalta, had won at least half a victory. It was also clear that the final reparations plan would depend largely on the extent of destruction inside Germany. Stemming from that point, Washington thinking was running along these lines:

P: Germany should be made to pay heavily from her vast stores of raw materials-- coal, potash (badly needed to fertilize Europe's wasted farmlands), timber, etc; she should also pay with some of her food.

P: Neither the U.S. nor Britain is minded to invest money to help Germany restore her smashed-up industrial plants; these would have to be repaired by the German people themselves, living on standards probably below even what they maintained during the war.

P: Germany should be made, it was thought in Washington, to return the machinery and facilities she has stolen from the ravaged countries of Europe, and she should be left, in her period of recovery, to find her own markets as best she can.

Finally, Washington knew that no U.S. official now was thinking in terms of a strong, centralized Germany again. U.S. official opinion, forming gradually, was moving along a strong policy line. Germany would have to face her debts, pay them in kind--and in full.

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