Choice of Weapons

In Colonel Robert R. McCormick's isolationist Chicago Tribune, the story rated a Page One banner headline. The Tribune's story: a $15 million-a-year subsidy from the Federal Government had been secretly arranged as a "reward" to a selected few U.S. newspapers, magazines, book publishers and film companies "which shouted the loudest for the 6 billion dollar Marshall Plan."

The Trib, which had shouted the loudest against the plan, accusingly ticked off a list of beneficiaries, including the New York Times and Herald Tribune, LIFE, TIME, Newsweek and Reader's Digest (all of which publish foreign editions) and the A.P., U.P. and I.N.S.

In Washington, Cissie Patterson's Times-Herald, little cousin of the Trib, picked up the story. When Mississippi's John Rankin read it, he brayed to the House that "if it is true, it certainly is an outrage and . . . Congress should investigate it, and should do it now."

Twisted Facts. It was neither true nor new, and it had already been investigated at length by Congress. Before the Tribune twisted them, the facts were these: last January Congress had approved the Smith-Mundt bill, which set up a bureau to run the Voice of America and otherwise see that the U.S. story is told abroad. The bill called for the widest use of private agencies in telling that story. The free, nongovernmental press, said Congressmen who toured Europe last summer, was the best weapon against Russia's propaganda.

Later, in approving ECA, Congress had authorized $15 million to keep this weapon in action. The money would be used to swap currencies. In selling copies to foreign customers, U.S. publications take foreign money in payment. Part of this currency is blocked; little of it can be used by publishers to pay their expenses. By trading the foreign currencies to the U.S. Government for dollars, publishers could meet their expenses. No subsidy had been asked or offered: no publisher would make a profit out of the exchange.

A typical case was that of the European edition of the Herald Tribune. Last winter, it was forced to cut its circulation in Germany to under 5,000. It was unwilling to continue piling up marks which it could not exchange for other currencies or spend in Germany. The Paris Trib could sell 50,000 more copies a day to Germans and Austrians "who are hungry for news of the U.S." But to meet this demand, it would have to be able to trade $462,000 a year worth of blocked marks for dollars.

Clarified Issue. More than dollars & cents were at stake. As most of the U.S. publishers doing business overseas were in the red, partly because of the blocked and inflated currencies, few of them felt that they could 1) indefinitely carry the financial burden of telling the U.S. story abroad or 2) expand their foreign editions, as the Government would like them to do.

The big issue was plainly put by This Week's Editor William I. Nichols, who made two European trips as an outside adviser (This Week has no foreign editions) for the State Department. He reported: "It is naive to say 'let private enterprise carry the ball,' and at the same time ignore the fact that there are widening areas in which private enterprise can no longer operate in a normal manner . . . Unless some formula is found for keeping private information services alive, we will end up in the ridiculous position of sending billions in goods overseas without at the same time giving people abroad any indication of where these goods came from or what kind of free society produced them . . .

"It certainly is not fair or wise to assume that American firms can continue to operate indefinitely in the red . . . We therefore have the choice of finding some way to tide them [U.S. publishers] over--or of relying exclusively on a Government-operated information program."

Last week the House Appropriations Committee, exercising that choice, cut the allocation for the currency swap to $10,000,000.

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