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SIXTEEN PAGES. _ WASHINGTON, D. C„ DECEMBER 9, 1945. * ~ " --
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Doctors Seek Substitute
For U. S. Health Program
American Medical Association Studies Plan for
Nongovernmental Insurance to Safe
guard Discretion of Individual
By Thomas R. Henry
Tne American Medical Association has
Just met squarely what many of its
members believe to be the greatest chal
lenge yet offered to independent medical
practice in the United States—the far
reaching Wagner-Murray-Dingell bill,
Introduced following President Truman’s
message to Congress on national health
on November 19.
This legislation in effect, would set up
a system of compulsory health insurance
met by deductions from pay envelopes.
It seeks to improve the national health
by making medical service available to
all the people—to spread over the popu
lation the inestimable values of medical
progress over the past generation.
The organized medical profession of
the United States has itself made great
advances in this direction and it is aware
of the hurdles and pitfalls better than
?ny other group—for it is constantly
coming in contact with them.
The association, following instructions
from its House of Delegates' meeting in
Chicago last week, is hard at work on a
prepayment sickness-insurance plan
which, its members feel, will confer
every real benefit likely to come from
the national legislation now proposed,
will be more practical and will keep the
profession free of lay—and they fear,
political—direction and interference.
Fathered by D. C. Society.
This decision by the medical associa
tion is largely due to the efforts of the
Medical Society of the District of Co
lumbia, one of the most progressive
groups in organized medicine, which es
sentially framed the resolution adopted at
Chicago. It is difficult to predict the
lines the national plan will follow. Pro
posed setups have been submitted by
several State societies.
There are certain elements in the
broad picture of medical care which are
responsible for the greatest hardships to
the individual—such as hospital bills,
surgical bills and obstetrical bills. There
are already efficient schemes of hospital
insurance, largely under private auspices.
Memberships are growing as the bene
fits are better appreciated, and there
appears to be little room for change ex
cept for improvements in details. Need
for major surgery is clearly a catas
trophe, like a fire. Presumably, reason
ably accurate statistical tables can be
framed on' which to base insurance
costs. With those taken care of, the
physicians believe, perhaps the biggest
element of the problem will be solved.
cannot be dealt with on any sweeping
basis. Each case presents its own pecul
iar problem and'medicine becomes both
a science and an art.
There can be no question but that the
cost of medical care is high. This is
inherent in the practice of a combined
exact science and fine art. The burden
falls heaviest on persons of moderate
incomes. It is an old truism that the
best in medicine is shared by the very
poor and the very rich. For the former,
communities have provided free hos
pitals and the medical profession, in
accordance with its ancient tradition of
service, gives its best efforts for noth
ing. The rich, of course, can afford to
pay. It has been to some extent the
practice of doctors to “soak the rich to
carry on their work for the poor. This
has not been very satisfactory, either to
the wealthly patients or the physicians.
But the family whose income just about
meets ordinary living expenses often
gets a terrific economic blow from un
predictable illness.
Sometimes" the members struggle for
years to meet the bills and seriously re
duce their standards of living. Some
times they simply do not pay. It is
generally supposed, by doctors, that their
bills are the last to be met. TTiat is one
of the reasons for the high cost of med
icine. Those who do pay must make up
for those who do not and. the physician
who was able to collect all his bills could
cut down his charges by a big margin.
Sickness Unpredictable.
Now the family’with a moderate in
come can insure against other unpre
dictable expenses, such as fire, death of
a breadwinner, etc. Why can they not
insure against catastrophic sickness?
One reason is that the former type of
catastrophies can be predicted by exact
actuarial statistics. It is a pretty safe bet
that a certain number of dwelling houses
in Washington will catch fire in the next
six months. There is little element of
guess work in predicting how many
Washingtonians in the 60-year-age
group will die in 1946.
Medical practice is different. One
cannot predict sickness, because there is
such a large subjective element about it.
Every person differs from every other
person. Some demand medical services
for complaints which would be regarded
as inconsequential by others. Doctors
sometimes make the cynical comment
that the best way to cut down the sick
ness rate of a community is to raise
prices for medical services.
Insurance against sickness costs in
general, doctors say, would be unpre
dictably and prohibitively expensive.
Various schemes of political medicine
have been tried. Perhaps the best
known is the British panel system',
which is not far removed in principle
from that proposed in the Wagner
Murray-Dingel bill, although the latter
would give a larger leeway for personal
choice. A group' of British physicians
constitutes a panel. Each panel has a
certain number of patients, who make
their own free choice of the doctors on
the panel. Only within this group does
the patient select his own physician.
Each constituent of a panel pays a
stated fee each year.
Dodge Responsibility.
There are various claims as to how
well this has worked. The conclusion
of most American observers is that it is
quite inefficient. The panel physicians
are inclined to treat only the simplest of
ailments. They are not held responsible
for specialist service and this gives them
an opportunity to avoid responsibility.
From his own observations, Dr. Lee
says, the higher type of independent
British physician is as good as any in
the world, but the panel doctors fall
far below the average American practi
tioners. They are much more inclined
to sell medical care over the counter,
like potatoes or cheese. They reach the
point where the peculiarities .of the in
dividual mean nothing.
One of the greatest ‘‘political med
icine” experiments was that of the Vet
erans' Administration after the last war,
when a corps of physicians was set up
to care for veterans with war-connected
disabilities. Over a course of years it
proved a dismal failure and veterans’
hospitals were a byword everywhere for
inefficiency.
The present administration, under
Maj. Gen. Paul R. Hawley, proposes to
do away with this system to a very large
extent and rely on the American private
physician, freely chosen by the patient
himself, to treat the 20,000,000 veterans
of the Second World War.
xncic auu iciuauia a vast;, um-uvcicu
field in wnich, it is presumed, the men
at work on the national plan will pro
ceed cautiously, by a system of trial and
error, rather than by a broad applica
tion of untested ideas such as is indi
cated by the bill now before Congress.
Doctor Wants to Be Free.
The American doctor wants to remain
free. He telleves that his freedom in
the past has been one of the greatest
factors in building up the finest medical
service anywhere in the world. He be
lieves th$t no discipline imposed from
outside will approach in effectiveness
the discipline of its own members, by
organized .medicine and the self-disci
pline Of the members themselves. But
also he is thoroughly devoted to the
extension of the best medical service to
all the people in the most effective way
possible.
Both, the physicians and the Govern
ment face one of the most complicated
social questions imaginable. Compared
to sickness insurance, such a complex
problem as unemployment insurance is
simple. No other field in the past has
been less susceptible to socialization. It
has seemed somewhat like socializing
music, art or poetry. As one physician
remarked: Insurance against sickness is
like a newspaper insuring itself against
ever being scooped.
Like every large body, the American
Medical Association has its right, left
and center. These are expected to work
out their differences in the numerous
conferences which will be necessary be
fore a workable plan is adopted to take
the place of that proposed by the Gov
ernment.
Trend Toward Socializing.
The fight is not against "socialized
medicine.” This is a complete misnomer,
says Dr. Roger I. Lee of Boston, newly
elected president of the American Med
ical Association. Medicine has grown
more and more "socialized” for the past
century—largely through the efforts of
the physicians themselves. Every pub
LnnUVi /iannvimoni miKlin
school clinic, every State or municipal
hospital, is a manifestation of “so
cialized medicine.”
Instead, the battle is against “political
medicine.” There is an infinite differ
ence between the two, Dr. Lee says.
There are certain medical and public
health services which can be rendered
almost mechanically by any conscien
tious, qualified individual. Such, for ex
amples, are general innoculations in
the face of an epidemic, X-raying of the
chests of school children, fortifying de
ficient foods with essential vitamins.
Medical societies everywhere have
fought for these things. They have
played, perhaps, the principal part in
making thp American people the health
iest in the world. There could be no
finer case for such work than the ex
perience of the Army and Navy in the
war. The sickness rate from com
municable diseases was reduced to a
point where it was almost inconse
quential, although it has been one of
the major problems in all past wars.
The doctors have no quarrel with the
creation by society of an environment
conducive to health, and both national
and local societies constantly are ad
vocating new activities, in this field
medicine is an exact science. Individ
uals can be dealt with en masse, for one
does not vary one iota from another.
Each Individual a Problem.
But the chief activity of the medical
profession lies in quite a different field,
where sickness is a matter of reaction
beAveen the environment and the in
dividual—where the patient is something
unique in the universe. The physical
and mental difficulties of such a person
a
Healthiest in World.
'these 20,000,000, by the way, go a
long way toward nullifying the value of
any compulsory health scheme—consti
tuting, as they do, such a considerable
element of the American population.
They have already the best sort of sick
ness insurance, for nothing. True, it is
supposed to extend only to war-connect
ed disabilities, but in actual practice the
dividing line is hard to draw.
A good deal has been made of the
poor health of the American people un
der the present system—as revealed by
the numbers rejected by the draft for
physical and mental defects. This is
all bunk, say the doctors. The American
people are the healthiest in the world/
No sort of medical service ever could
have remedied a good many of the de
fects for which men were rejected by
the Army. Doctors cannot repair con- ■
stitutional weaknesses. They cannot
raise subnormal'intelligence. A good
many of these rejected by the draft
boards would have had the same de
fects if physicians had danced attend
ance on them every instant since they
were bom. They could thank medical
men, as it was, for the fact that they
were alive—instead of have perished as
subnormal babies.
Furthermore, Army standards were
very strict. The British Army—and also
the German Army—was filled with man
who never could have gotten through
the gate of an American military post
and many of then made very good sol
diers.
Overnight by Air to a Weary England
New Flight Service Brings Washington Close to a London Still Living
A Life of Wartime Austerity
By I. William Hill
Any Friday, at 11 a.m„ it is now pos
sible to take off from Washington Air
port by American Overseas Airlines
flagship and 24 hours later be walking
down Piccadilly in London.
At the same time, until the body,
mind and spirit of England has had un
limited time to achieve a progress comp
arable to the scientific strides of air
transport, I beg leave to advise you to
postpone your overnight journey to the
British capital. I say this on the evi
dence provided by a week in London as
the guest of American Airlines in the
first direct commercial flight from
Washington abroad.
We took off from Washington on Fri
day, November 23, and high above
white fluffy clouds unfastened our safety
straps to lunch luxuriously on breast of
young turkey and to discuss how the
schedule of our flight was outmoding
the much-vaunted four-day Atlantic
crossings of the prewar ocean liners
Queen Mary and Normandie. We talked
of visits to the gay, sprightly London
of the late 1930s and speculated on how
extensive would be the changes left by
war. There was none of us but knew
the story told in the black headlines
of the past five years. Knowledge can
be far from understanding, however,
and we were carefree cruising across
the sky at 200 miles an hour.
Lulled to Sleep by Motors.
Even with a stop in Newfoundland
behind us and the Atlantic 8,000 feet be
low, our flagship was still a bit of
America. There was the stewardess
with her bright, cheerful face. It. was
she who taught you how to pop your
ears by holding your nose and puffing
your cheeks, who brought you cocktails,
cigarettes or all the sugar you wanted
for your coffee. You looked around at
your fellow passengers. One was a
young Scottish girl flying to marry a
Royal Air Force sergeant from whom
she’d been separated seven years by
war. Another was a well-dressed
Philadelphian, proud of his cellar of
prewar wines and the fact he’d had
bacon for breakfast almost eyery morn
ing. Anticipation, romance or pride
marked this and that face. But this
was still America.
By now the portholes had grown
dark and nothing was to be seen out
side but stars in a black sky. The din
ing table between two pairs of seats
was the scene of a bridge game. Other
passengers were playing gin rummy,
reading or tipping back their seats and
wrapping themselves with blankets to
doze away the night.
Lulled by the hum of the flagship’s
four motors, I closed my eyes and tried
to imagine what lay ahead in London.
My head was in the clouds. Flying
luxuriously on, I little knew.
In the morning, Ireland was be
neath us and alter circling at length in
a foggy overcast, we put down at Rine
anna, the airport for land-based air
planes beside the River Shannon. A
ruddy-cheeked young son of Eire
stepped forward.
Welcome to Shannon.
“Welcome to Shannon,” he greeted us.
His friendly cheerfulness was sym
bolic of what we were to find in Ire
land during a 24-hour stay, for, as it
turned out. the airport ahead in Eng
land was closed in by fog and we were
to spend a night in the ancient Irish
city of Limerick before proceeding on.
In such cases, accomodations are ar
ranged and paid for by American Ov
erseas Airlines. While a bus waited to
transport our party the 12 miles from
Rineanna to Limerick, we were inter
viewed by two young Irish newspaper
men, who made their notes in Gaelic.
They were enthusiastic over our young
Scottish girl on her way to marry the
RAP sergeant.
"It is what, in the States, you call
a ‘human nature’ story, isn't it?’’ said
one of them jovially.
Good-natured is the word for the
Irish. It is as characteristic as ruddy
cheeks. It was that way with the Mrs.
Ryan who presides genially over the
Glintworth Hotel in Limerick and it is
the same with every Irishman you meet
if, as I did, you do a “pub crawl.” That’s
the phrase for sitting around Cronin's
pub on a Saturday night, drinking stout
and discussing the affairs of the world
with whatever Irishman is crowded
next to you before a peat fire just warm
enough to thaw out the effects of the
raw Irsh mist.
Plenty of Food in Ireland.
They laugh if you raise the question
of why Eire stayed out of the war.
“Sure, but you don’t think the war was
without the fighting Irishman, do you?”
And your companion Informs you that
“as great a proportion of Irish lads vol
unteered to fight Jerry as ever the lads
in England.”
You buy a stout for a worker in the
railroad yards and presently he loses
the self-consciousness engendered by a
comparison of his well-worn corduroy
jacket with your American clothes.
“There’s been plenty to eat here all
along,” he'll tell you. "Beef—good beef
all the time. Of course, they closed
down the bacon factories during the
war. You still won’t be seeing much of
hams and bacon, but we've had plenty
of food.”
It's easy to believe after a dinner
at the Glintworth—lentil soup, a fish
course, filet mignon such as hasn’t been
seen in Washington since before the
war. if ever; four vegetables, all the
butter you want for your bread, a des
sert and tea. Finally, if you’re up to It,
there’s Irish or Gaelic coffee—a de
lectable combination of one part Irish
whisky, two parts hot coffee, with a
touch of sugar and topped by a good
half inch of thick double cream. Stir
the whole, drink at a swallow and you’re
as good-natured as any Irishman.
Good Spot for Vacation.
Yes, on the basis of 24 hours in Lim
erick, I think it’s just to report that if
you must have an early vacation across
the Atlantic, Eire should be your desti
nation. You’ll find the people living in
a lower economic level than in America,
but living well with well-stocked stores
and plenty of food. More than that,
whither you associate with them in
Cronin's pub or the Bedford Rink, where
Irish couples of all ages assemble on a
Saturday night to dance, you’ll find
them happy and eager to know America
and Americans. What’s more, if you do
visit the rink, you have a treat in store,
not only to see some Irish dances like
"The Walls of Limerick” and “The
Siege of Ennis,” but even the Irish ver
sion of the jitterbug.
In the case of our American Airlines
group, after one day we were hoping the
fog was still thick over England so we’d
have another day in Ireland, but it
wasn't to be. All we could do as we
took off from Shannon Airport was to
vote unanimously that a line place for
the home of the United Nations Organ
ization would be Limerick. Ireland had
done nothing to lower our spirits or pre
pare them for the England ahead.
It was only a two-hour flight from
Shannon to Hum, the commercial air
port nearest to London that has facili
ties to handle the American Overseas
Airlines version of the four-motored
C-54 Douglas Skymaster. We arrived
in time for lunch. The first trivial sug
gestion of what lay ahead was the sugar
that came with tea. It looked like rock
salt and its sweetening quality was lim
ited. One of our party brought out his
saccharin bottle. He was to use it often
in the week ahead.
Gas Strike in London.
It was a two-hour journey by train
from Hum to London and on the way,
a London newspaper headline presaged
more of what was ahead. A gas strike
was on. In many boroughs, all lighting,
heating and cooking was affected. It
sounded ominous. It was. We arrived
in London in a blackness that British
friends described as worse than the war
time blackouts. A hot bath? Out of the
question. “We’re cooking on the back of
our electric heaters, you know." The cab
driver who took us from Victoria Station
to our lodgings lost his way and had to
(See FLIGHT, Page C-9.)
U. S. ACTION TO SPEED HOUSING URGED
By Harold E. Stassen,
Captain. U. S. N. R.
There are 250,000 “homeless heroes” in
America today. Throughout the Na
tion these veterans of every battle on
every front have returned to their fam
ilies or have married the sweethearts
who were waiting for them; but they are
unable to establish homes because of the
acute shortage of housing. Obviously,
the number of home seekers will rapidly
Increase as the demobilization con
tinues, so that by next spring there will
be between 1,500,000 and 2,000,000 of
these veterans looking vainly for a house
to call home.
These homeless veterans are, of
course, only the more dramatic and ap
pealing portion of the total housing
problem in America. There are and
will be at least an equal number of
others of our fellow citizens who, either
because they are moving from a war
plant area to their previous location, or
for other reasons, are unsuccessfully
searching for a home.
In approaching the situation, we
should recognize that it is one of our
primary domestic problems. The con
struction of homes to meet the tremen
dous needs, not only this year but po
tentially in the next 20 years, can and
should be one of the major factors in
maintaining a healthy domestic econ
omy and in providing directly and in
directly a good proportion of those
millions of Jobs we hear discussed in
attractive and glowing terms. Further
more, the lack of good housing h»« very
major social implications. It is re
flected promptly in lower standards of
health, in social unrest, in crime, juve
nile delinquency, and unemployment.
The problem can best be met by the
intelligent use of the powers of Govern
ment to stimulate and make possible the
rapid and continuing creativeness of our
American system with free workmen,
individual enterprise and private cap
ital. But to do this means that Gov
ernment must not hesitate to step in
and take the essential action to permit
these forces to work.
I specifically suggest the following
preliminary measures:
First: That the President immediately
appoint a national housing expediter,
preferably utilizing one of the members
of the cabinet who is not now very busy.
This national housing expediter should
be charged with moving promptly to co
ordinate all elements of Government to
meet the present emergency and to plan
for the longer-view action of Govern
ment in the housing field.
. Second: That the shortage of skilled
tradesmen in many of the building
trades be met by immediately directing
the armed forces to release at once all
men skilled in these trades, who are not
busily engaged in essential high-priority
military construction. There should be
very little essential military construction
now under way, and the people as a
whole, including the men in the armed
forces, need an intelligent exercise of
priorities and release because of the
domestic need just as much or more
than occupations and types were given
consideration in induction into service.
Third: Extensive apprentice programs
should be promptly initiated, with the
co-operation of management and labor,
to train additional men in the skills that
are needed. Those few labor unions which
engage in narrow restrictive pedicles
as to the numbers that are permitted to
qualify in their craft must be required,
for the sake of better homes for their
own fellow workmen and for the return
ing veterans, to open their ranks, reduce
their initiation fees, and meet the? needs
of shelter for the people of America.
Fourth: Hie Army and Navy and all
other governmental agencies should
be required to report at once all un
used space in barracks and other build
ings throughout the country and tills
space should be leased on a short-term
basis to individuals who will manage it
and make it available for temporary
A
living facilities. The military plans
should be so arranged that facilities
which they hold, remote from populous
centers, are used for military activities
to a major degree, while facilities near
or in populatous centers be made avail
able for civilian purposes.
Fifth: There should be an immediate
national survey of all unoccupied tem
porary housing in former war-plant or
military areas. These should be made
quickly available at hard-pressed popu
lation centers.
Sixth: Building materials in military
supply depots should be rapidly placed
on the market and made available for
housing.
Seventh: A national campaign should
be started at once to revise and modern
ize the building ordinances of our
metropolitan centers. Many of them
were drawn up under entirely different
conditions as to construction, materials,
sanitation and fire control. Some of
them appear directly to favor monop
olies of material or construction, or of
labor. A small committee of competent
architects, engineers, fire chiefs, build
ers and craftsmen might well prepare
a model modern building ordinance for
metropolitan areas.
Eighth: Plans should immediately be
made, and their execution commenced,
for clearing out vast areas of the slums
of our metropolitan centers and turning
the real estate over to private enterprise
for rapid and efficient construction and
management of thousands of modem
housing units.
These are a few suggestions for action
on this pressing domestic problem.
What I am trying to emphasize is that
we must approach this problem with the
same kind of Imagination and of drive
and of scope as that with which we met
the terrific .challenge of the war we have
Just won.
We cannot build America by drifting.
(Osptotffct. IMS. to Hertz Americas Hews.
Paper Alliance and St Paul Dispatch and
Pioneer Preee.)
A.
German Economic Future
Presses for Clarification
Russia, Britain, France and U. S. All Hold
Differing Views on Proper Interpretation
of Potsdam Declaration
By Joseph Hanlon
It is becoming increasingly evident
that there must soon be a clarification
ot just what the United States and the
other Allied powers propose to do with
Germany—what level of economic life
is contemplated under the Potsdam dec
laratimi, which laid down only the
broad outline.
The Potsdam declaration has come to
mean one thing to Russia, another to
Great Britain, another to the United
States and still something else to Prance,
which was not one of the signatories.
The Potsdam declaration contem
plates the "elimination or control of all
German industry which could be used
for military production. It specifies
the elimination of all arms, ammuni
tion, implements of war, sea-going
ships, aircraft and facilities for their
maintenance or production.
But production of “metals, chemicals,
machinery and 9ther items that are
directly necessary to a war economy”
are to be “rigidly controlled”—not elim
inated. Imports are to be "reduced” and
excess productive capacity “removed.”
Chance for Disagreement.
It is here, on the question of what
is to be “removed” and what is to be
“controlled,” that prolific sources of dis
agreement have arisen among the four
Allies, and within the American group
itself. Control involves the matter of
deciding what German plants are to be
permitted to resume production, and to
what extent. Only the most general
guide for determination of these ques
tions is contained in the Potsdam dec
laration. One of the control criteria,
for instance, sets up the objective of an
equitable distribution of essential com
modities between the several occupation
zones, so as to produce a balanced
economy throughout Germany and re
duce the need for imports.
In practice it is easy to see how dif
ferences of opinion may arise among
honest men over how much of what is
“essential," at what level the German
economy is to be “balanced," and how
far imports, and therefore exports, are
to be reduced.
there still would remain the problem
of just what Potsdam meant.
Persons who have been associated
with the Control Council and oppose
the course suggested in the Draper
Hoover report, for instance, have told
the writer that four basic points of
view influence interpretation of the
Potsdam declaration. They are inclined
to list first not the temptation which
may come to an American to serve
selfishly German financial interests
which are also his interests, or the
kindred group committed by their busi
ness backgrounds to the support of
monopolies and cartels, but simply the
native American quality of trying to do
a good job, according to American
standards.
Would Leave “a Little Fire.”
Maj. Gen. John H. Hilldring, director
of the Civil Affairs Division of the War
Department, acknowledges that diffi
culty. In his testimony before the Kil
gore committee he said:
I think it is natural for a soldier
to want the outfit he has under his
charge to be highly efficient according
to our standards, and we are going to
have to reckon with that as a part'of the
human nature of the soldier and be
on the alert and contend with it. The
Army in this business is a little in the
position of the fire department that is
told to go to the fire and not put it
completely out, and we recognize that
point.”
Yet, by the statement of both mili
tary and civilian attaches of the Con
trol Council who have recently been
in Washington, American Military Gov
ernment in Germany has been reluc
tant “to put the fire completely out.”
“They think of things in terms of what
we are accustomed to in the United
States and not in terms of the minimum
that Germany can get along with," one
of these informants told the writer.
A third element in the situation rep
resents those who fear Russia more
than Germany, and want Germany re
built as a bulwark in Central Europe
against Communism.
Fourth may be listed those who take a
“businessman s view” of the situation—
in me Droaaest sense the division
probably finds on one side advocates
of a “hard” peace, and on the other pro
ponents of a "soft” peace, although this
oversimplifies the question.
On that basis, however, the Russians
are the “hard” peace fexpionents and
seem to have proceeded ruthlessly to
remove or destroy German industry in
their zone of occupation. The British
are at the other extreme, tending toward
a relatively lenient treatment of the
defeated enemy. The American group,
divided among itself as it is, falls some
where between these extremes, and the
French have a plan of their own—inter
nationalization of the Ruhr and the
Rhineland, where most of Germany's
industrial potention is concentrated.
Reids Foreign Trade Essential.
The uncertainty in the American
group is well illustrated by the so
called Draper-Hoover report, which Lt.
Gen. Lucius D. Clay said, on a recent
visit to Washington, had been submitted
to our Allies for consideration of “prin
ciples and methods.” In a nutshell, that
report, not yet adopted as policy, holds
that the Potsdam formula won’t work—
that Germany must have an expxjrt
trade about equal to that which she had
before the war, if she is to maintain a
minimum standard of living and meet
the costs of Allied occupation.
The group which prepared that repjort
was headed by Calvin Hoover, Duke
University economist who was until
recently economic adviser to Brig. Gen.
William H. Draper, chief of the eco
nomics division of the United States
Group Control Council. Gen. Draper
was formerly a member of the New
York investment firm, Dillon, Read &
Co., which, after the first World War,
participated in financing rebuilding of
the German steel industry. Among
mat Germany must pay the cost of her
occupation and can do so only by re
building her industry.
Russian Would Limit Sire.
Illustrative of the opposing viewpoints
of the Allies is their failure so far to
agree on a Russian proposal for defin
ing excessive concentration of economic
power in Germany, or on any substitute
for the Russian proposal. Russian rep
resentatives wanted a specific defini
tion, suggesting as excessive any busi
ness which employs more than 3,000
persons and is capitalized at more than
23,000,000 reichsmarks ($10,000,000 at
the old official rate of exchange).
United States representatives coun
tered with a much less specific pro
gram. The British didn’t like even that,
and a compromise W'as evolved, setting
out a loiig list of factors to be con
sidered in determining whether any
enterprise represented an “’excessive”
concentration of economic power. Now
the United States representatives are
under instructions from Washington to,
draw up a law along the lines of the
Russian proposal, but so far as is known
here nothing definite has happened.
In the British Parliament there has
been increasing criticism of the opera
tion of the Potsdam declaration, coming
from both Labor and Conservative
benches, on the ground that the penal
ties it imposes are too harsh. The
influential London Economist recently
came out flatly with the assertion that
the controls envisaged at Potsdam are
‘‘probably impossible under any condi
tions.” It suggested that Germany will
require a high degree of industrializa
tion to sustain on even a moderate basis
the population which will be crowded
into her reduced borders, and pro
posed, instead of the controls decreed
at Potsdam, simply the prohibition of
all armaments, from V weapons to
small-arms ammunition.
uibwwto ui iiwrw a tuuuiutbee were
Col. Maurice R. Scharff, in civilian life
a utilities engineer; Rufus J. Wysor,
former president of the Republic Steel
Corp., and Peter Hoaglund, who before
the war headed General Motors Corp.’s
Opel works in Germany.
Those within the American group
who lean toward the Russian or "hard’’
peace view are apprehensive about the
presence of such men as these in high
places in the American Group Control
Council. Some, in both civilian and mili
tary branches of government, who have
•returned to Washington in recent weeks,
have discussed the situation with this
writer and while unwilling to speak for
publication have expressed alarm about
the influence exerted by Americans as
sociated with “big” industry, particu
larly industries which have German
investments.
The subcommittee of the Senate Mil
itary Affairs Committee, headed by
Senator Harley M. Kilgore, Democrat,
of West Virginia, which has been inves
tigating means of eliminating German
resources for war, intends to reopen its
hearings soon and take up the question
of what part Americans with German
financial and industrial interests have
had in carrying out the Potsdam agree
ment.
$420,600,000 Invested.
The Kilgore committee has received
information that 171 American firms
have investments totaling (420,600,000
in 278 German enterprises. Conversely,
German industrialists, seeking safe
haven for their funds, have sent in
vestments abroad, the amount of which
cannot even be estimated. The Alien
Property Custodian has seized German
assets in this country amounting to
(154,000,000, but the Treasury has
blocked some seven billion of assets, on
the theory that some of these may be
German, although appearing in the
names of neutrals.
But if there were to be eliminated
from the American Group Control
Council every person to whom attached
a suspicion that he might in some way
be Influenced by a selfish interest in
the rebuilding of German economy,
would Avoid World War I Error.
In the light of these considerations
it is interesting to recall, as former
Secretary of the Treasury Henry Mor
genthau, jr.. does in his recent book,
“Germany Is Our Problem," how de
feated Germany, after the first World
War, was permitted and encouraged to
rebuild her industry in order to meet
reparation payments. In Morgenthau’s
estimation, we are in danger of making
the same mistake all over again.
Although it differs from Potsdam in
many details, the "Morgenthau plan”
for Germany, which he drew up last
year at the request of President Roose
velt, is a fairly close approximation of
what was done at Potsdam He wants
German heavy industry—metals, chem
icals and electric power—destroyed:
conversion of the Germans into a people
largely agrarian; internationalization
of the Ruhr, and partition of what
would be left of Germany into two
states, northern and southern.
Yet Morgenthau had not finished
writing his book last August before
“our own leaders permitted a partial
revival of these factories-.”
“Hardly were the zones of occupa
tion formally set,” he wrote, “than we
began to hear that since Allied troops
were on German soil, German factories
would be used to supply them.”
Baruch Idea Less Drastic.
Bernard M. Baruch, the white-haired
adviser of Presidents, would not go so
far as Morgenthau in stripping Ger
many of economic power, and not even
so far as the stricter interpreters of
Potsdam, but he is displeased with the
way things have gone in the six months
of Allied occupation of Germany.
Baruch would have a supreme economic
council not alone for Germany but for
Europe, and through it would seek to
control Germany’s economic develop
ment. Germany would be stripped of
her war-making potential, and her in
dustrial output would be controlled for
the benefit of all Europe, which des
l (See HANLON, Page C-9.)