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Reds Get Wrong Premises
On International Affairs ----7- j Russian Intelligence Effectual in War, but Fails to Get Proper Slant on Human Relations By Edward Crankshaw Who Sorvtd With tho British Military Mission in Moscow During tht War LONDON.—How well, or how badly, are the Soviet leaders informed ! about the outside world? No question is harder to answer; few are ! more important, since the peace of the world may depend on the j Kremlin’s estimate of the mood of the peoples of the west, the inten- ; tions of their Governments, and the strength of their military resources. Sometimes it looks as though their information is wild to the point of fantasy. On September 25 ‘ in Paris Mr. Vishinsky produced his short list of warmongers with that air of malignant triumph with which in the less-exacting atmos phere of Moscow he used to send his colleagues to the firing squad. This ridiculous document, prepared ob viously with great care and an ex treme elaboration of sifting and cross-checking, meant a great deal to Mr. Vishinsky. He was, and still is, deeply convinced of the power, the influence and sinister purpose of W. J. Brown, Harold Macmillan and a number of senior Air Force officers. The flat reception accorded his laborious indictment was almost certainly taken by him as a sign not of bewilderment, but of em barrassed guilt. The obvious question then arises: Douglas (Continued From Page C-l.) tices have been outlawed, business men have urged that Congress amend the laws to make them per missible. William Simon, general counsel of the Trade Policies Committee, in an address before trade association executives Wednesday, said that the commission's orders in the steel cases "expressly require f.o.b. mill pricing.” The steel cases have not been ruled on by the Supreme Court but the Pittsburgh-plus order was affirmed by agreement of the steel companies last month. Dr. Corwin D. Edwards, director of the Bureau of Industrial Eco nomics of the FTC, answers that this interpretation is not Justified. He cites the cement decision as holding that delivered prices (that is, prices covering the factory price plus the freight charge) are not barred. The court said: Another Point “Most of the objections to the order appear to rest in the premise that its terms will bar an individual cement producer from selling ce ment at delivered prices such that its net return from one customer will be less than from another, even if the particular sale be made in good faith to meet the lower price of a competitor. The com mission disclaims that the order be possibly so understood. Nor do we so understand it.” There is another point. It is the fear of business that the FTC will hold that "knowing parallel action” is an unfair method of competition. According to this reasoning, if one Pittsburg steel company absorbs the freight in selling steel to the Middle West it would be legal, but the prac tice would become illegal if others would do so knowing of the action by the first. Dr. Edwards answer to this Is that where there is collusion, yes. But he adds: “There is no instance in which the commission has charged that a single company using a basing point system without re- j gard to what its competitor is doing,! is in violation of the Federal Trade Commision Act.” . The Robinson-Patman Act makes illegal price discriminations that may injure competition. Take the case of a manufacturer who sells his product at the same price to sev eral customers at different distances from his plant. The differences in freight costs result in varying net returns. In view of the cement de cision, would not the FTC hold that this is price discrimination. Won’t Permit Conspiracies Dr. Edwards has this answer: “If these price differences create no Injuries to competition there can be no violation of the Robinson Patman Act, no matter how bizarre thf price structure may seem when compared with the freight struc ture.” Senator Capehart aays that what ever pricing policy will best pro mote competition at all levels should be permitted. But he emphasizes: that price-fixing conspiracies should continue to be illegal. The Capehart committee has re ceived some interesting stories from businessmen about the effect of f.o.b. pricing on the industrial sys tem. Committee staff members cite this complaint received from the New York Airbrake Co. of Water town, N. Y.: The company was established 50 years ago and manufactures air brakes which it sells principally to Western railroads. Its biggest com petitor is in Pittsburgh. The New York company says it cannot com pete if it has to pav the full freight oh the steel it purchases and charge tha full freight on the airbrakes it, ships to the West. Plight of Employes The company employs 2,000 per sons, more than 90 per cent of wftom own their own homes. It is the principal source of employment in the community. But it feels that to comply with the law it will have to move out of its $6,000,090 plant in Watertown and build a new pftnt in Pittsburgh, which it esti mates will cc»t $10,000,000. The plight of the town in such an event is illustrated by the fact It has held up construction of a new high school for which $2,000,000 in bonds was voted last year. The steel Industry grew up in Pittsburgh because of the avail ability of coal and ore. The area now has a steel capacity of 11,000, 000 Ingot tens, while the consump tion Jn the area Is approximately half. that. J t Are the big shots of the Kremlin as hopelessly at sea about all aspects of western life as they are in the small matter of the warmongers? And,> If so, is their ignorance of a kind ajhich might lead them to underestimate the strength and de termination of the west and plunge them prematurely into war? Intelligence Appraisal Obviously a straight answer is out of the question. We can only glance at probabilities. Arid first we must divide Soviet intelligence into two parts: The first part deals with ma terial strength and resources; the second with the imponderables— popular morale, the readiness to meet a challenge once that chal lenge is clearly seen for what it is, the intentions of foreign govern ments and the strength of local Communists. In a wasteful and omnivorous mariner the Soviet secret service is efficient—as the Red Army in wartime was efficient. From my own experience in trying to w'ork with Red Army intelligence in Mos cow during the war, I can say that it undoubtedly gets results. In peacetime the output of useful in telligence per man-hour is prob-j ably the lowest in the world, but the number of man-hours employed on getting it is incomparably the highest in the world] And, although the central headquarters must be by any but Russian standards ex cruciatingly unwieldiy, it does piece the jigsaw together and produce an adequate answer—when it comes to facts and figures. And, in addition to its multitudinous agents, whole; and part time, the Russians have all the published matter of the British and American press, the indiscretions of soldiers, scientists and politicians, and an immensely valuable background of first-hand information gathered during the war, when whole armies of Soviet military and civilian technicians were free to look at almost any factory or depot thgy chose. This was part of the policy of teaching the Russians to learn to trust us. In other words, when It comes to a straight appreciation of ma terial forces the Politburo is likely to be extremely well informed, with a slight temperamental bias in favor of an overestimate, springing from the refusal of any Russian to take anything at its face value. Premises Often Wrong When it comes to imponderables the story is different. We like to think of the Russians as clever in maneuver; and so, in a highly limited way, they are. They are great chess players. They can see more moves ahead than most other people—given the correct premises In chess they are given the premises: The board, the chess men, the rules. But in the game of international relations the premises are not supplied. You have to construct your own from a study of human nature, natural laws and the psychology of differ ent nations. It is here that the Russians utterly fail. They get their premises wrong, and on these false premises they see an infinity of moves ahead. They did this before they became Marxists. One of the reasons why they became Marxists, indeed, was their weak ness for false premises. And the Marxist dogma has played up to that weakness. In the words of the “Short History of the Com munist Party”: “The power of the Marxist-Leninist theory lies in the fact that it enables the party to find the right orientation in any situation, to understand the inner connection of events, to foresee their course, and to perceive not only how and in what direction they are developing in the present, but also! how and in what direction they are bound to develop in future.” This is not an abstraction, but an article of faith. If any one doubts the capacity of the human animal to indoctrinate itself against the truth let him examine a select handful of his own beliefs. It is also highly relevant to the matter in hand. It is, for example,: where Mr. Vishinsky's warmongers! come in. According to the book, warmongers must exist; therefore! they do. Prom my own observationI of Mr. Vishinsky at close quarters, I should say that he is sincere in this conviction. Suspicion, Hence Truth It was possible to contemplate the! workings of his mind at a famous press conference during the Moscow Conference, w’hen a British corre-j spondent caught him out on the charge that the British government was selling Ruhr coal for its own gain. It was perfectly clear that Mr. Vishinsky believed absolutely in the truth of his own accusation, so! much so that he had never troubled! to look into the facts—because, ac cording to the book, Britain was bound to steal Ruhr coal and sell it for gain. j It is in this spirit that the Russian evaluates the Intention and morale ;of the west today. The workers of the west must be on the edge of revolt, because ... the American boom must end in a slump, because j. . . America must be planning an attack on Russia, because . . .! Therefore all these things are. And when events appear to contradict any of these calculations, such as I the voluntary withdrawal of the British from India, then far from seeking to understand objectively why this is so, the Russian inquirer casts round in his mind for some reason, inevitably sinister, which fits the book. (Copnlfht reserved. London Observer end1 Canada Wide nature dervlea.) * J British Steel Industry Is Political Issue T—*BOT I TEU. YOU I DIDN'T ORDER A MASSAGE “ —World Copyright. Ey Arrangement with Evening Standard and Canada Wide Feature Service. By Robert Hewett LONDON.—The bitterest British political battle in years is brew- 1 ing over nationalization of the steel industry—key to the Labor gov ernment’s “peaceful Socialist revolution.” “Steel is the heart of capitalism.” That's the battle cry. The issue of state control versus private ownership of steel prob ably won't be settled until the voters give the final word in the 1950 general elections. The steel bill, written by Labor M. P. George Strauss, probably will be passed a few months before the elections, but informed Labor sources say the taking over of the industry may be deferred until after the vote. The voters’ will determine whether Britons are firmly committed to the Socialist principle that the government should control the na tion's industry and economy. For permanent government control of steel means permanent, if indirect, control of all manufacturing from baby buggies to ocean liners. The steel nationalization bill was introduced at the opening of the new Parliament to bring the industry under public ownership by May, 1950, with existing management remaining in charge of the nationalized firms working under a government holding corporation. Corporation to Control Prices and Development Firms will be free to compete with each other, but the corporation will control prices and organize development and research while holding ownership of capital stock of 107 major firms capitalized at the equivalent of $780,000,000 and employing some 300,000 persons of the 500,000 in the industry. Most smaller firms will operate under gov ernment license. The government will get control of 97.5 per cent of ore pro ducers, 97.6 per cent of smelters, 99.3 per cent of ingot plants and 93.6 per cent of rolling mills. For three years the Labor government, elected on a platform pledging public ownership of key industries, had deferred what So cialist writers call “an attack on the citadel'of capitalism.” During that period it nationalized coal, electricity, railroads, long-distance trucking, gas, airlines and the Bank of England. In those fields one of the main arguments of government sup porters was that nationalization would increase efficiency. In steel it's a different story, to some extent. Britain's steel industry since the war has been producing more than ever before in its history. Month by month it has been exceeding government production targets. It is well under way on a £200,000,000 ($800, 000,0001 plant expansion and modernization program. Socialist-minded government followers dispute the private steel makers’ claims of efficiency, but their main argument for public ownership is summed up by Labor M. P. Ian Mikardo in these words: Steel Industry Has Set Production Record "The industry represents a growing concentration of power in the hands of a small number of individuals, to an extent which might seriously endanger political democracy.” Private steelmakers, on the other hand, say the postwar Iron and Steel Board, which advises the government on price-fixing and supervises development, already adequately safeguards the public interest. Public ownership and operation, they argue, would bring only confusion and inexperienced management to a highly complex in dustry with a resulting loss in production—at a time when Britain is straining all her resources for recovery and rearmament. } Never in the last three years of debate over nationalization of ■ industry has any issue been so clouded with propaganda from both sides, and with such contradictory interpretation of known facts and figures. Here are a few basic background facts on the industry: Organization—Almost all of the companies are linked in an association called the British Iron and Steel Federation established in 1935 to speak for the industry. Production—Output this year has been at the annual rate of 14,652,000 ingot tons, compared to 12,724,000 tons in 1938 and 5,261,000 tons in the depression year of 1932. Incidentally, all of Britain’s steel industry combined produces less in one year than the United States Steel Corp. does in nine months. Plans Call for Scrapping Inefficient Machinery Government Supervision—There has been an increasing degree of government supervision and control since 1935. From 1946 to this September a seven-member Iron and Steel Board advised the Min ister of Supply on price fixing, has supervised development programs and allocated raw materials and exports. Because Of impending na tionalization the board’s functions were taken over in September by the Ministry of Supply. Development Program—Work has begun on slightly more than half of a £200,000,000 ($800,000,000) government-requested expansion program drafted by the BISF to raise plant capacity from 14,000,000 tons annually to 16,000,000.* The plan calls for scrapping about 30 per cent of old, inefficient plants. Labor Relations and Wages—Both sides agree labor relations in the industry are about the best in Britain. Except for the general strike of 1926, there has been no major labor dispute in 40 years. Average wages for a 48-hour week in 1947 were equivalent to $26.98, compared to $14.24 in 1938 and $10.85 in 1932. Steel workers’ unions have advocated nationalization since 1932. Private steelmakers point to their all-time high production as one argument that plants should not be nationalized. Government sup porters retort the increase is due mainly to greater efforts by the workers keeping the furnaces operating 24 hours a day, seven days a week. "The workers in the industry are producing steel in the hope of socialism, and the employes because of fear of socialism,” is the com ment of Health Minister Aneurin Bevin, stanchest advocate for steel nationalization in the cabinet. Private Owners Concede Need of Some Regulation Labor leaders find little fault with the industry's development program—but they insist it should have been carried out before the war. r. ; • The crucial argument, of course, is over who shall control the industry. The private owners concede there should be public super vision in some degree, probably similar to the postwar system in which the government-dominated board controls prices, raw ma terial allocation and development. , Even ardent supporters of nationalization concede present con trols over the steel industry go a long way to meet the need to serve the public interest—under present conditions. But they say a mere supervising board couldn't carry enougn authority in the future when present full employment and all-out proauction might end. There is no guarantee against private steel companies interested primarily in profits curtailing their production and capital invest ments in time of business slumps, they say. Their answer is that only complete public ownership and operation will do. __(Distributed br the Associated Press.) Russia Declares 15-Year War on Drought By David A. Stein Recent Sunday editions of Russia's major newspapers told Ivan and Sonya the detailed story of a new 15-year campaign against the "Mischief Maker,” their pet name for the Caspian Sea. The project was hailed as “the Stalinist strategic offensive against drought, insuring final victory over the age-old enemy of agriculture.” The newspapers advised Ivan that such projects can be developed only under communism and are impossible in capitalistc America, i Soil conservationists report that the United States has already out distanced the objective Russia has set for 1965.) A Russian area 10 times the size of Great Britain, with one France to spare, is desert or semidesert. Soviet scientists estimate that one third of the 1,875,000 miles of wasteland can be reclaimed eventually. Major objective of the new 15-year program, as outlined in As sociated^ Press dispatches and reported in Soviet publications received here, is to save the wheatlands of the Volga, the North Caucasus, the East Ukraine and Central Russia. To accomplish this purpose, droughts caused by the scorching, dry "sukoveyl,” dread winds which sweep up from the Caspian deserts, must be curbed. The Soviet plan is to provide eight basic systems of forest belts to stand in the path of the winds, forming four defense lines. Russian agriculturalists have announced the development of 300 nurseries, with an anniial output soon to reach a billion saplings a year. A total of 15,000,000 acres of forest, to protect 300,000,000 acres of collective state farms, has been projected. Also planned are 45,000 reservoirs and artificial ponds to be used for irrigation, hydroelectric power, and for maintaining high ground water level. An improved grass and crop rotation system is intended to produce a high yield of grain despite the droughts. Longest of the forest belts will extend nearly 700 miles from the South Urals to Gurev, on the Caspian Sea. One tree-planting project will extend 58 miles, from Saratov’to Astrakan. To battle to save the wheat lane’s is just one phase of the war against the Caspian. The Central Asian republics of Turkmen, Uzbek, Kirgiz, Kazakh and Tadzhik must conquer the desert, too, and their chief weapon is irrigation. Russia plans to make this region one of its greatest industrial and agricultural centers. On the high mountain ranges bordering Central Asia an almost unlimited water potential exists. This area is reported to be rich in such raw materials as coal, iron, copper, salt, oil and sulphur. Irrigation in the five republics has already paid dividends by making Russia Independent of cotton imports, Soviet sources claim. Other agricultural products include alfalfa, rice, sunflowers, jute, melons, citrus fruits, mulberry trees (to feed silk worms), sugar beets and tropical fruits. U. S. Forfeits West Flank Defense Bastion to Reds Manchuria’s Fall Means North China May Eventually Become Springboard for Attack on Japan'and Alaska i By Constantine Brown America's long-range plans for national security suffered a severe blow last week when the Chinese Communists succeeded in taking over Manchuria. This blow to American defense received little attention from the rank and file, because Americans have been preoccupied in recent weeks with the election battle and with the antics of the diplomats of the United Nations meetings in Paris.4 Par more newspaper space was devoted to the Palestinian question, which has only minor importance for the safety of this Nation, than to the fall of Manchuria to Mos cow’s stooges. When we discuss China’s recovery .potential and her future we must bear in mind that Manchuria and North China are by far the most vital sections of that country. Strategically both Manchuria and North China are of great importance. They are a rampart of defense against aggressors who may choose Siberia as a springboard for an eventual attack against the United States and Japan. The economic and political im portance of Manchuria and North China is so great that since the days of the Czars and the Tokyo war lords those provinces have been bones of contention between Rus sian and Japanese imperialisms. We recognized their importance in 1931 when, as the Tokyo war lords opened their campaign Igainst China by way of Manchuria, we took up the cudgels for the Chinese government, despite our military unpreparedness, and spared no ef fort to dislodge the Japs from that vital part of China. Eventually the Mukden incident brought forth our doctrine of non recognition of territorial acquisitions by force. That led to the Pearl Harbor attack and our war with Japan, which ended in the destruc tion of the military power of that empire. Pledges Made to Chiang Throughout World War II our political leaders recognized that whatever concessions we might make to the Russians in Europe, it was necessary lor our security that we keep Manchuria in the hands of its rightful owner, the National government of China. At president Roosevelt’s confer ence with Generalissimo Chiang Kai-shek at Cairo in November, ■ 1943, the President promised that; as,soon as Japan was defeated we! would see to it that the National government's authority over Man churia woud be fully recognized. Mr. Roosevelt undertook to win Prime Minister Stalin to that point of view, and, according to some re ports, temporarily succeeded in do ing so. / At Yalta in February, 1945, we weakened but did not surrender Manchuria to the Russians. We agreed that Russia should regain the special privileges which the Czars squeezed out of the weak Chi nese government. We also agreed that Russia should regain control of the Chinese Eastern and South Mancnuria railways—which meant, in fact, economic domination ofj Manchuria—as well as an exclusive' lease on the Port Arthur naval base, which the Czarist government: lost to the Japanese at the Ports mouth Peace Conference in 1905. We went further and obligated ourselves to persuade the National government of China to accept these concessions, which were given to Mr. Stalin without prior consulta tion with Gen. Chiang and despite the Cairo agreement for Man churia’s return to China’s sov ereignty at the end of the war. Mr. Roosevelt is said to have stated at that time that these con cessions to the U. S. S. R.—in ex change for which the Soviet govern ment promised to send more than 20 divisions to the Far Eastern front within 90 days after the collapse of the Reich—were of no great po litical importance. • More U. S. Backing Pledged We promised the (Jhinese govern ment that after the war was over we would continue to supply its newly created, American-trained army divisions and air forces with the necessary war equipment to maintain them. Moreover, Mr. Stalin agreed to sign with Gen. Chiang a treaty of friendship and amity and the Red dictator denied, in the presence of Mr. Roosevelt and Prime Minister Churchill, any in terest in the Chinese Communists. Everything looked lovely to the wishful-thinking policy-framers of the United States. The Russians would get an economic interest in Manchuria, which eventually would work to the benefit of the Chinese themselves, while Gen. Chiang would have enough military strength to defeat any attempt by the Moscow-sponsored Communist leader, Gen. Mao Tse-tung, to cap ture Manchuria or any part of Northern China. f Moreover, the ideological-minded Par Eastern Division of the State Department had assured the White House and the Secretaries of State who followed Cordell Hull that the term “Chinese Communists” was a misnomer. They were nothing more than agrarian reformers, according to the so-called experts of our Chinese section of the State De partment. After Mr. Roosevelt’s death Presi dent Truman, who was better in formed about the situation in China through his contact with the Chi nese Ambassador here, desired to continue his predecessor’s policy. The untimely resignation of our Ambassador to Chungking, Patrick J. Hurley, compelled him to find another Ambassador immediately. He decided that we needed an out standing personality as his special Ambassador in China and his choice fell on Gen. Marshall, who had Just retired as Army Chief of Staff. Gen. Marshall accepted the as signment as an order from the d Commander in,Chief to a military man. He went to China with the task of patching up the differences between the Nationalists and Com munists in order to form a coalition government, thus puting an end to the civil war and permitting the economic and political reconstruc tion of China. Marshall Sought Harmony The State Department’s Far East ern Division had sold tlw idea, to both the President and Gen. Mar shall, that this could be achieved easily if a certain amount of pres sure was exercised on the reaction ary Gen. Chiang by Gen. Marshall. The new Ambassador was imbued with the Good Samaritan spirit and believed that he could patch up the breach between the Nationalists and Communists by forcing Gen. Chiang's hand and by using media tion to terminate the civil war. This mission was Gen. Marshall’s first real failure. Although Gen. i Chiang was willing to accept some | Communists in his government, it soon became apparent that the | Communists, represented at Nan i king by Gen. Chou En-lai, wanted j complete control over the adminis tration of China. The situation became even worse when Gen. Marshall sugested a truce, to be supervised by teams of American, Chinese Nationalist and Chinese Communist officers. This worked to the advantage of the Communists, who encouraged fight ing in areas where they had the upper hand and could still win vic tories, while adhering faithfully, to Gen. Marshall’s terms wherever the Nationalists were in superiority. Meanwhile the Russians, who rushed their forces into Manchuria after a brief skirmish with Japanese forces, began looting the country and taking to Siberia most of the important and modern factories the Japanese government had installed in Manchuia since 1933. Arms Given to ‘Reformers’ The forces of Gen. Mao were reorganized immediately by Russian staff officers—despite State Depart ment denials that it had any tan gible proof of this—and substantial amounts of war material which had been captured from the Japanese were turned over by the Russians to the “agrarian reformers,” who here tofore were short of military equip ment and other supplies. The Communists began to infil trate into Northern China and Man churia. In the winter of 1946 the Russians decided to live up to their agreements with Gen. Chiang and began to evacuate Manchuria. Gen. Chiang sent his American-trained divisions to take over in Manchuria, but he encountered great difficulties in the lack of winter clothing for his troops and of the means to transport them. The Nationalist forces were met by a Communist force which re sisted their efforts to take over from the Russians. The National ists won some victories, but Gen. Chiang lost some of his best divi sions in that guerrilla warfare. Meanwhile, Gen. Marshall, irked by his defeat in his first venture into the diplomatic field, left China with his mission unfulfilled and returned to the United States in bitter mood because Gen. Chiang, in his opinion, had been the cause of his humiliation. Before leaving Nanking to become Secretary of ; State he issued orders that the '$500,000,000 earmarked by the Ex port-Import Bank for a loan to the [Nanking government be canceled. At the same time the State De partment, under the pretext of fol lowing the advice of President Tru man's special Ambassador to China, j refused to issue licenses for the export of war materials to Nanking, jeven when the Chinese were willing to pay for them out of their gold (reserves abroad. U. S. Aid Cut Off Materially President Roosevelt’s pledges that we would continue to provide China with war materials were junked without ceremony. After 1946 and until a few weeks ago only a piti fully small amolmt of war material was permitted to trickle to China, in spite of President Truman’s de sires and Congress’ decision to pro vide the Nationalist forces with the means to suppress the Communist threat. What we did send was almost completely useless for the kind of warfare Gen. Chiang's troops had to wage against the Communist guerrillas. The Nationalist army became weaker as the Communists became stronger. Washington continued its underground work of sabotaging the Chiang government. The complete rout of the National ist qrmies in Manchuria, which was the 'direct result of our failure to live up to the promises made by our government, has placed them in a difficult strategic position, according to our military and some political observers. We do not know when or whether , the Russians will decide to trans form the present cold war into a shooting war. We are making elaborate plans for the organiza tion of the West’s defenses from the Rhine to the southern tip of Africa, But except for some steps Gen. Mc Arthur has taken in Japan—some times without the knowledge of Washington—there is nothing con structive to offset this major Rus sian victory in Manchuria.