MARSHALL PLAN RESTS ON WIDE CO-OPERATION

Press, Volume LXXXIV, Issue 25427, 25 February 1948, Page 6

MARSHALL PLAN RESTS ON WIDE CO-OPERATION

RECOVERY IN EUROPE

[By a Correspondent of the "Manchester Guardian.”] (Reprinted by Arrangement)

The experience of the three major “emergency” organisations which have operated since the end of the war, their defects, as well as their achievements, will no doubt have some influence on the shaping of the European “reconstruction plan.” The last of these, the European Coal Organisation (E.C.0.), came to an end on January 1; the Emergency Economic Committee for Europe (E.E.C.E.) ended last August, and the European Central Inland Transport Organisation (E.C.1.T.0.) the following month. All three grbw out of Allied co-operation in the final phases of the war. They were designed to meet conditions of acute scarcity in the rehabilitation period and prevent an ugly scramble for essential commodities and services. , The extent of their membership varied a good deal. The Soviet Government refused to take part in the work either of E.C.O. or the E.E.C.E., and it played only a very limited part in that of E.C.1.T.0. On the other hand, Czechoslovakia and Poland were active members of E.C.O. and E.C.1.T.0., and showed considerable interest also in the activities- of E.E.C.E. With the exception of E.C.0., however (in which Poland had a big stake), the nucleus of all three organisations consisted in a group of countries roughly corresponding to the 16 who met in Paris last summer to draw up a joint answer to Mr Marshall’s offer. And the United Kingdom, besides acting as host to all three organisations, sponsored and initiated a great number of their activities. The Economic Commission

On their liquidation, the essential functions of all three organisations became the responsibility of the Economic Commission for Europe of the United Nations. This commission, with its seat in Geneva, was set up by the Economic and Social Council last March. Its birth was greeted with considerable hope. But in the months which followed political developments have inevitably forced it into a backwater. Though it has begun to build up an efficient secretariat and has held a number of technical meetings, its place in the reconstruction of Western Europe is not at all easy to imagine. While Europe is being rebuilt in two separate halves, the commission’s function, like that of the United Nations in general, is more likely to be the strategic one of holding intact the bridge between East and West. Its underlying economic conception, however, that of providing a forum- in which Europe’s various economic problems can be resolved in the light of a unified policy, will no doubt commend itself equally to those responsible for the reconstruction of Western Europe.

The Paris Conference, having reviewed various problems, commended them specifically to the care of the emergency organisations and of the Economic Commission in so far as it had already taken over their tasljs—the co-ordination of hydro-electric power development with particular emphasis on the construction of a European high-tension grid; the supply of skilled manpower and modern mining machinery to the coalfields of Europe in an attempt to raise output of European industry in general; and the raising of the efficiency of Europe’s transport system by such projects as the partial standardisation of equipment and the creation of a European freight-car pool. These examples serve to illustrate the type df problem which calls for solution on an international scale. Long before the E.C.E. or the Paris Conference appeared, the emergency organisations had investigated many of these problems and made a number of useful recommendations for action “within their own fields of competence.” The solution to any specific

scarcity, however, is only in the rarest of cases found within the limits of the problem in question. Whether we are dealing with coal, transport, or steel, the problem cannot be resolved unless it is tackled on the widest of fronts: for a point is invariably reached where the problem invades the domain of one or more of its hardpressed neighbours. Coal production is inextricably tied to that of timber production, to the availability of rolling-stock and to electric power. In their turn the increased production of rolilng-stock, of timber, and of power depend vitally on the supply of various engineering products based on steel—and thus lead us right back once more to the output of coal. This vicious circle of interlocking shortages is in turn aggravated bv certain distortions in the pattern ot European and world trade and of the balance of payments: the need to earn hard currencies for the payment of essential imports inevitably means a diversion of vital manufactured goods from the needy markets of Europe to the overseas suppliers of primary produce. Financial assistance from the United States will help to arrest this process—which has its psychological as well as its purely physical sides. But if the production targets which the European couniries have set themselves are to be reached in the appointed time, some comparison of their plans, some periodic check as to the mutual compatibility of their programmes, will no doubt be desirable. In the social democracies of Western Europe economic plans are largely based on export-import programmes. In drawing up such programmes Governments make certain assumptions about import availabilities and export markets, assumptions which the emergence of a buvers’ market tends increasingly to bedevil. It is along such lines as these that international economic co-operation can make its most powerful contribution. Power and Transport The development of Europe’s power resources is an obvious case in point The European Coal Organisation, during its lifetime, had the task of pro. moting the supply and equitable distribution of coal as well as scarce items of mining equipment and mining supplies. The Public Utilities Panel of E.E.C.E. performed similar functions in respect of electric power. Certain emergency work of a hand-to-mouth character still remains* to be accomplished, but there is clearly a call also for a broad review of the combined fuel and power base required to launch any comprehensive reconstruction programme. Such a review would take into account not merely coal and electricity, but would consider equally the problems arising from possible competition among various sources of power (including atomic power) and from the possibilities of substitution among them. Fuel and power, being the base of most industrial activity, are naturally a useful point of departure for any economic study; an increase in their supply is capable of stimulating expansion elsewhere. But the problem of fuel and power, even in. its widest context, does not make proper sense if it is viewed in isolation. It is a continuous chicken-and-egg problem. What comes first: food or coal? coal or transport? transport or steel? The correct answer invariably is along the lines: no coal, no transport—no transport, no coal! *

The early stages of post-war rehabilitation lent themselves to- treatment in “commodity” compartments. It was essentially a “hit-and-miss” process in which any action at all yielded so rich a profit that it was worth taking for its own sake alone. Now that Europe is working against a far more rigid background of set national objectives, international studies and exchanges of views of a far more comprehensive and subtle kind must precede any really useful action.