Page 10

the States. I shall refer to this area as thi
"New Germany."
2. I assume that our objective must be to
clear German life of the Nazi conspirators
and to punish those who have contributed to
this conspiracy, which murdered millions of
people in cold blood and brought this ap-
palling disaster upon the world.
3. I assume that we will, not make the
major mistake of Versailles, but will com-
plete absolute disarmament of the Germans
so that they shall not be able again to engage
in aggressions; that this disarmament will
embrace destruction of all military arms,
fortifications, and direct arms factories, with
certain control of industry; that the Germans
will have no army, no navy, and no 'air
forces, retaining only a constabulary in
which no Nazi or previous Army officer may
be employed; that this disarmament must be
continued for a generation or two, until
Germany has lost the "know-how" of war
and the descent of militarism through birth.
4. I assume that these requirements must
be safeguarded by international guarantees
and effective police service by the nations.
5. I assume, in our own interest and that
of Europe, that we wish to restore the pro-
ductivity of the continent, that we wish to
revive personal freedom, honest elections,
and generally to reconstruct the German
people into a peace-loving nation cooperating
in the recovery of Western civilization.
6. 1 assume that the United States will
not join in such guarantees and policing
unless the treaty with Germany is so con-
cluded that it contributes to the restoration
of productivity and lasting peace in Europe
and promptly relieves us of drains upon our
taxpayers.
The German Economic Problem.
The German economic problems have two
aspects:
1. The long-view, broad economic policies
toward the new Germany which alone can
produce the reconstruction of Europe -and
peace.
2. Otur imniediate probl(!ion Ea-the 0joint
Anglo-American military' zones during the
interregnum pending peace.
I therefore  divide this discussion' into
these 2 parts.
Part 1: The long-view economic problem.
The long-view economic problems involved
in the peace with the new Germany and its
aftermaths are greatly affected by war de-
struction, the boundary settlements for the
new Germany, the plant removals for repara-
tions, and the policies with respect to "war
potential" of industry.
These effects may be summarized:
1. There was considerable destruction of
non-war industry from   the air and other-
wise during the war. The loss to peaceful
productivity has not been determined, but it
is considerable.
2. The proposed annexations to Poland
and Russia, and the possible annexation of
the Saar basin by France, will take from
Germany, as compared to 1936, about 25
percent of her food supply, about 30 per-
cent of her bituminous coal and about 20
percent of her manufacturing. capacity.
3. The population of Germany in 1936
was about 63,000C000. The population of
the new Germany by 1949 will be about
71,000,000 due to the, expulsion of Germans
from the Polish and Russian annexations,
from   Czechoslovakia,  Hungary,  Austria,
Yugoslavia, Roumania and the return of
prisoners into this area.
4. The Allied economic policies toward
-Germany are - I have adopted 1936 as a
basis for economic comparisons because it
was a full year before German industry was
distorted by her annexations and her Most
intensive  armament activity   -  of two
categories: The first involves world safety,
'Continued on page 26)
A potter molds clay into vales in a small Bavarian
potery factory. Hand-made products such as these
are to play a large part in? the projected bizonal
export program to make- Germany economically
self-sufficient.                Photo by Byers
10,