June 9, 2015

1949. West Germany's Booming Industry Alarms Britain and France

The Reinvigorated Ruhr
The Zollverein Coal Mine Industrial Complex in Essen, February 1949. Photo by Carl August Stachelscheid (source)
Bill Downs

CBS Berlin

January 28, 1949

It is becoming increasingly clear that the economic future of Western Europe will depend in a large part upon what happens in some 1,300 dirty, sooty square miles of Western Germany.

The Ruhr is gradually becoming the focal point of the Western European recovery under the Marshall Plan. The quantity of coal, steel, and power produced in this valley—only forty-five miles long and thirty miles wide—will largely determine the amount of taxes the American taxpayer will have to contribute to the revival of Western Europe.

If the peace of the world depends upon a reconstructed Western Europe, then the Ruhr and its German workers have a tremendous part to play in the achievement of this goal.

I have just returned from a week of traveling in the Ruhr industrial complex, talking with industrialists, workers, political leaders, and occupation authorities. It is not the most pleasant place in the world. The mile after mile of mines, foundries, and furnaces; the run down and dirty laboring communities; the smoke and soot from the chimneys.

The district was badly bombed during the war, and places like Essen and Duisburg are still mostly huge piles of rubble.

But underneath the grime and the damage, there is a great vitality. The people have lost their defeated shuffle and now walk with vigor and spirit. Everyone can work who wants a job, and now that the reformed West Mark has achieved confidence and value, the Ruhr German is working hard.

The city of Düsseldorf, which the Ruhr control authority has made the unofficial capital of the district, is overflowing with life. The shops, where plaster is hardly dry, are jammed with everything from pot scrapers to fur coats. Jewelers are back in business with gems and gold and silver. In blockaded Berlin, for example, you find a large number of antique shops where desperate families trade the last of their valuables for marks. In the Ruhr there are few antique shops. Everything is new.

A wealthy merchant class is emerging in the revived Ruhr economy. These men could be compared with the carpetbaggers in our own civil war. You see them in the most expensive restaurants, driving the biggest automobiles, and wearing the finest clothing. They are the middlemen, sometimes dealing on the black market and sometimes not. If an industrialist needs scrap iron, these men know where to get it. If it is sheet steel, they can make a deal.

You have probably seen caricatures of the traditional German businessman with a round, protruding stomach and a fat, moon face. The corporation stomach is returning to Germany by way of the carpetbagger. You don't find it in the people who do the work.

Yes, the Pittsburgh of Western Europe is rapidly getting back on its feet, and this fact alone poses serious problems for the American, British, and French who must channel Ruhr production into the entire economy of Europe. The Germans have ideas of their own as to how this should be done.

At present it is estimated that the United States is pouring a billion dollars a year into Western Germany to keep her alive. The only way that Germany can repay this is to export on the foreign market. If that were all there is to the problem, it would be simple.

But the British and French have different viewpoints. Britain particularly is in the position of "export or die," and a British official told me frankly that "if someone is going to die, it will not be the United Kingdom."

The French have a similar viewpoint with another added factor. They say we must be careful not to make the mistakes of the last war. Revive the German economy and German nationalism will follow. Then you have a Teutonic threat of war on your hands.

The Americans insist that this position is illogical. Our aim is to revive the European economy. The Ruhr and Western Germany form a vital part of that economy. The life of a free economy, America says, is competition. And if German production is in competition with other countries, it can't be helped. American authorities point out that this revived German production will also be in competition with United States industry.

That is the argument between the three occupying powers. The Germans watch these tensions and act accordingly.

The Germans put up a tremendous howl, and still are sobbing, when the international control of the Ruhr was announced.

Right now the British have an embarrassing trial on their hands in the case of seven German workers who refused to dismantle a drop forge in Bochum, claiming that it was a plant necessary to the peacetime German economy. The British, I gathered, are a little sorry they brought the thing up.

This is the first instance of passive resistance against an occupation power in Germany. A similar thing occurred in 1923 when the entire Ruhr population refused to work for reparations. France and Belgium sent troops in, and for almost two years the Ruhr was under a state of siege until Germany was reduced to a state of bankruptcy and her resistance broken.

The Germans know, and we know, that the occupying powers cannot afford to let a similar situation develop now when we are trying so desperately to put Western Europe back on her feet. It places great power in the hands of the people who were supposed to be conquered in the last war.

Right now the Ruhr is governed by a "level of industry" regulation that sets steel production at 11.7 million tons of steel a year. It is expected that this level will be raised to 14 million tons. This will mean the first real postwar boom in the Ruhr. It will also mean greater exports into the European economy and fewer dollars needed in Germany.

At present there is a moratorium on foreign investments in Germany, but both British and American authorities have recommended that this ban be lifted.

Opening Germany to foreign investment will be of greatest importance to American financiers. As one German industrialist put it, America is the only nation in the world today that has money to export. This industrialist, who has connections in the United States, says American capital is extremely interested in investing in Germany.

"However," he explained, "No one is going to risk money in this country until the international political situation becomes more stable. There has to be the prospect of ten years of peace before the dollars will risk going to work here."

These are only part of the complex problems facing Western Powers as they seek the road to economic revival, stability, and peace.

The main questions being asked are:

Is Germany becoming the dominant economic factor in Europe, as the British fear?

Is Germany being so strengthened that she will become another threat to peace, as the French fear?

Only time will give the answers to these and other problems. Meanwhile the Ruhr and West Germany continues to pull itself out of the rubble of war. Make no mistake about it, the Germans are the hardest working people in Europe.