4 MARCH 1949, Page 1


THE knot which had developed in the negotiations for a German settlement now seems likely to be loosened, if not quite removed. The military governors having given the representatives of the Bonn Assembly their views on the present draft constitution the work may now proceed, despite the continued delay in producing an occupation statute. The new step forward has not come too soon. The neat list of outstanding issues—Ruhr Authority, Military Security Board, occupation statute and dismantling—was beginning to look like a confused tangle of cross purposes. The French attitude to the Ruhr settlement still includes a stiff determination not to allow any slackening of outside control. Combined with the subdued but stubborn German protest that international control of the Ruhr does not make sense unless it is fitted into a wider international scheme, has led to some tension. The talks on the occupation statute are said to be making some progress, largely no doubt because of the British Government's willingness to modify its previous support for a considerable degree of central control in the new German State. Possibly corresponding concessions by French and Americans may now be expected in other subjects under discussion. Yet it still cannot be claimed that all is well. Far from it. The Humphrey Report on dismantling continues to be discussed in secret to the exas- peration of everybody, including the Germans. Only the Military Security Board has reasonably clear workinginstructions, but it still has no formal charter. And at this moment the first signs of a rapid deflationary movement have appeared in West Germany. The Deutschemark. is getting scarce and unemployment is rising despite the fact that physical reconstruction is still, of course, far from com- plete. It is too early yet to judge how serious this movement is, and the possibility that certain German interests are exaggerating its Seriousness cannot be ruled out. It would no doubt be very convenient for them if, at the time when direct Western grants in aid may be expected to diminish, a plausible case could be made for loans for construction work to absorb the unemployed. The occupation authorities may quite well take their time before deciding about that. But on everything else they should move as quickly as they can.