FOREIGN RELATIONS: THE SECOND STAGE

ECA's boss, Paul Hoffman, was a happy man. After arguing over the matter for weeks, the 16 Marshall Plan nations and Western Germany agreed among themselves last week on how to whack up ECA's $4,875,000,000 (see INTERNATIONAL). It was one of the few times in recent history that the European nations had agreed on anything. Hoffman dared to hope that that cooperation, born out of desperation, was a milestone on the road to economic sanity.

With that milestone passed, ECA sized up its accomplishments. Even while Europe argued over how to divide allotments, ECA had approved shipments to Europe totaling $1.49 billion. The major allotments had been for wheat ($230 million), coal ($128 million), petroleum ($127 million), cotton ($111 million), nonferrous metals ($89 million), meat ($64 million), industrial equipment ($48 million), tobacco ($26 million).

Administrator Hoffman was reasonably well pleased with the results. Despite mistakes and the awkwardness to be expected in getting any such vast plan started, ECA was generally doing what it was supposed to do. Without ECA, Hoffman declared, France and Italy "would have been in the hands of the Communists six months ago."

In a flattering, creeping fashion, Europe was edging back towards something like economic health.

ECA was a shot in the arm and a steadying influence which was lifting Europe back on its feet.

Italy reported a rise in industrial production and stabilization of the lira. Britain's rundown industrial machine was gradually winding up again. In two months, production in Western Germany climbed 20%, bringing it to 60% of the 1936 level. More important, Ruhr iron and steel production set a new postwar record.

These were signs that Europe was getting off relief, and getting to the point where the U.S. could demand considerable selfhelp. ECA aid was coming into a second stage, where immediate food and fuel supplies could be replaced by the machinery and equipment to produce a permanent recovery.