BUSINESS ABROAD: Schumania's Year

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In Switzerland last week, on a well-earned vacation, France's peppery little Jean Monnet, managing director and original creator of the Schuman Plan, ticked off the gains and setbacks since Western Europe agreed to pool its coal and steel resources just one year ago. The most obvious achievement was that the huge, $6 billion coal and steel industry—which accounts for 15% of the total industrial production of France, Germany, Italy and the Benelux nations, and provides work for one out of every ten of their workers —had actually been brought under a single command. By so doing, the plan had: 1) established a common market for coal, iron ore, scrap and steel; 2) eliminated customs duties, quotas, currency controls and double pricing. In long-divided Europe, that in itself was a very big accomplishment.

The rest of the score:

¶ Coal. A common price has been achieved, but at the cost of higher prices for both French and German customers. Germany's double-pricing system, which favored its own industries, was eliminated by raising the domestic price to the export rate. Similarly, the pegged domestic price of French coal was raised. But importers of Belgian coal, notably the Dutch, now pay less, and marginal Belgian mines, under Schuman pressure, are planning to modernize. As for coal supply, two mild winters have cut the need for U.S. imports from 18.2 million tons to a yearly rate of 4,000,000 tons, and have boosted coal stocks to 10 million tons.

¶ Iron Ore. France, which used to subsidize its own users with the low price of 850 francs a ton (while outsiders paid 1,380 francs and could get little of it), now charges one price (1,250 francs) to all. Result: production has gone up 10%, and Belgian steelmakers, for instance, can now get adequate supplies.

¶ Scrap. Order has been brought to a price scramble where Italy paid as high as $85 a ton for scrap from India, while The Netherlands held its own price down to $22.50 by strict controls. A common market has established a price of $33 a ton (v. the U.S.'s $43), and Italy, which still has to depend on high-priced foreign scrap, gets a subsidy from the other Schumania nations to make up the difference. At first, France's government tried to buck the common market with its own cartel designed to limit exports, but yielded when Monnet put his foot down.

¶ Steel. Once, prices were fixed in each of five areas—France, Germany, Italy, The Netherlands and Belgium-Luxembourg. Currency barriers and price controls restricted exports. With the lifting of controls, steel prices found a steady level. They recently dropped slightly, and with a pre-election price cut in Germany averaging 5%, are going lower. Customers are holding out for cheaper prices, but Monnet wants to keep them high enough to finance modernization and expansion.

To Schumania's Boss Monnet, the most encouraging sign of all is that Europe's nationalists are beginning to think as Europeans. Last January, hoping to raise $30 million to pay for administrative expenses, technical research and interest on loans, the High Authority told the community's 1,008 factories and mines that they would be taxed .3% of the average value of their monthly output and that the levy would ultimately be raised to .9%. Not one protest was heard, and payments have been coming in regularly.