Author's Note: This article is based on discussions in a group of members of the Council on Foreign Relations who have been studying the German problem. It is not to be taken as representing the views of the Council, which does not itself take a position on public questions, or of all the individual members of the group, some of whom were in disagreement on specific points.
ALLEN W. DULLES, American member of the Preparatory Commission for the Disarmament Conference in 1926, and legal adviser to the American delegation at the Three Power Naval Conference in 1927 and at the Disarmament Conference in 1932 and 1933; representative of OSS in Central Europe, 1942-1945, and Chief of the OSS Mission to Germany after V-E Day
THERE will not be economic or political health in Europe until we have faced and dealt with the German problem. Neither Britain nor France, war-weary, in financial straits and preoccupied with domestic and empire problems, can shoulder the major part of the burden of making a settlement in Germany. The United States is the only western Power which has the capacity, if it has the will, to take the lead and to see the task through. The performance of this task demands American initiative, ingenuity and money in large amounts. The money is not charity; it is part of the cost of World War II. It is also an investment in our own future welfare and security.
Germany must be dealt with in the framework of Europe. If the settlement is to bring economic health to Europe, it must advance the economic stabilization of all of Germany's neighbors and help them to face their common economic problems together. If it is to bring political health to Europe, it must contribute to a reduction of the political tension on the Continent and between the Powers outside the Continent which are hardly less concerned with the future of Germany than are that country's immediate neighbors.
In laying plans to deal with Germany we face these problems and contradictions:
1. If Germany is to be solvent and self-sustaining, and hence is to cease being an object of outside charity, she will, by implication, be industrially prosperous. But the prospect of a prosperous Germany arouses fears of a Germany that may again be militarily powerful and dangerous.
2. Germany's industry is necessary for Europe, and must be fitted into the European economy. But the natural pattern to follow, i.e., integrating the industry of western Germany chiefly into western Europe, will arouse Russia's suspicions that preparations are being made to use Germany against her. Similarly, the absorption of the industrial capacity of prewar eastern Germany (Silesia, etc.) into the Soviet sphere of influence will raise apprehensions in the west of a substantial strengthening of the military potential of Soviet Russia.
3. Democracy cannot be inculcated in a society which is starving and hopeless. But we have historical grounds for fearing that as soon as Germans begin to hope, they will hope for a new Greater Reich...
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U.S. troops on conquered territory, infrastructure in ruins, international squabbling over reconstruction: a window onto occupied Germany seven months after V-E Day, when progress was still unsteady and Europe's future hung in the balance.
This article is based on discussions in a group of members of the Council on Foreign Relations who have been studying the German problem. It is not to be taken as representing the views of the Council, which does not itself take a position on public questions, or of all the individual members of the group, some of whom were in disagreement on specific points. (Author's Note.)
HOW far is it true that a large domestic or internal national debt, as contrasted with an external or foreign debt, is a relatively negligible burden? Does the payment of an internal debt, requiring merely the transfer of wealth or income from some persons to others within the same country, put no formidable strain upon that country's economic energies?

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