Watch on the Rhine

Since the war, the most persistent block to integration of continental European economics has been the French fear of German economic supremacy, once German industry was rebuilt. France has been adamant in her demands that Britain must enter into any European economic union to balance out the German industrial power. Therefore her offer last week to put all German and French steel and coal production under a "joint high authority" came as a surprise to everyone, especially to the British.

This move represents a great change in emphasis of French efforts to keep a hand on the German industrial throttle. Heretofore, she has put her trust in one-sided plans like the Allied Ruhr Control Authority and her fifty-year lease on Saar coal mines. But the Ruhr control has been honored more in the breach than in the observance, and it is the Rhine and the Ruhr, not the Saar, which are the keys to German industrial might.

The Germans have two good reasons for submitting their production to the new bi-national authority. For one thing, the present quota which is severely limiting their steel production would be steadily relaxed. In addition, the new agreement would virtually nullify the French-Saar pact which has caused so much resentment in Germany.

One of the most salutary effects of the new plan would be to cut down the extent of "double pricing" (charging a higher price for exports than for domestic production) which is currently pushing European steel prices out of the competitive range. Under the treaty, the joint authority would "supply coal and steel on equal terms to members." Though this is a bilateral agreement, all European countries will be invited to join the coal-steel union.

Economically, the new French plan will unite the most basic industries of two complementary areas which have been segregated by trade barriers and periodic wars. Politically, it is an important step in integrating Western Germany into the Atlantic states, while keeping some check on the German industry that has been a crucial factor in two world wars. If the new proposal indicates genuine French-German cooperation, it may be the basis for further economic and political cooperation in continental Europe.