492

stood without placing it against the background of whdt

happened in 1947: During the first part of that year,
prices showed signs of leveling off. The President, on
the basis of studles by his Counc~lof Economic Advisers,
urged business not to make further increases and to reduce where possible, and said that wage boosts should
not be granted except where they would not require
raising prices. The Economic Reportpaidparticular
attentlon to the gains made by thebltumlnous miners,
and pleaded with coal operators and steel employers not
to increase prices as a result, at least until they had had
a chance to see whether the higher labor charges could
not be otherwise absorbed.
Coal and steelpromptly jacked prices up,and
by
more than the amount necessary to cover their increased
costs. This, combined with the short corn crop and the
resulting higher prices of food, let inflation loose again.
Belatedly, the blg companies have now executed an
about-face, but they have not yet retraced their steps far
enough to get back where they were a year ago. Even
thismuch IS better than further upward spirallng, but
it is to be regretted that they dld not take their present:
course earller, when it might have prevented the current
inflatlon and when they could have obtalned the cooperation of organized labor.
Meanwhlle, the baslcexcess of demand over supply
has become greater, and ~t will be harder than ever to
check the upward spiral. Bank loans, In spite of a concerted move on the part of banks to llmlt them, have
expanded. The government, whlch In 1947 contributed
substantially tothe
restriction of demand by taklng
billions more from the publlc than it pald back, now has
been compelled by Congress to reduce taxes and faces
expanded mllitary expenditure. It may even have a deficlt
at the end of the year. It would be a considerable feat
even for a confirmed optlmist to belleve thatthere is
much chance for voluntary action on the part of buuness to make headway against this tlde.
The best that can be done is to hold the line while
production increases, In the hope that when and
if the
present abnormal stimulants to purchasing power
slacken
off, the decline In the abillty of the lower-income groups
to buy will not have become so great as to producea
serious slump. The best tlme to prevent a depresslon 1s
before it begins to happen, and the chief danger in the
present situation is that consumers are being priced out
of markets.

WHY

did the bigcorporations sudmdenly change their

Po@? Was it because they saw falling prices in the
offing, and believed that their volume of business would
drop if they dld not anticipate the trend? Possibly, but
in the case of steel and others who may imitate it, there
is a morelikelyexplanation.
When they raised their
prices, they did expect a slump in the near future. They

The NATION
were not impressed by theargument that they could
help to avoid it and ought to do so. They were not sure
that others would do the same; the svmgs of the cycle
seemed to them foreordained. Therefore they decided to
sell all they could for hlgh prices while the weather was
fair, in order to provideample reserves and surpluses
against the storm. Now, however, they are reassured
about the prospect because of the armament program and
otherrelateddevelopments and are willlng to adopt
d
more far-slghted pollcy by easlng off the price pressure
a little.
It is unfortunate thataprogram
of this kind could
not have been coordinatedwltha real anti-inflationary
campaign, thorough and well planned. That would have
requiredsimultaneous
action by governmentboth
in
controls andin fiscal pollcy, together withprior consultatlon with labor and agriculture and approprlate
action by both.

PartitionBeginsat Home
BY FREDA KIRCHWEY

IT

IS too late to save Palestine mm terrible and destructive war. Even without the
dmrnentatlon in the
Nation Associates's memorandum,publishedwiththls
issue, I t has been no secret that Arab incurslons and preplt-atlons forgeneral
invaslcnwerebeingmadewith
full knawledge of the mzndatory power. But If Brltlsh
complicity was self-ewdent, that of the Unlted States was
almost as blatantand
even morereprchenslble.
For
Britain had made its opposition to partition clear from
the beginning, while the United States had sponsored the
partcion resolution In the Assembly. The retreat executed
by the State Department, sounded on December 5 by its
embargo on arms shipmentsto Palesbne, was an allclear signal to British and Arabs. From then on, both
knew that the Unlted States would give only verbal backing to partltion, andbothwent
ahead, full steam, to
create conditions designed to make partltion impossible.
Britain continued to arm the Arabs, and the Arabs initiated a reign of terror that increascd as the weeks passed
and it became evldent America would contmue to yleld
ground under threat of violence.
When the United States delegation produced its truss
teeship scheme, m e day after President Truman had assured Dr. Weizmann he stlll stood for partitlon, Ametican prestige h t a new low and the BIitlsh-Arab coalition
h e w they need not accept even trusteeship, They knew
trusteeship could be blocked by the same tactics that had
blocked partition. So the border violat,ions became n o r e
flagrant and were duly recorded by Btiblsh Intelligence,
as our document reveals; but no el4ort was made to halt
h i s invasion of Palestlne by volunteers organized out

493

May 8, 1948

feat Bntish-Arab mar.euvers and expose the trusteeship

scheme as empty nonsense. The unreallty of the h e r ican proposal has already become so pamfully apparent
that a new reversal of poky is being rumored in Washmgton
Lake Success.
It IS no secret that the Presldent is both worried and
ashamed over the part he has played. Some modification
of American policy IS almost certain; otherwise General
HILE the delegates go through their futile motions John E. Hdldring wouldneverhzve been put in the
p l x e of Loy Henderson as chie8fadvlser to the Secretary
in the Assembly-dutifully discussmg trusteeshlp
of State on Palestme affairs. Hllldring helped nurse parwith delegates of Arab states whose governments, at the
titionthroughthe
Assembly lastNovember. He thorsame moment, openlyannounce ,their plans for fulloug$ly belleves the plan is the best solution available.
fledged aggression-the Jews of Palestme have effecAbove all, he has steadfastly opposed the oil diplomacy
tively taken the first steps to makepartitionaliving
of the Henderson-Wadsworth clique. That Hilldring, in
reallty. Resistingwlthremarkablecourage
the war of
sp:te of Ill-health and a firm resolve to refuse furbher
nerves belng waged against t h e m in London and WashStateDepartment assignments, has come back to take
ington, the Ilaganah has occupied the key pomts in alcharge of Palestme pol~cyis a hopeful sequel to, and u.nmost thewholearea awarded the Jewlsh state by the
doubtedly in part a consequence of, the Jewish successes
UnitedNations. That partition is a fact has been acin Palestine.
knowledged by the head of the Palestine Commmons
The resolution of November 29 still stands. It has not
advance party; Dr. Pablo de Azcarate, on his return from
been superceded by any otherproposal. Presrdent TruJerusalem last week, reported that partltmn was in effect
man has continued to indorse partltion even in the face
and could not now be overthrown. The truce commission
of theState Deparbments betrayal of it. These rather
sent lout by the Securlty Councrl has reported back that
pathetic discrepancies provide a Imphole through which
the Jewish Agency is takmg over suspendedgoverna new policy may sllp, if a new p o l q is in the making.
mental actlvltles as the British withdraw and is functionOne dare not hope for an unqualified reversal. But the
ing effectively in splte of constant warfare. Both testlfied
government, without too great loss o.f face, can recognize
that no central authority exlsts in Arab areas.
several facts.thatits brusteeship plan has not received
The same story has been told In greater detail by other
observers. Jewish authorlties have taken over most of the
enough support in the Assemlbiy to warrant pressing it
farther; rhat an Arab invasion of Palestme has taken
services; they collect taxes; they have even issued stamps
for use wlthin thelr boundaries, and have announced the
place; that a Jewish state is in process of being set up
and partition is being effected by a Jewish militia. On the
restoration of foreign mall service. More impressive stdl,
basis of these facts, It could (1) withdraw the trusteethey have set up an agency to control the properties of
Arabs who fled as the Jews tookover: businesses are
ship proposal; ( 2 ) recommend that the Security &unci1
beingmanagedwhere
possible; vineyards and other
immedlately take up the threat to peace involved in the
aggression of the Arab states and the failure of the Britfarms are belng tended and thelr produck used, but the
ish to maintain order; ( 3 ) recognize the Jewish state on
assets conserved for the legal owners. This, I should say,
May 15 when theBritishmandateends;
( 4 ) propose a
is the final proof of an established, responsible adminutrusteeship for the Arab areas pendmg the creation of an
traticn.
At the same time, the Jews are fighting the Arab inon
Arabgovernment; ( 5 ) propose ageneralembargo
vaders andtheir local allies with courage and success.
shipments of arms to the states of the Arab League; ( 6 )
llft the American embargo on arms for Jewish Palestine;
That they can hold out for a long tlme is certain. Ameri( 7 ) make a loan to the Jewish state.
can army officers who have lately inspected the Jewish
forces and training centers have reported a high morale
This IS a mlnlmal program which does little more than
take account of the situation so dramatically revealed in
andintelligentpreparation.Already,Arableaders
are
our supplement and offer frlghtened officials a chance to
lettlng it be known that while they are committed to a
holy war to blot out theJewish State, they will go about It
repair the worst consequences of their now irretrlevable
gradually, accolmplishing their end, as Assam Pasha said
mistakes. An adequate program obvlously would require
the other day, by atlritlon.
international action, not only tu enable the Jews to maintam partition through thelr own efforts, but to marshal1
OT theUnitedNationsbutthe
Jews themselves
behind those efforts the full support of the United Nahave implemented the United hlations plan. This 1s
tions.But this wouldrequire a degree of courage and
the single most impatant fact to hold in mind.I t will do
vision we have learned not to expect. At this desperate
hour, we sl1ould be grAttful for less.
more than a hundred arguments in the Assembly to de-

of the regular armies of the Arab states, and no charges

were preferred in the Security Council.
But if It is too late to stop a war lnltlated by the Arabs,
abetted by the Bntish, and connlved at by the Americans,
it 1s still possible to ead It soon and on tolerable and
terms.
One need not Indulge hopeful fantasies
to realize that
a narrow avenue of honorgble escape stlll remains open.