Three-Year-Old's Progress

Last week the World Bank, originally chartered in 1944, finally transacted its first piece of business. With a minimum of formality and the signing of a mere twelve documents, the International Bank for Reconstruction and Development took a positive step toward "bringing about a smooth transition from a wartime to a peacetime economy." This first step was a loan of $250,000,000 to France, for 30 years, at 3 1/4% interest, plus 1% commission (on the outstanding part) which the Bank collects to build up a special reserve. The negotiations, which took only six weeks, were conducted for the Bank by smiling, solid John J. McCloy, its president, and for France by Ambassador Henri Bonnet and Wilfrid Baumgartner, President of Credit National--France's RFC.

France intends to spend the dollars on raw materials and machinery. Allowed to shop anywhere she pleases, she is expected to spend 90% of them in the U.S. Said the official loan agreement: "France needs the proposed loan. ... The economic rehabilitation of France will speed the recovery of surrounding countries. . . ."

Though many an American hoped that the loan would help France's Government in its struggle with the Communists, the French Government itself was playing down that line to avoid cries of "dollar diplomacy." Plain Frenchmen regard the Bank's credit as a U.S. loan. Said a middle-class Paris housewife, when asked how she felt about American aid to France: "The Communists say we are getting closer to the Americans because that persuades the Americans to help us. But what is so disgraceful about that? Isn't that what you do in business every day?"

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