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    "ocrText": "COPY NO. 1\nFOR THE PRESIDENT\nOF THE UNITED STATES\nBELGIUM and LUXEMBOURG\nINTELL\nE\nGENCE\nCENTRA\nGENCY\nSR-19\nPublished 16 November 1948\nTHE BARTY ARCHIVES NATIONAL RECORDS SERVICE TROMAN AND LIBRARY\nE.S. GOVERN FAIL -\nCENTRAL INTELLIGENCE AGENCY\nDECLASSIFIED\nE.O. 11652, Sec. 3(E) and 5(D) OR (E)\nC.I.A. 6.13.76\nCARD letter,\nby NLT NC NARS Date 7.5.74\nWARNING\nThis document contains information affecting the na-\ntional defense of the United States within the meaning\nof the Espionage Act, 50 U.S.C., 31 and 32, as amended.\nIts transmission or the revelation of its contents in any\nmanner to an unauthorized person is prohibited by law.\nкоизен\nзаятияс\nDISSEMINATION NOTICE\n1. This copy of this publication is for the information and use of the recipient\ndesignated on the front cover and of individuals under the jurisdiction of the recipient's\noffice who require the information for the performance of their official duties. Further\ndissemination elsewhere in the department to other offices which require the informa-\ntion for the performance of official duties may be authorized by the following:\na. Special Assistant to the Secretary of State for Research and Intelligence, for\nthe Department of State\nb. Director of Intelligence, GS, USA, for the Department of the Army\nc. Chief, Naval Intelligence, for the Department of the Navy\nd. Director of Intelligence, USAF, for the Department of the Air Force\ne. Director of Security and Intelligence, AEC, for the Atomic Energy Com-\nmission\nf. Deputy Director for Intelligence, Joint Staff, for the Joint Staff\ng. Assistant Director for Collection and Dissemination, CIA, for any other\nDepartment or Agency\n2. This copy may be either retained or destroyed by burning in accordance with\napplicable security regulations, or returned to the Central Intelligence Agency by\narrangement with the Office of Collection and Dissemination, CIA.\nTREMAN\nABUVH\n\"NATIONAL\nARCHIVES AND\nRECORDS\nLIBRARY\nSERVICE\nE.S. ARCHIVES S. RECORDS GOVERN MENT SERVICE\" NATIONAL TRUMAN AND LIBRARY\nDISTRIBUTION:\nOffice of the President\nNational Security Council\nNational Security Resources Board\nDepartment of State\nOffice of Secretary of Defense\nDepartment of the Army\nDepartment of the Navy\nDepartment of the Air Force\nState-Army-Navy-Air Force Coordinating Committee\nJoint Chiefs of Staff\nAtomic Energy Commission\nResearch and Development Board\nSECRET\nPublished November 1948\nSECRET\n(noteU эітолозИ 9\n08\nоттолога bas noinU }\nSR-19 ИОШНОТ-Ш\nes\n.1\nBELGIUM and LUXEMBOURG\n08\n&\n08\n.B\nTABLE OF CONTENTS\n08\nхиблей d\n18\nXU\nis\nSUMMARY\n18\n.b\n18\n.9\nSECTION I-POLITICAL SITUATION (BELGIUM)\nSE\non\n1. GENESIS OF THE PRESENT POLITICAL SYSTEM\n1\n2. PRESENT GOVERNMENT STRUCTURE\n2\n3. POLITICAL PARTIES AND CURRENT ISSUES\n3\na. Political Parties\n3\n88\nTO\n88\n(1) Christian Social Party\n4\n(2) Socialist Party\n5\n02\n(vsn.\nd\n(3) Liberal Party\n5\n08\n(4) Communist Party\n6\n18\n(5) Democratic Union\n6\nΓE\n4. TRADE UNIONS\n6\n5. STABILITY OF THE PRESENT ADMINISTRATION\n7\nd\n6. CURRENT ISSUES\n8\n3\na. King Leopold\n9\n18\n.b\nb. Price-Wage Relation\n10\n88\nc. Education\n10\n08\nd.\nNationalization\n11\ne. Social Measures\n11\nf. Walloon Problem\n12\n04\nBECAHILA\nSECTION II-ECONOMIC SITUATION (BELGIUM)\nA\n1. GENESIS OF PRESENT ECONOMIC SYSTEM\n13\nSA a. Agriculture\n16\nb. Natural Resources\n17\nEA\n8\nc. Industry\n18\n(1) Iron and Steel\n18\nΓA\n(2) Non-Ferrous Metals\n19\nBA\n(3) Textiles and Leather Goods\n20\n(4) Chemicals and Fertilizers\n20\n(5) Diamond-Cutting Industry 20\n02\n(6) Electric Energy and Gas\n21\nAS d. Finance\n21\nSECRET\nSECRET\ne. Foreign Trade (Belgo-Luxembourg Economic Union)\n24\nf. Benelux Customs Union and the Contemplated Economic Union\n26\nSECTION III-FOREIGN AFFAIRS (BELGIUM)\n1. GENESIS OF PRESENT FOREIGN POLICIES\n29\n2. RECENT DEVELOPMENTS IN FOREIGN RELATIONS\n30\na. Western Europe\n30\nb. Benelux\n30\nc. UK\n31\nd. France\n31\ne. Germany\n31\nf. USSR and Satellite Countries\n32\nSECTION IV-MILITARY SITUATION (BELGIUM)\n1. GENESIS OF PRESENT MILITARY POLICIES\n35\n2. STRENGTH AND DISPOSITION OF THE ARMED FORCES\n35\na. Army\n35\nb. Navy\n36\nc. Air Force\n36\nd. Corps of Gendarmerie\n37\n3. WAR POTENTIAL\n37\na. Manpower\n37\nb. Industry\n37\nc. Science\n37\nd. Finance\n37\n4. MILITARY INTENTIONS AND CAPABILITIES\n38\nSECTION V-STRATEGIC CONSIDERATIONS AFFECTING US SECURITY\n39\nSECTION VI-PROBABLE FUTURE DEVELOPMENTS AFFECTING US\nSECURITY\n40\nAPPENDIX A- Topography and Climate\nBelgium\n41\nLuxembourg\n42\nAPPENDIX B- Significant Communications Facilities\n43\nAPPENDIX C — Population Statistics and Characteristics\nBelgium\n47\nLuxembourg\n49\nAPPENDIX D- Significant Biographical Data\nBelgium\n50\nLuxembourg\n54\nSECRET\nAPPENDIX E- Chronology of Important Events\n55\nSUPPLEMENT ON LUXEMBOURG\n1. Political\n58\na. Genesis of the Present Political System\n58\nb. Present Governmental Structure\n58\nc. Political Parties and Current Issues\n59\n(1) Political Parties\n59\n(2) Current Issues\n60\n2. Economic\n60\n3. Military\n61\nMaps:\nBelgium and Luxembourg\nBelgium and Luxembourg: Industrial Areas\nBelgium and Luxembourg: Population Density\nSECRET\nSECRET\nSUMMARY\nToday Belgium and Luxembourg are areas of exceptional economic and political\nstability. Their postwar recovery has been rapid and steady. Their people, tradition-\nally hard-working and ambitious, are spurred on to greater production by visible in-\ncentives displayed in well stocked shop windows. As highly industrialized nations with\nfew natural resources (Luxembourg has iron ore and Belgium coal), they must rely\nupon human skills and active foreign trade to maintain and improve their standard of\nliving. To expand their internal market and improve their position in foreign trade,\nBelgium and Luxembourg have entered into an agreement with the Netherlands estab-\nlishing the Benelux Customs Union, which they envision as developing into a complete\neconomic union within the next few years. Only the initial steps have been taken,\nhowever, and most of the provisions of the agreement are still in the planning stage.\nIf implemented fully, this agreement will make the Low Countries the third largest\ntrading area of the world in value of transactions, and provide an expanded labor market\nfor Belgium's 8,500,000 and Luxembourg's 292,000 people, a large proportion of whom\nare highly skilled.\nThe forms of government of the Kingdom of Belgium and the Grand Duchy of\nLuxembourg and the actual operation of their political institutions are essentially\ndemocratic and stable, and the orientation of the Governments and the great majority\nof the people is toward the West. There is no basic political factor of instability that\nwould constitute a threat to US security in Luxembourg, and none in Belgium except,\nas a remote possibility, the sharp division of Belgian political groups over the question of\nKing Leopold's status. The conflict between the two ethnic groups in Belgium, the\nDutch-speaking Flemings and the French-speaking Walloons, may eventually be a\nsource of friction, but will probably be prevented from reaching serious proportions if\nthe members of the Government itself do not become divided on the issue and can elimi-\nnate the economic causes of conflict. A real danger to both nations, however, would\nbe the deterioration of their foreign trade (on which their economies are greatly de-\npendent) to a point that would seriously diminish the large volume of exports and im-\nports of the Belgo-Luxembourg Economic Union. Numerous postwar economic ad-\nvantages accruing to Belgium and Luxembourg, resulting from their early liberation,\nprompt revival of trade and extraordinary sources of dollars, are, to a certain extent,\ntemporary. The two countries may be faced with domestic readjustments because of\ninflation and wage-price disparities, and may have difficulty in selling in foreign mar-\nkets within the next few years when high production costs prevent selling at competi-\ntive prices and the transitory advantages are no longer available to them.\nBelgium and Luxembourg, separately or together, never would on their own initiative\nbe a threat to US security. On the contrary, there is every reason to believe that their\nNote: The information in this report is as of September 1948.\nThe intelligence organizations of the Departments of State, Army, Navy, and the Air Force\nhave concurred in this report.\nSECRET\ncontribution to US security as stabilizing factors in Western Europe is far out of pro-\nportion to their size. The Economic Union, under Belgian leadership, can be expected\nto continue playing an important part in the European recovery program if its neigh-\nbors can survive economic and political crises within the next few years. The Benelux\nCustoms Union has increased considerably the general bargaining power of the two\ncountries in Western Europe. They can be expected to use this favorable position to\nobtain increased economic and political cooperation in Western Europe.\nBelgium has abandoned all thought of seeking a neutral position and ideologically\nand politically has aligned itself with the West. Luxembourg also formally forsook\nneutrality in view of the demonstrated failure of such a policy to protect the country\nfrom two German invasions. The two countries will continue to support the United\nNations, because, as small countries, they feel that the effective functioning of a world-\nwide international organization is to their advantage. Until the UN meets this need,\nBelgium and Luxembourg will continue to seek collective security in conjunction with\nother Western nations. Progress made along these lines is evident by active Belgian\nand Luxembourg participation in forming a western union with the UK, France, and\nthe Netherlands. With insignificant military forces and little military potential, Bel-\ngium and Luxembourg are dependent upon British technical assistance and US arms\nto establish a defensive force of any value. Belgium is looking to the Congo as a base\nof operations in the event of an invasion of Europe, but the investment required for an\neffective military establishment in this undeveloped area is almost prohibitive. The\nGovernments can be expected to continue their efforts to obtain a voice in the German\npeace treaty, and a step in this direction was achieved by the inclusion of the Low\nCountries in the three-power discussions on western Germany in February 1948. Bel-\ngium is particularly concerned with a revival of the German economy which would\npartially restore that economy to its normal relations with Belgian trade and transit\ntraffic. Luxembourg, though it concurs with Belgium on this subject, is perhaps more\nconcerned with the security aspects of a revived Germany.\nBelgium and Luxembourg, with the Netherlands, are sponsoring discussion with\nother Western European nations for the establishment of a more general customs\nunion. As one of the chief exponents of a Western European bloc, Belgium openly sup-\nports the eventual formation of a political union of some sort to be based upon the cus-\ntoms union. Because of this open support of a grouping that Moscow has branded as\nanti-Communist, Belgium, and to a lesser extent Luxembourg, will continue to receive\nSoviet criticism.\nThe Economic Union is not expected to become a special target for Communist ac-\ntivity, because in the long run Communist success or failure in Western Europe is not\ndependent upon the situation in Belgium and Luxembourg. On the contrary, complete\nCommunist control of France and the consequent economic chaos would be sufficient to\ndisrupt the stability of both countries. In Belgium, the proximity of a Communist\nFrance probably would produce a sharp political division between the Right and the\nLeft that would make it difficult for the present coalition Government to remain in\npower. Communist agitation alone in conservative and stable Luxembourg could not\nupset the economic activity of the country. The USSR is expected to limit its activities\nSECRET\nSECRET\nagainst Belgium to propaganda and nominal support of the Belgian Communist Party.\nThis party is not strong enough to assume control of Belgium, and its value to the\nUSSR would lie in its promotion of strikes and sabotage synchronized with the activities\nof other Communists in Western Europe.\nSECRET\nSECRET\nSECTION I\nPOLITICAL SITUATION (BELGIUM)\n1.\nGENESIS OF THE PRESENT POLITICAL SYSTEM.\nThe Kingdom of Belgium came into existence with the adoption in 1831 of a Con-\nstitution which, like that of the United States, has been subject to only relatively minor\nchanges during the past century.\nThe Treaty of Vienna (1815) established Holland, Belgium, and Luxembourg as\nthe Netherlands Kingdom under William I of Orange. Prior to that time, Belgium had\nbeen dominated successively by the Austrians, the Spanish, and the French. However,\nthe urban centers early became powerful, and provided the spirit of independence which\nwas one of the decisive factors in the struggle against foreign rule.\nThe union with Holland was a brief one. In 1830 Belgian Catholics and Liberals\nunited to break away from the sovereignty of William I. France and England, for po-\nlitical reasons of their own, hastened to recognize the independent Kingdom of Bel-\ngium, and its ruler, Leopold of Saxe-Coburg, a German prince educated in England\nand an uncle of Queen Victoria. Under his leadership, Belgium's permanent neutrality\nwas recognized and guaranteed by the great European powers in 1839. There followed\nnearly a century of peaceful but vigorous development during which Belgium became\nhighly industrialized, acquired the Belgian Congo with its vast natural resources, and\nbecame an important trading nation.\nThis era of peace came to an abrupt end in 1914 with the invasion by the German\nArmy. Political changes in the aftermath of World War I were evident in the first\npostwar elections, from which the Socialist Party emerged in a position of strength\nnearly equal to that of the previously dominant Catholic or Rightist Party. The Social-\nists abandoned their opposition to the monarchy and worked to achieve their program\nof social reform within the constitutional framework.\nAfter World War I, Belgium abandoned neutrality and until 1936 sought to estab-\nlish defensive relationships with other victorious nations. However, growing appre-\nhensions of a remilitarized Germany led the Belgians to revert to their former policy,\nwhich proved ineffective when the German Army again invaded Belgium at the out-\nbreak of World War II. The French and British were able to send little aid to Belgium,\nand the Belgian Army, after only 18 days of resistance, surrendered unconditionally.\nAgainst the advice of his Cabinet, the King remained with his Army, while the Cabinet\nfled to France and then London, where it became a Government-in-Exile.\nThe unexpected rapidity of Belgium's liberation in early September 1944, made\npossible the return of the Government-in-Exile immediately behind the Allied forces\nand also prevented extensive property destruction and looting by the Germans. At\nthis time, Leopold III was being held in Germany, and Parliament acted swiftly to ap-\npoint Leopold's brother, Prince Charles, as regent. He still holds that position, pend-\ning clarification of Leopold's status as an exile.\n1\nSECRET\nSECRET\n2. PRESENT GOVERNMENTAL STRUCTURE.\nThe Belgian Constitution provides for a monarchical, representative, unitary (as\nopposed to federal) Government. It provides protection for rights of individual liberty,\nprivate property, and freedom of expression, education, and assembly. In theory, the\nKing holds the executive power, but all acts must be countersigned by a minister,\nwho in turn is responsible to Parliament. The King is entitled to reign only after he\nhas sworn an oath of fidelity to the Constitution, which declares explicitly that all\nrights emanate from the nation. The King is Commander-in-Chief of the Army, but\nonly in times of war has he actually assumed command. The King chooses the Prime\nMinister, usually a member of the largest party, who in turn picks his Cabinet. In 1947,\na Council of State was established which acts as an advisory body to the King on\nlegislative and administrative matters. Since World War I no Belgian party has been\nstrong enough to form a stable Government alone, and the general practice has been\nto form a strong coalition of two or more parties. The Cabinet Ministers are generally,\nthough not necessarily, members of Parliament. Each heads a government department\nand may, on his own responsibility, promulgate royal decrees on administrative or execu-\ntive matters, though their constitutionality is subject to the interpretation of the courts.\nThe ministers also have the power to issue decrees in time of war or emergency.\nA revision of the Constitution in 1920/21 gave the vote to every male subject at the\nage of 21. At present, women have the right to vote only in the communal elections;\nafter July 1949, they will be allowed to participate also in provincial and national elec-\ntions. The distribution of the seats in Parliament is according to proportional repre-\nsentation. This system ensures the representation in Parliament of all shades of\npublic opinion, but often in the past has prevented the establishment of stable party\nmajorities, with the result that coalition governments have been required.\nThe Parliament consists of the Chamber of Representatives, the 202 members of\nwhich are elected by popular franchise every four years, and the Senate, whose 167\nmembers are elected every four years, partially by popular franchise, partly by the\nprovincial councils, and partly by cooptation. The Parliament votes the budget, passes\nor modifies laws, makes certain appointments, grants naturalization, and indirectly\ncontrols the executive powers of the Cabinet through its exercise of the vote of con-\nfidence. Thus, in reality Belgium has been governed by a mixed power, resulting\nfrom a close association of the legislative and executive branches.\nThe judiciary is independent of the legislative and executive branches. All of the\ncourts are national and are classed according to the types of cases handled. The\nhighest court can judge only the validity of legal procedures of the lower courts. The\nconstitutionality of parliamentary laws is decided by Parliament instead of the courts.\nBecause the Belgian Constitution devotes only 2 of its 139 articles to communal and\nprovincial institutions, it reflects inadequately the true importance of the local adminis-\ntrations. The communes antedate the Belgian State by several centuries, evolving in\nmost instances from the parishes of the Roman Catholic Church of the Middle Ages.\nThe nine provinces correspond geographically to the departments organized in Belgium\nby the French Republic at the time of annexation in 1795, but the names of the old\n2\nBelgian principalities have been retained. The communes and provinces are not merely\nbranches or agencies of the central government but are quite distinct from and usually\nmore important than the local services of the national administration. In matters\nthat are traditionally handled locally, the provincial and communal rights are respected,\nin particular the latter. However, local authorities are subjected to a partial control\nby the central authority, which is empowered by law to prevent them from over-stepping\ntheir powers or interfering with public welfare. The provincial governor is appointed\nby the King (i.e., his Ministers) and is responsible in most cases to the Minister of the\nInterior. The provincial Council is elected and is delegated certain administrative\npowers. In the communes, the burgomaster is nominated by an elected council and\nappointed by the Crown.\n3. POLITICAL PARTIES AND CURRENT ISSUES.\na. Political Parties.\nTraditionally, the two original Belgian political parties-Catholic and Liberal-\nwere constituted according to religious convictions. The \"believers,\" the Catholic\nParty, now known as the Christian Social Party (PSC), constituted the Right, and the\n\"freethinkers,\" originally only the Liberal Party, formed the Left. Because the parties\nhad a religious rather than a political foundation, each had its conservative and pro-\ngressive elements and represented various shades of opinions on domestic and even\nforeign issues. Thus, a party platform, in trying to satisfy all of the party's supporters,\nusually did not present clear-cut issues except on questions related to religious con-\nvictions, such as that of education. However, this heterogeneous quality of the po-\nlitical parties has contributed to the maintenance of national unity and inhibited\nclear-cut political divisions along linguistic and sectional lines. Since the end of World\nWar I and the consequent strengthening of the Socialist Party, the parties have had\nto take a more definite stand on social and economic issues, but the primary division\nbetween the \"believers\" and \"freethinkers\" still remains.\nInfluencing party policy since World War I is the fact already noted that no single\nparty has been strong enough to form a stable Government. This has necessitated\nvarious compromises on the part of the two or more parties forming a Cabinet, a state\nof affairs which at times has hampered action on important issues and resulted in\nthe use of extreme parliamentarism. However, the ability of the political parties to\ncompromise has generally been valuable in preventing any cleavages that might en-\ndanger national unity. On international issues in which the security of the nation is\ninvolved, the parties usually support a non-partisan policy in the national interest.\nThe exceptions, minority groups such as the Flemish nationalists in the periods pre-\nceding World War I and World War II, have had little influence on the official policy\nand negligible public support. The Communists, although initially popular after\nWorld War II, no longer influence foreign policy.\nWhen the Government-in-Exile, composed of Socialists, Catholics, a Liberal, and\none non-party specialist, returned to Brussels in September 1944, the immediate prob-\nlem was to reconstitute it in a manner more representative of the whole country. The\n3\nSECRET\nCabinet resigned and a new one was formed by the same Prime Minister. The new\nCabinet provided a more equitable distribution of the posts among the Catholics,\nSocialists, and Liberals, and included, as an innovation in Belgian politics, two Com-\nmunists.\nThe question of permitting the return of King Leopold precipitated a crisis in\nthe postwar four-party Cabinet in June 1945, which caused the Catholics, staunch\nLeopold supporters, to resign. The parties of the Left-Socialists, Liberals, and Com-\nmunists-made up the four succeeding Cabinets, except for a short-lived Socialist\nCabinet. Their instability was recognized by all, but the intransigence of both the\nCatholics and the Socialists on the question of Leopold left no alternative combination.\nEven the national elections in February 1946, which clearly revealed that the Catholics\nwere the strongest party in Parliament, did not bring the Catholics into the Government.\nThese elections also showed that the ratio between the Right and the combined strength\nof the Left was almost unchanged as compared with the last prewar election, the com-\nbined Left increasing its slight majority by only two seats. However, there was a\nmoderate swing to the left by the political parties as a whole which was not obvious in\nthe election returns. Finally, on 20 March 1947, after the Communists suddenly with-\ndrew from the Government and refused to join another leftist coalition, Socialist Paul\nHenri Spaak was successful in forming a Government composed of Socialists and Catho-\nlics, the two strongest parties in Parliament. Only by agreeing to shelve the problem\nof Leopold's return for the time being were they able to reach an agreement. While\nserious disagreement on the King's return could precipitate another crisis, cooperation\nbetween the Socialists and Catholics to reach a compromise solution may be possible.\nOther problems with which the Government is confronted are not as likely to cause\nserious intra-Government friction.\n(1) Christian Social Party. (former Catholic Party)\nSupport. This party is composed of divergent social groups of the Cath-\nolic faith. Its greatest strength stems from the Flemish areas. The party is divided\ninto Flemish and Walloon sections and within each section there are four distinct\ngroups: conservatives, middle class, peasants, and liberals (called Christian Demo-\ncrats). It also receives the support of some pro-Leopoldist non-Catholics.\nPlatform. The platform of the Christian Social Party is designed to appeal\nto all of its members and offend none. It advocates increased government aid to\nfamilies, greater labor participation with management in industry-wide committees,\nincreased social benefits. It favors the reduction of taxes and government economic\ncontrols and calls for a balanced budget. As the traditional Royalist Party, it also\ndemands the return of King Leopold although the left wing may be willing to com-\npromise on the issue. To a certain degree, it represents the position of the Catholic\nChurch in Belgian political life.\nHistory. The party was established in 1831, at the time of the formation\nof independent Belgium. For 30 years prior to World War I, it formed a single-party\nGovernment. With the rise of organized socialism in the late 19th century, the\nCatholics found it necessary, in order to retain their hold on the enlarged electorate,\nSECRET\n4\nSECRET\nto accept increased suffrage and to compete with the Socialists in the field of social\nreform. Although the relative strength of the Christian Social Party has declined\nsince 1918, it remains the largest political party in Belgium, and supplied most of the\npremiers of the coalition Governments between the two wars. The rise of the Fascist\nparties in the 1930's caused some defection of Catholic support.\nIn the first postwar elections, February 1946, the Christian Social Party\nreceived the largest number of votes-nearly half of those cast. As the only postwar\nrightist party, it apparently received the votes of a large number of those who had sup-\nported the prewar fascists groups. A reorganization of the party after liberation was\ncarried out to increase the appeal of the party to the more progressive and younger\nelectorate. There has been increased antagonism, however, between the conservative\nright wing and the young workers and intellectuals of the left wing, particularly\nthose from Wallonia. The party as a whole has shifted noticeably to the left of its\nprewar position.\n(2) Socialist Party.\nSupport. The strength of the Socialist Party comes largely from the\nindustrial working class, particularly in the Walloon area.\nPlatform. The principal economic aims of the Socialist Party are: a\nplanned economy, either with outright nationalization or at least government control\nof certain essential services and industries; active participation of the trade unions\nwith management in industry-wide committees; greater social benefits for workers; and\nreduction in prices and freezing of wages except for adjustments where inequities exist.\nThe Socialist Party favors the abdication of King Leopold.\nHistory. The Socialist Party was established in 1885. By 1914 it had\nbecome a consolidation of political, trade union, and economic groups, leading a move-\nment toward the reform of workers' wages, hours, working conditions, and social bene-\nfits. The party's campaign for universal suffrage was successful in bringing about an\nextension of suffrage in 1921, and the Socialist strength increased to equal that of the\nCatholic Party. Between the wars the Socialists participated in some three-party\ncabinets, but more often were in opposition to Catholic-Liberal coalitions. In the post-\nwar elections, the Socialists were able to regain the prewar strength which they had\ndisplayed in the 1936 elections but had lost in 1939 because of dissension within the\nparty. Although the Socialist Party lost some votes to the Communists after the war,\nthey evidently gained some of the support formerly given to the Liberals.\n(3) Liberal Party.\nSupport. The Liberal Party, composed largely of French-speaking people,\nderives its support from the industrial and commercial middle class of large towns\nand from certain intellectuals.\nPlatform. It is opposed to state control in economic affairs and to church\ninterference in secular matters.\nHistory. The Liberal Party was established while Belgium was still a\npart of the Netherlands Kingdom (1815-1830) During the first fifty years of Belgian\nindependence it was usually the majority party, occasionally cooperating in govern-\n5\nSECRET\nSECRET\nments with the Catholics. After 1884, when social problems began to dominate po-\nlitical life, the Liberal Party began to lose support. In the February 1946 elections,\nthe party lost to the Communists its previously held place as third largest party. At\nthat time, some pro-Leopold Liberals may have voted Christian Socialist, but the greatest\nloss was to the Socialists, who have supplanted the Liberals as the left-of-center party.\nAlthough the Liberal Party still is classified as part of the Left because of its anti-\nclerical attitude, and has participated in the leftist coalition Governments since the\nend of the war, on most of its economic policies the Liberals belong politically to the\nright of the Catholics.\n(4) Communist Party.\nSupport. Extreme left-wing industrial workers, especially those in the\nWalloon area, make up the strength of the Communist Party, which after World War\nII received increased support, principally from former Socialists and new voters.\nPlatform. The Belgian Communist Party demands the nationalization\nof such essential industries as the coal mines, Belgian Congo uranium mines, and the\nNational Bank. It advocates reduced prices, increased wages, and labor participation\nin industrial management. It opposes formation of the Benelux Customs Union, be-\ncause Communists view it as the forerunner of a Western bloc. The party bitterly\ncondemns the European recovery program and favors the orientation of trade toward\nEastern Europe. In general, it follows the principals of international Communism.\nHistory. The Belgian Communist Party was established shortly after\nWorld War I. By 1925, it had gained sufficient strength to elect two members to the\nHouse of Representatives, but only after the Liberation in September 1944, did it\nachieve a representation in the Cabinet. In the postwar elections it has gained pro-\nportionately more strength than any other party. However, there is every indication\nthat its following has declined considerably since the 1946 national elections. In\nMarch 1947, over the comparatively trivial issue of a 29-franc increase per ton in the\nprice of coal, the Belgian Communists refused to join a new Cabinet. It is possible that\nthis withdrawal from the Government manifested a change in tactic of the Western\nEuropean Communists, because similar Communist moves followed in other countries.\nThe Communist Party has now lost a large part of the labor support it enjoyed initially\nafter the war.\n(5) Democratic Union.\nThe Democratic Union was a postwar group composed of leftist Catholics\nwho advocated the separation of Church from politics. In the February 1946 elections,\nit sent only one member to the Chamber of Deputies, and since that time its representa-\ntive has joined the Socialist Party and the Democratic Union no longer functions as\na political party.\n4. TRADE UNIONS.\nOver one million Belgian wage earners (about 40 percent of the working popu-\nlation) belong to trade unions, and the political influence of organized labor in Belgian\nlife is considerable. Although labor organizations are not formally affiliated with po-\nlitical parties, the union federations are generally parallel to the political groups,\nSECRET\n6\nSECRET\na result of their close association with the parties before World War II. The largest\nfederation is the Socialist-Communist General Federation of Belgian Labor (FGTB)\nwhich was organized after the war from three separate groups, the Communist-\ncontrolled clandestine trade unions, non-affiliated unions, and the old Socialist con-\nfederation. The Socialists were somewhat discredited after liberation because of\ntheir passive resistance to German control, but Communist popularity was at a high\npoint. Since the fusion in 1945, however, Communist control has declined from about\n30 percent of the trade unions joining the FGTB to no more than 6 to 10 percent. With\ntheir decline in numerical support, the Communists have also lost considerable prestige,\nand in the FGTB elections in March 1948, were excluded from the Federation's secre-\ntariat and bureaus. Compared to the FGTB membership of over 540,000 the Catholic\nunions, organized in the Confederation of Christian Syndicates (CSC), have approxi-\nmately 402,000, and the Liberal Trade Union Center probably less than 25,000 members.\nThe danger of complete Communist domination of former Socialist labor groups\nwas overcome partly by the efforts of Socialist leaders and partly by the excessive po-\nlitical control attempted by Communist trade union officials, against which a large\nsection of labor has reacted. While the threat of a Socialist-Communist split that would\nallow the Communists greater freedom of action is possible, they probably would not\nforce a break with the Socialists unless they planned an independent aggressive pro-\ngram of strikes and sabotage.\n5.\nSTABILITY OF THE PRESENT ADMINISTRATION.\nThe coalition now in power has a large majority in Parliament, and the Liberals\nPARTY REPRESENTATION IN PRESENT PARLIAMENT\nChamber of Deputies\nSenate\nPolitical Party\nNo. of\n% of popular\nNo. of\n% of popular\nSeats\nvote ('46)\nSeats\nvote ('46)\nChristian Social\n92\n45.5\n83\n42.74\nSocialist\n69\n34.2\n59\n31.22\nCommunist\n23\n11.4\n17\n12.86\nLiberal\n17\n8.4\n8\n9.18\nDemocratic Union (defunct;\none deputy joined Socialist\nParty)\n1\n.5\n2.07\nLiberal-Socialist\nCartel (a single list in certain\nareas)\n1.44\nOthers\n.48\nTotal\n202\n100.0\n167\n100.00\n7\nSECRET\nSECRET\nand Communists of the opposition offer no real threat at present to the Government's\nposition. The right-wing Catholics and left-wing Socialists were not enthusiastic about\nthe coalition when it was formed, and this lack of enthusiasm was very evident in the\nGovernment crisis these two groups provoked in May 1948 over a relatively minor issue\nof increasing state subsidies for secular trade schools. Premier Spaak resigned before\nthe Education Minister's budget, which included the objectionable provisions, was\nvoted upon. By so doing, he prevented an open break in his Socialist Party and the\nincrease in Christian Social-Socialist friction which probably would have resulted if the\nbill had passed. Nevertheless, during the ten-day crisis before a compromise was\nreached and Spaak withdrew his resignation, there was never any question of a dissolu-\ntion of the Christian Social-Socialist coalition. Following Spaak's return to the premier-\nship, his position and that of his Cabinet appeared to be stronger than ever.\nHowever, a threat to political stability is the continued failure of the Government\nto find a peaceful solution to the question of the Belgian monarchy. The two Gov-\nernment parties have been in violent disagreement on the Leopold issue, and for\nnearly two years the Christian Socialists and Socialists refused to accept the logical\ncoalition because they would not compromise their respective positions on the King.\nThe Government has been able to avoid a decision on the issue, but the feelings on both\nsides are sufficiently strong and persistent to cause it to become a seriously controversial\nproblem at any time.\nA further possible threat to political stability is the continued cycle of price and\nwage increases. Periodic labor demands for higher wages as prices continue to rise\nmake further labor troubles likely. The Government may be expected to meet these\nproblems satisfactorily unless serious dissension develops, either between the two\nGovernment parties, or between the right and left wings of the Socialist Party. The\nthreat to Belgium's exports because of high prices and import restrictions of other\ncountries has been considerably lessened by the allotment of ERP aid to these countries\nfor purchases in Belgium.\nAt present, however, threats to governmental stability are only potential in charac-\nter. In the absence of a widespread economic crisis and the probable discrediting of\nthe Government in control if it occurs, it is reasonable to expect the Christian Social\nParty and the Socialists to continue their cooperation, perhaps until the next elections\nin late 1949. Under Spaak's leadership, the Government may be able to find eventually\na compromise solution to the problem of the Monarch. Spaak, as the outstanding\nBelgian statesman best able to guide expertly both international and domestic decisions,\ncan be expected to continue as Foreign Minister and probably as Premier.\n6. CURRENT ISSUES.\nWhen the present Cabinet of the Socialists and Christian Socialists was formed\nin 1947, a compromise program was announced indicating that agreement had been\nreached (or a status quo was maintained on issues on which the two parties could not\nimmediately agree) on outstanding domestic problems. A majority of the announced\npolicies have now been carried out. Bills have been passed granting compensation\nfor material war damage suffered by individuals, and allowing women to vote in pro-\nSECRET\n8\nvincial and national elections after July 1949. The latter measure was agreed to by the\nSocialists only after the Christian Social Party pledged support to a Socialist-sponsored\ncoal bill. This coal bill required compensation to the unprofitable mines by those\noperating at a profit and provided that the Government requisition any coal mines\nwhich might be forced to close for financial or other reasons. The question of state\nsupport of secular trade schools still remains a controversial issue between the Chris-\ntian Social and Socialist Parties, and disagreement over the Education Minister's budget\nin May 1948 caused the Government to resign. In spite of the compromise finally\nreached, which permitted Premier Spaak to withdraw his Cabinet's resignation, the\nbasic differences between the two groups on the question still remain.\na.\nKing Leopold.\nA status quo is to be maintained on the \"royal question\" until both parties can\nreach a mutually satisfactory solution. Prime Minister Spaak has made numerous\nattempts to bring about a settlement, but with no evident concrete results. To the\nBelgian, the controversy is a serious one which may impair the traditional position of\nthe Belgian crown as a symbol of national unity. There is no opposition to the\nmonarchy as an institution, even the Communists taking the position that it is a \"neces-\nsary evil.\" Leopold's critics charge that he collaborated with the Germans, but a\nmore basic criticism is that his conduct in the past indicates an authoritarian concept\nof his power that is incompatible with a democratic form of government. On the other\nhand, Leopold's supporters among Christian Socialist and conservative circles praise\nhis decision to remain with his people during the war, and argue that he gave no active\nassistance to the Germans and saved Belgium from even more severe treatment than\nit received. For nearly four years the problem has remained unsolved; during that\ntime the popularity of the Prince Regent has increased considerably, but there is no\nindication that he has personal ambitions to become king. A possible compromise\nwhich has frequently been discussed would include: first, the return of Leopold to\nclear him of all possible charges, and second, his abdication in favor of his eldest son,\nPrince Baudouin. However, the accession of Baudouin to the throne would by no means\nmeet with unanimous approval. Some Belgians feel that he has been away from\nBelgium too long to know his country and people.\nDespite the pressure for a solution before Baudouin's 18th birthday in Septem-\nber 1948, the age at which the royal heir traditionally takes his seat in the Senate,\nfollowed by entrance into the Belgian Military Academy, no action was taken, and\nLeopold informed the Cabinet that there was no necessity for Baudouin's early return\nto Belgium. King Leopold, in a letter of 22 June to Spaak, called for a referendum and\nstated his willingness to resign if there is not an indisputable majority in favor of his\nrestoration. The idea of a referendum is strongly opposed by the Socialists, and the\nCatholics do not seem to be entirely agreed on the advisability of it. Some Catholics\nbelieve it would be wiser to wait until women acquire the franchise in July 1949, before\nputting the royal question to a vote. Although the issue can, with little warning,\ncause the Cabinet to fall, the present Government may be able to postpone a decision\nuntil a satisfactory solution is found. Although the royal question can be expected to\n9\nSECRET\ncome to the foreground from time to time in the interim, this issue in itself is not ex-\npected to make cooperation between the two major parties impossible.\nb. Price-Wage Relation.\nThe policy of the previous Government to freeze wages and reduce prices is\ncontinued by the Spaak Government. It has not been carried out entirely, however;\nthe reduction of some subsidies (on coal and certain foods) and the increase in the\ncost of imports has caused prices to rise, and efforts to adjust wage inequalities have\nled to increases in the wage level. This continuation of the upward spiral has provided\nample grounds for criticism by the Opposition, the Liberals blaming it on Government\ninterference and the Communists on lack of adequate price controls. Although the\nCommunists have attempted to capitalize on labor discontent with the increased cost\nof living, their influence on labor is small. Labor troubles since the end of the war\nhave generally followed a pattern of strikes followed by compromise wage concessions,\na period of relative quiet, gradual building up of tension as prices rise, culminating in\nfurther strikes. The Spaak Government ably demonstrated its ability to deal with the\npolitical aspects injected by the Communists in the strikes in February 1948, but found\nit necessary to grant some concessions such as special bonuses, double vacation pay,\nand increased pensions. Another strike during June 1948 involving about 200,000\nmetallurgical workers resulted in the employers granting substantially the wage in-\ncreases demanded, but as a result the trade unions accepted the Government proposal\nto negotiate wage adjustments within each industry and abandoned their demand for\na 5 percent over-all wage increase. The steady inflationary trend in Belgium fore-\nshadows continued labor troubles. However, the Government seems strong enough to\ncope with the strike problem unless serious dissension develops over the issue, either\nbetween the two Government parties, who have been able in the past to maintain a\nunified labor policy, or between the right and left wings of the Socialist party.\nThough rising prices are a real danger to Belgium's exports, since the end of\nthe war there has been a world market for Belgian industrial goods at almost any price.\nIn 1947, despite an almost unrestricted import program which Belgium was able to\nafford because of dollars accumulated during World War II, 72 percent of the value of\nBelgium's imports were balanced by exports. Belgian dollar supplies were also respon-\nsible to a certain extent for the large volume of exports, because Belgium was able to\npurchase raw materials and semi-processed items for its industries. Resistance to\nBelgian prices on foreign markets may eventually force the prices down, but for the\npresent they continue to increase. The Government is continuing its policy of reduc-\ning economic controls to a minimum and allowing supply and demand to effect the\nnecessary adjustments. If currency exchange obstacles are reduced, Belgium hopes\nthat by increasing the efficiency of production under the European recovery program,\nit can lower prices to a level that will give Belgian production greater access to foreign\nmarkets. Many Belgians, including Government officials, hope for a mild recession to\nbring Belgian prices more in line with the world level.\nC.\nEducation.\nSpaak's coalition Government had postponed a decision on the problem of\nSECRET\n10\nstate control of vocation schools by referring it to a \"technical commission\" because\nit was one of the questions on which the Christian Socialists and Socialists violently\ndisagreed. The question has been one of lengthy controversy between the clerical and\nanti-clerical groups; exaggerated out of all proportion to its real importance as a\npolitical issue, it led to the resignation of the Spaak Government in May 1948 through\na parliamentary crisis over the Education Minister's budget. The Cabinet had agreed\nto a compromise measure increasing the state subsidy to Catholic trade schools, and\nat the same time increasing funds for state technical schools. However, the parlia-\nmentary left-wing Socialists objected to the former provision and the Christian So-\ncialists to the latter. Although Premier Spaak, after personally appealing to the\nChamber of Deputies for passage of the measure, submitted the resignation of his\nCabinet to the Prince Regent, it was felt generally that the bill would have received\nsufficient votes in the Chamber. Spaak evidently realized, however, that debate on\nthis measure would widen the split in the Socialist Party, and preferred to resign in\norder to preserve the unity of his party. After ten days' negotiations, the two parties\nfinally agreed upon a compromise, and Spaak withdrew his resignation. However, a\nresolution of the basic differences between the Christian Socialists and Socialists on\nthe education issue has by no means been achieved.\nd. Nationalization.\nThe composition of the Government precludes the possibility of extensive na-\ntionalization in Belgium at present, and the current prosperity of the country makes\nbroad Government control of industry unattractive to the majority of Belgians. A\nrestricted socialization of the National Industrial Credit Company (for industrial re-\nequipment) and the Belgian National Bank was provided for in laws passed by Parlia-\nment in July 1948. The laws are compromises between Socialist demands for national-\nization and the Christian Social view of limited Government control. Active planning\nfor the nationalization of other industrial enterprises has been dropped by the Social-\nist Party for the time being and probably will not be attempted by the present Govern-\nment. In early 1947, a Senate committee investigated the French nationalized coal\nmines to determine if nationalization should be recommended for the Belgian coal\nindustry, and the committee reported overwhelmingly in the negative. As has pre-\nviously been noted, the Christian Socialist Party originally opposed a measure allowing\nGovernment seizure of bankrupt coal mines, but ultimately supported the bill in Febru-\nary 1948, apparently in exchange for Socialist support on another issue. Periodically,\nthe Communists agitate for nationalization measures, but because of the present na-\ntional prosperity their efforts have had little effect.\ne. Social Measures.\nThe social reforms to be undertaken by the present Government include ex-\ntension of social security, old age insurance, and family allowances. More important\nfrom the viewpoint of labor is the establishment of \"conseils d'entreprises\" (labor\nmanagement committees) to allow greater labor participation in the problems of man-\nagement. A bill was finally passed by Parliament in August 1948 providing for the\nestablishment of the councils. Although both the Socialists and Catholics advocated\n11\nSECRET\nSECRET\nthe formation of these councils, in actual practice there was considerable disagreement\nas to their constitution and function. However, the pressure from Socialist-Com-\nmunist and Catholic trade union federations for some kind of representation in man-\nagement forced the Government to effect a compromise solution. The \"conseils d'en-\ntreprises\" probably will give labor only a nominal voice in the direction of managerial\ndecisions regarding technical problems, but labor's inclusion in the committees should\nconsiderably increase the prestige of the trade unions in the eyes of the worker.\nf.\nWalloon Problem.\nAlthough the Government has given no official recognition of the Walloon\ncomplaints of discrimination in favor of the Flemish, the question of Walloon-Flemish\nequality is one that may develop into a threat to Belgian unity. The problem stems\nfrom the formation of a nation composed of two distinct ethnic elements-the Flemish\nand the French-different in race and tongue. French originally was estabilshed\nas the official language, but before World War II the Flemings attained full legal\nequality in all spheres of Belgian life. Since liberation the Walloons have been ap-\nprehensive of the growing numerical superiority of the Flemings and have complained\nof the dominant position the latter are achieving in the nation. The Walloons are\nalso apprehensive of the rapid economic development of Flemish areas through expand-\ning industries (based on coal supplies of the recently exploited Campine Basin). These\napprehensions are voiced through various organizations whose purpose it is to present\nWalloon claims and protect the Walloon position in the life of the nation. The com-\nplaints stem from various social, linguistic, and political factors. Walloon demands\nrange from a decentralized or federal form of government to complete Walloon inde-\npendence or union with France.\nThe Leopold issue adds tension to the Flemish-Walloon situation because Leo-\npold's main support is from the Catholic Flemish populace. The Walloons fear that\nhis return will mean complete Flemish domination of the country.\nThe Walloon cause is officially supported only by the Communist Party, al-\nthough members of the Liberal Party are also active supporters. Though the Catholics,\nand particularly the Socialists, seem anxious to find a solution to prevent party and\nnational disunity, a proposed bill for federalism has been rejected by the Parliamentary\nCommittee studying it. A possible solution, and the one that probably will be sought,\nis the establishment of as much administrative decentralization as possible without im-\npairing the national unity.\n12\nSECRET\nSECTION II\nECONOMIC SITUATION (BELGIUM)\n1.\nGENESIS OF PRESENT ECONOMIC SYSTEM.\nBelgium is one of the most highly industrialized countries in the world. Intensive\nindustrialization has been based upon: (a) home supplies of coal; (b) a closely inte-\ngrated system of communications; (c) ready access to the sea through the port of\nAntwerp; and (d) a dense population with established traditions of industrial skill.\nIts industrial prosperity depends upon the large-scale import of raw materials and\non the export of manufactured goods.\nWhen Belgium proclaimed its national indepndence in 1830, it was the most\nhighly industrialized country in continental Europe. Modern coal mining, iron work-\ning, and engineering were already firmly established in the country, and mechanized\ntextile industries employed a large number of workers. These industries formed the\nbasis for further industrial expansion. The building of railways-Belgium built the\nfirst network on the Continent; the establishment of corporations and the growth of\nlarge industrial enterprises; the Belgian policy of virtually free trade; and the expansion\nof investments abroad, made possible the steady progress of industrialization.\nDuring the last century and a half, from a nation devoted largely to agriculture,\nBelgium has become industrialized to such an extent that over half of its population\nis now engaged in industrial activities, with only 17 percent earning a living from tilling\nthe soil. Yet the role of the farming population in economic activities remains im-\nportant. In the late 19th century, when other European nations were instituting high\ntariffs to protect their agriculture, Belgium was unique in not adopting a protective\npolicy. Instead, its agriculture underwent a remarkable transformation. The eco-\nnomic advantage of raising profitable specialized products was recognized, and the cul-\ntivation of cereals was discarded and replaced by that of plants (the sugar beet in\nparticular) and vegetables. Above all, cattle raising and dairy production expanded.\nChiefly because of the intensive use of fertilizers, the soil was increasingly productive,\nand the production of most crops, per acre, was among the highest in the world. Be-\ncause of the density of the population, which doubled in the hundred years preceding\n1930, Belgium had to import a large portion of its food, but remained an exporter of\ncertain specialized food products.\nBefore World War I, the lack of raw materials, the density of the population, the\nobligation to compete in foreign markets, and also to some degree, the weakness of the\nlabor movement and social legislation, resulted, for a large section of the Belgian popu-\nlation, in a standard of living which compared unfavorably with living conditions\nin England and in France. The two decades between the wars was the principal period\nof the development of social legislation and the growth of labor organizations. This was\nstimulated by increased industrial concentration and the rapid development of the\nCongo, which yielded extensive raw materials. Before World War II Belgium was\n13\nSECRET\nSECRET\namong the most progressive nations as far as social legislation was concerned, and the\nstandard of living was generally superior to that of other industrial countries.\nIn spite of the disorganized and impoverished state of Belgium after World War\nI, industry was restored, and by 1926 production was above the prewar level. The\ninstability of international markets and the world-wide encouragement of protectionist\npolicies finally brought changes in Belgian foreign commercial policy. Tariffs were\nincreased or introduced for some manufacturing industries, but their purpose was not\nonly to preserve the home market for the national industries but also to obtain reduc-\ntions in the tariffs applied by other countries to Belgian exports. By 1939, the Belgian\neconomy had generally recovered from the effects of the world-wide depression, only\nto suffer the German invasion and occupation in 1940.\nThe Belgian population emerged from the occupation in the fall of 1944 poorly\nfed and clothed; the country was faced with inflation; transport was demoralized; coal\nproduction and industrial activity were at a wartime low. Nevertheless, destruction\nwas not as extensive in Belgium as in most of the countries participating in the war,\nand agriculture was in a relatively good position.\nImmediately after liberation, the Government took strong measures to combat\ninflation and achieve financial stability. A policy of almost unlimited importing of\ngoods and restricting of exports in order to satisfy domestic demand and restore stocks\nwas possible bcause of extraordinary dollar supplies obtained through reverse lend-\nlease, loans, and favorable wartime US-Congo trade. However, because of expenditures\nfor consumer goods, reinvestment in and expansion of industry was hindered. Rail\nand water transportation were rapidly put back into serviceable condition; repairs to\ndamaged industrial plants and equipment restored Belgian industrial capacity gener-\nally to prewar levels. The caloric food consumption was raised to supply an average\nof 2700 calories daily per person, compared to the prewar 2900 calories. Agricultural\nproduction rapidly returned to near normal, although the 1947 crops were considerably\nless than those of 1946 because of a prolonged freezing winter and a subsequent summer\ndrought. There was considerable improvement, however, in the outlook for the 1948\ncrops.\nThe general movement of industrial production in 1946 was sharply upward,\nin almost all categories. This improvement was continued in 1947 at a more irregular\nand slower rate. By September 1948 the rate of industrial activity was estimated to be\nat a postwar high of 128.1 percent of the prewar average (1936-38). Coal and the\nbuilding industries were the only important categories below the prewar level.\nDespite the great economic progress made since the end of the war, Belgium is\nstill faced with difficult problems which must be solved before the country attains\nthe degree of economic prosperity and stability it hopes to achieve during the next\nfew years. These unfavorable aspects of the Belgian economic situation are, essentially:\n(1) continuing insufficiency of domestic coal production; (2) shortage of skilled labor;\n(3) abnormally large trade deficits with the dollar area; (4) high costs of export pro-\nduction, because of obsolescent and worn-out industrial equipment as well as probable\nover-evaluation of the Belgian franc, which handicap the sale of Belgian goods in com-\nSECRET\n14\npetitive world markets; (5) reduced activity of the port of Antwerp as a transit center;\n(6) almost total absence of trade with Germany; and (7) nonconvertibility of soft\ncurrencies and sterling.\nBelgian plans for solving these problems during the four-year recovery period\nenvisaged under the European recovery program are generally reasonable. As a highly\nindustrialized trading nation, Belgium is, however, considerably at the mercy of factors\nbeyond its control.\nCoal production in the fiscal year of 1948-49 is expected to be raised to the prewar\nlevel, as compared to the 1947 production of approximately 85 percent of the prewar and\nthe first half of 1948 at 90 percent. By 1951-52, 107 percent of the prewar level of pro-\nduction is anticipated. These goals are obtainable only if Belgium can recruit and train\nadditional mine workers and if the output per worker is improved. To provide mine\nlabor, Belgium has been encouraging immigration, particularly of Italians and displaced\npersons. Like other countries, Belgium continues to encourage increased individual\noutput by high wages and special privileges. Some additional use of machinery in\nthe mines is planned, but many Belgian mines do not lend themselves to extensive\nmechanization because of narrow coal seams.\nWhile the shortage of labor is more acute in the coal mines than elsewhere, other\nindustries also lack skilled labor. In addition to recruiting and training foreign work-\ners, Belgium is stepping up the training of its own unskilled workers. The Belgian\nGovernment expects that, with the return of normal economic conditions, the thou-\nsands of people who left the labor market to engage in temporarily more profitable ac-\ntivities as commercial middlemen, will go back into industry. Meanwhile certain in-\ndustries, particularly the textile and leather industries, have had to slow down pro-\nduction. This trend will be reversed if Belgian prices are reduced to meet competition,\nand if markets are developed in hard currency areas and in Europe. An increased\nmarket for Belgian goods in Europe depends on the procurement of Belgian francs,\na scheme which is being sponsored through the OEEC inter-European payments plan.\nThe gap between imports and exports was considerably reduced in 1947, but\nBelgium still is faced with an unfavorable dollar balance. From the end of the war\nuntil August 1947, Belgium has had sources of dollars outside of trade which have\nbeen used to meet dollar deficits. Most of these dollar supplies were available be-\ncause of abnormal wartime and postwar conditions; now, except for ERP aid, Belgium\nmust depend upon normal sources such as trade and ordinary invisible receipts for\nthe acquisition of hard currencies. Although Beligum expects to increase somewhat\nits exports to the Western Hemisphere within the next few years, the restoration of\nits prewar pattern of trade-the greater part with its neighbors-is expected, except\nwith respect to Germany. It is hoped that imports from dollar areas may gradually\nbe reduced, as goods from normal suppliers become available. As a temporary neces-\nsity, Belgium has, since the first of the year, considerably curtailed dollar imports.\nOf greater long-range importance to Belgium would be the convertibility of soft cur-\nrencies into dollars so that the latter can be utilized for purchases in hard currency\nareas. Belgian trade problems cannot be solved on any kind of permanent basis\n15\nSECRET\nuntil restrictions on inter-European trade, brought about to protect currencies, are\nrelaxed.\nThe Belgian Government has entered upon an optimistic ten-year plan for the re-\nequipment of industry, agriculture, communications, ports, etc., which may generally\nbe attainable. It is expected that about 90 percent of the equipment needed for the\nprogram can be produced in Belgium. This estimate presupposes, however, that\nBelgium will receive the necessary raw materials to manufacture capital equipment.\nPerhaps one of the more important deterrents to Belgian recovery, and certainly\na psychological one, is the absence of German trade and transit traffic. Formerly\nBelgium's second-best customer and supplier, Germany also provided at least 15 percent\nof the transit trade that made Antwerp one of Europe's most important ports and the\nleading center for that trade. With the admittance of the Low Countries to the three-\npower conference on Germany in February 1948, Belgium became increasingly hopeful\nthat its commercial relations with Germany will at least be partially revived.\nThe efforts of the Belgian Government to reduce the price level is considerably\ndependent upon the results of efforts to modernize and expand Belgian industry.\nAdministrative price controls have not proved effective, and the production of goods at\na lower cost is necessary to bring about any real reduction in prices.\nHaving achieved a degree of economic stability, Belgium is concerned with the\nover-all European problems that restrict the development of the Belgian economy.\nThe Benelux Customs Union with the Netherlands and Luxembourg is being imple-\nmented, and positive steps are being taken toward an eventual economic union. Bel-\ngium is actively participating in the 16-nation OEEC and the Western Union with\nFrance, UK, Netherlands, and Luxembourg, in an effort to increase Western European\ncooperation, particularly in the economic field.\na. Agriculture.\nPerhaps the most important characteristic of Belgian agriculture is the extreme\nexploitation of individual land holdings. This is best illustrated by the fact that\nBelgium, with an area of only 11,755 square miles, and as the most densely populated\ncountry in Europe, is able to supply 84 percent of the food needs of her people, with\nthe important exception of wheat. Domestic production of wheat normally meets only\n20 percent of Belgium's requirements. Taking all food commodities as a whole Belgium\nwas about 47 percent self-sufficient in prewar years. Food and fodder rank first among\nBelgian imports, and before the war Belgium's dependency on imports in terms of\ncalories was exceeded only by Norway and the UK. About 60 percent of the total area\nof Belgium is under cultivation, and only 17 percent of the population is engaged in\nfarming. Agricultural productivity is hindered more by a lack of mechanization and\ncoordination in the cultivation of the many small land holdings than by a shortage\nof manpower.\nBelgian agriculture is of a mixed character; its farms are devoted both to live-\nstock and crop production. Before the war, the income from livestock and dairy\nproduction represented about three-fourths of the total agricultural income, and since\nthe end of the war, their importance is gradually being re-established. There is also\nSECRET\n16\nSECRET\na general tendency to produce special and more lucrative industrial crops such as flax\nand tobacco, rather than food for human consumption.\nBelgian agriculture is rapidly returning to prewar normal; the 1947 planted area\nwas almost equal to the prewar average, and the fertilizer supply was greater than\nprewar. However, the prolonged freezing weather of the winter of 1946-47 and the\nsubsequent summer's drought reduced crop yields to a dangerous level. The over-all\ncereals production for 1947 (1,000,000 metric tons), with wheat the hardest hit, was\nabout 20 percent less than the 1946 yield and approximately 65 percent of the prewar\naverage. The total grain production for 1948 is estimated at between 80 and 85 percent\nof the average prewar yield.\nBelgium has not requested from the International Emergency Food Council more\nthan prewar cereal imports, but has been successful in obtaining imports outside of\ninternational allocations. The great improvement in 1948 crop conditions over 1947,\ntogether with anticipated imports, made possible an increase in the daily bread ration\nfrom 300 grams to 350, probably to be followed by the derationing of bread on 1 Novem-\nber 1948.\nThe 1947 production of meat was only 54 percent of the annual prewar average\nof 313,000 metric tons; almost self-sufficient before the war, Belgium imported 110,000\nmetric tons of meat in 1947. Production of dairy products was below prewar in 1947,\nbut, coupled with imports, production was sufficient in the spring of 1948 to permit\nderationing of milk and domestic butter. Since the end of the war, production of fish\nhas assumed an increased importance, and the 1947 catch was 75,370 metric tons, com-\npared to an annual prewar average of 40,000 metric tons.\nb.\nNatural Resources.\nBelgium's only important natural resources are its coal and its geographical\nadvantages as a transport center, but around them it has built a highly industrialized\neconomy. By utilizing the iron ore of Luxembourg and Lorraine, Belgium has developed\na large iron and steel industry, which provides the materials for the Belgian engineer-\ning industries.\nBefore the war, Belgium's annual coal output of 29,000,000 metric tons was\nsufficient for domestic needs, but the percentage of coking coal produced was not\nsufficient to meet the requirements of the metallurgical industry. As a consequence,\nBelgium was obliged to import about 4,500,000 tons a year of coal suitable for coking,\n65 percent of which was obtained from the Ruhr. To balance these imports it was able\nto export similar quantities of other coals, mostly of the volatile variety, the bulk of\nwhich was taken by France. The 1947 production of coke was 4,729,000 metric tons,\ncompared to a 1938-39 average of 5,000,000 tons. Coke production for the first six\nmonths of 1948 was 2,687,000, slightly above the prewar average. The 1947 production\nof coal was 85 percent of prewar and by August 1948 had reached 91 percent of the pre-\nwar monthly average. The principal problems to be overcome are: (1) shortage of ex-\nperienced labor and reduced productivity; (2) uneconomical exploitation of a large\nnumber of marginal mines; and (3) the deterioration and obsolescence of a large por-\ntion of the mining machinery. Belgium already has imported Italian laborers and\ndisplaced persons to replace the German PW miners returned to Germany. Belgium\n17\nSECRET\nSECRET\nnow has 17 percent more mine workers than before the war, and the number is in-\ncreasing. Labor productivity also is increasing slowly, although it still is below prewar\naverages.\nBy application of considerable labor and ingenuity, Belgium has made use of its\ngeographic advantages to develop the excellent facilities at Antwerp, the dense and\nefficient system of railroads, and the inland network of rivers and canals, which have\nmade Belgium one of the important transport centers in Europe.\nOnly about 18 percent of the Belgian land surfaces is forested, and the yield of\ntimber is insufficient for the heavy demands of the mining and building industries. Net\nimports of wood and wood products, exclusive of paper, totaled 765,400 metric tons\n(approximately 918,480 cubic meters) in 1947.\nThe atmospheric conditions in western Belgium are particularly well suited\nto its large textile industry. The flax processing industry, for which Belgium supplies\nonly a part of the flax, is one of the best known in the world.\nBelgium because of its possession of high-quality supplies of sand has been\nable to build an important glass industry, and before the war, produced about a quarter\nof the world output of glassware. Belgium has also important supplies of lime and\nlimestone, which form the basis of a large cement industry. Before the war, Belgium\nwas the world's largest exporter of cement.\nc.\nIndustry.\n(1) Iron and Steel.\nBelgium's iron industry is centuries old, but it was not until 1878, with\nthe discovery of the basic Bessemer process, that the ore deposits of Lorraine and Luxem-\nbourg could be used in the Belgian production of steel. Belgium was able to produce\nsteel at a low cost because of the proximity of raw materials, its highly developed trans-\nportation, and the availability of cheap labor. Today, however, the high Belgium prices\nare tending to curb foreign demand, and when steel products face a buyer's market,\nthe effect on Belgian steel exports may be serious.\nAt the time of liberation the output of Belgian heavy industry had fallen\nto practically negligible levels, and supplies of coke and ore were necessary for increased\nproduction. Improvement was rapid in the case of ore supplies, but coke supplies\nwere more difficult to re-establish, so that important progress in the steel industry was\nnot registered until 1946 and 1947. In October of 1947 production of pig iron, steel,\nand finished steel products began to exceed prewar production. Output of steel during\n1947 was 2,828,480 metric tons (93 percent of 1936-38 annual average); of pig iron\n2,819,790 metric tons (90 percent of prewar); and of finished steel products 2,349,470\nmetric tons (99 percent of prewar). Steel production the first six months of 1948 was\nslightly greater than the prewar average. The capacity of the iron and steel industry\nis slightly larger than prewar, and due to increased efficiency, the output per ton of\ncoke is greater. Implementation of plans for modernization of the industry will in-\ncrease the capacity to an even greater extent. However, the shortage of coke is the\nprincipal limiting factor, and the rate of production at the end of 1947 was approxi-\nmately 50 percent of capacity.\nBelgium is exporting nearly 65 percent of her finished steel, and, as before\nSECRET\n18\nКИ\nthe war, is able to fill her domestic requirements except for small amounts of high-\nquality steel not produced in Belgium. The principal markets for steel under commer-\ncial agreements are the Scandinavian countries, Switzerland, the Netherlands, and cer-\ntain South American countries.\nSince April 1946, the production of iron and steel semi-manufactures and\nmechanical equipment has been at a level equal to and in some instances better than\nthe 1936-38 average. These items include foundry products, forgings, boiler equipment,\nrailway material, machine tool and related manufactures, industrial equipment, etc.\nAbout 35 percent of these metal manufactures were exported in 1947. There is a fairly\nactive ship repair industry, although shipbuilding is not important.\nBelgium possesses a capacity for certain types of armaments, especially\nsmall arms, but her industry is ill-balanced and inadequate for large-scale production.\nIt is able to meet Belgian Army requirements for rifles, light automatic weapons, and\nlight machine guns. Nearly all of the commercial output of rifles, carbines, and pistols\nis exported. Belgium imports its requirements for heavy armaments from the US\nand UK.\n(2) Non-Ferrous Metals.\nThe nation's skilled workers in the metallurgical industry and supplies\nof coal of coking quality have made it possible for a small nation with few mineral\nresources to become one of the foremost producers of metals in the world. In 1939\nBelgium produced approximately 11.4 percent of the world's zinc, 3 percent of the\ncopper, 4.7 percent of the lead, and 60 percent of the radium from imported concen-\ntrates. Because of the world shortage of metals, Belgian over-all production has not\nreached capacity or prewar output, especially of lead and zinc; however, Belgian pro-\nduction of copper is greater than in 1938.\nThere is a definite postwar trend toward the production of semi-finished\nmetal products for export at the expense of the less profitable crude metal exports.\nGenerally, the main limiting factors in the postwar non-ferrous metals industry have\nbeen lack of fuel and in some instances a shortage of concentrates.\nCopper production is based largely upon blister and matte imported from\nthe Belgian Congo, and the Belgian copper industry, excluding that of the USSR, is\nthe most important in Europe. Belgium's supply of zinc ore is insignificant, and the\nzinc industry is based largely on imports from the Belgian Congo, Sweden, Sardinia,\nAustralia, Newfoundland, Yugoslavia, and Argentina. The output of pig lead was\nabout 100,000 tons annually in prewar years, but Belgium is now having difficulty\nimporting lead concentrates because of the world-wide lead shortage. Before World\nWar II, Belgium ranked next to the US in the production of zinc metal (spelter) and\nsupplied one-seventh of the world total. In addition to the domestic industry, a Bel-\ngian firm, Vieille Montagne, has widespread interests in zinc mining and metallurgical\nenterprises throughout the world. Belgian plants also process ores and concentrates\ncontaining nickel, aluminum, cobalt, tin, gold, silver, platinum, and antimony, but these\nare of relatively minor significance in the total Belgian output of non-ferrous metals.\nCadmium, arsenic, selenium, and tellurium are recovered as by-products of smelting\nand refining operations.\n19\nSECRET\n(3) Textiles and Leather Goods.\nPrior to the war the Belgian textile industries had an export surplus,\nwhich in value made up about one-tenth of total Belgian exports. With the exception\nof flax, of which Belgium is one of the largest producers in Europe, these industries are\ndependent almost entirely upon imported raw materials, mainly from overseas. In\ngeneral, textile production is at or above the prewar level. The most important tex-\ntiles produced are cotton, linen, wool, jute, and to a lesser extent, rayon. Throughout\n1946, the Belgian Government restricted exports of textiles, in order to create a relative\nabundance for the Belgian consumers and to reduce the prices in the domestic market.\nThe measure apparently was successful, because as of 1 December 1946, textiles were\nno longer rationed. The Belgian leather industry, dependent to a large extent on im-\nported hides and skins, ranked fifth in Europe in importance before the war. Produc-\ntion in 1946 was above prewar levels, but demand, and consequently production, de-\nclined in the first half of 1947, particularly for fine leather products.\n(4) Chemicals and Fertilizers.\nThe Belgian chemical and fertilizer industries are based to a large extent\non the processing of imported materials and exportation of most of the finished prod-\nucts. Despite temporary shortages in raw materials and scarcity of labor, output has\nnow surpassed the prewar level. Because domestic requirements in most lines are now\ngreater than prewar, exports do not reflect directly the increased production. Pro-\nduction, consumption, and exports of nitrogen fertilizers have nearly doubled since\n1937. Production and use of phosphate fertilizers, which are produced almost entirely\nfrom imported phosphate rock, have increased slightly. However, potash must be im-\nported and is now being received from Spain, the Soviet zone of Germany, and France.\nA wide range of heavy and fine chemicals is produced, and supplies of most basic chemi-\ncals are sufficient to meet demands. Soda ash for the glass, soap, and chemical indus-\ntries must still be imported.\nBy far the largest chemical company in Belgium is Union Chimique Belge\nwhich processes many materials from the Belgian Congo and produces many organic\nand inorganic chemicals, pharmaceuticals, and photographic materials. Belgium is\none of the leading producers of coal-tar crudes and some of the intermediates and\nfinished products manufactured from them, but in the prewar period full capacity\nproduction was not reached because of German competition. Plans are under way to\nachieve a greater degree of self-sufficiency in coal tar intermediates and finished\nproducts.\n(5) Diamond-Cutting Industry.\nThe Low Countries have been the world center of the diamond-cutting\nindustry for over 400 years. In Belgium, Antwerp is the diamond-cutting center and\nbefore the war employed some 20,000 workers, representing 75 percent of the world's\ndiamond cutters. By 1946 the production of polished and industrial diamonds was far\nabove prewar in both volume and value. Exports for that year were approximately\n8 percent of the total Belgian export value, as compared to nearly 2 percent of prewar\nexports. In 1947 this percentage dropped to 3.5. The abnormally greater postwar\nincrease in the price of rough diamonds over the price of the polished stones reduces\nSECRET\n20\nSECRET\nconsiderably the margin of profit in foreign exchange. In November 1946, the diamond\nindustry reduced its work-week to 24 hours in an attempt to prevent falling prices and\nmaintain full employment. This measure, together with a Government policy of\nrestricting imports of rough diamonds, maintained the price of polished stones and\nprevented too serious a drain on foreign exchange.\n(6) Electric Energy and Gas.\nAlmost all of the Belgian generating stations are thermal plants, the ma-\njority burning coal, with a few in the Charleroi and Mons coalfields utilizing coke-oven\nor blast-furnace gas. A group of small hydroelectric stations in the Malmedy Area\nrepresent only about 1 percent of the total capacity. Since October 1945 the amount\nof electric power generated has exceeded the 1936-38 monthly average, and by the end\nof 1947 the monthly production exceeded the prewar average by nearly 70 percent. The\ntotal 1947 output of electric energy was more than seven billion kilowatt hours, sup-\nplied by 309 power stations. For many years, the tendency has been to concentrate\ngenerating capacity in a fairly small number of large power stations serving a wide\narea through a network of transmission lines. Despite postwar increase in electricity\ngenerated, the present power production facilities are not sufficient to meet the coun-\ntry's increased industrial requirements. War damage, delay in re-equipping plants,\nand the unsatisfactory maintenance of equipment in use during the war have con-\ntributed to the outworn and inefficient state of the power installations. There are plans\nafoot for the rehabilitation and expansion of present facilities within the next few years.\nUnits already ordered and in production, expected to be installed during the period\n1947-49, will provide a total capacity of about 500,000 kilowatts. This program is de-\nsigned not only to increase available capacity but also to lower coal consumption per\nunit.\nClose coordination and connection exists among the Belgian power sys-\ntems and those of Luxembourg, France, Germany, and the Netherlands. Belgium has\na sizeable import and export trade of electric energy with them, importing considerably\nmore than it exports.\nBelgium uses large quantities of gas for heating and lighting purposes,\nbut nearly all of the gas distributed is produced by plants which primarily produce\ncoke, gas being a by-product. The rate of gas production toward the end of 1947 was\napproximately one-third greater than prewar, but the great demand made restrictions\non household gas consumption necessary. Distribution of gas for industrial use has\nbeen increasing since the beginning of 1946, but the volume supplied has not yet reached\nthe level of 1939 and amounts to only about one-third of the gas supplied for household\nconsumption. Imports of gas during 1947 were only slightly larger than prewar, but\nexports increased sharply.\nd.\nFinance.\nThe Belgian financial position is sound, compared to that of most other\nWestern European nations. The Belgian franc, after the Swiss franc, is probably the\nstrongest currency in continental Europe and has been called the \"dollar\" of Europe.\nThis is based primarily upon general confidence in Belgian economic and political sta-\nbility as a result of Belgium's postwar measures to prevent disastrous inflation, and\n21\nSECRET\nSECRET\nupon the early availability of goods required by Europe, as a result of Belgium's early\nand rapid liberation and the small extent of war damage to productive facilities.\nFaced with excessive purchasing power and low industrial production at\nthe time of Belgium's liberation, the Government met these inflationary factors with\ndrastic measures. In October 1944, nine-tenths of the money in circulation was frozen,\nand of this, 40 percent was frozen temporarily and 60 percent permanently. Most of\nthe 40 percent has been released, and the permanently frozen assets were either con-\nverted into a forced Currency Reform Loan, or were absorbed by non-recurring taxes.\nPrice controls, introduced in the fall of 1944, have gradually been relaxed.\nThe Belgian general price policy has been based on the thesis that by supplying the\ndomestic market adequately by imports and domestic production, prices could be pre-\nvented from rising. In May 1946 a flat 10 percent reduction in prices was decreed for\nalmost all commodities and services. From a high of 399 in October 1945, the retail\nprice index (1936/1938-100) dropped to a low of 317 in June 1946 as a result of this\nprice reduction. Prices again began a steady rise, and the expected decline of prices\nin 1947, when demand at existing prices was fairly well satisfied, did not take place.\nThe average price level during the first quarter of 1948 was 382, an increase of 13 percent\nover the same period in 1947, and the price level reached 398 in May. Part of this price\nincrease was due to the withdrawal of certain food subsidies. The Government has at-\ntempted to compensate the lower-income groups for the resultant price rise by granting\nspecial purchase coupons. However, the Government machinery for issuing necessary\ncertificates has evidently functioned unsatisfactorily, and this latest price increase is a\nreal hardship for the low-income groups. Part of the price rise since the first quarter\nof 1947 is also attributable to the influence of world-wide price increases.\nBecause adequate comparative data on price and wage increases are not\navailable, it is difficult to make a conclusive comparison. It has been estimated, how-\never, that the wage level of white collar workers is approximately 250 (1936/1938-100)\nand the level for all labor in general at an approximate level of 350, in contrast to 395\nfor the general level of prices in July 1948. By June 1948, only bread, fats, sugar, and\nfuel were rationed, and ceiling prices were no longer in effect for many luxury and\nnon-essential items.\nThe national budget for 1947 of over 60 billion francs showed a deficit of\nabout 8 billion francs. This compares favorably with a 24-billion-franc deficit in 1946.\nThe 1948 ordinary budget is expected to be balanced, and the small deficit in the extra-\nordinary budget will probably be met without difficulty by an internal loan, which,\nwhen presented, was heavily oversubscribed.\nA problem that Belgium has yet to solve is whether or not the Govern-\nment will make good the currency issued by the German-instituted bank during the\noccupation. The Belgian National Bank still carries this issue as an asset, and the\nBank's stockholders and depositors demand that the Government pay it. However, the\npayment of some 64½ billion francs would be a dangerous strain on the Government's\nfinances and the Left has adamantly opposed the assumption of this responsibility by\nthe State. It is unlikely that all, and uncertain if any, of this debt will be repaid.\nAnother heavy strain on the national budget is the war damages compensation to in-\nSECRET\n22\nSECRET\ndividuals, to which the Government is committed. However, as a non-recurring ex-\npenditure spread over a number a years, the war damages compensation probably can\nbe met, without undue strain on the national budget, by floating internal loans.\nThe Belgian National Bank, a private institution, is the central bank and\nthe bank of issue. A bill was passed by Parliament in July 1948 modifying the char-\nacter of the Bank and giving the Government a substantial share in its control and\nmanagement. Among other things, the bill provides for an increase in the Bank's\ncapital from 200 million to 400 million francs, the increase to be subscribed for entirely\nby the state. The Government will be permitted to exercise its 50 percent voting rights\nas a stockholder and will have direct representation in the management of the Bank.\nAs of January 1947, there were 84 privately owned domestic and 8 for-\neign banks. Most of the large commercial banks control considerable industrial inter-\nests, especially through their participation as stockholders in various enterprises. The\nmost striking example of this close association of industrial and banking interests is\nthe Société Générale de Belgique, which not only has extensive holdings in Belgium\nbut in the Belgian Congo as well.\nBelgium was able to make very large dollar purchases after liberation be-\ncause of its extraordinary dollar supplies. Belgium received large payments in dollars\nand sterling for Belgian francs advanced for troop pay, reverse lend-lease, and mutual\naid. Two Export-Import Bank loans and a Surplus Property Credit were utilized,\nand a Canadian credit was made available. Also, $233 million of Belgian gold taken\nby the Germans from the Bank of France was restored soon after liberation, and there\nwas some repatriation of private Belgian assets in the US, UK, and other countries. It\nis evident, however, that the wartime and immediate postwar supply of dollars was an\nabnormal supply on which Belgium cannot depend in the future.\nThe danger of losing the postwar economic gains is now lessened by the avail-\nability of ERP dollars, but there are problems with which Belgium still is faced. The\ntrade deficit with the dollar area is substantial. Belgian prices are generally high for\nthose foreign markets in which Belgium must sell to maintain postwar economic gains,\nand there is growing evidence that the Belgian franc may be overvalued in relation to\nother currencies. Belgium is a creditor of \"soft currency\" countries, particularly the\nNetherlands and France, and the Belgian over-all exchange position is considerably de-\npendent upon their ability to pay in \"hard currencies\". Belgium's total foreign balances\n(excluding dollar areas) amounted to about 13 billion francs in early 1948. But because\nBelgium cannot convert soft currency balances to dollars, imports from the US have\nbeen curtailed.\nUntil the discontinuance of sterling convertibility on 20 August 1947,\nBelgium's gold and foreign exchange position, in contrast to the situation in other\nEuropean countries, was stronger than it had been before the war. The combined\ngold and foreign exchange reserves of the Belgian National Bank amounted to nearly\n40 billion francs (over $900 million) in December 1947, as compared to 36 billion a\nyear previous. Most of the exchange, however, was in inconvertible currencies, and\nonly a relatively small part was convertible under Belgian payments agreements into\ngold and US dollars. The Belgian US dollar holdings were fairly adequate for the\n23\nSECRET\nSECRET\nnation's needs until the end of 1947, due in part to the favorable postwar balance of\ncredits mentioned previously. In addition, Belgian payments agreements with other\ncountries required payment of gold, sterling, or dollars when the maximum of soft\ncurrency Belgium would hold had been reached. By agreement negotiated with the\nUK in September 1947, Belgium drastically curtailed the acceptance of sterling from\nnon-sterling areas, and a new agreement in March 1948 reduced the amount of sterl-\nling Belgium would accept from third countries to 2 million pounds annually (compared\nto 25 million pounds received in 1947). The inability of debtor nations to pay in gold\nor dollars the settlement in favor of Belgium required under their bilateral agreements\nwith Belgium made the operation of trade under these agreements extremely difficult\ntoward the end of 1947, thereby reducing Belgium's ability to buy in the US and to sell\nin soft currency countries. In an effort to reduce the foreign exchange difficulties in\nWestern Europe, Belgium was a strong supporter of the preliminary discussions in Brus-\nsels in November 1947 among Western European nations for a multilateral exchange\nagreement, and, with its Benelux partners, has pressed for a workable exchange system\namong the sixteen ERP nations as well as within the Western Union.\ne.\nForeign Trade (Belgo-Luxembourg Economic Union).\nOrdinarily, the per capita value of the Belgo-Luxembourg Economic Union's\nforeign trade is one of the highest in the world. Having few natural resources, the\nEconomic Union imports principally raw materials and exports semi-finished and fin-\nished products. Although Belgium and Luxembourg, together with the Belgian Congo,\nhad a small foreign trade deficit before the war, the net import balance was more than\noffset by invisible exports such as tourist trade, income from foreign investments, and\ntransit traffic to and from Central Europe.\nAt the end of the war, in order to increase the supply of goods and curb infla-\ntion, the Economic Union instituted a policy of virtually unrestricted importation of\nindustrial consumer goods and limitation of exports. This program, combined with\nthe wartime backlog of import demands and the slow recovery of Belgium's export in-\ndustries, resulted in an extreme imbalance between exports and imports. In 1946,\nexports constituted only about half the value of imports. The Economic Union was\nable to meet this deficit by dollar exchange derived from various sources, including pay-\nments for services rendered the Allies during the last months of the war, US and Ca-\nnadian loans, US-Congo wartime trade, and convertibility agreements with the UK\nwhich allowed, until August 1947, the conversion into dollars of sterling payments\nreceived from other countries.\nIn 1947 Belgium and Luxembourg made considerable progress in increasing\nexports, so that 72 percent of the value of imports was covered thereby. During the\nfirst six months of 1948 this percentage increased to 81. The postwar demand for\ncapital goods and other durable goods, which domestic and customary prewar foreign\nsources of supply could not meet, resulted, however, in the purchase of approximately\n27 percent of Belgium's 1947 imports from the US. Hence, the greater part of Belgium's\nnet import balance was in dollars. The extraordinary sources of dollars, set forth above,\nwere no longer available, however, and the prewar invisible sources of foreign exchange\nwere not completely re-established. As a consequence, on 1 January 1948, the Belgian\n24\nGovernment found it necessary to interpret more strictly those foreign exchange re-\nstrictions and related export-import controls which had been extended by basic legis-\nlation shortly after liberation, but which had been only loosely applied. The import\nrestrictions have succeeded in reducing somewhat the large import balance with the US.\nThis effort to decrease non-essential imports from dollar areas was partly dictated by\nBelgium's difficulties in obtaining payment in convertible currencies from its European\ncustomers.\nIn 1947, the Belgo-Luxembourg trade deficit with all countries (except the\nCongo) was 19,130 million francs (approximately $436 million), compared to the im-\nmediate prewar average import balance of only about 5,818 million francs (approxi-\nmately $11 million). More important, however, is the fact that recent large imports\nfrom hard currency areas have not been balanced by corresponding exports, as Belgo-\nLuxembourg exports go mainly to soft currency countries. To maintain any consider-\nable volume of exports to the latter countries, Belgium has had to extend credits be-\ncause these debtors could not pay in convertible currencies. The efforts of the OEEC\ncountries to establish an inter-European payments system, if successful, should stimu-\nlate purchases of other European countries in Belgium for which Belgium will initially\nreceive ERP dollars.\nWith a few notable exceptions, such as the loss of the German market, the\nprincipal customers of the Belgo-Luxembourg Economic Union since the war are the\nsame as those of the prewar period. The relative values of imports to these countries,\nhowever, has changed since the war. Belgium's principal prewar (1936-38) markets\nwere, by value of exports: France (17 percent), UK (14 percent), Netherlands (12\npercent), Germany (11 percent), the US (7 percent), Argentina (3 percent). In 1947,\nhowever, the Economic Union's best customers were: Netherlands (13 percent), France\n(12 percent), UK (10 percent), Switzerland (7 percent), Sweden (6 percent), and the\nUS (4 percent). Before the war, the US held third place as supplier, preceded by\nFrance and Germany, and closely followed by the UK and Netherlands. By contrast,\nthe US held first place as supplier in 1947, providing approximately 27 percent of Belgian\nimports; it was followed by France (11 percent), UK (9 percent), Netherlands (6 per-\ncent), Switzerland (4 percent) and Argentina (3 percent).\nThe economic dislocations caused by the war, war damages, and the develop-\nment of compensation-clearing agreements with a number of important trading areas,\nhave all influenced the shifting of trade channels. Imports of greater importance than\nbefore the war are: paper and paper products; railway equipment; automotive vehicles;\ncolonial products; silk and rayon; wines, liquors, and miscellaneous foodstuffs; mineral\nfuels; ores; wood and wood products. The relative importance of exports has also\nundergone some change, with metals and metal products, mechanical and electrical\nequipment (including railway equipment), and textile products receiving greater em-\nphasis than they did in the prewar period.\nSince the war the Belgo-Luxembourg Economic Union has been active in the\ndevelopment of bilateral commercial and financial agreements, having concluded such\narrangements with some 20 countries. Confronted with the breakdown of multilateral\ntrading and the increasing difficulty of selling its exports for convertible currencies,\n25\nSECRET\nBelgium, like most other countries of Europe, resorted to such bilateral arrangements\nas expedients to maintain the level of its production and trade. Thus, despite transfer\nand exchange problems, essential imports were obtained and markets sustained for\nkey export industries. Most of these arrangements were of the \"trade and payments\ntype\" wherein the respective governments agreed to facilitate the exchange of desig-\nnated commodities more or less on a compensatory basis. They were usually accom-\npanied by \"payments\" agreements establishing clearing accounts in the respective\nnational banks to facilitate compensatory transactions. These accords enabled the\nEconomic Union to trade with all the countries of Western Europe and most of the\nEastern European countries.\nAn important difficulty encountered in concluding trade treaties has been the\ndesire of most countries to limit their imports as much as possible to raw materials\nand essential supplies and to re-establish their commercial trade balance and balance of\npayments, especially with hard-currency countries. The Economic Union's most im-\nportant barter-clearing agreements are with neighboring countries. Those with Latin\nAmerican and Eastern European nations have not been particularly successful. How-\never, the Economic Union finally concluded a commercial agreement with the USSR in\nFebruary 1948, which provides, among other things, for the exchange of Belgian ma-\nchinery and finished and semi-finished products for grains and small amounts of other\nraw materials.\nDuring 1947 the Economic Union began to experience resistance in foreign\nmarkets to the high prices of its products, especially of luxury and semi-luxury articles.\nPrice competition, particularly in the Western Hemisphere, as well as foreign resistance\nto the importation of non-essential items, is making it more and more difficult to sell\nabroad. The slowing down of production in the diamond-cutting, textile, and shoe\nindustries because of decreased domestic and foreign demand is viewed as a forerunner\nof the difficulties with which most of the Belgian industries will eventually be faced.\nAlthough certain Government, business, and labor groups view with approval the pos-\nsibility of a mild business recession and deflation, the rapid rise of prices during the\nfirst four months of 1948 is likely to be checked by a more violent deflation than is\ndesired.\nThe Economic Union's prospects of increasing exports are, except for high\nBelgo-Luxembourg prices, largely dependent upon factors over which the Union has no\ncontrol. The rigid import controls retained by Belgium's normal customers since the\nend of the war and the foreign exchange difficulties in which most of them are involved\nhave decreased considerably Belgian exports to some Western European nations, par-\nticularly since the beginning of 1948. World-wide shortages of important raw mate-\nrials, such as coal, iron and certain non-ferrous metals, have made it impossible for\nsome of Belgium's industries to operate at capacity levels. Belgium and Luxembourg\nare endeavoring to obtain ERP dollars for their exports to the participating countries,\nand, in conjunction with the Netherlands are pressing for a multilateral system of\nforeign exchange to reduce payments difficulties among the ERP countries.\nSECRET\n26\nSECRET\nf.\nBenelux Customs Union and the Contemplated Economic Union.\nDuring their exile in London, the refugee governments of Belgium, the Nether-\nlands, and Luxembourg worked out a formula for a common customs tariff, and at\nLondon on 5 September 1944 the three countries signed an agreement which laid the\nfoundation of the Benelux Customs Union. Although it had been planned to effectu-\nate the customs union immediately following liberation, many circumstances contrib-\nuted to delay. The economic recovery of the three countries was very uneven; the\nNetherlands in particular was faced with domestic economic difficulties and with serious\ncolonial problems. In each country it was necessary to secure support for the revised\ntariffs from the economic groups affected, and ratification by the respective parliaments.\nFurthermore, many technical problems, such as tariff classifications, had to be settled.\nFollowing lengthy negotiations, a pact was passed by the parliaments and finally ratified\nby the three governments on 29 October 1947.\nThe common Benelux tariff schedule, which went into effect on 1 January\n1948, employs the League of Nations model nomenclature and represents a compromise\nbetween the former tariffs of the Netherlands and Belgium-Luxembourg. Whereas\nthe former Belgo-Luxembourg tariff comprised mostly specific duties, the Benelux tar-\niff is almost entirely on an ad valorem basis, as was the former Netherlands schedule.\nThe rates of duty in the Benelux tariffs are clearly higher than those of the previous\nDutch tariff, and are generally considered lower than those in the former Belgo-Luxem-\nbourg tariff. Duties on certain food products which were scheduled to go into effect\nat the beginning of 1948 have been suspended until the end of the year, because of the\ninadequacy of domestic production. For the time being, the Benelux customs receipts\nare not being pooled, each country continuing to retain the duties paid in its territory.\nThis procedure is regarded, however, as purely a temporary expedient.\nEven though duties are no longer collected on Dutch products imported into\nBelgium, and vice versa, the frontier posts remain, and trade among the participating\ncountries is still subject to border control. Trade restrictions such as exchange control,\nquotas, and import and export licenses still exist within the area. At present, prac-\ntically the only commodities which may move freely among the three participating\ncountries, without being subject to controls, are indigenous fresh fruits and vegetables.\nExcise, sales, and other taxes are not uniform, and the economic policies of\nthe Netherlands and the Belgo-Luxembourg Economic Union are widely divergent.\nThe three countries have agreed in principle, however, that they will take steps neces-\nsary to reach a full economic union, which means that border controls will be eliminated,\nthe excise and sales taxes made uniform, a monetary union achieved, and the economic\npolicies in the fields of agriculture, industry, transport, and labor coordinated.\nAt the beginning of 1948 the negotiations reached the critical point at which\neach of the countries had to make substantial concessions to achieve union. It was\ndecided that the next step should be the coordination of the basic economic policies of\nthe three countries, and it is in this direction that the negotiations for the Economic\nUnion proceeded. The Benelux countries hope to achieve this step by 1 January 1950,\nbut it is expected to be difficult because the Netherlands policy of austerity and con-\ntrolled economy is in sharp contrast to the Belgian and Luxembourg liberal trade policy\n27\nSECRET\nand restricted Government control of the economy. Agreement on controls over the\nestablishment of new industries and the expansion of others already existing has been\nlargely achieved, and preliminary steps have been taken to modify agricultural policies\nin preparation for complete economic union. However, the crucial problem of provid-\ning for complete interchangeabiilty of the strong Belgian and Luxembourg francs with\nthe relatively weak Dutch guilder has not been solved.\nBefore the war, the Belgo-Luxembourg Economic Union had a small favorable\nbalance of trade with the Netherlands, but since the end of the war this export balance\nhas become so great that Belgium found it necessary to grant credits to the Netherlands\nwhich amounted to about 4,300,000,000 francs (almost $100 million) early in 1948. Al-\nmost every obstacle to full economic union hinges upon the balance of payment diffi-\nculty. It is recognized, however, that until the Dutch market becomes adequately sup-\nplied with many commodities which are freely available in Belgium and Luxembourg,\nthe Netherlands will be forced to maintain stringent currency controls. A recent favor-\nable development has been a more ready acceptance of the lower-priced Dutch goods on\nthe Belgian market than previously, which if continued, may lessen the unfavorable\nDutch import balance with Belgium. Complete economic union, allowing the un-\nrestricted movement of goods, capital, and persons within the Benelux area, therefore,\ncannot be expected for several years.\nThe general economy of Benelux remains much the same as that of its con-\nstituent parts-Benelux imports raw materials and exports finished products. The task\nof forming the economic union is made easier by the fact that this union does not alter\nthe fundamental economic character of its constituents. The Netherlands and the\nBelgo-Luxembourg Economic Union continue to negotiate individually bilateral com-\nmercial agreements. As soon as the Benelux Economic Union is sufficiently advanced,\nhowever, it is planned to negotiate such agreements for Benelux as a whole. Benelux\nappeared on the international economic scene as a unit for the first time in the Geneva\nnegotiations on the General Agreement on Tariffs and Trade. The three countries,\nrealizing that their advantage as the third largest trading area in the postwar world,\nseem determined to continue to act as a unit in future economic conferences.\n10 seisting Tedio bne\nHiw at besign\nUsw simonose the 8\nDevoldha vistenom 8 assai\nbelanibioos has ,hoqannil smillurings to odi asibiling\nde dateg Destrict berionss anottallogen 8881 to gainniged IA\n11 notru Inlinatedua extem of had astitudo 10 rises\nto estallog to blvode qsta ixen\nsidi ni al 11 Das\n,0001 I of settinuos\nBru to gollog estrased of belaeques 11\nbise neigle8 of\n28\nSECRET\nSECTION III\nFOREIGN AFFAIRS (BELGIUM)\n1. GENESIS OF PRESENT FOREIGN POLICIES.\nAfter Belgium became an independent nation in 1831, the Great Powers- Austria,\nFrance, Great Britain, Russia, and Prussia-saw the necessity of preventing aggression\nby any one power against such a strategically located nation. Permanent neutrality\nwas therefore imposed on Belgium and its territorial integrity was guaranteed by the\nGreat Powers. Belgium could maintain an army for protection against aggression but\ncould not enter into any independent system of alliances.\nBelgium welcomed these stipulations and felt justified in its position when the\ncountry escaped involvement in the Franco-Prussian War of 1870. The Belgian people\nidentified Belgium's economic prosperity and growing importance in international\ntrade with neutrality. When in 1914 the Government rejected Germany's ultimatum\ndemanding permission for its troops to cross into France, the Belgian people fully\nsupported the decision.\nWorld War I brought about a complete change in the foreign policy of the nation.\nThe enforced neutrality was abandoned, and during the years following the war,\nBelgium pursued a policy of collaboration with other victorious nations to secure\nadequate guarantees against future aggression. Belgium was among the founders\nof the League of Nations and sat on the Council, took part in the occupation of the\nRhineland, and later joined France in the occupation of the Ruhr. In 1920 a military\nagreement was signed with France, but was never ratified by the Belgian Parliament\nbecause of Flemish opposition to this alignment. Belgium hoped also to conclude an\nalliance with the UK and France, for immediate armed support in case of another\nGerman attack. British and French differences, however, put an end to any such\nhope.\nIn 1925 Belgium adhered readily to the Treaty of Locarno, signed by Germany,\nFrance, Great Britain, Italy, and Belgium, to confirm the demilitarization of the left\nbank of the Rhine and guarantee the frontiers of Belgium and France which are con-\ntiguous with Germany. For a time, Belgium felt that its borders were secure. After\n1935, however, events abroad gave rise to an increasing Belgian alarm, which was re-\nflected in internal confusion and instability. Fear of another German invasion domin-\nated everything else, and Belgium became actively concerned about its defense system.\nA change in the attitude of the Government toward its international commitments was\ncrystallized in 1936 when King Leopold defined a new policy of \"independence\" that\nclosely paralleled the earlier Belgian neutrality. France, Great Britain, and subse-\nquently Germany recognized and agreed to uphold Belgium's inviolability.\nThe invasion of the Low Countries in 1940 caused another change in Belgium's\nforeign policy. After the war it abandoned all thought of neutrality and placed its\nhope in the effectiveness of the UN and in close association with other Western nations,\n29\nSECRET\nespecially its neighbors. The nation has found by bitter experience that its land con-\nstitutes one of the main military routes of Western Europe, a route which can best be\nsafeguarded by international agreements for collective security.\n2. RECENT DEVELOPMENTS IN FOREIGN RELATIONS.\na. Western Europe.\nIn March 1947, Premier Spaak publicly announced his Government's desire\nfor alliance with the UK and France, similar to the French-UK Dunkirk agreement.\nAt the same time, to forestall criticism that he was developing a Western European\nbloc, he extended the offer to the USSR. No Soviet answer was expected or received;\nSpaak had suggested a similar alliance to the USSR in 1945 and got no reply.\nAlthough both the French and British indicated informally their interest in\nan alliance with Belgium, no positive steps were taken. By the time UK Foreign\nMinister Bevin proposed a \"western union\" with France and the Low Countries in\nJanuary 1948, the wishes of the Belgian Government had enlarged accordingly, and\nBelgium accepted without hesitation the invitation to discuss concrete proposals. In\nthe subsequent negotiations, Belgium, with the support of Luxembourg and the Nether-\nlands, insisted upon: (1) an alliance signed by all five powers, rather than separate\nbilateral treaties; (2) a provision for mutual and immediate assistance in the event\nof attack from any aggressor, not just Germany; and (3) special provision for close\neconomic collaboration. Prime Minister Spaak left no doubt that, privately, he con-\nsidered it an alliance against the USSR.\nThe Spaak Government, since its formation in March 1947, has expressed\nconsiderable interest in a Western European customs union and seems to have general\npublic support in its view. Benelux initiative led to the formation of the OEEC Study\nGroup on a customs union for the sixteen nations participating in the European re-\ncovery program. Belgium particularly seems to feel that political and military co-\nordination must be accompanied by economic measures to break down trade barriers\nin Western Europe. The Belgian Government believes that, in view of the enormous\nproblems involved in a customs union, a practical approach would be the formation of\nregional groupings similar to Benelux that eventually could be coordinated in a union\nfor all of Western Europe.\nb. Benelux.\nThe most notable manifestation of Belgium's postwar foreign policy is the\nclose cooperation being achieved with the Netherlands and Luxembourg through the\nBenelux Customs Union. Although the main objectives of Benelux are economic, the\nunion necessitates high-level coordination on many other mutual problems-military,\ncultural, social, legislative, and administrative. The signing of a Belgian-Dutch mili-\ntary pact in May 1948 indicates the growth of this cooperation. It seems to reflect also\na desire of the Benelux countries to accelerate the five-nation military discussions and\nUS consideration of military aid to the Western Union. As small nations, the Low\nCountries recognize the benefits to be derived from achieving common objectives by\njoint efforts. Their prestige has been enhanced considerably at international con-\nferences at which they have had a joint Benelux delegation, particularly at the OEEC\nmeeting, where collectively they have offered leadership and specific programs. The\n30\nSECRET\naim of the Benelux countries is to achieve eventually a complete economic union and\npossibly extend it to include other Western European countries.\nc. UK.\nTraditionally a friend and protector of Belgian interests, the UK played an\ninfluential part in Belgian foreign policy during and immediately after World War II.\nHowever, the rapid economic recovery of Belgium and adverse economic situation of\nthe UK have led Belgium by almost imperceptible degrees to depend less on the UK\nand more upon its own resources and upon the US. However, the security which\nis Belgium's constant and major concern must still center largely upon British arms,\ntraining assistance, and friendly proximity. The Brussels Pact will probably add\nemphasis and importance to this relationship.\nd. France.\nBetween the two wars Belgium generally supported France on European prob-\nlems because of their mutual fear of the revival of an aggressive Germany. There\nwas some military coordination; the Belgian army was modeled along French lines;\nthe two countries jointly occupied the Ruhr. However, Flemish suspicion of French\ndesigns to dominate Belgium prevented the conclusion of an economic agreement\nand ratification of an outright military pact. During World War II, when Belgium\nlooked more and more to the UK for assistance, British military organization, training,\nand equipment replaced the French system and consequently diminished Belgian de-\npendency on France.\nThe apparent cause of Belgium's wary attitude toward France today is a\ndeep-seated fear of French instability and the possibility of large-scale Communist\nactivities in that country. Belgium is well aware of the far-reaching effect of French\nevents on the rest of Western Europe and realizes that the repercussions of French\neconomic and political unrest would be felt forcibly in Belgium. French economic and\npolitical instability and Belgian fear of possible French domination prompted Belgium\nto reject unofficial French overtures for a customs union with the Benelux countries,\nalthough it has willingly entered into the Western Union including France. In dis-\ncussions of the latter proposal, Spaak has expressed confidence that the Benelux\ncounrties will be in the strategic position of mediator and balance between France\nand the UK.\ne. Germany.\nBefore World War II, trade was a strong link between Belgium and Germany.\nAlthough Belgium became extremely apprehensive of possible German aggression after\nthe advent of Hitler, a considerable volume of trade, including transit traffic, was\ncontinued. The complete postwar disruption of this trade has seriously affected the\nBelgian economy, and Belgium's desire for a revival of the German economy within\nthe limits of security dominates the Government's views on Germany's future. Belgium,\nin conjunction with the Netherlands and Luxembourg, has consistently demanded\na part in formulating the German treaty, and felt its efforts were rewarded when the\nBenelux countries were invited to the three-power London meeting on Western Ger-\nmany in February 1948. Belgium's concept of a German treaty and Belgian repara-\ntion demands as officially formulated in 1946 and early 1947, have been revised con-\n31\nSECRET\nSECRET\nsiderably in the light of the general shift in thinking on Germany resulting from the\nintensification of the East-West conflict. The essential points of Belgian policy on\nGermany include: (1) establishment of a politically federated and economically united\nGermany; (2) establishment of a Rhineland Commission composed of UK, France, the\nNetherlands, Luxembourg, and Belgium, to control directly German industrial output;\n(3) the inclusion of the Ruhr in Germany politically; (4) effective guarantees against\nrestrictive trade practices in Germany; and (5) Belgian use of the natural routes of\nthe Low Countries' ports and inland waterways for German trade, unrestricted by\npolicies favoring the north German ports. Thus, Belgium's interest in Germany has\nshifted from reparations to the possibility of a revival of German trade. In spite of\nthe continued failure of successive Dutch-Belgian negotiations with the bizonal authori-\nties for the shipping of occupation supplies through the Low Countries' ports, an\nagreement was finally reached in September 1948 as a trial procedure for three months,\nat the end of which time the problem will be re-examined. Although the Belgians hope\nfor an adjustment of the Belgian-German border by which Belgium would acquire six\nGerman enclaves (totalling 12 square miles with a population of less than 4,000), they\nare less seriously concerned about this territory than they are about the satisfaction\nof their other demands.\nf.\nUSSR and Satellite Countries.\nBelgium has made it quite apparent that its foreign policy and sentiments\nare aligned with those of the West. During the war, in Belgium, as in other occupied\ncountries, the Communists worked successfully with other groups in the underground,\nbut subsequent obstructionist tactics of the USSR and of Belgian Communists have\nbeen costly to the local Communist Party. Since the Communist withdrawal from the\nBelgian Government in March 1947, the Government has been decidedly more out-\nspoken against the USSR, particularly in the UN. In addition to the vicarious antip-\nathy toward the USSR based on a general identification of Belgian aims with those of\nthe US and UK, Belgium has encountered Soviet criticism because of its participation\nin the Western Union and its active role in various efforts to bring about greater unity\nin Western Europe.\nAlarm at the scope and possible aim of Soviet postwar expansion is now a\nmajor element in Belgian foreign policy. Belgium's fear of a world conflict does not\nalter its firm position against Soviet domination of Europe. However, the Belgian\nGovernment considers that its business-like trade agreement with the USSR, concluded\nin February 1948, in no way compromises this policy. By receiving grains and other\nraw materials from the USSR in exchange for industrial finished products, the Gov-\nernment feels that it is not only assuring internal stability but is actually contribut-\ning to the success of the ERP by reducing Belgian needs from the West. It seems likely\nthat the USSR expected no political advantage from the agreement and was primarily\ninterested in obtaining Belgian iron and steel products.\nThough Belgium has trade agreements with most of the Soviet satellite coun-\ntries, the difficulty of carrying on commercial relations makes the agreements, except\nin a few instances, completely inoperative. Belgium signed a cultural agreement with\nCzechoslovakia in March 1947, when Spaak made a special trip to Prague for the\nSECRET\n32\npurpose. At that time he shared the hope with other Western Europeans that Czecho-\nslovakia would be able to bridge the political gap between the East and West. Following\nthe Czechoslovakian coup in March 1948, Belgians were as disillusioned and alarmed\nas the rest of the non-Communist world. As a result, this cultural agreement no\nlonger has any significance.\n33\nSECRET\nSECTION IV\nMILITARY SITUATION (BELGIUM)\n1.\nGENESIS OF PRESENT MILITARY POLICIES.\nBelgium has never fought an offensive war, and its strategy has always been one\nof defense. Vulnerable because of its geographic position, Belgium forms a convenient\ncorridor for the movement of powerful armies. After the German invasion in 1914,\nBelgium abandoned its policy of neutrality in favor of unofficial cooperation with France\nand the UK. By 1934 it was evident that a definite defense system was urgently needed.\nThe main defense line was built along Belgium's eastern border, and the Meuse and\nAntwerp fortresses were strengthened. In 1936, these fortifications were completed,\nand because of changes in the international political scene, Belgium once again adopted\na policy of neutrality.\nAt the time of the German invasion of 1940, Belgium had relatively strong fortifica-\ntions. Belgian strategy was based on the defense of three successive fortified lines with\nthe object of delaying the enemy advance until expected British and French re-enforce-\nments could arrive. However, lack of advance coordination with the Allies and the\nsurprising speed of the German advance prevented the full implementation of this\nstrategy. Withdrawal to the North Sea ports forced the Belgians, as well as the\nFranco-British troops who came to their aid, into a pocket with their backs to the\ncoast and no alternatives but escape by sea or surrender.\nSince the liberation of Belgium the problem of future strategy has been extensively\ndiscussed, but no definite plan has yet been formulated. Although new methods of\nwarfare have altered the defense problems of Belgium, they have not decreased its\nimportance as the natural invasion route to France. At the same time, the scope of\nmodern warfare makes inevitable the inclusion of Belgium in any open conflict in\nWestern Europe.\nThe question of refortifying Belgium has arisen, but the Government, made cau-\ntious by the experience of World War II and aware of its own limited resources, has\nnot yet reached a decision to maintain and rebuild the Belgian fortification system.\nThe provision for high-level military coordination, implied in the Brussels Pact, with\nthe UK, France, the Netherlands and Luxembourg, presumably will lead to the formu-\nlation of a combined strategy with these treaty partners. This can be expected to\ninclude arms standardization and will probably lead to a closely coordinated develop-\nment by Belgium, the UK, and France of their respective African colonies as an area\nfor military operations in the event of a war resulting in the occupation of the mother\ncountries.\n2.\nSTRENGTH AND DISPOSITION OF THE ARMED FORCES.\na.\nArmy.\nThe strength of the Belgian Armed Forces as of September 1948 was 59,276.\nOf these, 52,000 are in the Belgian Army, which is slightly smaller than it was before\n35\nSECRET\nSECRET\nWorld War II. After liberation, with British aid, the Army slowly expanded to a\npeak of 115,000 men in January 1946. Partial demobilization has brought it down to\nthe present level. No great changes in the present strength seem likely in the near\nfuture, although a small reduction may become necessary, depending upon the military\nbudget.\nThe best trained and equipped units of the Belgian Army are organized into\nthe I Army Corps, which consists of 1st and 2nd Infantry Divisions, plus corps troops, and\ntotals 17,000 men. It forms the Belgian occupation force in the UK Zone of Germany.\nThe remaining 35,000 men are distributed in Belgium partly as line of communication\ntroops for maintenance of the Occupation Force and partly as units for the training of\nnew conscripts.\nThe conscription system makes service for a period of twelve months com-\npulsory for every male citizen who has reached the age of 20. Since the liberation of\nBelgium, the army has gradually reopened and expanded its schools and training in-\nstallations. Until 1947 much of the training was received in the UK, but at present,\nexcept in a few special British schools, the Belgian Army is no longer represented. At\nleast 1,500 Resistance officers were given regular commissions, but in the future, Regular\nArmy appointments will be made from the graduates of the Royal Military School.\nThe lack of a military tradition has at no time threatened the loyalty of the\nBelgian troops. Although individualists, the Belgians generally accept military serv-\nice and discipline as a necessary national duty. The linguistic problem has been dealt\nwith wisely and has never threatened unity of command and good discipline. The\nArmed Forces neither control nor are controlled by any political group.\nb. Navy.\nBy a decree of 30 March 1946, the Belgian Section of the British Royal Navy\nreassumed its identity as the Belgian Naval Force. Its current strength of 1,000 men\nis unlikely to be changed in the near future. The personnel consists of volunteers and\nconscripts who have indicated a preference for naval duty.\nThe naval vessels consist of 2 combat units (1,630 and 1,086 tons respectively),\n8 mine sweepers, and 1 boom-defense vessel. The Navy is under the Minister of Com-\nmunications in peacetime, but in case of war would revert to the control of the National\nDefense Minister. Its primary function in case of war is to protect merchant shipping\nand perform mine-sweeping operations in the harbors.\nc.\nAir Force.\nIn September 1946, the Belgian Section of the British Royal Air Force was\nestablished independently as the Belgian Air Force. As of 1 September 1948 the Air\nForce had a strength of about 6,276 men, a figure which may be slightly increased to\na permanent peacetime strength, as the organization is still in its formative stages.\nThere are 399 flying personnel, all of which are believed to be qualified pilots, and the\nremainder make up the administrative and technical ground crew. At the present\ntime there are four fighter squadrons, one communication and liaison squadron, and\none transport squadron. Available aircraft totals 271 planes, with at least 31 first-\nline fighters. Other aircraft are on order from the UK. Plans provide only for a\ndefensive combat group of fighter planes.\nSECRET\n36\nSECRET\nThe efficiency of the Air Force is very good, as flying training is received at\nBritish schools. The Belgians soon will begin to operate their own flying schools, which\nare expected to train to the present degree of efficiency about 70 pilots a year, with\nsufficient air and ground crew personnel to supplement that number. In case of\nhostilities, undoubtedly Belgium will allow her Air Force to become allied with the\nother air forces of the Western Union.\nd. Corps of Gendarmerie.\nThe Gendarmerie, with a strength of approximately 10,600, is independent of\nthe Army but comes within the administrative control of the Minister of National De-\nfense for personnel, supplies, and discipline, and under the Ministry of Public Works\nfor its billeting. It operates respectively under the command of the Ministries of Jus-\ntice and Interior for police work and for maintenance of public order.\n3.\nWAR POTENTIAL.\na. Manpower.\nThe number of physically fit males, between the ages of 15 and 49 inclusive,\navailable for the Armed Forces is estimated at 1,381,480 as of 1 January 1948. However,\nit is not likely that the World War II peak mobilization (January 1940) of 650,000 men\ncould be exceeded. Equipment and efficient training facilities are not available for a\nforce much greater than the present Army, and economic difficulties undoubtedly will\nprevent any great expansion of such facilities in the near future.\nb. Industry.\nIf cut off from outside sources of raw materials, Belgian industry would be\nunable to maintain the Armed Forces with fighting equipment, except from negligible\nstockpiles for a short period of time. In peace time, Belgium can satisfy her small-\narms requirements but lacks sufficient industrial facilities to manufacture large-caliber\nweapons and other heavy equipment.\nc. Science.\nThe present and probable future policy of Belgium regarding scientific military\nresearch and development is to keep abreast of the most modern equipment of other\nnations and try to obtain that which is practical for the Belgian Army without stock-\npiling matériel that may soon be obsolete. Belgium has inadequate facilities and\nfinances for nuclear physics research but is attempting to coordinate the work of the\nuniversities interested in the field. By the end of 1947, 30 million francs had been\nallotted for nuclear research and although no specific figures are available for 1948,\nit is probable that at least an equivalent amount has been made available. There are\nbelieved to be about 15 or 16 competent nuclear physicists in the various Belgian uni-\nversities, and the University of Ghent has available from a nearby industrial plant\nequipment with a voltage of two million, one of the highest available to any laboratory\nin Europe. However, Belgium is not regarded as a potential producer of atomic weapons,\nand is more interested in future industrial use of atomic energy.\nd. Finance.\nBelgium's military potential is limited financially by the basic economy of the\ncountry, which depends largely upon foreign trade and to some extent upon income\nfrom foreign investments. Wartime conditions would disrupt such an economy to a\n37\nSECRET\ndegree that even normal financing of the essentials for livelihood would be seriously\ncurtailed. However, if not occupied, Belgium could be a valuable military ally because\nof: (1) uranium and other strategic ores in the Belgian Congo; (2) a highly industrial-\nized economy, including important metallurgical plants (if not occupied by an enemy);\nand (3) a strategic geographical position in Western Europe.\n4. MILITARY INTENTIONS AND CAPABILITIES.\nBelgium's unfortunate military experiences of the past have influenced its military\npolicy. Belgium no longer relies solely upon its fortifications and former lines of\nstatic defense, but in frank recognition that its military capacity is principally that of\nlimited defense and holding action, the Belgian Army is designed as a defensive unity,\nfor employment in cooperation with forces of the UK, the Netherlands, and France.\nThis dependency of the Belgian Army upon the other signers of the Brussels Pact can\nbe expected to be intensified as definite over-all military plans are developed by the five\ncountries.\nThe Belgian Congo is being stressed in Belgian discussions of long-range military\npolicy, probably as a base for the Belgian Air Force. If forced to evacuate Belgium,\nthe Government and the Army would be more likely to move to the UK or North Africa\nthan the Congo, as the latter lacks the essential requirements as a base of operations.\nHtw simonose bas VITTA insuriq edit nedi теляетд doom 90101\nexplut ТВЭД add ml done 10 18913 VITA Insverq\nis\ned bluow details aisistam WBI to 8802108 obtatuo most Bo tuo 11\noldigifged most Jasmqiups galidgh date bennA and misidem 03 aldanu\n-Плите TSUT Visitas mulyis8 smill 9089q at needs to botteg stode 8 TOT asliquisota\nredilão-sgral of installus solori 3ud\nImemqlups yvard Todio bris anoqsew\nvisition offitation galbzager mulgied to volloq cudet aldedomy brin Insestig 9dT\n10 заэтацире moborn 120.00 odd to issueds qued of RI inamgoloveb has Потязвот\ntworthw VAPIA naigle8 add 101 at doldw tadi alsido of VII brts smottan\nbas additional stargebani and mugled atstoado ed ПООЕ yam India feitètem gaillq\ngrit to know sitt stanibuco of at dud solaying TO) asortant\nased barf anned 08 .TAC1 to bise orth va bish add ni\n8181 TOT sidellays 518 sewgh afficed on riguodis bris region TOT bottolls\n918 TisnT sidelieve abam used and Invents Instaviups MS tastel 38 tedi eldedord at J1\n-Irter asigle8 BEFOITEV oril ni atabiaydq issionn instagmos 01 10 ar tuods 90 of bevelled\ntasiq 8 most aldeltave and to bisa antistev\nTHE of cidellava feadgid add to 500 notifier ow) to egallov 8 rithw Inomqiirps\nanoqesw ohmote to receborg leitnetoq 628 bebinger motgle8 JavewoH sqoina ml\nудтело to 98.0 sansui 910m at bns\nb\nto stand VIsionant bottall et lefinsioq visitlim s'muigle8\nemosal пофи Insixe emos at bria abail region) Visgret abnoqub\na of as doue tqualb\nSECRET\n38\nSECTION V\nSTRATEGIC CONSIDERATIONS AFFECTING US SECURITY\nBelgium's present significance for US security is indirect and related to the use\nof the British Isles as a forward base for military operations in Europe. A sector of the\nlow coastal plain facing the British Isles, it has formed part of the continental projec-\ntion of the defenses of the United Kingdom and is the natural invasion route from the\nEast to France. In this context, Belgium in enemy hands could serve as a launching\nsite for guided missiles, as a base for offensive and defensive air operations, and as a\nmounting stage for amphibious operations against the British Isles.\n10\nIf effectively denied to an enemy, Belgium would have considerable value as a base\nfor US and Allied operations in Western Europe. Its highly developed port facilities,\nand its road, rail, and water communications would give it great logistic importance.\nThe area is difficult and costly to defend because natural lines of defense are not suffi-\ncient to stop modern attack. Hw odT Ядоша CIL\nshiw-bitow B 10 tarit 1991 york) ashimos Пята ES sanased\nsteem ИО litnU to эзілатару faod gift ai\nni glimose evitoelloo **** of Blw bas magles been\ndllw noinU 9dd 88 sibom Hous dignout) amoilan TOTAL dillw nottoant\nshashedle bus SOURTY NU\nedit brus gwodmexuň ml atsimimmo orts to Xnow one\nvivitors not toying totvoa sming & gnimooed sends to\nsosdo elmorross gnillivası ods astiánnos al Indines tainummoO\nCom- risds 10 enisy odT astimos ritod to vilidete of Insibiline ad blrow\negalodes birs to deltomong risds ml gil bloow HEBU sitt of asided Jainum\nядоша ni staimumme asdito 10 astivities odd ridger\ndad bas mulgisH to поӏавуді and has sqoiră 111 LSW 20 tasva-edi nl\nguivaleb B as somete утятосте! neds shom on 19710 of beloagas sd 083\nBITUOY vidlesoq bas isnnoamq ver and 10 od) wolls of noliss\nand ni bequieveb assd and sand elsupoba 118 11 938 visitim to asm\nmurging mort medd sisuosve TO start aqood Ledmos tead all noissia blrow vidadorq\n-Lieve extem of beloeque DBD nutgleä .equired to gateent Insurave and ni traq sales of\nbeiqueso at mulgied 11 neve adouboxq anoitan 9d3 of elds\n39\nSECRET\nSECTION VI\nPROBABLE FUTURE DEVELOPMENTS AFFECTING US SECURITY\nThere is no basic political factor of instability that would constitute a threat to\nUS security in Luxembourg, and none in Belgium except possibly the sharp division\nof Belgian political groups over the question of King Leopold's status. A real danger\nto both nations, however, would be the deterioration of their foreign trade, upon which\ntheir economies are built.\nBelgium and Luxembourg, separately or together, never would on their own initia-\ntive be a threat to US security. On the contrary, there is every reason to believe that\ntheir contribution to US security as stabilizing factors in Western Europe is far out of\nproportion to their size. The Benelux Customs Union has increased considerably the\ngeneral bargaining power of the two countries in Western Europe. They can be ex-\npected to use this favorable position to obtain increased economic and political coopera-\ntion in Western Europe. The two countries will continue to support the United Na-\ntions, because, as small countries, they feel that effective functioning of a world-wide\ninternational organization is the best guarantee of their security. Until the UN meets\nthis need, Belgium and Luxembourg will continue to seek collective security in con-\njunction with other Western nations through such media as the Western Union with\nthe UK, France, and the Netherlands.\nThe weak position of the Communists in Luxembourg and Belgium precludes the\npossibility of these countries becoming a prime Soviet target for Communist activity.\nComplete Communist control in neighboring countries and the resulting economic chaos\nwould be sufficient to disrupt the stability of both countries. The value of their Com-\nmunist Parties to the USSR would lie in their promotion of strikes and sabotage\nsynchronized with the activities of other Communists in Western Europe.\nIn the event of war in Europe and the invasion of Belgium and Luxembourg, their\nsmall armies can be expected to offer no more than temporary resistance as a delaying\naction to allow the evacuation of the Government, key personnel, and possibly young\nmen of military age. If an adequate base has been developed in the Congo, Belgium\nprobably would station its best combat troops there or evacuate them from Belgium\nto take part in the eventual freeing of Europe. Belgium can be expected to make avail-\nable to the Western nations valuable Congo products even if Belgium is occupied.\nSECRET\n40\nSECRET\nAPPENDIX A\nTopography and Climate\nBELGIUM\nThe Kingdom of Belgium has an area of 11,775 square miles, a frontier of 831 miles,\nand seaboard of 42 miles. It is bounded on the north by the Netherlands, on the south\nby France, on the east by Germany and Luxembourg, and on the west by the North\nSea. Except for a short stretch of the River Meuse, which separates Belgium from the\nsouthern part of the Netherlands, Belgium's only natural frontier is the North Sea.\nAs a whole, Belgium's physical aspect presents no extremes. However, the Meuse\nRiver and its tributary the Sambre, divide Belgium into two comparatively distinct\nregions: the generally level and fertile western part, and the \"table-land\" of the\nArdennes in the east, which is for the most part hilly and wooded, with poor soil. The\nreclaimed \"polders\" form a coastal strip almost thirty miles in depth and covering\nan area of 193 miles, protected by dikes against floods. Several of the larger streams\nflow from southeast to northwest, slowly and in wide curves, often between dikes and\nabove the level of the surrounding country. The principal rivers are the Meuse, the\nSchelde, and the Lys. The highest hill, Baraque Michel, rises to 2,230 feet, but the\nmean elevation of the whole country does not exceed 526 feet, and the northern third\nof the country averages only 60 feet above sea level.\nThe climate is cool, temperate, and rainy, being slightly warmer and drier near\nthe coast. The mean annual temperature is 49° Fahrenheit. Severe cold is rare,\nexcept on the highest summits of the southern hills. Rain falls abundantly and snow\nis not infrequent from December to March. The average number of days with rain\nis 195 per annum.\n41\nSECRET\nLUXEMBOURG\nThe Grand Duchy of Luxembourg has an area of only 999 miles and frontiers\nof 220 miles, which are adjacent to Germany on the east, France on the south, and\nBelgium on the north and west. Despite its small size, Luxembourg has two distinct\nregions, physically, geologically and climatically. The northern and western portions\nof the country are a continuation of the Belgian Ardennes, and it is here that the\nhighest elevation is found. Although some of this area's dense forests have been\ncleared and the land cultivated, more characteristic are the deep meadowland valleys.\nThe country's eastern portion slopes down to the level of the Moselle River and is\ncharacterized by undulating plains, low hills and sluggish rivers. Geologically it is\nsimilar to northeastern France's mineral basin and is rich in iron ore. The altitude\nis more moderate than that of the northwest region and ranges from 800 to 1200 feet\nabove sea-level. Numerous brooks and streams throughout the country drain into\nsmall rivers which flow into the Our, the Sure, and the Moselle.\nThe climate of Luxembourg is generally free from extremes, although the northern\nsection is usually colder than the southeast. Rainfall is frequent and fairly abundant\nand heavier in the north. Luxembourg's elevation and distance from the sea tend to\ngive a large number of bright, sunshiny winter days and correspondingly a better sum-\nmer climate than some of its western European neighbors. to\nto\nat\nSECRET\n42\nCRET\nAPPENDIX B\nSignificant Communications Facilities\n1.\nHARBORS.\nBecause the Belgian economy is so greatly dependent upon trade, Belgian ports,\nespecially the port of Antwerp, provide extensive and efficient facilities for shipping.\nThere are eight ports listed in official Belgian statistics, but Antwerp handles 75\npercent of all Belgian foreign trade by sea and inland waterways. Antwerp lies 58\nmiles from Flushing by deep channels; over 34 miles of this approach lie in Dutch ter-\nritory. Before the war, Antwerp was one of the world's principal entrepôt ports, com-\npeting strongly with Hamburg and Rotterdam. Because of its advantageous position\non one of the main points of entry to the European inland waterway system, it re-\nceived a large proportion of its traffic from neighboring countries, and about 46 percent\nof outgoing and 37 percent of incoming shipments by sea were for foreign account.\nAntwerp sustained heavy bomb damage during the war, but repairs were immediately\nmade, and it became the principal port of entry for the Allies during 1945. The adverse\neffect of the termination of large military shipments is evident in the 1946 statistics,\nparticularly since peacetime trade was far below normal. During 1947, the recovery\nof Antwerp shipping was rapid, and the total tonnage handled was nearly 94 percent\nof the prewar figure, but there is considerable concern among officials and shipping\ncompanies because of the disproportionate percentage of imports over exports. The\nvolume of imports during 1947, including temporary imports and bonded goods, ex-\nceeded that of 1938 by 32 percent, but almost all of this increase represented an in-\ncrease in Belgian imports, as distinguished from goods in transit through Belgium to\nGermany, northeastern France, Switzerland, and the rest of the hinterland served by\nAntwerp. Imports into Belgium cannot continue indefinitely to make good the falling\noff of transit trade. Although Belgian re-exports and exports originating in Belgium\ntotalled, in 1947, 86 percent of the corresponding figure for 1938, the volume of goods\nexported through Antwerp from points outside Belgium and Luxembourg only rose to\n21 percent of the 1938 figure, and the total shipments leaving Antwerp by sea was\nonly 55 percent of the tonnage shipped in 1938.\nOf the remaining Belgian ports, Ghent is the largest. It derives the bulk of its\ntrade from inland waterway traffic. Next in importance are Ostende and Zeebrugge.\nTheir chief function is to act as terminals of the cross-channel traffic with the UK;\napart from this, their seaborne trade is of minor importance.\n2. MERCHANT MARINE.\nThe Belgian merchant marine is relatively unimportant, moving only about 8\npercent of the total tonnage handled in Antwerp. Nearly three-fourths of the Belgian\nprewar fleet of 101 ships, aggregating 422,949 tons gross, was lost during World War II.\nIn October 1947, this fleet had already been restored to 75 vessels, with a gross tonnage\nof 332,200, and 22 vessels, aggregating 64,000 tons gross were under construction.\n43\nSECRET\nSECRET\n3. NAVIGABLE WATERWAYS.\nWaterways have long been vital arteries of Belgian commerce, and, although there\nis a well developed rail network, nearly one-third of all inland freight moves by water.\nThe Belgian waterways, totalling approximately 1,030 miles, derive their importance to\nBelgian transportation from the triple delta of the Scheldt, Meuse, and Rhine Rivers.\nAlmost all industrial establishments are situated near waterways. Originally placed\nthere because of easy access to bulky raw materials, they have also benefited from com-\npetitive rates of the roads and railways which often run parallel to the waterways. In\nthe fall of 1944 the waterway system was practically useless due to the destruction of\nbridges and locks and to other obstructions. By the end of March 1945, however,\nalmost the entire system had been reopened to use. The recovery of the inland shipping\nfleet was slower, as many barges were destroyed during the war, or were taken away\nby the Germans. The barge numbers have been nearly completely restored, and by\nthe end of 1947 the tonnage of freight handled was near the prewar monthly average.\nHowever, the international movement on the inland waterways was still less than half\nof the prewar transit traffic, and its complete restoration is dependent upon the re-\nvival of transit trade with Germany.\n4. RAILROADS.\nThe railway network of Belgium is of greater density than that of any other\nEuropean country and, because of Belgium's geographical position, is of international as\nwell as national importance. In 1939, the total length of main-line railway routes\nwas 3,188 miles, and the local railways comprised another 3,265 miles. The main\nsystem is operated by the state-owned Société Nationale des Chemins de Fer Belges,\nand the subsidiary systems are largely under the control of and subsidized by provincial\nand municipal authorities. The railroads suffered considerable damage both to fixed\ninstallations and to rolling stock during the war, but most of the essential repairs had\nbeen made to tracks, bridges, tunnels, etc., by the end of 1945. The restoration of\nrolling stock was slower, but by the end of 1947 the number of locomotives in use was\nnear that of prewar, and there had been a considerable increase in the number of\nserviceable freight and passenger cars. The freight and passenger traffic of 1947 was\ngreater than in 1938. This was possible because of various factors such as the use of\nheavier trains, especially for passenger traffic, and better utilization of the capacity of\nboth freight and passenger cars.\nBefore World War II, only 27 miles of double track in the main-line system were\nelectrified and 910 miles of the light and local railway lines. A postwar program for\nthe electrification of 932 miles of the main double-track lines has been developed. The\nsystem of lines to be electrified comprises about 3 percent of the total length of the\nnetwork, but the traffic carried by it reaches about 70 percent of the total traffic handled\nby the system. Economy in operation and the saving in coal are important considera-\ntions in installing this electrification.\n5. ROADS.\nThe road system of Belgium follows closely the network of the railways, and before\nWorld War II consisted of 6,560 miles of state and provincial roads. The road system\nserves local traffic primarily, and there are very few long distance roads. Judging by\nSECRET\n44\nSECRET\nthe increase in the number of trucks since the end of the war, there is probably an in-\ncrease in domestic and international trucking, but road transportation is expected to\nremain of minor importance compared to rail and inland waterway transport.\n6. AIR LINES.\nA monopoly of all scheduled commercial aviation, other than private and club\nflying, has been held since 1923 by the Société Anonyme Belge d'Exploitation de la\nNavigation Aerienne (Sabena). Sabena was established in 1923 as a state-controlled\ncommercial company to operate air services within Belgium, between Belgium and\nother European countries, and to and within the Belgian Congo. In the years pre-\nceding World War II Belgium became one of the most air-minded countries of the\nworld. Sabena's operations attained an excellent reputation for regularity and safety.\nThe air line's service embraced a network with lines extending from Brussels to the main\ncapitals of Europe, a liaison line connecting Belgium with the Belgian Congo, and a\nnetwork in the Congo serving the capital of each province as well as other commercial\ncenters. At the outbreak of World War II, Belgium had achieved an important po-\nsition in commercial air transportation.\nSabena's European operations were suspended with the outbreak of war, and the\nairline withdrew to the continent of Africa, where its route miles and traffic increased in\nspite of wartime difficulties. With the liberation of Belgium, Sabena resumed service\nto Europe on the same date that the Belgian Government returned to Brussels, in\nSeptember 1944. By early 1948, Sabena had established routes between Brussels and\nmost of the important cities of Western Europe. Sabena also serves Prague, Athens,\nTunis, and Cairo, and connects the Belgian Congo with Western Europe, the Middle\nEast and South Africa.\nRegular trans-Atlantic service to New York was established in July 1947 and as\nof February 1949, the air line is also planning a route to Lima, Peru. In 1947 Sabena\nexpanded passenger traffic by 447 percent of the 1938 figure and more than half of this\nexpansion occurred in 1946. Flight mileage in 1947 was 373 percent of that of 1938.\nIn February 1948, Sabena's intercontinental routes were served by eight Douglas DC-4's\nand three DC-6's. On secondary routes it uses fifteen DC-3's besides miscellaneous\nsmaller models in the Congo.\n7. TELECOMMUNICATIONS.\nThe telephone and land-telegraph services in Belgium are operated by various di-\nvisions of the Ministry of Communications. Wireless telegraphic and telephonic serv-\nices are also largely state-operated, although there are a number of private companies.\nTelephone service is quite adequate, and international telephonic communication plays\na very important part in the national system. Not only are most Belgian towns linked\ndirectly with other countries, but a number of long-distance circuits between other\ncountries, such as Netherlands-France, pass through the country. Submarine cable\nservices are controlled by both Belgian and foreign countries and connect Belgium\nwith the UK and Portugal.\nThe Belgian National Institute of Broadcasting (I.N.R.) is the Government-con-\ntrolled instrument for the national radio service, while Belgium's \"World Service\" is\ndisseminated by the National Belgian Broadcast (R.N.B.) from its powerful station\n45\nSECRET\nSECRET\nin the Congo. Within Belgium proper the I.N.R. maintains eleven medium-wave send-\ning stations and one shortwave sending station. In 1947 there were about 800,000\nregistered receiving sets in Belgium, with two million listeners. sogmi допіш to niamer\nHIA .8\nduto bris steving next TODJO nottaive belubadoa Its to viogonom A\nsi 9b eglea эшулолА edit vd eser somia bied assd and gnivA\n8 as ESSI mi bedelidates RGW enedsB (ameds8) emmehsA noitegivsñ\nbris mulgied needed mulgis8 nidjiw accivies us elssago of vasqmos Interemmos\n-919 8'189Y, all. OgneO naisled gift airliw bas of bris ashitmocs nasqomH Todito\nsrit to bebaim-tis from srit to эло smeed mulgisa II 18W blrow gnibeo\nvjetna bas not noitstuqer Jaelleoxe BE benisits anottsisqo a'anede8 blrow\nninm arti of most gribnetze sonil rittw Howton a because solvice s'enli HE 9dT\n8 bas Congo naigled srit rittw muigisä smill nostall £ to aisliqso\nInformation Terijo 26 How 88 servivorq riose to oris guivise ognoO sdd at drowled\n-oq instroqmi as beveldes bed muigisH .II 18W blow to still JA\nThe (sistemmos mi noldia\nadt bas ,16W to odd drive bebrisque slow anoilsteqo паздотия n'enednE\nat officer brue solum admos all stedw sohia 10 treatitios adj of weibdiw smilits\nsolvice homest ansdea muiglea to sid diw smithuw to etiqa\nai alsesunt of benwiter neigle art) Jsdl sish sett по of\nbas neewled astual berfalidates bad enede8 8481 vitas VEI redmeJqs8\nanediA sugar9 207102 osis sneds8 .sqoura mislesW to Instioqmi orit 10 Jaom\nsibbiM grid rittw Codego naigled orts stoennoo bris Other bos start\n.soritA name birs Jasa\n88 bna TAGI visit nl beriafidates BBW X10Y well 07 solvisa\nsnedse TASI MI 15109 amill of stuor S gainnsiq 0818 at and The add ever to\naids 10 Hed nedi этовт bits stugh 1338 add to ineaseq ГАФ vd officer 192093884 bebrisqxe\nBEEI 10 tadd to incossing ETS 26W THEI ml egaslim tdgira .8481 ni\nasiguoa trigio vd beview 919W estuon a'anede8 8481 VISUING mI\nsubland 2'8-00 matth 2080 It astuat утаблюза no 2'8-DCI serrit bas\nsett ni sisbom Telisme\nN\n-1b adoinev Vd belango 978 mulgies til accivies DAS enoriquist adT\n-VISE einodqeist bas atriqargsted sasisviW to valulniM arit to anolaiv\nasinsquido staving to redmum S ore overff riguoritis ,bstarsqo-stafe visgret oals 918 гээі\neyaiq brie staupshs strup at solvice enodqeisT\nbestrul anwed naigles Jeom SIS vino Jon mstays (smotten arts ai ting instioqmi Vuev 8\nredio needed altuatio ennataib-griol to redmum 8 tud toddo risiw\nsides enhamidu8 commina od) riguords assq as dous\nmurigied toennos bris nglemi bris migle8 rifod yd bellectace 9TB asoivies\nbrie HU grit ritiw\n-noo-Ingmnisvo© grit at (.Я.И.І) to studitant LanoNeM netgina enT\nat \"solvise blow\" a'muigisS offew SOLVIDE other (smolten 9113 TOI insmuritant bellow\nnotista Intrewoq all moth (.а.и.я) Jasobson8 rusigist grit Vd betanimssaib\n46\nSECRET\nAPPENDIX C\nPopulation Statistics and Characteristics\nBELGIUM\nBelgium is one of the most thickly inhabited areas in the world, and the density\nof population, 715 to a square mile, is the highest in Europe. In 1946, the total popula-\ntion was estimated at nearly 8,400,000. This population is characterized by its two dis-\ntinct ethnic and linguistic groups, the Flemish and Walloon. The former are of\nFrankish stock and speak the Netherland (Dutch) language. The latter represent\nthe Celto-Roman population which inhabited the country before the Frankish pene-\ntration from the north and northeast, and are French-speaking people. In general,\nnorthern and western Belgium is occupied by the Flemish population, while the Wal-\nloons inhabit the southern and eastern sections of the country. At the time of the last\ncensus in 1930, 4,135,000 Belgians spoke French only or by preference; 3,513,000 Bel-\ngians spoke French only or by preference; and 100,000 Belgians spoke German. The\nfirst census since 1930 is being conducted during 1948 and is expected to reflect the\nincreasing proportion of Flemish to French-speaking nationals. The French language\nwas originally the first tongue of the nation, and only by persistent efforts on the\npart of the Flemish was their language and culture granted an equal status with that\nof the French. With the trend now reversed, the French-speaking Belgians are develop-\ning the fear of domination previously attributed to the Dutch-speaking population.\nAlthough less gravely affected than France, Belgium is concerned over a decreasing\nbirth rate and an increase in the average age of its population. Family allowances sub-\nsidized by the Government and employers have been extended and increased in an\neffort to encourage large families.\nAccording to the 1930 census, 55 percent of Belgium's active population is engaged\nin mining and industry. Although about 60 percent of the land is agricultural, only\n17 percent of the working population is engaged in its cultivation. However, the dis-\ntinction between urban industrial population and rural agricultural population is far\nfrom being a sharp one. A large proportion of industrial workers live in the country\nand cultivate small plots of land with the aid of their families. The remainder of the\npopulation is engaged in commerce and banking, public service, liberal professions,\netc. Life in Belgium is, with the exception of a few large towns, essentially provincial\nin character, as illustrated by the fact that 73 percent of the total population live in\ncommunities which comprise no more than 25,000 persons.\nThe overwhelming majority of the country's inhabitants belong to the Catholic\nChurch. The depth of attachment to the Church varies, however, in each section and\nsocial class. Practicing Catholics are more numerous in the Flemish areas than in\nBrussels and the French-speaking regions. Further, they are more numerous in rural\nareas than in large towns and among the industrial population. The state is respon-\nsible for a proportion of the stipends of recognized ministers belonging to the three\n47\nSECRET\nSECRET\nmain religious bodies-Roman Catholic, Protestant, and Jewish. The state also pro-\nvides subsidies for the erection of buildings designed for religious use, as well as grants\nfor upkeep and repairs.\nThe number of illiterate adults in Belgium is very small. Compulsory education\nwas introduced in 1914, and all children between the ages of 6 and 14, unless educated\nat home, must attend a school recognized and supervised by the public authorities.\nSchools are established and administered either by the communes or by private bodies,\nof which the Catholic Church is by far the most important. Besides excellent sec-\nondary schools and universities, Belgium has numerous vocational and technical schools\nthat in general have a high standard of teaching. These schools are largely responsible\nfor making the average Belgian workman a skilled and diligent craftsman. Joats\nBelgium has had, for the past half century, a fairly sizeable foreign population.\nIn 1910 it composed 3.4 percent of the total population and over 4 percent by 1938.\nAfter World War I the composition of the foreign element underwent radical changes.\nThe number of Germans decreased almost to a fifth of their previous number, and the\nnumber of French and Dutch each showed some decrease also. But this reduction was\nmore than made up by the influx of Poles, Italians, and Czechoslovaks. This trend\nis still evident and is now supplemented by the immigration of displaced Balts, Ukrain-\nians, and others. An agreement with the Italian Government whereby Belgium is\nfurnished Italian workers in return for coal has been fairly successful, and approxi-\nmately 30,000 Italians are working in Belgian coal mines. The agreement provides for\na total of 50,000 Italians, and Belgium is expected to be able to absorb that number.\nAlso currently in force are agreements with the US and UK Zones of Germany, which\nprovide for immigration of an unspecified number of displaced persons for work in\nBelgian coal mines. In addition, there is a small group of Germans who worked in\nBelgium as prisoners of war and have elected to remain. Although the great majority\nof foreign laborers are concentrated in the coal mines and represent over 50 percent\nof all mine workers, a few find their way into other industries. The Belgian Govern-\nment is assuring foreigners rights and benefits equal with those of Belgian labor, and\nno serious conflict or discontent is expected as long as full employment is assured and\nforeigners do not compete to any serious extent with Belgians outside of the coal mines.\nat bruth bate dolletugog\nni A\nadoig\nat Legages al noitsinqoq\nfalonivorq well to\nni noitaluqoq 10 Insured ET\ngrated to gatraladwasvo\nbren moldose\nat and 18978\ntear ni\nbestrgoosi 10\nSECRET\n48\nLUXEMBOURG\nLuxembourg has a population of 290,000 which, because of various war and postwar\ndevelopments, is slightly less than it was before the war. The largest class of workers\nis agricultural, followed by those engaged in mining and steel production. Most of the\nremainder are engaged in the production of wine, leather goods and gloves, in railway\noperation, and in governmental services.\nThe country is virtually bilingual. French is the official legislative, administra-\ntive, and judicial language, and German is the commercial language. Since the end\nof the war, however, German has been replaced to a certain extent by French and\nEnglish. The native language or dialect of the country, used by all classes in one or\nanother of its four slightly varying forms, is the dialect called Letzeburgesch. Al-\nthough it is based upon old Teutonic origins, it contains many words and roots bor-\nrowed from Celtic, Latin, and French.\nMore than 90 percent of the population belongs to the Catholic faith, but there are\na few Jewish and Protestant communities. The people are generally cautious by\nnature and little given to public demonstrations; while they are law-abiding, they dis-\nlike any form of regimentation. The Grand Duchy is not, on the whole, a country of\nsharp social contrasts, particularly as between rich and poor, a condition which may\nresult partly from the fact that at least a third of the population earns its living by\nagriculture.\nSince 1881, primary education has been compulsory for children between the ages\nof six and thirteen. Illiteracy is practically unknown; in fact, it is claimed that Luxem-\nbourg has not had an illiterate among its population since 1847. There is no uni-\nversity in the country, and higher education is pursued in foreign universities.\nThere are very few foreigners in Luxembourg, and the Government has not\nattempted to import large numbers of workers from other countries. A few Italians\nhave been recruited as agricultural workers, and about 1,000 German prisoners of war\nhave voluntarily remained in Luxembourg.\nto\nto Aget smouds of bebeseaus bloqoe.I\nto ovidos\n81 orl bria\n10W bontamst VAM\nat of qhd 8\nbosselers Bim bontermst\n8 bris A\nfor to notimedit aid outgled aluqaib mesting\ngahub toubrios families of of\n49\nSECRET\nAPPENDIX D\nSignificant Biographical Data\nBELGIUM\nPaul Henri SPAAK.\nPlace of birth:\nSchaerbeek, Belgium\nDate of birth:\n25 January 1899\nEducation:\nDoctor of Laws, University of Brussels\nPresent position:\nPrime Minister; Minister of Foreign Affairs\nPolitical\naffiliation:\nSocialist Party\nPaul Henri Spaak's quick intelligence, skill in political maneuvering, and natural\ntalent for oratory have won him recognition as an outstanding international diplomat,\nas well as Belgium's leading statesman. Since he began his political career at the age\nof 33 as a Socialist member of the Chamber of Deputies, he has found ample scope for\nhis talents, notably as Minister of Foreign Affairs without interruption since 1936; as\nPrime Minister of one prewar cabinet; as a leading figure in the Government-in-Exile;\nas chairman of the Belgian delegation to the San Francisco Conference in 1945 and\nvirtually all other import postwar conferences; as President of the first United Nations\nGeneral Assembly in 1946; and as Chairman of the OEEC Executive Council. At pres-\nent Spaak is Prime Minister as well as Foreign Minister in the coalition Government\nformed in March 1947. In the course of his career, he has gradually shifted from\nthe left to the right wing of the Socialist Party, and has completely abandoned his\nprewar adherence to a policy of neutrality for Belgium, to become an outstanding advo-\ncate of closer European cooperation. The key role played by Spaak in the formation of\nthe Western Union is proof of his frankly pro-Western sympathies. His friendly attitude\ntoward the US and UK is more than evident.\nKing LEOPOLD.\nPlace of birth:\nBrussels, Belgium\nDate of birth:\n3 November 1901\nEducation:\nPrivate tutors; Eton College\nPresent position:\nKing of Belgium\nReligion:\nCatholic\nLeopold succeeded to the throne in 1934 on the death of his father, King Albert.\nHe assumed an active role as Commander-in-Chief of the Belgian armed forces when the\nGerman Army invaded the country, and he surrendered to the Germans 18 days later\non 28 May 1940. He remained in Belgium during the war in semi-confinement, except\nfor a trip to Berchtesgaden to confer with Hitler in November 1940. He was taken to\nBavaria in 1944, where he remained until released by the US forces in May 1945, when\nhe went to Switzerland. A stubborn and independent ruler, Leopold precipitated a\nbitter partisan dispute in Belgium after his liberation because of his determination not\nto return to his country until accusations levelled against him for his conduct during\nSECRET\n50\nSECRET\nthe war had been officially retracted. His brother, Prince Charles, was made regent\nwhile Leopold was still a prisoner, and a law was passed by Parliament in July 1945\nconfirming the regency and making it impossible for the King to resume his func-\ntions without Parliament's approval. Although Prime Minister Spaak has declared\nthat the conflict is based on political grounds entirely and that the King's honor never\nhas been in question, the accusations that Leopold is a \"reactionary\" and showed him-\nself to be \"pro-German\" still prevail. He has been criticised severely for his second\nmarriage in 1941 to a commoner, daughter and sister of suspected collaborationists.\nThis was considered a selfish act when his people were undergoing an occupation and\nwhen he was technically a prisoner of war. It was particularly resented by the Wal-\nloons because his wife was Flemish, and even more important, Queen Astrid, his first\nwife, who was killed in an accident in 1935, is still held in great veneration in Belgium.\nPrince CHARLES, King Leopold's junior by two years, was appointed Regent in Sep-\ntember 1944 pending Leopold's return. Concurrently with the decline of the King's\npopularity as a result of his conduct during the war, Charles' prestige with the Belgians\nhas increased tremendously as a result of his competence, dignity, and wise handling\nof the extremely difficult political situation following the liberation. The active and\neffective part which the Prince took in the Resistance (while Leopold accepted Ger-\nman occupation and believed in the ultimate victory of Hitler) has also served to\nenhance his position in Belgium. His relations with Leopold are believed to have been\nunfriendly since 1940, although he has scrupulously upheld the King's interests.\nCharles' official visit to the Belgian Congo in July 1947, and more particularly his visit\nto the US and Canada in April 1948, have caused considerable criticism from Leopold's\nsupporters, but the majority of Belgians seemed to believe that he did it in the national\ninterest rather than to enhance his own position.\nPrince BAUDOUIN, elder son of King Leopold and the late Queen Astrid, is a key\nfigure in the controversial question of the Belgian monarchy. The solution that the\nBelgian Government is said to favor is the abdication of Leopold in favor of Baudouin\nwith an arrangement that would permit Prince Charles, his uncle, to continue the\nRegency for five or six years until Baudouin has the proper education background and\nmaturity to become King. According to the Belgian Constitution, Baudouin, on attain-\ning his majority in September 1948, was to become a member of the Senate and pre-\nsumably take his seat the following November. At that time he presumably was to\nbegin his period of army service traditionally required of male members of the royal\nfamily. However, Leopold notified the Cabinet that he did not think this necessary\nat the present. Baudouin reportedly has not been popular with the majority of Belgians\nbecause of his father's refusal to allow him to return to Belgium to be educated after\nhis long absence from the country. Moreover, it was felt that he had not been under\nthe guidance of suitable influences and did not show a realization of his responsibili-\nties. Prime Minister Spaak has indicated that he does not wish to see Prince Baudouin's\nearly accession to the throne, but has urged King Leopold to permit his son to return\nto Belgium, thus enabling Baudouin to know his country and appreciate the political\nsituation for himself.\n51\nSECRET\nSECRET\nMax BUSET.\nPlace of birth:\nFayt-lex-Manage, Belgium\nDate of birth:\n13 March 1896\nEducation:\nBrussels University; Ruskin College (advanced school of British\nLabor Party)\nPresent position:\nPresident, Belgian Socialist Party\nPolitical affiliation: Socialist Party\nOf simple background, Buset has devoted practically his entire life to Socialism\nand is considered one of the leading Belgian Socialist theoreticians. He is known\nto be uncompromising in his basic beliefs, and his primary interest is the advancement\nof the Belgian Socialist Party and to prevent it from straying too far from basic\nMarxian theory. As president of the Socialist Party and leader of its left wing, he is\nfrequently in opposition to Prime Minister Spaak. The resignation of the Spaak\nGovernment in May 1948 was brought about mainly because of Buset's opposition to\nan agreement, pertaining to the Education Minister's budget, reached by both Socialist\nand Christian Socialist Cabinet members. Spaak resigned rather than cause an open\nbreak within the Socialist Party. Undoubtedly Buset was eventually persuaded to\nagree to a compromise solution only to preserve Socialist unity. Although always\nrepresentative of the worker's point of view, Buset is bitterly anti-Communist, fully\nappreciating the difference between Stalinist totalitarianism and pure Marxian theory.\nHis outlook is essentially national, with little concern for international affairs.\nAuguste Sylvain Edmond de SCHRYVER.\nPlace of birth:\nGhent, Belgium\nDate of birth:\n16 May 1898\nEducation:\nDoctor of Laws; University of Ghent; London School of Economics\nPresent position:\nPresident, Christian Social Party\nPolitical affiliation: Christian Social Party\nReligion:\nCatholic\nAs president of the reorganized Catholic Party, established after the war as the\nChristian Social Party, de Schryver has come into prominence in Belgian postwar\npolitical life. He typifies the trend in Belgium toward younger leaders. He began\nhis political career as a member of the Chamber of Deputies in 1928. From 1935 to\n1940 he was a member of various cabinets, but when he did not join the Belgian Gov-\nernment-in-Exile in London, he was relieved of his ministerial responsibilities. He\nescaped to England in 1942, was gradually taken back into the confidence of the Gov-\nernment, and rejoined the Cabinet as Minister of the Interior in 1943. During and\nafter the war, de Schryver actively planned for the reform of the Catholic Party, and\nit was no surprise when he was elected president of the party in August 1945. The new\nparty continued its predecessor's support of King Leopold, so that de Schryver as presi-\ndent now represents the outstanding political faction loyal to the King. However,\nde Schryver heads the party's moderate faction which favors King Leopold's abdication\nin favor of his son.\nSECRET\n52\nEdgar LALMAND.\nPlace of birth:\nAntwerp, Belgium\nDate of birth:\n1895\nEducation:\nPresent position:\nSecretary General, Belgian Communist Party\nPolitical affiliation: Belgian Communist Party\nAs Secretary General of the Communist Party, Lalmand is not only its leading\nspokesman in Belgium, but is considered, together with Terfve, the brains of the party\nas well. He joined the Communist Party in 1932 and since 1935 has been a member\nof its Central Committee and Political Bureau. He directed the Communist resistance\nactivities during World War II and has been the party's Secretary General since 1943.\nIn his position as Minister of Food in all of the postwar cabinets from February 1945\nto March 1947, he is believed to have manipulated food supplies for political purposes\nand falsified production figures.\nJean TERFVE\nPlace of birth:\nLiége, Belgium\nDate of birth:\n1907\nEducation:\nLaw degree, University of Liége\nPresent position:\nCommunist Member, Belgian House of Deputies; Editor, Le Dra-\npeau Rouge, official Communist newspaper\nPolitical affiliation: Belgian Communist Party\nTerfve joined the Belgian Communist Party in 1935, and since that time he has\nheld various positions of importance in the party hierarchy. He is considered one of\nthe directing geniuses of the Communist Party. As an active member of the under-\nground during the occupation, he assumed leadership of the Armée des Partisans, was\nclosely associated with the publication of clandestine newspapers, and before the end\nof the war became Secretary General of the Front de l'Indépendence, a Communist-\ncontrolled resistance organization. Terfve was Minister of Reconstruction from April\n1946 until March 1947, and he reportedly handled his official duties in such a way as\nto avoid open criticism from other political groups. A member of the Chamber of\nDeputies since 1935, Terfve seems to be the most staunch adherent to the official party\nline in parliamentary debates, as well as in his articles frequently published in the\nofficial Communist newspaper.\n53\nLUXEMBOURG\nPierre DUPONG.\nPlace of birth:\nKeispelt, Luxembourg\nDate of birth:\n1 November 1885\nEducation:\nDoctor of Jurisprudence (1910); studied at Universities of Paris,\nBerlin, and Fribourg\nPresent position:\nPrime Minister of Luxembourg\nPolitical affiliation: Christian Social Party\nReligion:\nCatholic\nAs premier of Luxembourg since 1937 and Finance Minister for over 20 years,\nDupong holds the European record for longevity in office, a reflection of the remark-\nable stability of Luxembourg, and confirming Dupong's reputation for being intelli-\ngent and hard-working, if not especially imaginative. At present he is also Minister of\nEpuration, Labor, Social Welfare, and Mining, and holds a key position in the Chris-\ntion Social Party. He is conservative in his views and very friendly toward the US,\nwhich he frequently visits.\nJoseph BECH.\nPlace of birth:\nDiekirch, Luxembourg\nDate of birth:\n1887\nEducation:\nDoctor of Laws, University of Paris; Ecole Libre des Sciences\nPolitique, Paris\nPresent position:\nMinister of Foreign Affairs; Minister of Foreign Commerce; Minis-\nter of Viticulture\nPolitical affiliation: Christian Social Party\nReligion:\nCatholic\nBech enjoys great prestige both at home and abroad and has been characterized\nas intelligent, cultured, and charming, possessing humor and joie de vivre. He has\nbeen a deputy to Parliament since 1914, was Premier from 1926 to 1937, and has held\nthe post of Foreign Minister since 1926 without interruption. He has been an active\nsupporter of international cooperation since the early days of the League of Nations\nand was among the first to become interested in the Benelux Customs Union. He has\nrepresented Luxembourg in the United Nations since its establishment at San Fran-\ncisco and during the 1947 General Assembly was Chariman of the important Political\nand Security Committee (Committee I).\n54\nSECRET\nAPPENDIX E\nChronology of Important Events\n1831\n- Kingdom of Belgium established as a hereditary constitutional mon-\narchy.\n1839\n- The nation's neutrality guaranteed by the great powers.\n1885\n- Belgian chambers voted King Leopold II Chief of Congo Free State.\n1890\n- Belgian government acquired right of annexing Congo Free State.\n1908\n- The Belgian Congo annexed by Belgium.\n1914\n4 August\n- The German Army invaded Belgium.\n1918\n22 November - King Albert and the Government returned to Brussels.\n1919\n- The Treaty of Versailles relieved Belgium of her obligations of neu-\ntrality and placed the Prussian cantons of Eupen, Malmedy, and St.\nVith under Belgian sovereignty. Belgium obtained a mandate over\na part of former German East Africa (Ruanda-Urundi).\nNovember\n- Socialists for the first time nearly equalled the strength of the Catholic\nparty, which for forty years had enjoyed an absolute majority.\n1922\n- Belgium and Luxembourg joined together in a customs union.\n1926\n- The Belgian franc was stabilized at one-seventh of its original value,\nand the creation of the belga returned Belgium to the gold standard.\n1935\n- After five years of a drastic deflationary policy, the franc was de-\nvaluated 28 percent, and the economy of the nation began to recover\nfrom the depression.\n1936\n- Belgium returned to a neutral status and sought protection against\naggression in the guarantees of the large powers, including Germany.\nThe Flemish Nationalists and the French-speaking Rexists, both ultra-\nnationalists, Fascist parties, reached the height of their strength and\npopularity.\n1940\n10 May\n- The German Army invaded Belgium; the Cabinet ministers proceeded\nto France.\n28 May\n- King Leopold, as Commander-in-Chief of the Army, surrendered to\nthe Germans.\nOctober\n- Government-in-exile formed in London.\n1944\nJune\n- King Leopold deported to Germany.\nSeptember\n- The Governments-in-exile of Belgium, Netherlands, and Luxembourg\nsigned the Benelux Customs Convention. Most of Belgium was liber-\nated, and the Government-in-exile returned to Brussels.\n55\nSECRET\nLeopold's brother, Prince Charles, was appointed Regent in the King's\nabsence.\nThe exile Cabinet was reorganized to include resistance groups, and\ntwo Communists entered the Government for the first time.\n1945\nJune\n- Socialist Van Acker formed his first postwar \"leftist\" Government\nwhen the Christian Socialists withdrew from the \"national\" Cabinet\nbecause of disagreement with Socialists, Liberals, and Communists\non the question of King Leopold's return.\n17 July\n- Parliament passed a bill requiring its consent for the resumption by\nKing Leopold of his functions as reigning monarch.\nSeptember\n- Van Acker's three-party Government fell, but he again formed a\nsimilar left coalition Cabinet.\n1946\nFebruary\n- National elections confirmed the strong position of the Christian So-\ncialists when they received 45.5 percent of the popular vote, but they\nwere still unable to reach agreement with any of the other parties for\nforming a Government.\n11-20\nMarch - Spaak formed a short-lived minority Socialist Government.\n31 March\n- Van Acker again formed a three-party Government excluding the\nChristian Socialists.\nJuly\n- Van Acker Government resigned after adverse Senate vote on question\nof administrative interference in the judiciary.\nAugust\n- Socialist Camille Huysmans formed another three-party Government.\nOctober\n- Belgian troops assumed responsibility for a small area of the UK Zone\nof Occupation in Germany.\n5 November\n- Belgium and Luxembourg presented their territorial claims against\nGermany to the Council of Foreign Ministers.\n1947\n27 January\n- Belgium presented economic claims against Germany, including pro-\nvision of raw materials, to the Council of Foreign Ministers, and stated\nBelgium's desire to prevent discriminatory German trade and trans-\nport practices.\nFebruary\n- Communists caused the Huysmans Government to fall on the pretext\nthat they could not agree to a rise in the price of coal.\nMarch\n- Spaak formed a coalition Government of the Christian Socialist and\nSocialist parties.\nPremier Spaak informally proposed bilateral alliances with UK, France,\nand the USSR.\n1948\n1 January\n- The Benelux Customs Union went into effect.\nFebruary\n- Belgium accepted the invitation of the US, UK, and France to join\nthe London talks on Germany.\n17 March\n- The UK, France, and the Benelux countries signed the Brussels Pact\nSECRET\n56\nSECRET\nwhich established the Western Union.\n5 May\n- The Spaak Government resigned because of a Chamber of Deputies\ndispute over the Education Minister's budget.\n10 May\n- Belgium and the Netherlands signed a military pact for joint staff\nplanning and arms standardization.\n15 May\n- Compromise agreement reached between the Socialist and Christian\nSocialist parties on the education question, and Spaak withdrew his\nCabinet's resignation. mstay& sitt to usareD 35\n8\nJune MV to - A meeting of Benelux representatives in Luxembourg resulted in agree-\n-sansqmoo ni ment on principles governing implementation of a complete economic\nsrit TO Mari union. nitua of овзавИ to visa add griblely 211 tot nots\n3 July sloob - Premier Spaak initialed bilateral European Aid Agreement with the\nэдтя! 90 US. bestasteug gillasiven ristw bristO insbrisqebal\n10 S of snow sell redw Langore nwo att bertalidates bad bits\norit to дліЯ add riskit radio vlimel self\nneed and gwodmszu.I VIOJAIN nesqomS misbom to boring smith 9d3 gaiwa\n8918 9113 JETH daew bns date sdd no amodrigien all Vd glassotevos bris bays\n-9b ST9W 989.13 mails Total bris assaneteb group all to sidaviev berebiarros B.BW\nandT losts has поті brus begolevab giwen aji to seussed bevoite\nto 9dd tedi griffes) virwess TOT Jesup instanoo 8 at need and groodmexu.I\n-Linstadua ₦101 ni noissvni паштой gdT been all vialisa toa bib villativen isujeqteq\nелег mi someal cláiw notair & 101 belov .alduob 989.13 base\nof тедле этопт 90118TH Jrigues # ovianio odt galveldos to sqod orit at\nditter notnit эітолого TUB svad of risks isbiod lasedtion 8JI gaihnetab m лодцца restgled\ngwodmexu.I по misto all berrobnads bas netglest of bebecas\ntarit rittw noino amotato 8 berriol bris muiglea of berret ciedit Includ basiD gifT\nnoins etefamoo S odni bebrieque saw elssy Total all doldw SSSI of\nrefin bas beriash ti удішоэе quallim 9713 evig fort blb aidT\n-ni VIleutos asw orit dolriw gahob nottaquooo bas noiseval asmeD indians\nsecurity B 19V9 and STORE gribless at grundmexul dolsh sdi otal\nTo\n.6\nni beaiver bris 8881 ni beisglumorq vrissa bastD add to adT\n-19q bas eldansifant eldigivibal ILB BB visaa basiD add bedtresh RIGI\nto srit siqooq and to odi aminloonq bits state Indian vilsuteq\nw.s. arts stoted He to villaupo bas уледота to ytilidalotval ,STSWOO\nтебло M nobneds of bodov inemsits srit revered 8401 HtgA of по\nIssunes sifT missew T9woq-d and to redmom R amoosed bloos\n10 Comes odt aMotradO banD &d bestonexe at Insurrievog\narts to DRS gdT aeiduqe to TedmedO orit bris (JenidaD)\naeidoranom assqoina Teddo to and still wollot Issuess (1) tasm\nat doldw state to Homes redmem-nobilà 8 et stadit JonidaO add of noitibbe nI\nolidaq to astim TO swel besogory по solvhe asvig bas svitettuanos Vistiem\natorraib 1001 otal Issol to see not behivib at bastD sitT\n57\nSECRET\nLUXEMBOURG\n(Supplement to SR-19)\n1.\nPOLITICAL.\na. Genesis of the Present Political System.\nLuxembourg was established as a Grand Duchy by the Congress of Vienna in\n1815 but was given to William of Orange-Nassau, King of the Netherlands, in compensa-\ntion for his yielding the Duchy of Nassau to Prussia. During the latter half of the\nnineteenth century, Luxembourg adopted its present constitution; was declared an\nindependent Grand Duchy with perpetual neutrality guaranteed by the large powers;\nand had established its own royal dynasty when the succession went to a member of\nthe Orange-Nassau family other than the King of the Netherlands.\nDuring the entire period of modern European history, Luxembourg has been\neyed jealously and covetously by its neighbors on the east and west. First the area\nwas considered valuable because of its strong defenses, and later, after these were de-\nstroyed, because of its newly developed and wealthy iron and steel industry. Thus\nLuxembourg has been in a constant quest for security, feeling that the guarantee of\nperpetual neutrality did not satisfy its need. The German invasion in 1914 substanti-\nated these doubts. Luxembourgers voted for a commercial union with France in 1919\nin the hope of achieving the elusive security it sought. France, more eager to secure\nBelgian support in defending its northeast border than to have an economic union with\nLuxembourg, acceded to Belgian pressure and abandoned its claim on Luxembourg.\nThe Grand Duchy then turned to Belgium and formed a customs union with that\ncountry in 1922, which in later years was expanded into a complete economic union.\nThis did not give Luxembourg the military security it desired, however, and after\nanother German invasion and occupation, during which the country was actually in-\ncorporated into the Reich, Luxembourg is seeking more intensely than ever a guarantee\nof independence.\nb. Present Governmental Structure.\nThe Constitution of the Grand Duchy, promulgated in 1868, and revised in\n1919, described the Grand Duchy as an independent, indivisible, inalienable and per-\npetually neutral state, and proclaims the sovereignty of the people, the separation of\npowers, inviolability of property, and equality of all Luxembourgers before the law.\nOn 15 April 1948, however, the Parliament voted to abandon neutrality in order that\nLuxembourg could become a member of the 5-power Western Union. The central\ngovernment is exercised by Grand Duchess Charlotte, the Council of Government\n(Cabinet), and the Chamber of Deputies. The structure and functions of the Govern-\nment in general follow the lines of other Western European constitutional monarchies.\nIn addition to the Cabinet, there is a fifteen-member Council of State which is\nmainly consultative and gives advice on proposed laws or rules of public administration.\nThe Grand Duchy is divided for purposes of local administration into four districts,\nSECRET\n58\nSECRET\nwhich are broken down into cantons, each of which comprises a certain number of com-\nmunes. The heads of the districts and the burgomasters of the communes are ap-\npointed by the Crown, but each commune has a popularly elected body to handle local\naffairs.\nc. Political Parties and Current Issues.\n(1) Political Parties.\nAs a predominantly Catholic country, Luxembourg naturally has a strong\nChristian Social (Catholic) Party, which controls twenty-two of the fifty-one Chamber\nof Deputies' seats. However, during and after the first World War, an extremist left-\nwing developed which agitated strongly for a republic and for socialization of industry.\nThe reigning Duchess subsequently abdicated, not so much because of the radical\nrepublican demonstrations, but because of general dissatisfaction with her pro-German\nsympathies and because of French pressure for her removal. However, a referendum\nheld in September 1919, showed the people to be overwhelmingly in favor of con-\ntinuing the monarchy. Since that time, fear of interference or invasion by foreign\npowers has generally overshadowed party differences on important issues.\nThe present Cabinet, formed in March 1947, is the third since the return\nof the exiled Government in 1944, with changes made in two ministries in July 1948.\nThe Cabinet is a coalition of the Christian Social Party and the conservative Patriotic\nand Democratic Group. The elections in October 1945 resulted in the replacement of\nthe Government-in-exile by a three-party coalition which included the Socialists. Dis-\nagreement over Government policy between the Socialists and Catholics, however,\ncaused the Cabinet to resign, and the present one was formed, putting the Socialists\nin the Opposition with the Communists.\nThe 1945 elections showed a consolidation of the Right and a strengthen-\ning of the extreme Left at the expense of the Center. However, the increased support\nof the Communists from the Socialist following was believed to be temporary, as con-\nsiderable Communist strength seemed to come from workers who collaborated with\nthe Germans and were discharged, not by the employers, but by their trade unions. In\nthe June 1948 elections for 26 of the 51 Chamber seats, the prewar position of the So-\ncialists was partially restored, at the expense of the Christian Democrats. Although\nthe Communists retained the same number of seats, they received fewer popular votes\nthan in 1945.\nThere are four major parties in Luxembourg:\n(a) the Christian Social Party, which is supported by members of the\nCatholic Church from all social and income levels, is conservative, but is influenced by\na strong labor group within its ranks;\n(b) the Socialist Party, which has its greatest strength in the industrial\nareas and advocates moderate social and economic reforms;\n(c) the Patriotic and Democratic Group, which succeeded the old Radical\nLiberal Party but included resistance elements, and has a secular and moderately\nconservative approach; and\n(d) the Communist Party, which evidently includes a small nucleus of\n59\nSECRET\nSECRET\nreal Communists and a remainder of malcontents, is pro-Soviet and anti-Western, and\nadvocates nationalization of industry\nComposition of the Chamber of Deputies\nPolitical Party\nNO. OF SEATS\n1937\n1945\nJUNE 1948\nChristian Social\n25\n25\n22\nSocialist\n18\n11\n14\nPatriotic and Democratic Group\n6\n9\n9\nCommunist\n5\n5\nIndependent Rightist\n3\n1\n1\nNational Democratic\n5\nTotal\n55\n51\n51\n(2) Current Issues.\nThe Luxembourg Government and people are mainly preoccupied with\ninternational questions as they directly bear on their insecure position in the heart of\nEurope. They have welcomed the Brussels Pact, as well they might, for they can con-\ntribute little toward joint military efforts but stand to gain in security by Western\nEuropean collaboration. They are naturally concerned about the future of Germany,\nbecause they, like the French, fear the re-emergence of a strong, aggressive Germany\nalmost more than any other possible threat to their national security. Although\nthere are domestic issues which arouse a considerable volume of debate and controversy,\nthere is none which is likely to cause serious intra-party friction or national disunity.\n2. ECONOMIC.\nFormerly an entirely agricultural state, the Grand Duchy of Luxembourg has\ndeveloped within the last fifty years an iron and steel industry of international im-\nportance, based partially upon indigenous iron ore deposits. Although nearly a third\nof the working population is engaged in agriculture, it is around the metallurgical\nindustry that Luxembourg's economy revolves. Before World War II, Luxembourg,\nin spite of its small size, ranked eighth among the steel-producing countries of the\nworld. The industry is controlled by four large firms, of which ARBED is the strongest\nand most widely known. Their powerful position in the Luxembourg economy allows\nthem considerable influence in the country. The various types of engineering con-\ncerns which are usually found around metallurgical centers are absent in Luxembourg.\nThe only other existing industries, such as leather, quarrying, wine-making and tex-\ntiles, are all of minor importance.\nFor seventy-five years prior to World War I, the Grand Duchy was a member of the\nGerman Zollverein (customs union). About 70 percent of its iron and steel produc-\ntion was sold in Germany, and the industrial works were owned chiefly by German\ninterests. The German invasion of Luxembourg in 1914, as in 1940, was a matter\nof a few hours, and the iron and steel plants were taken over undamaged. At the end\nof World War I, Luxembourg ended her membership in the German Zollverein and\nentered into a customs agreement with Belgium.\nThe iron mines, until the 20th century, were worked principally for smelting out-\nSECRET\n60\nSECRET\nside the country, but by 1913 the production of pig iron in Luxembourg had developed\nto such an extent that it required imports of ore, in spite of record output. Iron ore\nmining reached only 35 percent of the prewar level in 1946 and has declined since then,\nmainly because Luxembourg's low-grade ore had Germany as its principal market.\nThe 1947 production was slightly less than 2 million tons. With orders now being\nreceived from western Germany, a gradual increase in production is expected.\nAfter Luxembourg was free of German control, its iron and steel industry developed\nrapidly, and by 1929 the steel plants were capable of absorbing the country's whole pig-\niron production. The iron and steel industry suffered very little damage during the\nwar, but now requires considerable modernization. Of the $12 million World Bank loan\nobtained in 1947, $7.5 million was earmarked for the equipment of a modern continuous\nsteel strip mill. The total 1947 pig-iron production was 1,931,800 metric tons, and\nalthough greater than the 1938 and 1946 figures, was only 86 percent of the 1929-\n1938 annual average. Steel production in 1947 totaled 1,800,000 tons, and was above\nthe 1938 and 1946 totals and below the 1929-1938 mean annual steel production. Dur-\ning the first few months of 1948, iron and steel production continued to increase, largely\nas the result of more regular coke supplies. Capacity is believed to be about equal\nto prewar.\nThe outlook for 1948 is favorable, contingent upon several factors: (1) adequate\nsupplies of coke, which must be imported; (2) continued foreign market demand; and\n(3) maintenance of costs at a level which will permit profitable sales at the prevail-\ning world prices. The production and export of Luxembourg iron and steel is main-\ntained at a ratio of about three-fifths of the Belgian production under agreement be-\ntween the two countries.\nLuxembourg's agricultural production is nearly adequate to supply the nation's\nneeds, and 60 percent of the national area was under cultivation in 1947. The destruc-\ntion of extensive areas of farmland in the last part of World War II delayed considerably\na return to normal crop production, but the outlook for the 1948-1949 crop year is ex-\ntremely favorable. The freezing winter and prolonged summer drought in 1947 seri-\nously curtailed agricultural output, and Luxembourg was more dependent upon imports\nthan normally. The number of cattle is nearly equal to prewar figures, but dairy,\npork, and veal production is still below normal. In spite of these shortages, Luxem-\nbourg ranks with Switzerland in the abundance and availability of essential and luxury\nfoods. Only grain products and fats are rationed, and the adequacy of supply, even\nof these commodities, is indicated by the fact that there is no Government control\nover the delivery of grains by farmers. Normally, Luxembourg is self-sufficient in\nwheat.\nAside from its iron ore reserves, estimated at 178 million tons, Luxembourg has\nfew natural resources. About a third of the total land surface is timbered, and there\nare adequate supplies of rock and sand to support quarries and a cement plant, which\nsupply the domestic market.\n3. MILITARY.\nThe London Treaty of 1867 that guaranteed Luxembourg's neutrality also limited\nits military forces to the minimum necessary to insure internal order. However, a\n61\nSECRET\nGrand-Ducal decree of November 1944 instituting compulsory military service was em-\nbodied in a law six months later. Although it apparently violated the Treaty of 1867,\nthis measure was adopted with the approval of the Allies.\nThe strength of the Army in February 1948 was believed to be about 1,500, making\nup one battalion in the French Zone of Germany and a small training center at home.\nThis is supplemented by about 600 men in the Police Force and Gendarmerie. The\ncompulsory service law is invoked only when sufficient volunteers are not available.\nThe Army was organized and trained by US Army personnel in the summer of 1945.\nThis supervision was taken over by a British Military Mission in late 1945, and was\ncontinued until the Military Mission's withdrawal in mid-1947. The organization,\ntraining, tactics, and equipment are essentially British, but there seems to have been\nsome deterioration in efficiency and quality of personnel since the British mission de-\nparted. Luxembourg has no air force and, of course, no navy.\nThe Police and Gendarmerie are capable of dealing with any internal disorder,\nand the Army is maintained primarily as an occupation force, mainly, it seems, for\nthe purpose of pushing Luxembourg's claims to a strip of adjoining German territory.\nOut of a total population of 292,000, Luxembourg had, as of 1 January 1947, a man-\npower reserve of military age totaling 85,900. In spite of a deep sense of patriotism and\nwillingness to fight if their independence is threatened, the Luxembourgers do not have\na military tradition, adequate military training, or more important, sufficient arms and\nequipment to prevent the invasion and occupation of their country. However, Luxem-\nbourg can be expected to maintain a small defensive army that, for its size, should\nprove effective as a unit within an over-all organization of the military forces of the\nfive Western Union nations.\nsteupoba ai noticishory\nTo\nU blroW 10 truq basimmer to\nNootine nolloubosq qo19 8\nbegnoting brea salment gifT siderover\nJugiuo Immittrange\nthe (these at 10\nto Jammon Ulde millouborg Easy\ntelinsess to\n10 bas benother brus aloubong niving\nal betasibut Astilhommos\nIn\ngarodmexti.I 871 to betermine ano\nfure bonsdent at boal to\nSpaiq Insured = bas entrietry\n8\n62\nROVISIONAL\n10825\nMiddell\nH\nE\nBergen-\nR\nHelmond\nL\nNORTH\nSEA\nSchelde\nA\nZ\nKempen\nD\nZeebrugge\nS\nTurnhout\nSüchtebs\nKrefeld\nViersen\nMerksem\nDalken\nOostende\nMünchen-\nEekloo\nAntwerpen\nGladbard\nBrugge\nMol\nRoermond\nHoboken\nSint-Niklags\nHerental\nGed\nRheydt\nNiewupoort\nSchelde\nLokeren\nErkeleng\nVeurne\nTorhout\nDikmuide\nGent\nDender\nMechelen\nG\nTielt\nAarschot\nDiest\nGeilenkirchen\nRoeselare\nKalst\nGenk\nJálich\nBruxelles\nVilvoorde\nHasselt\nleper\n(Ypres)\nWaregem\nLeuven\nKortrijk\nOudenaarde\n(Lowvain)\nPoperinge\n(Courtrai)\nMaastricht\n3\nMeenen\nForest\nGette\nTienen\nEachweiler\nSins-Truiden\nDüren\nGeernardsbergen\nTongeren\nAacher\nBailleul\nMouscron\nRonse\nTourcoing\nEscaut\nHalle\nDyle\nArmentikes!\nEdingen\nRoupaix)\nW\nR\nLille\nLiége\nEupen\nyou\nAth\nournaj\nNivelles\nLeuze\nVerviers\nBéchune\nSoignies\nSchleiden\nMeuse\nФ Ниу\n22\nMons\nNamur\nLens\nGilly\nSambre\nMalmédy\nBinche\nhâtelet\nDouai\nValencienne\nCharleroi\nArras\n5 mg\nScorpe\nExcaut\nMaubeuge\nCiney\nSt. Vith\nDinant\nBeaumont\nMarche\nOurthe\nPrúm\nFamenne\nCambrai\nPhilippeville\nF\nR\nN\nChimay\nBELGIUM\nA\nBastogne\nBitburg\nAND\nHirson\nLUXEMBOURG\nSure\nEttelbruck\nGRAND DUCHY\nEchternach\nInternational Boundary\nMain Highway\nMézières\nRailroad\nOF\nCanal\nSedan\nE\nArion\nLUXEMBOURG\nSCALE 1,500,000\nLuxembourg\nMosalls\n10\n20\n30\n40\nMILES\nLIBIT\n30\nKILOMETERS\nirton\nRemich\nEach-sur-\nAlgette\nAlzetto\nLongury\n$2\nComplime\n6'30\"\n4'30\"\n5'30'\n10826\nH\nE\n6'30\"\nBergen\nR\nNORTH\nSEA\n7\nL\nSchelde\nE\nA\n≤\nZ\nKengen\nD\nZeebrwgge\nS\nTurnhout\no\nSüchteln\nKrefeld\nLiersen\nMerissem\n0\nDalkes\nOostende\na\nMünchen\nEekloo\n***\nBrugge\nAntwerpen\nGladbork\nMol\nRommond\n***\nHoboken\nI\na\nSins\nHerental\nGeel\n0\nRheydt\nNicuspoort\nSchulde\nLokeren\nan\nLice\n0\nVeurne\nON\nTorhout\n###\n1\nDiksmuide\nGent\n<>\nDendermonde\nMechelen\nTHE\nTielt\no\nAarichot\nDiest\nRoeselare\nAalst\nGenk\nHitch\nVilvoorde\nOI\nHasselt\nleper\nBruxelles\nI\n(Ypres)\nWaregem\nLeuven\nPoperinge\nKortrijk\nOudenaarde\nowain)\n(Courtral)\nMaastricht\nE\no\nMeenen\nForest\nTienen\nEachageiler\nSinsTruiden\nDiren\nGeernardsbergen\nTongeren\nAdd\nBuilleul\nMouseron\nRonse\n***\nTourcoing\nHalle\no\nArmentieses\nEdingen\no\nRoubaix\no\nR\nLille\nLiége\nEupen\nAth\nTournai\nNivelles\n***\nLeuze\nto\no\nVerviers\nBéthame\nSoignies\n⑉\no\nSchleiden\nHwy\n22\nMons\nA\nLess\nNamur\no\nGilly\nSambre\nMalmedy\nI\nBinche\nhâtelet\nDouai\nValencienne\no\nCharleroi\n0\n00\nArras\nSCOUP\n...\nGamr\nEcout\nMaubeuge\nT\nCiney\nSt. Vith\nDinant\nBeaumont\nMarche-\nPrium\nFamenne\nCambrai\nPhilippeville\nF\nR\no\nZ\nChimay\nBELGIUM AND LUXEMBOURG\nA\nBastogne\nMAJOR INDUSTRIES\nBitburg\nPIG-IRON AND STEEL\nHirson\nAGRICULTURAL MACHINERY\nGLASS\nSüre\nIRON FOUNDING\nFERTILIZERS\nDIAMOND CUTTING\nENGINEERING (Structural\nEttelbruck\nSteel, Machine Tools)\nCHEMICALS\nZINC PROCESSING\nARMAMENTS\nTEXTILES\nI\nCOPPER PROCESSING\nGRAND DUCHY\nEchternach\nInternational Boundary\nMain Highway\nMézières\nRailroad\nCanal\nOF\nCOAL MINING REGION\nSedan\n(Approximate Extent)\nArlon\nLUXEMBOURG\nSCALE 1:500,000\n...\n0\n10\n20\nLuxembourg\nMoselle\n30\n40\nMILES\n...\nOI\n10\n20\n20\n40\nKILOMETERS\nVirton\n...\nRemich\nEsch-sur-\n...\nLongury\nthe Altette\n... Alzette\n$2\n...\nCompletee\n6'30\"\n10827\n3°\n3°30'\n4°\n4°30'\n5°\n5°30'\n6°\n6°30'\n51\n30\nOOSTER-SCHELDE\n51°\nH\nE\nR\n30\nL\nWESTER\nA\nNORTH SEA\nSCHELDE\nN\nTurnhout\nS\nOostende\n(Ostende)\nAntwerpen\nBrugge\n(Anvers)\n(Bruges)\nSint Niklaas\n(Saint Nicolas)\nWilrijk\nLier\nLokeren\nO\n(Lierre)\n$\nGent\n(Gand)\nMechelen\n(Malines)\n51°\n51°\nE\nM\nS\nH\nGenk\nO\nRoeselare\nAalst O\nVilvoorde\nO\nHasselt\n(Vilvorde)\nE\n(Roulers)\n(Alost)\nBruxell FRENCH\nLeuven\nR\n(Brusse\nel)\n(Louvain)\nO\nKortrijk\nand\n(Courtrai)\nFLEMISH\n3\nFRENCH and FLEMISH\nMouscron\nRonse\nix)o\nA\nFRENCH!\nand FLEMISH\nLiége\nZ\n(Luik)\nII\nTournai\nSeraing\nVerviers\nR\n(Doornik)\nOERMAN\n50°\n50\nN\nNamur\n30\n30\n(Namen)\nJumet\nE\nO\nCharleroi\nGERMAN\nF\nR\nE\nN\nC\nH\nBELGIUM - LUXEMBOURG\nPOPULATION DENSITY\nand\n50°\nLINGUISTIC AREAS\n50°\nNumber of Persons\nCities\nFRENCH,\nPer Square Mile\nPer Square Kilometer\n500,000 1,000,000\nBruxelles\n3050\n7900\n100,000-500,000\nAntwerpen\n2000\n5180\n50,000-100,000\nLuxembourg\nGERMAN,\n1600\n4144\n25,000-50,000\nJumet\nand\n1200\n3118\nBoundaries\nLUXEMBOURG\n800\n2072\nNational\nLETZEBURGESCH\n400\n1036\nProvincial\nArrondissement or Canton\n90\n233\nSOURCES FOR POPULATION DATA:\nFRENCH\nNames in Purple Denote the Principal Language(s) Spoken in the Area.\n\"Chiffre de Population de Droit, par Commune, à la Date du 31 Décembre, 1945\n1:1,000,000\nMoniteur Belge, N. 216, August 4, 1946 (Bruxelles)\nLuxem-\n0\n10\n20\n30\nAperçu Statistique, Annexe à \"Annuaire Officiel,\nbourg\nMILES\nOffice de Statistique, 1939 (Luxembourg)\n0\n10\n20\n30\nKILOMETERS\nData for Belgium by Arrondissements,\nEsch-sur-\n49°\n49°\nfor Luxembourg by Cantons\no\nAlzette\n30\n30\n5°\n5°30'\n6°\n6°30'\n3°30'\n4°\n4°30'\n3°\nU.S. GPO-S\n10827 Map Branch, CIA, 3-48\nSECRET\nTHE\nU.S. GOVERNMENT PRINTING OFFICE\n3073-S-1948"
}