Holland's Heroic Achievement
By MARTIN EBON
The Turning Point
/y,
In this behind-the-news story Mr. Ebon shoius how
the Dutch, because of their policy of encouraging
private industry, find themselves in a strong
position to cope with the recent disastrous floods.
Once again Holland is teaching the world a les
son in self-reliance. Once again the tradi
tional Dutch characteristic of calm tenacity is be
ing pitted against enormous odds. Dike against
flood, construction against destructionthose are
the symbols of Holland's remarkable will to sur
vive.
Here is a nation that has suffered well over a
thousand deaths, that has sustained more than a
quarter billion dollars worth of damage, that is
faced with the loss of over 300,000 acres of farm
landand that says, in the matter-of-fact manner
of August G. Maris, Netherlands Director General
of Waterways: "The next full harvest can be ex
pected in 1955."
They are already thinking in terms of 1955, and
beyond. They are already preparing the gypsum
that will neutralize the salt which violent floods
have spread over the rich brown Dutch earth.
They are busy repairing dikes, draining the soil,
and making plans to prevent a repetition of the
disastrous flood of 1953.
This, in detail, is the damage the Netherlands
suffered as a result of the flood that hit the nation
during the first days of February: 1,395 dead;
nearly 70,000 people made homeless; close to six
per cent of the country's cultivated land flooded;
144,000 head of livestock and horses lost to the
merciless sea.
The February disaster hit the Netherlands
barely one week after the nation announced that it
would be able to do without §15 million in dollar
aid under the United States Mutual Security Pro
gram. "This action," Secretary of State John Fos
ter Dulles had said, "which is in the best Dutch
tradition of self-reliance, deserves the admiration
of the American people."
The same approach which enabled the Nether
lands to go without this dollar aid is now being
used in repairing the flood damage, putting the
country back in order, and going about the nation's
business. To study this approach, we have to go
back to the spring of 1951. It was then that the
Dutch decided they didn't like the looks of their
country's economy.
Just about two years ago, the Netherlands found
itself suffering from a global economic disease
prices were high; wages were rising; inflation
was mounting. But the Hollanders, in response to
these conditions, did not follow the line of least re
sistance. They did not tighten controls on wages
and prices. They did not establish new government
agencies, clamoring for the taxpayer's money and
eager to found control empires of their own.
No, the Dutch did the exact opposite. They de
cided to relax controls and free prices. The results
were apparent within one year. While, during the
first half of 1951, the Netherlands imported nearly
thirty per cent more than it sold abroad, by early
1952 its exports exceeded imports. From March,
1951 to March, 1952, the Netherlands reserves of
gold and foreign exchange rose from 1.3 billion to
2.2 billion guilders. Although controls were re
duced and prices largely permitted to find their
own level, the cost of living index hardly moved
during the twelve-month period.
How did this happen? Well, the government, for
one thing, decided to get out of much of the in
dustry and building field. After the war, ambitious
plans for plant development and building were ad
vanced by various cabinets. This increased infla
tionary pressures. When the turning point came in
early 1951, the Dutch government stimulated pri
vate business to do its best, while cutting its own
expenditures in these fields by one-fourth.
The deflationary policies initiated in early 1951
caused a reduction in the buying of domestically
produced goods. This might have led to unemploy
ment. And, as the Netherlands has a relatively
small land area, its non-farm labor force is con
stantly growing. The employment crisis reached
its peak in January, 1952. The number of unem
ployed at that time rose to 175,000. Would the gov
ernment seek to reduce this figure by inflationary
measures? Would the carefully planned come-back
boomerang? But natural economic laws caused the
unemployment pendulum to drop back. By last No
vember it was down to less than 130,000.
Although not all the figures for 1952 are in by
this time, we know for certain that Dutch recovery
continued along the same lines. Exports during the
year had almost completely covered imports. By
year's end, the Netherlands had accumulated a $525
million surplus in its international payments bal
ance. Its total foreign exchange and gold reserves
amounted to more than 3.3 billion guilders. Com
paring even the improved early 1952 figures with
those available at the beginning of 1953, we see an
impressive further strengthening of the Dutch
MARCH 9, 1953 41 5
