In that context, the Americans publicly announced that they would co-operate in the Brussels Pact. The American guarantee was an essential ingredient for the French as well — they would accept the German state, creation of which had been formally resolved upon at London, on 4 June — provided that there were an American presence to prevent the Germans from growing too independent. Now, the old Second World War associations came alive again: Eisenhower, Montgomery, the French all knew each other well, and they co-operated again. Here was the start of NATO, and of much else, as Atlantic ties multiplied and thickened. Trade unions co-operated in a free association. The American trade unions (the AFL, or American Federation of Labor, had merged in 1946 with the CIO, or Congress of Industrial Organizations) were now strongly anti-Communist (their leader, Walter Reuther, having worked for two years at a Ford plant in Nizhny Novgorod, and thus knowing his Soviet circumstances) and the Western trade unions set up an organization of their own, challenging the older international one, which the Communists had taken over. There were generous provisions for cross-Atlantic student exchanges and scholarships, particularly with Britain, so that the elites could get to know each other, or even that foreign students in the United States would go back to their own countries and teach the natives how to do things. To win over the intelligentsia, American subsidies went to Preuves in France and Encounter in England (via Melvin Lasky, who had a German wife). These magazines were very good indeed, and writers appeared in them for prestige, not for the fees. On another level, Reader’s Digest promoted simple-minded American patriotism and anti-Communism, and was translated into many languages. It paid well, and was widely read. After the fall of Communism, a famous American commentator, at the time something of a fellow-traveller, remarked that Reader’s Digest had been a better guide to what was going on than anything else. The CIA, set up on a British model, also came into its own around this time.
One vital part of the new order was a restored Germany. The London conferences in February-March and April-June had recommended this on 4 June. One great difficulty was with France: would her parliament accept this restitution of the hereditary enemy? The American Senate’s adoption of the Vandenberg Resolution on 11 June was reassuring: there would be an American presence in Europe to contain Germany, and the London recommendations went through Paris, though by only eight votes — one of the deciding moments of French history, in that the main danger was now recognized as Soviet, and the way forward, the elaboration of a pan-European system which the French would have a lead in managing. In July the German federal states were authorized to set up a ‘parliamentary council’ which would write a constitution. In this period the Allies received another great fillip. The Italian elections of mid-April 1948 were decisive, and the Communists lost. There were (and are) cries of ‘foul’, because of covert activity by CIA men such as Michael Ledeen or Edward Luttwak, who knew the country well. But there had already been the considerable counter-example of the Czech coup to deter anyone on the moderate Left from voting for the Communists, Marshall aid was at stake, and, besides, the Americans were in a position to save the Italian minority of Trieste from absorption in Yugoslavia. The Christian Democrats, under the European-minded De Gasperi, swept the board.
The Cold War took a further ratchet in Germany, and a configuration was then set, for the next two generations. ‘Trizonia’, now that the French (formally in April 1949) had included their zone in ‘Bizonia’, was being turned into a state, but this could not be done with the old Reich currency, which had become dramatically valueless. The whole economy was distorted, as banks could not operate with it, and a vast proportion of exchanges took place in the black market, with which by now all Germans were familiar. Controls existed on food prices but the result was that food vanished from the shops: sellers could not afford to sell at these giveaway prices, and the same was true for most other goods. As ever with inflations, cheats and parasites were rewarded; far from there being a social revolution in Germany, people with property were rewarded for just sitting on it, as it went up in value. But there would be no economic recovery — outside the black market — until the currency was reformed; at a British suggestion, this was undertaken, and in great secrecy new banknotes were printed for the Deutsche Mark. This turned out to be an enormous success, because shop windows all of a sudden were filled, at last, with goods.
Would it be extended to the western sectors of Berlin? All along there had been friction in the German capital, as the Russians attempted to force Social Democrats and Communists into a single party, which they could control. In the western parts of the city, a referendum at the end of March 1946 rejected it by an enormous majority. Early in 1946 there were still many people in the British administration who reckoned that they should just cut their losses and concede Berlin to the Russians, while building up their own zone, and even the American commander, Clay, who became a subsequent West German hero, was not sure. Late in 1946 there returned (from exile in Ankara) a remarkable soon-to-be Lord Mayor, Ernst Reuter. He and his rival Willy Brandt were strongly anti-Communist, having (like Bevin) had ugly experiences of their tactics, and even the Popular Front nostalgics in the SPD were silenced as the Soviet oppression and kidnappings went ahead. Besides, the British were having to pay £80 million per annum for their own occupation zone, and Soviet reparations demands seemed designed to wreck the economy, or even to make the British pay more. The Western Allies could not give up Berlin if they wanted to remake a Germany of their own, and a British adviser, Alec Cairncross, was responsible for the new currency. On 20 June 1948, a Sunday, the new Deutsche Mark came in, the old Reichsmark was scrapped. Money savings were almost wiped out but each German got forty of the new Marks.
It was the signal for collision. By now western Berlin was seen by the Western powers as part of their own territory, and the currency was to be introduced there as well. The Soviet zone operated along entirely different principles, and there prices did not play the same part: such goods as were available were paid for in the old paper in any event, and prices were fixed by decree or Plan. The Russians protested against the process, and on 30 March began to make difficulties for Allied vehicles going to and from West Berlin. On 16 June they walked out of the Kommandatura, the joint body managing affairs for Germany, cut the railways on 23 June, and on 10 July closed the canals. Here, there was a difficult point, because there were no treaty arrangements as regards Western access by land to Berlin. There was, however, legally a right to passage by air, and there followed a remarkable episode. By air, with aircraft landing, skimming the rooftops, every few minutes, two and a half million people were fed and even heated by coal over eleven months by an Anglo-American effort. American warplanes, capable of delivering nuclear bombs, now reoccupied the wartime airfields in eastern England, and there were rumours of war. From full-scale war, Stalin shrank, and he never turned off Berlin’s water supply, which would indeed have caused the place to surrender. But he had done enough to make the Americans formally support the new military structure being set up at Brussels, and in the following year it was turned into NATO, the North Atlantic Treaty Organization, with an American commander. There was almost no opposition to the demands for rearmament that were now heard in the United States. The ‘National Security State’ emerged, in later years much bemoaned, but at the time an apparently obvious outcome of the Soviet challenge.