OUR GREATEST CHALLENGE LIES JUST AHEAD
Follette, Sen. Robert M. La Jr.
Our Greatest Challenge Lies Just Ahead By SEN. ROBERT M. LA FOLLETTE, Jr. IT IS HIGH TIME for frank and open consideration of the Government's policy on reconversion of industry to civilian...
...The Truman Committee reports, "From now on, we may expect cancellations or cut-backs of existing contracts to be made at an ever increasing rate, and within a few months to exceed in volume the new contracts...
...Seventy per cent of the total amount of prime war contracts placed with American firms from June 1940 until September 1943 were concentrated in the hands of only 100 corporations...
...If, on the other hand, that opportunity is lost, we face an economic crisis that will make 1929 and 1932 look trifling in comparison...
...The issues of postwar economics are being shaped here and now...
...Industrial production is catching up with military requirements, except in a comparatively few special items such as landing craft, heavy and long-range airplanes, radio and radar, and ships...
...Americans know the war is not over because they have their sons on the battlefields...
...It may seem strange to discuss the reconversion of industrial facilities from military to civilian production when the decisive battles of the war' are still to be fought...
...It will depend upon the ability of the competitive segment of industry to prevail over the philosophy of scarcity that dominates the thinking and policies of monopoly...
...This high level of productivity has been reached in spite of the fact that over 10,000,000 men and women, the cream of our labor force, have been drawn into the armed forces...
...The smaller business enterprises are least able to withstand suspension of operations because of their limited capital resources...
...The aluminum is available, there are idle stamping facilities avail- ; able, and in many communities there can be no question about available manpower...
...The Barrier To Action Now Already idle production facilities are appearing in such basic commodities as ^aluminum, pig-iron, and steel...
...Consequently, we should not be surprised to discover that limited demobilization of production is possible at a time when military operations are increasing...
...In spite of all its careful phrasing and guarded statements, the sum and substance of the Baruch report on the question of disposing of these Government properties was aimed at one principal objective, that of liquidating the public's interest in these facilities as quickly as possible and forestalling the possibility that these plants might compete with established corporate supremacy in these fields...
...This represents approximately 40 per cent of the facilities engaged in munitions production...
...According to data assembled by the Truman Committee, these same 100 corporations have unfilled war orders on their books which will keep them busy for an average of 16 months without taking into account new orders...
...The mechanics of mobilization for modern warfare are such that the effort on the industrial front reaches its peak before the effort on the military front...
...If big business is allowed to win the battle of reconversion the consequences will be disastrous...
...It is clear therefore that it will be the relatively small independent producer, the competitive segment of our economy, who will suffer most from any delay in formulating Government reconversion policy...
...They will give every ounce of energy and devotion necessary to meet the needs of the armed forces in the months ahead...
...Here again the struggle between monopoly and free competition becomes a vital issue which will affect our future economic pattern...
...Issue Being Shaped Now Seventy per cent or more of the Government's facilities can be turned to some type of peacetime production when they are no longer needed for filling military requirements...
...Likewise, governmental policy and methods employed in the reconversion of industry to civilian production will be the key to postwar economic and social problems...
...The extension of economic activity in America after the war will depend in great measure upon the opportunity for independent enterprises and small business men to pioneer new industry...
...But whether such an eventuality comes to pass or not, there is no escaping the immediate problem of idle productive capacity in increasing quantities which could be used for needed civilian production...
...The answer lies in the fact that the Aluminum Company of America, which got the lion's share of war contracts, is not free at this time to go back into civilian production...
...Through extremely favorable tax concessions, the Government has indirectly financed approximately $5,000,000,000 worth of expanded industrial facilities owned by private industry...
...Specific situations are arising that clearly demonstrate this fact...
...Already the armed forces have cancelled war contracts totaling approximately 13 billion dollars, as the result of revised estimates on military requirements...
...To win the war our productive facilities have been expanded to the point where they now are producing a national income of approximately $150,000,-000,000...
...This compares with an estimated backlog of unfilled orders placed with smaller companies which will keep them occupied for only about five months...
...Yet unless the excessive demand upon manpower by the armed forces checks the rising tide of war production we are over the hump...
...Plants in many sections of the country which have been producing aluminum cooking utensils were shut down because all available aluminum was at once diverted into aircraft production and similar military uses...
...The danger to civilian morale lies not in free discussion of domestic problems, even those affecting the reconversion of industry, but rather in this game of official make-believe which is hampering public understanding of vital domestic issues...
...The question of what the Government will do with these facilities is of vital importance to the future of our national economy...
...In many lines the nation's industrial production facilities are being shut down to remain in idleness, temporarily at 'least, even though they could be employed for the manufacture of needed civilian goods...
...Two recent reports, the Baruch-Han-cock report and the third annual report of the Truman Committee, have given the public a glimpse of the issues at stake in industrial reconversion...
...IT IS HIGH TIME for frank and open consideration of the Government's policy on reconversion of industry to civilian production...
...f this productive machine can be utilized at full capacity when the war is over, and made to produce the tools of peaceful pursuits, the American people are upon the threshhold of a period of unprecedented wealth and material well-being...
...Then there is the issue of Government-owned industrial facilities...
...The struggle between monopoly and free competitive enterprise will be drastically influenced by the decisions made on reconversion policy long before the war is finally won...
...Consequently, it does not want anyone to go back into civilian production of articles which may later be in competition with Alcoa...
...It is true that an unexpected military disaster would mean a revision of our military requirements and possible reemployment of these idle production facilities for war needs...
...The Key To The Problem American patriotism has shown itself capable of supreme sacrifices when those sacrifices are required...
...As victory in this war approaches, the American people will face the greatest economic challenge of all times...
...When the national defense crisis engulfed the nation, the aluminum industry was one of the first to feel the pinch of mobilization...
...The implications of reconversion can be seen in the present aluminum situation...
...Big business won the battle of conversion to war...
...Now, as a result of vastly increased facilities for the production of aluminum, the supply exceeds military requirements, and many of the contracts which were placed with the stamped utensil industry in an effort to keep it afloat during the war are being withdrawn...
...The question inevitably arises, why not release our excess supplies of aluminum for limited civilian production of aluminum cooking utensils...
...In this war program the Government has built approximately 15 billion dollars worth of industrial facilities...
...The weapons of war must be made and adequate reserves accumulated before the decisive attacks are launched...
...Cancellations and cut-backs have freed 15 aluminum pot-lines with a capacity of 437,000,000 pounds of aluminum per year, pig-iron facilities with a capacity of 2,000,000 tons per year, and steel furnaces with a capacity of 1,600,000 tons of steel per year...
...Governmental policy and the methods employed in converting industry from peace to war production were the key to the economic and social problems of the war period...
Vol. 8 • April 1944 • No. 15
