WASHINGTON NEWS BUREAU
€ POSTSCRIPTS POTOMAC ROBERT GIBBS, Associate
Editor
Control of inflation rather than difficulties of attaining production goals appears to b e major obstacle in defense mobilization effort "DUiLDiNC America's Might" is the most ** concise, understandable report on the status of the nation's defense mobilization program yet issued. In 43 pages well illus trated by simple charts, Charles E. Wilson, Director of the Office of Defense Mobiliza tion, outlines policies, plans, and pro grams to build America's military strength and productive power "to meet the chal lenge of outright communist aggression." While most of the information in the report has appeared in one form or an other at various times since the nation initiated its defense program last June, Mr. Wilson has combined the salient fac tors to give an over-all picture. The major points he includes are the adminis trative organization of the Government's defense agencies; plans and programs to meet military requirements; efforts to ex pand and control production; the need for efficient utilization of manpower resources; methods by which the economy can be stabilized; the need for international co operation to strengthen the free nations and to assure continued supplies of needed raw materials; and finally a brief insight into the future. On the whole, Mr. Wilson's report is optimistic with respect to progress in meet ing defense production goals. Inflation, however, is the dark shadow which poses the most serious threat to the prepared ness effort. Defense Program Is Long Range Following the attack on Korea, the United States Government realized that the safety of free nations depended on their strength. This country, therefore, embarked on a definite, long-range pro gram to build up and maintain its militarystrength and that of other free nations against communist aggression. Production wise, the program calls for the production of military equipment and supplies plus the building up of productive capacity for use in the event of all-out war. More specifically, military planning envisions the production of military sup plies and equipment for use in the present fighting in Korea; for the expanding armed services in the United States and Europe; for assisting the growing forces of other nations; and for reserve stocks for one year of full-scale war. Plans to increase productive capacity include the stockpiling of scarce and critical materials, the addition of produc tion lines for military requirements which would be needed in the event of all-out war, and the addition of basic industrial capacity to support both military and civilian production at a high level. 1602
The current timetable calls for attain ment of these objectives by 195-3. Mr. Wilson states that this program is similar in some ways to the one initiate-d after Pearl Harbor but differs in many other respects. He notes, for example, t"hat the current program calls for an armed forces strength of 3.5 million as contrasted with 12 million in World War II. This in turn means lessened materiel requirements and a larger available manpower pool for de fense production. Another important dif ference is that the nation is now produc ing for readiness and not for alk>ut war. A third important factor is that the nation's production and capacity levels are far greater than in 1941. Left-Over Equipment and Stand-by Plants Are Assets In addition, the United States possesses many military supplies from World War II as well as a large reserve of w a r and cargo ships, and a large number o f stand by plants to produce explosives, aircraft, and synthetic rubber. In some ways the differences in the current program and that of World War II are best illustrated by expenditure fig ures. At the peak of World War I I , 4 5 % of the gross national product v^ent for national defense; at present i t is 33%; by the end of the year it will b e 1 5 ^ ; and at the height of the program it ^vill not exceed 20%. Progress to Date The past nine months, Mr. Wilson states, have been a tooling-up period. During this time Congress has enacted basic laws and appropriated funds to start the de fense machinery operating. The defense organization a s now set up consists of the Office of Defense Mobiliza tion as the policy-making and control agency over six major areas o f mol>ilization activity: stabilization, production, man power, transportation, foreign supplies and requirements, and scientific research. With the exception of the scientific Tesearch organization, which is in the formative stage, the other areas are fairly -well or ganized. In the field of military requiTements, orders for new weapons, equipment, and stockpile items are now running about $1 billion a week, with orders since Korea totaling $23 billion. Because of t h e com plexity of new weapons.and equipment, the "lead time" between orders arid deliv eries will run from two or three y e a r s for many heavy items. The rrtaximxim pro duction impact will come early i n 1952. Between the first quarter of 1Φ50 and C H E M I C A L
the first quarter ui 1951 the total national output increased 107c, reaching the $300 billion mark. To meet military require ments and yet not cut civilian consump tion too greatly, production must be fur ther expanded. A goal of 15% in the next three years has been set, which would raise the total national output to $345 billion. At this time the nation should have capacity to produce 50,000 airplanes and 35,000 tanks a year. It is hoped that this goal may be at tained through aids to increased produc tion. These aids include accelerated tax amortization, direct loans, loan guaranties, procurement and purchase contracts, and installation of government-owned equip ment and plant extensions. In the manpower field, the armed serv ices have doubled their manpower and now total 2.9 million men. This will be increased to 3.5 million. Defense produc tion will require 3 to 4 million new workers. This need can be met by per sons transferring from nondefense work, by the unemployed, by women workers, and by increased hours of work. In the area of economic stabilization, Mr. Wilson says that inflation can be combatted by getting demand and sup ply in better balance* and/ or preventing the inflation resulting from an unbalanced situation by controlling prices and wages. Reducing credit, increasing taxes, and increasing savings can reduce the demand until production can b e increased within the limits allowed by the defense program. In an attempt to promote collective security, the United States is assisting friendly nations by furnishing them with substantial amounts of military and eco nomic aid. At the same time, this countryhas been developing existing and new foreign sources of strategic materials. Forecast for the Future Mr. Wilson states: "One year from now, with unflagging determination and effort, we and our allies will have achieved a formidable strength in many phases of modem warfare. T w o years from now w e should have military and economic strength sufficient to give us reasonable safety against aggression." During these two years the people will be called on to bear heavier taxes, to work longer hours, to experience shortages of civilian goods, especially those made from metals, to meet dislocation in the economy as civilian production is converted to mili tary output, and to experience a slowing down of technological and social progress. Almost all qualified young men will be called to serve in the armed services. While none of these effects can be averted, one of the greatest hardships which can be avoided is inflation. Mr. Wilson is convinced that inflation can be controlled and, in fact, must be, if the economy is to remain strong and the de fense effort is to be successful. He ob serves that while the legal framework for the control of wages and prices exists, the cooperation and understanding of the people as a whole are necessary to make the program successful. AND
ENGINEERING
NEWS
