WASHINGTON NEWS BUREAU
pEPOTOMAC i^eSTSCiliPTS ROBERT GIBBS, Associate Editor Government agencies responsible for n e w defense a n d m o b i l i z a t i o n pSans are i n throes of o r g a n i z a t i o n . . . N e w agencies h a v e extensive g i v e n a u thority to control w a g e s a n d prices a n d allocate materials a n d c o m m o d ities . . . Inventory but not a l l o c a t i o n controls placed on six basic chemicals CONFUSION
is the
order of
the
day
in
^ Washington. On Sept. 1, Congress approved t h e Defense Production Act of 1950. This act gave the President broad powers to control t h e nation's economy through price a n d w a g e stabilization. It also gave him the authority to impose priorities a n d allocations on a w i d e variety of commodities and resources ( see Potomac Postscripts, Sept. 1 1 , 1 9 5 0 ) . On Sept. 8, t h e President signed the bill making it law. On t h e following day Mr. Truman issued an executive order delegating certain functions under this law. Some of these were granted to existing government groups b u t the most i m p o r t a n t w e r e given to two n e w agencies, the National Production Authority and the Economic Stabilization Agency. Since the executive order was issued, government officials responsible for carrying out t h e President's orders have b e e n in the throes of organization. Several of t h e officials involved in the program have stated "off t h e record" that order will b e restored b u t t h a t it will take some time because of t h e m u l t i t u d e of problems involved. It appears t h a t W . Stuart Symington, chairman of t h e National Security Resources Board a n d newly appointed Defense Coordinator, will b e faced with many knotty problems. Priorities and Allocations Responsibility and authority for priorities and allocations have b e e n split four ways. T h e Secretary of Interior will handle petroleum, gas, solid fuels, a n d electric power. The Secretary of Agriculture has been assigned authority for food, farm equipment, and commercial fertilizer. T h e Interstate Commerce Commission will be responsible for domestic transportation, storage, and port facilities. Air transport and shipping are excluded from this authority. T h e Secretary of C o m merce will handle all other materials and facilities. I n order to h a n d l e the m u l t i t u d e of controls which h a v e fallen to him, Secretary of Commerce Sawyer has established t h e National Production Authority. H e a p pointed as NPA administrator William Henry Harrison, president of International Telephone a n d Telegraph C o r p . This agency will function within t h e D e p a r t ment of Commerce. T h e NPA will ascertain t h e requirements for materials a n d commodities needed for defense, civilian, foreign, a n d other purposes and will then formulate a n d execute policies and p r o g r a m s necessary to fulfill these requirements. T o as3288
sist in this matter, an Advisory Committee on Priorities Administration is called for. This committee will be m a d e u p of representatives from ten interested government agencies. Other subcommittees and working groups may b e established as t h e needs arise. T o facilitate further t h e operations of NPA, several industry divisions of t h e Office of Industry and Commerce ( Bureau of Foreign and Domestic C o m m e r c e ) h a v e been transferred to the NPA. T h e s e industry divisions include iron and steel, metals and minerals, rubber, textiles and leather, chemicals, forest products, construction, machinery and equipment, general products, motion pictures, food, petroleum, and fuels a n d energy. The Division of Small Business ( Office of I n dustry and C o m m e r c e ) has also b e e n placed u n d e r N P A direction. E v e n before t h e signature was dry on t h e executive order questions arose with respect to the control of chemicals derived from coke. T h e executive order, as n o t e d above, gave t h e Interior Department control over solid fuels which were defined as "all forms of anthracite, bituminous, s u b bituminous, and ligndtic coals, and coke a n d its b y - p r o d u c t s / ' This has posed t h e question as to whether the Interior D e p a r t m e n t or t h e D e p a r t m e n t of C o m m e r c e , which is primarily responsible for controls on chemicals, will handle b e n z e n e a n d related chemicals obtained from coal. T h e same question arises as to a m m o n i u m sulfate. Should it be considered as a chemical to be handled b y t h e C o m m e r c e D e p a r t m e n t , a fertilizer material to b e h a n d l e d by t h e D e p a r t m e n t of Agriculture, or a coke by-product and thus b e placed under Interior D e p a r t m e n t control? T h e s e are questions which would a p p e a r to fall within t h e province of Mr. Symington for a final decision. Representatives of various segments of t h e chemical industry a r e concerned over t h e question of controls and allocations. O n e responsible source within t h e Government stated that while a large percentage of chemicals could b e considered " s c a r c e " under existing definitions, he believes that t h e n u m b e r which will b e declared to b e officially scarce will be limited at this t i m e t o those which were recently m a d e s u b ject t o inventory control. These a r e : b e n zene, chlorine, caustic soda, soda ash, alcohol, a n d glycerol. Should t h e list b e ext e n d e d to include other chemicals, such as phenols and polystyrene, the n u m b e r of products involved directly or indirectly w o u l d probably b e so large t h a t over-all C H E M I C A L
controls on all chemicals would be required. In any event, it appears that co'^rols will b e imposed, with the cooperation of the industry a n d on a voluntary basis. Inventory controls have also been placed on many metals and minerals, iron and steel, forest products, and rubber, textiles, and b u i l d i n g materials. Economic Stabilization Agency T h e President's order h a s established a new and i n d e p e n d e n t agency to be called the Economic Stabilization Agency. It will be h e a d e d by a presidentially a p pointed administrator, w i t h advice and consent of the Senate. T h e administrator will be responsible for preserving and m a i n t a i n i n g a stabilized economy. To th.it end h e will plan price and wage stabilization policies, with emphasis on voluntary programs. He has authority to establish price a n d wage ceilings. Within the agency t h e r e will be a price administrator a n d a nine-man w a g e stabilization board. O t h e r Control Agencies C o n s u m e r and real estate credit control* h a v e b e e n assigned to t h e Federal Reserve Board. T h e F e d e r a l Reserve has already t a k e n steps t o impose credit curbs on installment credit similar to those in effect d u r i n g World War II. The Federal Reserve will work with t h e housing and H o m e F i n a n c e Agency with respect to real estate credit controls. T h e Secretary of Labor has been assigned responsibility for questions involving labor supply, employment service, a n d induction a n d deferment policy. In connection with t h e last item, he will work in conjunction with the Secretary of Defense a n d t h e Director of Selective Service. T h e Labor Department will h a v e no control over civilian personnel in t h e reserves. T h e question of plant expansion is somewhat more complicated. In essence, however, t h e F e d e r a l Reserve banks will m a k e loans to private parties on t h e basis of guarantees b y t h e Army, Navy, Air Force, General Services Administration, and the D e p a r t m e n t s of Commerce, I n terior, a n d Agriculture for the expansion of productive facilities. T h e Reconstruction F i n a n c e Corporation, on the basis of recommendation of the secretaries of I n terior a n d Agriculture, is authorized to make loans for the expansion of capacity, the development of technological proccesses, a n d t h e production of essential materials. Included in this category for loans a r e the exploration, development, a n d m i n i n g of strategic a n d critical metals and minerals. T h e Secretary of the Interior is authorized to encourage private exploration, development, and mining of such materials. T h e Administrator of General Services may purchase such items ( i n c l u d i n g liquid fuels). T h e last official will also b e responsible for installing government-owned equipment, facilities, processes, or improvements in government-owned a n d private plants, factories, and other industrial facilities. AND
ENGINEERING
NEWS
