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TEXAS BUSINESS REVIEW 3
Business Review and Prospect
GENERAL
Two noteworthy reports bearing on the same general
subject were made public during February. These were
the Baruch-Hancock report on "War and Post-War Ad-
justment Policies" and the report of the George Com,-
mittee on "Post-War Economic Policy and Planning."
Although there are points of difference in the two sets
of proposals, the similarities of the two programs and
their broad areas of agreement are far more impressive
than their differences. Both are based upon the prin-
ciple that the great need in the demobilizaiton period
will be to get people back to work on peacetime jobs.
To that end both would get the Government out of busi-
ness promptly by having it pay its debts, move war
materials out of plants, and sell- its surpluses; and both
would preserve and strengthen the system of free enter-
prise. .
One of the main themes of the Baruch-Hancock report
is that the size of the post-war conversion problem should
be reduced and the war effort itself speeded by tighten-
ing up efficiency during the war. It states forcefully that
scrutiny of iWar requirements to avoid waste, such as
accumulating excess stocks of weapons which rapidly
become obsolete, should be intensified.
The report objects to the making of goods no longer
needed simply to provide employment or profit, either
in the war or post-war period. It argues for an early
- effective review of the programs for the production of
raw materials, for stockpiling, for imports, and for sub-
sidies, premiums, or other devices for stimulating
marginal production. Wherever practicable it would use
materials left after the war needs are met to fulfill
civilian requirements. It calls for making necessary
decisions promptly; otherwise later decisions will be
more difficult. Where there have been war expansions
far beyond any possible post-war future, it will be better
to cancel war contracts .earlier and begin reducing the
bloat than to wait until it has to be done all at once.
This emphasis on speed in shifting from war to peace-
runs throughout the report. It applies to cutbacks in
production, to settlement of contracts, and to handling of
surpluses. The report says: - '
"Some short-sighted persons will oppose prompt decisions in
the hope of continuing unnecessary production. We call them
short-sighted because they are only borrowing employment from
the future when it will be needed and using it up in the present
when there is more work than all of us can do. Unneeded stocks
of raw materials beyond the margin of military safety will hang
over the post-war market depressing future production, employ-
ment and prices. It will be stockpiling trouble for the future."
The same philosophy is carried over into proposals for
disposal of surplus property. The first suggestion made
is that the Surplus Property Administrator "sell as much
as he can as early as he can without disrupting normal
trade." The points are made that during the months
immediately' ahead the surplus war goods can most
readily be sold, market conditions will be at their best,
and an immediate start on the problem would reduce
enormously the likely surpluses that would be left for
the more difficult months after the war.
As principles to governi sales the report urges, among
others: no sales to speculators or promoters; use of
regular channels of trade; proceeds of all sales to go to
reduce national debt; equal access to surpluses for all
businesses and all sizes of businesses with size of lots
to be determined accordingly; no creation of monopoly.
To promote reconversion the Baruch-Hancock report
recommends advance planning jointly by military and
civilian agencies for the unknown day on which Germany
is defeated. The plan would seek to estimate in advance
the cancellations, the industries affected, and the resources
likely to be released. It would make tentative selections
of the industries and plants to be freed all for the pur-
pose of speeding reconversion and reimployment and
increasing the supply of civilian goods early. It recom-
mends an advance listing of civilian needs which have
been restricted during the war and which should have
preference in the opening up of civilian supply, giving
highest priority to such things as vital repairs, expanded
transportation or improved maintenance. It advises that
industries which will need to retool for peacetime work
be permitted to secure their tools before the end of the
war. It would guide cancellations to permit the earliest
release of small concerns which can convert back to
peacetime production. "Nuisance" production controls
affecting only small quantities of materials would be re-
laxed early under the plan and all materials limitations
would be brought under early review.
The report recommends that "as far as possible no
manufacturer should be permitted to jump the gun on
his competitors," but, it states, "it may not always be
possible to do so, and industrialists must understand
that this objective cannot be allowed to interfere with
war requirements or hold back the production of needed
civilian items and so contribute to inflation and unem-
ployment."
'With reference to the return of the Armed Forces to
civilian life, the report states that demobilization will be
gradual and absorption into industry will be aided by
several factors, such as:, the giving up of war jobs by
many women; the retirement of older workers; the
increase of travel and recreation time; the return of
many younger workers to school; the resumption of
college and professional training by many now in the
services or in war industry; the renewal of many pro.
fessional and service businesses that have stopped during
the war; the starting of new enterprises; the business
involved in meeting the needs of the world the reduc-
tion in work week; the normal enforcement of child
labor laws. While acknowledging the difficulty of the
problem the report states: "considering the factors men-
tioned above the problem of demobilization is soluble if
we 6'reate the atmosphere in which private initiative and
resourcefulness--the traditional American spirit--can
again take hold."
Both the Baruch-Hancock report and the George
Committee report state without qualification that there
should be no government operation of plants to compete
,with private industry. Both agree that in the case of
synthetic rubber and other industries whose fate will
TEXAS BUSINESS REVIEW
3