Post-War Planning Week

Last week was post-war planning week around the U.S. convention circuit. As businessmen met to exchange ideas and forebodings, there was one encouraging overtone to their conversations: they agreed to "some sort of post-war planning" for their own industries. That meant they had at least stopped regarding a post-war collapse as inevitable, begun figuring out how it might be avoided instead.

Shipping. In San Francisco, 800 shipping moguls at the American Merchant Marine Congress sponsored by the Propeller Club found that 1,152 new vessels had been added to their fleet since their last meeting. What would they do with such a fleet after the war? The Maritime Commission's bigmouthed, ruddy-faced Captain Howard L. Vickery warned the shipowners that "this is our opportunity, and we may not have another, to plan. . . ." They liked one of his suggestions especially. "I told the British," he boomed, "we were going to take a crack at the tramp trade after the war." The proposed weapon: the U.S.'s new ugly ducklings.

As for the world's regular trade routes, which they now ply at great profit with little or no competition, the shipping men agreed that the U.S. merchant marine could and should dominate them even when the low-cost Danes, Italians, etc. return to the sea. Methods: 1) Cash reserves must be built up to pay in full for efficient new tonnage now, cushion competitive losses later. 2) Economic changes abroad must be studied in advance, and new kinds of service devised. 3) An international understanding on trade routes and tariffs is essential. So are continued U.S. Government subsidies.

Alcoa. In Philadelphia, shortage-harassed metalmen tried to key their Metal Show to the dear unborn days when they can turn from production to sales. Biggest display was by Aluminum Co. of America, now so pressed for production that most of its exhibits were small pieces of aluminum finishes, not actual finished products.

Alcoa is more than conscious of the fact that U.S. aluminum capacity will soon be six times what it was in 1939, and that one-third of it will belong to new competitors and the U.S. Government. Alcoa's own capacity will be at least 1,100,000,000 Ib. a year, instead of pre-war 327,000,000 Ib. Some 70% of its output is going into aircraft (less than 30% was so used in 1939) and Alcoa knows that won't last.

Some substitute post-war markets it already plans to invade: >An aluminum design was submitted for the Tacoma Narrows Bridge. Alcoa is glad that was not accepted, but plans to bid on many another bridge job after the war.

Other architectural uses: store fronts, window frames. Said one Alcoa man, "If anyone wants to make a million, all he has to do is bring us a perfected window frame." A mere 5% of that market, he estimated, would call for 30,000,000 Ib. of aluminum a year.

> Until defense interfered, Alcoa was busy on the cigaret foil market, claims the tobacco industry could save $500,000 a year in freight costs by using aluminum foil instead of tin. Aluminum beer kegs are already used by Ballantine and others.

Many other food, milk, drug and cosmetic containers could be made of aluminum.

> Apart from whatever is left of the aircraft industry, Alcoa plans to expand its railroad passenger car market, enter the hopper car and acid-carrying tank car field, make bus, truck and trailer bodies too.

Alcoa plans to sell 1,000,000 Ib. of aluminum yearly for shoe eyelets; more in typewriter parts, hair curlers, license plates, etc. etc.

But at what price all these post-war markets would add up to 1,100,000,000 Ib. a year, not even Alcoa knew last week.

General Electric. In Manhattan, General Electric's Commercial Engineering Manager David C. Prince* announced the establishment of a G.E. post-war planning committee. Mr. Prince does not believe that G.E. will have to shut down its expanded capacity after the war. (A large subcontractor, G.E. has expanded only 20%.) By January he expects to have post-war sales and capacity estimates from every G.E. department. His committee will then offset one department's capacity surplus with another's deficit, start planning at once for the use of any net surplus.

If every business would do this, he believes, the initial assumption upon which his plans are based--that defense employment levels can be permanently maintained--will become a fact.

Round Table. This week, many such post-war hopes, fears and plans were buttoned up in the nearest thing to an overall program yet. FORTUNE'S November issue revealed the "area of agreement" on "problems of the post-war transition" between 24 leaders in business, Government, labor and agriculture, who met for the Tenth FORTUNE Round Table. Their fundamental agreement: "That the U.S. can find jobs for its defense workers in the post-war period within the framework of the American system, if the country begins to lay plans at once." When the war is over, a majority of the Round Table favored 1) tapering off of war orders, with dismissal wages to aid reemployment; 2) a Government agency to supervise "economic demobilization," continuing as long as necessary OPM's and OPA's supply and price controls. Acting Bureau, of Labor Statistics Commissioner A. Ford Hinrichs described this agency's job as "priorities continued literally in reverse . . . favoring everything other than those [wartime] contracts." The Round Table also agreed with Defense Housing Coordinator Charles F. Palmer that housing is the best and biggest bet for post-war investment and employment.

In a longer perspective, they also saw reason for hope in new technological opportunities and in underdeveloped foreign countries. But they agreed that no postwar world would work unless inflation is ruled out now, the tax system revamped to encourage post-war venture capital, industrial research specifically encouraged (by Government grants). Most important need of all: "integration of the U.S. economic system . . . with that of the outside world," with the U.S. taking the lead in long-term financing, currency stabilization and lowering trade barriers.

The Round Table's favorite specific idea was advanced by G.E.'s Planner Prince: a "bank" of new inventions to be built up by U.S. corporations now, released after the war through a "national clearinghouse." Less popular were the views of a refugee French aluminum trust chairman who is now with the Brookings Institution.

Pinch-faced, monocled Louis Marlio, while he saw great hopes for aluminum, saw "no foreseeable peacetime market" for magnesium, wanted these brave new plants scrapped. Mr. Marlio was also discouraging on the subject of post-war "national [industry] councils" to be set up for planning purposes. "I have seen the same thing in Italy," he said. "At the beginning . . . the scheme was good and very liberal . . . but after two years the Government representative was head of the industry."

*This week Mr. Prince became one of G.E.'s five new vice presidents. The others: Walter R. G. Baker, Chester H. Lang, Elmer D. Spicer, Harry A. Winne.

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