Palace Revolution

The WPB offices seethed and simmered. Down the halls went whispers of revolt and counter-revolt. WPB was in the midst of a palace revolution--which would either save the day or hasten the failure.

Back to the grinding struggle, after a week's rest in the Adirondacks, went Donald Nelson, the patient, plodding ex-Sears, Roebuck vice president now under fire for failing to be Production Boss in fact as well as in title. He had gone away dog-tired, his nerves deckle-edged, and almost willing to give in and give up. Now the weary wrinkles had left his brown eyes; the sag was gone from his padded cheeks; he was as fighting mad as a peaceable man can get. His friends in WPB passed word around: a new Nelson had returned for a fight to the finish.

He got his chance to fight sooner than he expected. On the second day that he walked into his office he landed smack in the middle of one of the senseless, directionless, back-biting family quarrels that have racked WPB from the start.

A front-page story in that morning's Washington Post bore a shocking headline: INEFFICIENCY, WASTE LAID TO WPB's IRON, STEEL BRANCH. Said the Post scoop: a young, $5,600-a-year WPB consultant named Frederick I. Libbey was cooking up a report which would blister the WPB's Iron & Steel Branch; after consultation around the country with steel experts he had found gross mismanagement in Washington; he was convinced the steel branch experts were second-rate ex-salesmen palmed off on the Government by steel companies who don't need salesmen any more. Only a major shake-up could save the day, said the Libbey story.

No responsible WPB official had seen the Libbey report; but it had "leaked" to the Post. There was doubtless some truth in it. No one has yet made a satisfactory explanation why the U.S., with half the world's steel capacity, is bogged in a steel "shortage." But the cure was not in intramural bickering in WPB's big undisciplined mob. A more likely solution had already been laid on Nelson's desk by big (6 ft. 3) hustling Reese Taylor, steel division chief: he wants a quota plan patterned after Bernard Baruch's World War I steel controls (TIME, Aug. 24).

WPB's iron & steel men took one look at the Post story, blew up. In groups and singly, dozens walked in to Reese Taylor and tossed resignations on his desk. They were in revolt. Taylor could not answer their angry argument that discipline was impossible if any WPB hireling could publicly indict everybody else. Taylor, too, was sore. He stomped off to Nelson.

Taylor got quick action from the boss. Nelson at once disowned the report, ordered Libbey fired for talking out of turn, gathered the whole steel branch around him to promise no more monkeyshines. Never before had Nelson moved so quickly.

The C.I.O. members of WPB's labor advisory committee promptly staged a counter-revolt, charging that their friend Libbey was fired "for telling the truth," that "vested interests" had blocked the steel program, that the interests were "given aid and comfort by certain dollar-a-year men." But everyone else, including Frederick Libbey, seemed pleased. Said he, as he started to look for a new job:

"If what I have said made Mr. Nelson mad enough to clear out the deadwood, my head is a cheap price to pay for it. I would gladly give what little neck I have left to see the boss up to his knees in splinters and still swinging."

Nelson kept swinging for the rest of the week. When newsmen asked if he really meant to get and stay hard-boiled this time, he pounded his desk so hard that the inkwells jumped. Shouted Donald Nelson: "I am going to get tough enough to get this job done, and the job will be done. You can be sure of that. From now on anybody who crosses my path is going to have his head taken off."

He made some big decisions--or what seemed to be decisions at the time. He decided to adopt Reese Taylor's centralized plan to allocate steel--and to apply it to other raw materials as well. He issued orders taking away the blank-check power that Army & Navy field agents all over the country now have over priorities --a big factor in today's hopeless confusion. He insisted he would not back down, because of Army & Navy opposition, on his promise that Henry Kaiser could go ahead with cargo plane construction.

He decided--but by week's end, except for firing Libbey and bucking the Army on field agents' priorities, he had not yet acted. Washington watched closely, to see whether Nelson's new toughness was in the biceps or larynx. WPB's hour was late. The problems were multifold and urgent.

With a few exceptions, WPB has never yet enlisted the real No. 1 men of U.S. industry, as Baruch's Industries Board did in World War I. Many of its staff members failed to produce on the old National Defense Advisory Commission, on OPM and SPAB--but still hold similar jobs under new titles. One high WPB official admitted last week: "You could take the entire WPB personnel--stenographers, clerks and brass hats--line them up single file, fire every other one indiscriminately, and come out with a better organization."

A basic fault in war production to date has been that the Army & Navy have insisted on ordering everything, from battleships to pistol cartridges, that might prove useful in any kind of a war anywhere on the face of the earth. No Production Boss can balance production and avoid shortages unless he persuades--or forces--the military strategists to adopt a specific, limited program calling for specific types of material. Thus far Nelson has lost practically every round with the Army & Navy, which in general still insist on building everything at once. And this fundamental error overstrains production from raw materials up.

So Washington watched and waited; at week's end began to wonder. At Donald Nelson's Saturday press conference, much of his anger seemed to have worn off. Asked a reporter: "You still mad, Don?" Nelson's surprised eyebrows lifted a notch.

"I mean, are you going to get tough?"

Nelson shrugged, grinned a little, said: "I'll leave that for you to decide."

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