General Defeats Banker

While U.S. citizens were going over the top in the latest Battle of Scrap, Washington scrapmen last week were wallowing in the muddy trough of another war of jurisdiction. After only three weeks, the common man's sidewalk-pile of old flat-irons, buggies, bumpers and bedsteads was reaching toward the 3,000,000-ton mark. But after more than three months the 5,000,000 tons of prime "heavy scrap" --old bridges, abandoned streetcar rails, etc.--that (together with industrial scrap and the yield of automobile graveyards) was counted upon to push the scrap drive beyond its 17,000,000-ton goal was getting no place fast. Reason: an RFC-WPB wrangle over who was to get it.

Source of the wrangle was that WPB is the General in the Battle of Scrap, but to get the heavy scrap it had to call in a Banker and the Banker took over the war. To make it profitable for scrap dealers to wreck steel structures, either the ceiling price on scrap had to be raised or a Government corporation had to pay the extra expense. Three months ago WPB's fumbling Conservation Division asked Jesse Jones to set up a new RFC subsidiary to act as its banker on heavy scrap. Jesse complied with alacrity--but War Materials Inc., the $500,000,000 dream corporation he set up in Pittsburgh late in August, had a green light from him to do a lot more than write checks for WPB. It was, in fact, all set to take over WPB's heavy scrap-collecting job, lock, stock & barrel.

The final irony was that WMI, which was not supposed to collect scrap, turned into a scrap-collecting organization that made WPB's own Special Projects Salvage Section look sick. At WMI's head was Pittsburgh's John M. Hopwood, a fast-moving 5 ft. 4 in. British-born industrialist (Hagan Corp.: boiler combustion-control systems, etc.). He had the ability to get aides of real stature and knowledge, the sense to ask the U.S.'s hitherto neglected junk dealers to help him. In two weeks he cleaned up Pittsburgh's old Federal Reserve Bank Building--vacant and silt-filled since the 1936 flood--for his headquarters, assembled a staff of 300 expert assistants, had the whole steel industry rooting for him. By last week, after only six weeks of life, WMI had rounded up 216 big projects.

But heavy-scrap projects bounced back and forth between WPB and WMI, whose officials found themselves spending much more time fussing over who had jurisdiction than over how to move scrap.*

Last week Donald Nelson called a halt to the mess with a blunt order to Jesse Jones to stop "duplicating" WPB's work, turn WMI into a strictly banking organ. Jesse's deputies meekly agreed. Thereupon John Hopwood and all his high-powered aides resigned from WMI. Said Hopwood in his first flush of anger: "The only thing I'm sorry about is that I called it [the old Federal Reserve Bank] the Victory Building. I should have called it the Flophouse." Steelmen echoed his anger. The General had very properly ousted the Banker. The misfortune was that the Banker had been proving a better commander than the General.

* First public blowoff came fortnight ago when New York City's volatile Park Commissioner Robert Moses, after digging up some 50,000 tons of abandoned buildings, bridges, etc., discovered that WPB was blocking WMI--with whom he had negotiated--from paying the $2,725,000 it would take to demolish them. So terrible-tempered Bob Moses resigned from his job as New York City scrap chief, and the U.S. is still the poorer by 50,000 tons of prime scrap.

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