Out from Under?

When World War II ends, U.S. industry may well find itself swamped by $75,000,000,000 in war materials. Its production lines will be clogged by thousands of Government-owned tools, mountainous war inventories. Its executive staffs will be cumbered by 1,000,000 war contracts.

Faced with this awesome burden, more & more hardheaded business men have bluntly warned Washington that unless intelligent plans are made, and made now, the avalanche of contract cancellations on demobilization day may paralyze U.S. industry. One immediate result: industry will be unable to provide the millions of new jobs the U.S. will need.

Last week Washington put its shoulders to the job of getting industry out from under. After weeks of delving, Senator Walter F. George's Postwar Committee presented a detailed blueprint of the job to be done and how to do it. Most significant (and debatable) point: Congress, not the Administration, should run the job of reconversion.

531 Bosses. The Committee recommended that a brand-new federal agency, the Office of Demobilization, be set up.

Its director would be appointed by the President. But it would be responsible to Congress, which would set its policies.

The actual spadework of unwinding the industrial machine would be done by the present procurement agencies. Until war's end, the new agency would be under OWM.

After that it would become independent except of its 531 Congressional bosses.

As part of the broad policies to be followed, the Committee recommended that: 1) war surpluses should be sold abroad, if necessary to avoid glutting the U.S. market; 2) the Federal Government relax "traditional [audit] rules on payments," interpret regulations liberally to speed contracts settlements.

Plugs for Loopholes. Senator George found his report approved by businessmen, the Army & Navy and WPB. Promptly, he and Montana's Senator James E.

Murray put in the Congressional hopper a bill to make into law their recommendations on contract termination. While the bill went over some ground already covered by Elder Statesmen Bernie Baruch and John Hancock in their standard termination clause (TIME, Jan. 17), it plugged up several big loopholes they missed. The bill would:

> Establish an Office of Contract Termination Settlement under a director appointed by the President.

> Guarantee payment by the Government of not less than 90% of prime contractors' termination claims within 30 days, pending final settlement, and assure prompt payment of subcontractors' claims.

> Free Government officials from personal liability in settlement except for fraud.

> Permit manufacturers to remove Government equipment and store it at Government expense and risk, if in the plant 30 days after contract cancellation!

Baruch v. George? Last week the downtown Washington postwar planning team of Baruch & Hancock was likewise busy along the same lines, drafting its own comprehensive report on reconversion. The team is expected to recommend that a new overall agency be established to run reconversion, but that its management should be left to the Administration. In adopting the theory that the agencies that

"wound up" the war economy should unwind it, Messrs. Baruch & Hancock have implied that overall reconversion policies can best be set by an agency acting under Presidential directive.

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