Baruch Program

Because Elder Statesman Bernard Baruch has an almost mystic reputation as the Man Who Can Solve Anything, the Baruch Report issued last week was widely and wrongly billed as a complete postwar blueprint. This impression was reinforced by its sheer bulk: 120 mimeographed pages, 30,000 words, one pound.

But as Baruch himself put it: "I didn't cover all the world." The report is aimed at one target: to make sure that the short-term complications involved in converting U.S. industry to peace do not make the long-term job of winning the peace itself more difficult--or even impossible.

Adventure in Prosperity. The prime feature of the Baruch Report is its solid optimism". The shrewd oldster and his white-thatched "junior partner," John Milton Hancock, 61, said bluntly: "There is no need for a postwar depression." Far from cringing at the unknown terrors of the future, the optimistic Ancients buoyantly proclaimed that the conversion job, if competently managed, "should be an adventure in prosperity." Cried Author Baruch to Scripps-Howard's Henry J. Taylor: "If the program carries the scream of the American eagle, it is because I feel that the old bird in its own right deserves first attention in the world aviary."

The Baruch optimism is based on one fundamental proposition--a major premise, which dominates the entire report. This is that demobilization can be done "if we create the atmosphere in which private initiative and resourcefulness--the traditional American spirit--can again take hold."

Triple Entente. Most significantly, the next major feature of the report is that it repeatedly suggests that its recommendations take effect through the law--i.e., that Congress should define and regulate the functions and powers of the reconversion agencies. The whole tone of the report is such as to encourage Congress in opposing the usual Administration practice of asking blank-check powers and appropriations for vaguely denned agencies. The economic destiny of the U.S. is envisioned as being not in the hands of the President (who released the report with a perfunctory nod), but in a Triple Entente: President, Congress, People.

Only two new jobs were recommended, both to fit under Baruch's own boss, James F. Byrnes, Office of War Mobilization director. One: a Work Director, to apply "a single unforgetful mind" to what Baruch called "the human problem" of reconditioning and reemploying servicemen and war workers. Two: a Surplus Property

Administrator, to handle the unloading of the umpteen-billions-worth of ships, shoes and sealing wax -- and the plants that make them -- which the Government will own at war's end.

This week, just three days after Baruch submitted his report, Jimmy Byrnes dis closed that both jobs had been filled, by Executive order. Ex-Cotton King Will Clayton, 64, of Houston, resigned as Man Friday to Jesse Jones, became Sur plus Property Administrator.

The second job had been set up to be especially hard to fill: Baruch specifically called for a man "of such outstanding caliber as to command the immediate confidence of the country" -- in short, neither a political hack, a bureaucrat, nor one of the New Deal's famed "tame capitalists." But the President found his man in a hurry. The new Retraining & Reemployment ("Work") Director is the 64-year-old Veterans Administrator, Briga dier General Frank Thomas Hines, who has been bureau chief for veterans affairs in Washington ever since Warren G. Harding gave him the job in 1923.

Something less than a prime national figure, General Hines, nonetheless, knows a lot about ex-soldiers: He is himself a veteran dating back to the Spanish war (when he served with the First Utah Volunteer Artillery in the Philippines). More publicized than this general in recent years is New York's labor relations expert Anna Rosenberg (TIME, Sept. 27), who is slated to be his No. 1 assistant.

Panic by Quibbling. Nearest thing to a blueprint in the report is its section on how terminated war contracts should be paid for. It presented an eight-point "Financial Kit" that gave the contractor everything up to & including the kitchen sink. Main items in the Kit: > Immediate 100% payment on 1) completed articles, 2) "factual" costs such as direct labor and materials on uncompleted parts of contracts, 3) subcontracts. > Up to 90% payment on all other estimated costs, plus interest on all termination claims held up for further investigation.

> Government-guaranteed bank loans, or direct Government loans if the banks hold back, or special "expedited settlements" for any hardship cases that might still be left over.

The report also came out against any Government audit of war contracts after the contracting agency has terminated them, except where there is indication of fraud. Baruch insisted that too many complex attempts to safeguard the taxpayer's dollar would inevitably "quibble the nation into a panic."

The Inevitable Surplus. To the Surplus Property Administrator the report recommended a set of principles that should appeal to any businessman who believes that expanded production is his only long-term postwar hope. The recommendations :

> The Administrator must operate "in a goldfish bowl," reporting all deals fully. To prevent monopolistic skulduggery, the Justice Department should sit on the Surplus Property Policy Board. > The Administrator must not allow fire sales to disrupt the existing cost structure of private enterprise, nor subsidize one economic area against another. He should also be ready to take "heavy losses" on high-cost properties.

> Surpluses should be sold through normal business channels if possible; Government plants should be taken out of competition with private industry as quickly as possible. And the services should be pressed to cut back production now, wherever obvious surpluses begin to pile up.

Approach to X-Day. Another main Baruch recommendation was on war-contract cancellation policy. The chief suggestion: that WPB and the services prepare an "X-Day Reconversion Plan" ("X-Day" being the day Germany folds up) that would establish 1) what civilian production should start first, 2) what industries and plants should get in on the ground floor.

As guidance, the report advised: 1) "As far as possible no manufacturer should be permitted to jump the gun on his competitors" but 2) "this objective cannot be . allowed to ... hold back the production of needed civilian items and so to contribute to inflation and unemployment." Also briefly recommended as aids in returning to peacetime production: > A postwar tax law to assure industry in advance that sky-high war taxes will not be continued.

> "Planning, designing and engineering of worth-while -not simply make-work--public works."

Promoting the Obvious. To fine-point students, or those economists who are well along on devising long-term rationales for the U.S. economy, the report seemed disappointingly obvious. This, too, could be construed as a triumph for the Ba-ruchian wisdom, which is as platitudinous as most wisdom in that it concentrates on the all-too-often-forgotten obvious things, which are so often the fundamentals. As Clausewitz contributed to military science such statements as "the overthrow of the Enemy [is] the aim of military action," so Messrs. Baruch & Hancock advise the U.S.: "Transition from a war economy to that of peace is not easy; nothing worth-while is."

But with every special interest in & out of Government demanding particulars, Messrs. Baruch & Hancock took a cold look at policy problems in general--and drew obvious conclusions. The great service that the report performed for the nation was that it dumped a lot of particular problems into one package and suggested some common-sense ways to lick them before they could lick the nation.

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