Santa Claus Has Gone

The U.S. heard some plain talk last week on reconversion. It came from War Mobilization Director James F. Byrnes in a speech before the Academy of Political Science in Manhattan. His most significant point: the harsh realities are at hand; big war plants are going to close down; in the next 20 months war production will be cut back some $16,750,000,000 at least; another $1,402,000,000 will be slashed from the spare parts programs of the Army & Navy by the end of this year. Then Assistant President Byrnes warned:

"The Government must take a firm stand and close plants no longer needed in the war effort. From civic groups and from men in public office, there will come the cry: 'Woodman, spare that plant!' But we must realize that Santa Claus has gone."

Up Benefits. Then Jimmy Byrnes came to grips with the question of dismissal pay for war workers. The Administration has pointedly ignored labor's demands for pay to tide over the men suddenly washed out of war jobs. The Baruch-Hancock report (TIME, Feb. 28) had likewise sidestepped the issue. Now Jimmy Byrnes flatly opposed such pay. He objected that "the dismissal wage would bear no exact relation to the needs of the workers. Some who might quickly find new jobs would get more than they needed, while others would get less." He recognized that there is certain to be unemployment during reconversion, and noted: "Neither industry nor Government will be able to resist the demand for dismissal pay unless a better alternative is offered."

The Byrnes alternative: a boost in state unemployment benefits, with the extra cost to be paid for by the Government. To make this workable, Congress would have to pass a "federal demobilization law." This would: 1) scale benefits according to previous earnings, with an additional allowance for dependents; 2) cut to a minimum the present period of waiting for the money; 3) eliminate restrictions on the length of time such benefits are now payable. Such a system, he said, might be instituted after the collapse of Germany. He claimed such a law would give "private enterprise the assurance that its efforts to expand after the war will not be frustrated ... by unemployment and falling purchasing power."

Down Taxes. Jimmy Byrnes, praising the Baruch-Hancock report, promised U.S. industry that as much of it as possible would be made effective by Presidential order, pending Congressional action. But on the question of taxes, which many a U.S. businessman considers the No. 1 postwar problem, Jimmy Byrnes was vague.

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