Where Are the Goods?

The U.S. is well through the slough of reconversion. So said Civilian Production Administrator John D. Small last week. In his report, CPAster Small said that the low point in the shift from war to peace production had been passed in September. Said he: "The outstanding feature ... is the small amount of ... disemployment outside the automobile industry."

At the low point, general industrial production fell about 40% below the wartime rate. But employment in the "reconversion" industries was still 50% higher than it had been in 1939.

From now on, said Small, employment will steadily increase. Fifty-five key industries estimate that by next June their production will be up to 78.6% of this year's first quarter and three times their 1939 average. This was not quite so good as it looked, considering the rise in the price level since 1939. Still, manufacturers expected employment to climb to over 90% of the wartime level by June.

All of these rosy forecasts, warned Small, were made on the assumption that "production would not be seriously interrupted by external causes." Such "external causes" as strikes and price squabbles had already hit auto production so hard that it may not reach its peak until late 1946. Then, Small estimates that it will employ 569,000 workers (twice the 1939 level).

All this begged a big question: if reconversion was going so smoothly, why was there still so little to buy? One answer was that some articles were being justifiably held off the market. Example: one refrigerator manufacturer with 1,900 dealers is stacking up his products until he gets 1,900 of them--one for each dealer.

But, charged Small, other manufacturers are simply waiting for a better tax climate. Said he: they are holding up shipments of finished products until the excess-profits tax is repealed on Jan. 1.

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