War Babies, Care & Feeding Of

How should war babies be brought up? Last week an official proposal was made for the future of one of the most important: the $700 million synthetic-rubber industry, all Government owned.

Should it be operated by the Government? Should it be turned loose to live or die? Should it be kept alive in an incubator by tariff protection? An interdepartmental committee, headed by popular red-faced William L. Batt, wartime rubber czar, tried to answer these questions. Its answer to all of them: No. The Batt committee hoped to turn the war baby into a healthy, unsubsidized and profit-making private industry.

The committee's criterion of a satisfactory answer was that the U.S. should never again be caught as desperately short of rubber as it was in World War II. For the sake of efficiency the committee ruled out Government ownership; proposed sale of the "basic" butadiene and copolymer plants to private industry. These are the main lot of low-cost producing units with a capacity of 450,000 tons a year, about two-thirds prewar U.S. rubber consumption. "Fringe" plants (not planned as permanent) are already being disposed of.

Dissolving the Pool. To avoid competition between Government and privately owned plants, sale of the basic plants would be postponed until sometime in 1947, after the acute rubber shortage is past. Then, so far as possible, they would be sold all at once and to competitive companies.

At the same time that the basic plants are sold the patent pool under which the Government -built plants are now cross-licensed would be dissolved in order to give the new owners incentive for technological competition.

Would such a privately owned synthetic industry continue to grow and improve? The committee hoped so, but as an aid it favored 1) a subsidy on rubber articles which contained synthetic, and 2) specifications requiring the use of synthetic in all essential articles in order to improve U.S. know-how for emergencies.

Actually the committee recommended no immediate legislation for the synthetic industry except the creation of a "rubber supervisory body" to keep an eye on developments. For, said the committee "it is quite possible that cost and quality improvements may be such as to enable synthetic rubber to compete in a free market with natural rubber after the latter is again in ample supply."

This was no mere hope. The present price of synthetic rubber, 18 1/2-c- a lb., is about the Government's average cost of production in its high-and low-cost plants. Some of the basic plants have production costs as low as 13-c- a lb. If this cost can be further reduced and better synthetics gradually developed private industry should have a good chance of making money even when natural rubber comes down from its present abnormal high of 23 1/2-c-.

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