Needed: A Program

Inland Steel's President Clarence Randall rose before his stockholders in Chicago and raised a question which has been bothering many a businessman about the U.S. rearmament program. "Is what we are doing well conceived and well executed?" asked Randall. "Or are we going about it hit or miss?"

In Washington last week, the evidence was plain: the greatest country in the world is still going about it hit or miss. The confusion is so great that even Washington's own planners are worried. Bewildering, often contradictory directives pour out, without relation to each other or their combined impact on the economy. There is no master blueprint with which to fit all the pieces together or determine how big a burden the economy can stand. Belatedly, with a new cabalistic word ("programing"), the planners are now trying to draw a blueprint. In every bureau, secretaries chirp: "Sorry, the Administrator is in a programing session."

Off Again, On Again. By last week it was high time for programing. Already, half of U.S. steel production was under DO (Defense Order) priority, yet the all-important U.S. aircraft industry was running short of special-alloy steels. And while the main emphasis had been on new plant expansion, there had been little check on whether it was for arms or unnecessary civilian goods. As a result, structural steel had grown so short that new restrictions had to be placed last week on residential building and industrial expansion. Example: the petroleum industry was told that it would get no more tax write-offs for expansion.

The lack of correlation between expansion and controls had snarled up the rubber industry. Although everybody knew that synthetic production was rising swiftly, NPA ordered a 10% cut in civilian rubber consumption only last January. Last week NPA abruptly reversed itself, canceled the cut. Similarly, NPA banned the use of aluminum windows, only to discover last week that aluminum windows were needed for defense plants. Again, NPA reversed itself.

Only two weeks ago, Economic Stabilizer Eric Johnston outlawed "consumer subsidies." This week, with angry cattlemen threatening to cut beef production because of price controls, Mobilization Chief Charles Wilson asked Congress for authority to pay subsidies to cattle growers.

On the Carpet. Nothing was more thoroughly snarled than the vital machine-tool industry. Automakers, with $5 billion in rearmament contracts, could not get the machine tools to build the arms. Reason: NPA had failed to provide priorities on materials for machine tools. And though machine tools have little bearing on consumer costs, OPS had thrown the industry out of joint by foolishly slapping on price controls. The controls themselves, ignoring the industry's long gap between orders and delivery, in some cases set ceilings on the basis of orders taken as long as three years ago.

Moreover, uncoordinated buying by rival Government agencies was aggravating shortages and bidding up prices. Army Ordnance, for example, had demanded 90-day delivery on 6,000,000 gallons of paint --a full year's supply. This sort of greediness so alarmed President Truman that last week he called his 21 top military and production chiefs on the carpet, read them a stern lecture on how to buy. Accordingly, the Munitions Board put out a new primer for buying agencies to 1) space their orders instead of placing them in one lump, 2) stop hoarding goods.

All the strains and confusion did not mean that the arms program was hopelessly bogged down. But it does mean that as arms production increases--and a greater strain is put on the economy--the program may break down if an overall plan is not laid down and made effective.

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