The Pinch

Said Defense Mobilization Boss Charles E. Wilson: "The pinch is on." With defense plants finally swinging into mass production, cuts in civilian production will increase fast.

With that, DPAdministrator Manly Fleischmann, who a few weeks before had promised civilian producers 65% of their pre-Korea supplies of steel, announced that fourth-quarter allotments will be cut to 58%. Copper, because of the strike (see NATIONAL AFFAIRS), will be cut to 54%, aluminum to 46%.

But defense orders are still not going out fast enough to make up for the new civilian cutbacks. General Motors' President Charles E. Wilson, who runs the world's biggest corporation, warned last week that he has already had to trim his work force by 30,000, and will have to cut still more unless bigger defense orders are forthcoming. Faced with a 20% cut in civilian production, G.M.'s defense production so far accounts for about 10% of its 1950 dollar-volume.

Super-Priorities. The new cuts in civilian goods mean that production of many consumer items, which have glutted the market in the summer slump, will soon fall behind demand. And with employment at a record peak of 62,630,000, and consumer income setting a new record annual rate of $252 billion, it also means a new pressure on prices, which can be broken only when industry's huge expansion program is completed.

The program itself is being seriously threatened by all the confusion arising from Fleischmann's Controlled Materials Plan. The steel industry had to have structural steel to complete its new blast furnaces and steel mills, but DPA announced that structural steel is so short that the steelmakers will get only 51% of their expansion requirements. Furthermore, the whole jet-engine program has fallen six months behind schedule for lack of steel for machine tools.

Wilson's deputies had "solved" that shortage with a lot of paper directives, e.g., super-priorities entitling machine-tool makers to 140% of their pre-Korea steel supplies.

Super-Confusion. But machine toolmakers complained last week that they still weren't getting the steel. Reason: the warehouses which have always supplied their steel are only being allotted 80% of their base-period supplies. "What they're actually getting," said Cleveland's Tell Berna, general manager of the National Machine Tool Builders Association, "is about 40%." Last week the Government's new "solution" was a super-super-priority, which gives machine toolmakers first claim on any machine tools they may need to expand. But that, as Berna pointed out, will not supply steel. And this week DPA recognized a new claimant for steel; it is considering supplying 800,000 tons for Britain's rearmament program.

In short, the expected pinch in goods has arrived just when the supply of confusion over how to mesh rearmament with the civilian economy is more abundant than ever.

. . .

"I don't want the job," Economic Stabilizer Eric Johnston recently told a Senator who had baited him for "bellyaching" about inadequate Government controls. Last week Johnston, who had agreed to take the job for only nine months in the first place, announced that he was quitting, probably next month, to resume his duties as president of the Motion Picture Association of America.

This file is automatically generated by a robot program, so reader's discretion is required.