Evening star., 1940-12-01
Vital Decisions
Now Necessary
BIZ owen L. Scott.


events toward decisions that are funda-
mental In shaping national policy. The
President must decide the purpose for
which the United States is arming and
the extent to which this Nation now
should arm. He must determine the OUT
line for q new period Of national plan
ming.
The reasons why these decisions soon
will be forced is that the managers of
American industry must make vital de-
cisions of their own and the planners Of
Americas arms effort must arrive ut
their decisions concerning the shape and
the extent Of that effort. Only when the
goal is known can those responsible for
the performance Of industry and of gov
ernment determine how best to get that
performance.
Some one now must decide whether
the job to be done is to require . broad
expansion of the vital steel industry.
Somebody must decide whether the
situation is such that Government itself
should build steel plants If the industry
continues to feel that expansion Is not
necessary. The same applies to the
machine tool industry and to other in
dustries vitality related to defense. There
soon must be decision on price policy
whether Government is going to permit
prices and wages to start an upward
spiral or whether 1t is to use firm hand
to keep prices and wages under some
degree of control.
Before these decisions can be reached,
some one must decide whether the
United States is starting out on $l5,-
900 900 900 armament program or a $780,
600 900 900 program that will extend over
period of years and will tax all the
efforts of the Nation. President Roose-
welt is the one who must make up his
mind on these and other questions. He
has to decide whether the United States
is likely to get into the fight that is
spreading gradually over the world or
whether this country will continue to sit
on the sidernes.
1t was Great Britain's difficulty, and it
now is difficulty of the United States,
that government didn't quite know
where it was going. even after war had
started The British built the wrong
kind of air force and not enough of that
They also built, in part, the wrong kind
of navy and not enough of 1t. They
failed to organize their industry for. q
real productive effort. Emphasis was
upon muddling through.
The Germans took wholly different
tack, and this fact is impressing high
officials here now. Not that they want
to follow the German methods or use
the German technique. Emphatically,
they do not. But the Germans showed
what could be done with a nation very
poor in most of those things that 60 to
give q nation strength when there is an
understanding of the national goal and
planning to reach that goal.
That point is stressed in study of the
German effort made for Leon Henderson,
of this country's National Defense Com
mission. This preliminary study now is
being expanded. Already it suggests
some things that the United States needs
to know. One of these things is that the
Germans fitted their vast armament
program into the slack in the Nations
industrial system-during the war prep
aration years-without interfering with
the standard of living of the people
The German effort, although vast, was
puny by comparison with the effort the
United States could make with even less
strain If only the country knew where it
WAS going and what are to be its needs
In getting there.
The study made for Mr.. Henderson
points out the popular conception that
Hitler armed Germany by denying the
German people food and clothing and
houses and the other things that 60 to
make up standard of living. 1t also
points out that people credit Germany's
Hjalmar Schacht with some kind of
mystery plan in financing the German
effort without another wild imitation.
What actually happened, in simple
terms was this:
First, the Germans decided where they
were going and what they needed to get
there.
Second, they surveyed their resources
and gradually fitted the idle portion of
those resources into productive plan.
Third, they used government credit to
finance the use of those resources and
used the power of government to hold
prices and wages in line so that indus
try could speed up without an infia-
tionary spiral that would end in early
dislocations and disaster.
Facts and figures are offered in i'm
pressive total to show that the Germans
had both guns and butter in the arma-
ment period. The output of clothing and
furniture and food and other things that
people use increased one-third in the
period of armament. This means that
the workers had more of the things that
they want. At the same time the output
OF heavy goods-machinery and guns
and airplanes and tanks among other
things-increased three times over.
Instead OF using finance magic to
attain this result, the Germans-accord-
ing to the Defense Commission study
used the very methods that American
industry used in the 1920s to finance its
expansion and the very methods that
American Government used in the 1906
to finance the New Deal Only Ameri-
can industry built factories and provided
apartment houses and automobiles and
homes as q result of its effort and Amer
lean Government provided dams and