Evening star. [volume] (Washington, D.C.) 1854-1972, 1940-10-21
Tool Shortage Seen
As Threat 10 j. ).
Factory Output
Meeting Defense Needs
And Normal Demand
Is Big Problem
BY the Associated Press.

IS Dig rIoDIem
By the Associated Press.
NEW YORK. Oct. 21.-Industrial
leaders have run into the first
strategic "bottleneck" Of the de-
Tense program-machine tools-in
their effort to arm the Nation
speedily and at the same time sup
ply the civilian market with the
gadgets and comforts of machine
age living.
Whether industry can do both jobs
without skimping on production and
normal progress was a question
brought up last week in a gathering
here of automobile manufacturers.
normal times.
Reminder of an impending tool
shortage came from no less an au-
| thority than William S. Knudsen,
head of the production division Of
the National Advisory Defense Com
mission and former president OF
General Motors.
Knudsen said tool makers, Swamped
with orders for defense plants, were
sold out at least a year ahead.
| From Knudsen's remarks. many
inferred defense interference with
business in the initial stages, any
way, would show up mainly in mass
production and young industries de-
pendent upon modern machine
tools.
Model Changes Curbed.
The automobile industry, the Ma
tons No. l exhibit of mass output
technique, buys large quantities of
;Jo.s and dies annually for model
Chanocoi ars. Model changes next
year may he fewer than usual, 1t
was acknowledged in trade circles,
but inoustrialists foresaw nothing to
warrant following the footsteps OF
England, where manufacture of cars
for civilian use has ceased.
Outside tools, in fact, the vast in
dustrial capacity of the United
States seemed to be taking both
defense orders and expanding civ
ilian requirements in its stride to-
ward production figures.
The climb in manufacturing in
dices since the United States
multi billion defense spending last
spring still has left margin Of
surplus in manpower, raw materials
and money
AS stressed by knudsen and
others, however, Uncle Sans fedg-
ling war industry is only in the
"tooling up" phase. The big call
for men and raw materials is eX-
/ pected to come when new aircraft.
motor, tank, munitions and powder
plants have acquired the tools and
get into production.
/ Total defense, it was obvious,
has become a battle for machines.
For manufacture of an artillery
shell, experts estimated, some 1850
guages and tools are require in mass
machine production.
Anticipating heavier demand for
raw and semi-finished materials
when the defense program emerges
from the "tooling-up" phase into
big-scale production, purchasing
agents continued to build up reserve
stocks.
Inventories Accumulated.
Heavy buying in steel, textiles and
other markets last week was traced
in part to accumulation Of inven-
torres. Actual defense requirements,
although increasing, were said to &C
count for only a small portion Of
the capacity operations at many
| steel mills.
Some business analysts forecast
most industries would stay at high
levels for many months, certainly
while British purchases supplement
| the accelerating arms expenditures
of the United States. They pointed
out many new war plants entering
construction would not go into OPP
Grafton until late next year and in
1912.
Except for the tool shortage, some
said, general expansion Of peace
time industry likewise might be ex-
pected as factory pay rolls increase
and put added purchasing power
into the retail markets.
Despite the rise Of various bust
ness induces to new peaks since 1929,
Wall Street security markets re-
manned inert. Stocks and bonds on
the average barely came out ahead
on the week.
Brokers explained the neglect Of
securities partly in terms of higher
Federal taxes. They called atten-
ton to a number of third-quarter
corporate statements, showing
heavier taxes had cut into profits.
After allowing for tax boosts re-
Gently enacted by Congress, some
companies in the third quarter got
no profit benefits out of a larger
volume of sales.
In addition, brokers said. specu-
lators continued to operate cautious
ly, waiting for the next move in the
European war and for the outcome
of the political race at home. AS
political debate warmed up, there
| were manv SUMMONS of intense