Evening star., 1940-12-31

businessmen have deep-Seateo
fear that the system of private en-
terprise is to be greatly impaired oy
the New Deal, with war as an excuse
and that a system of collectlvlsm OF
state capitalism is to be substituted
not by the deliberate intent OF the
President. but through the machlna-
tionS of those leaders and groups
who often influence him on national
policies. Here is the passage in the
Presidents address that has excited
widespread comment in industrial
circles:
"Our defense efforts must not be
blocked by those who fear the future
consequences of surplus plant capac-
ity. The possible consequences OF
failure of our defense efforts now
are much more to be feared.
After the present needs of our
defense are past, proper handling
Of the country's peacetlme needs
will require all of the new productive
capacity-if not still more. No pes
simistic policy about the future OF
America shall delay the immediate
expansion of those industries essen
tial to defense. We need them
The Steel Case AprOpOs.
The foregoing looks innocent
enough, but back of it is an inside
story of far-reaching significance
1t is a passing reference to the fight
that has been going on behind the
scenes between the New Dealers, on
the one hand, and the executives OF
the steel industry on the other. The
steelmen say there is plenty OF
capacity to meet defense needs and
that if there isn't enough whatever
is necessary can be diverted from
customary uses. The steel people re-
call with pain what happened after
the last war when they were left
with a surplus steel capacity, and
this, in turn, drove men into unem-
ployment, for which the steel eXecu-
tives were blamed. The bitter de-
nunciation by President Roosevelt
of American businessmen for having
expanded in the 20S is still ringing
in the ears of the industrialists of
America and now they are told that
they should expand, no matter what
it costs.
But steel companies and other
industrial companies do not like to
readjust their capital structures
till they see the actual demand in
the form of orders and contracts.
They hesitate to ask their stock
holders to put up more money on
the bet that more orders will come.
So the answer customarily made
is that private capital will not wish
to take such a risk, whereupon the
Government spokesmen come back
promptly and say, Fine, we'll get
the Government to furnish the
capital"
Now, 1t will be asked, what could
be better? The Government takes
the risk of supplying the capital,
the new plants are built and the
war needs are met. Unfortunately
this is not the end OF, but the be-
ginning of the dilemma. There hap
pens to be an unwritten law-for
Congress never sanctioned it-that
whenever Government money is
loaned, stlpulations can be made
to bring about changes in manage
ment or unionization. The Ma
tional Labor Relations Board has
tried to use its power as club over
the industriaiSts whenever they
receive loans. Likewise, the labor
leaders are now trying to get the
defense contracts awarded on a
basis of whether the companies
concerned accept their ideas of
unionization.
Fear U. S. Capital Aid.
There is a kind of proflteering in
union dues nowadays quite ana
LOCUS to the profiteering of stock
holders and managers which has
been rightly condemned in war time.
But the drive to increase union
memberships by using the political
influence welded by the labor
unions with the New Dead has
finally reached the point where,
whether they express it openly or
not, industrial managers of many
American enterprises hesitate to &C
cept Government capital for fear
they are putting their heads in a
moose.
rrl,a - Soare of Tho Ar,,,,, onI tho
Navy have thus far resisted the
unionization propaganda and the
attempt to engage in labor profiteer-
ing. but little by little these Army
and Navy officers will be whitfield
down. Already one labor Spokes-
man has announced that it is time
to "democratize the Navy" and
there IS all sorts of propaganda
floating around here against the
military and naval men for daring
to speak out against the labor re-
strictionS that are hurting defense
Admiral Spear Of the Navy procure
ment division, who criticized the
Walsh h-Healey law on public con-
tracts, was promptly condemned
by the New Dealers for daring to
criticize labor policies that were
interfering with national defense.
just now there is another type
of propaganda in the making II
started with the so-called Reuther
plan to produce 500 airplanes q
day. The plan has been widely
publicized. 1t calls for joint man.
agement of the airplane industry
by representatives of the workers
as well as the owners. This collec-
Twist aspect naturally has not
aroused mus enthusiasm among
the automobile executives, who only
a year ago had to fight a strike in
which one of the principal demands
for the right to control production
schedules.
Excuse for Lack of Enthusiasm.
There is nothing new in the
proposal to make 500 planes a day
Henry Ford not long ago offered
TO make 1000 a day. Undoubtedly