Evening star., 1941-12-21
Change 70 War
Basis Speeded
During Week
Scoring Arms Needs
To Force New Cuts
In Non-Essentiols

Special Dispatch to The Star.
NEW YORK, Dec. 2o.-The
change over to an all-out war econ
omy proceeded grimly and briskly
both last week and this week, ac-
cording TO Business Week today.
Orders from Washington, the
Army and the Navy, it is stated,
were directed toward % curtailing
all uses OF critical materials which
do not directly contribute to the
building up of Americas defenses
and offenses and (2) protecting
civilians from potential air raids on
either coast.
Here. summarily, is fiaShback OF
some Of the things that happened:
Passenger car production quotas
were further reduced-to Is per cent
of January. l941, levels; the Office
of Production Management ordered
manufacturers of stoves to cut use
of iron and steel by 35 per cent;
pending the taking of an inventory,
all automobile tire sales were
banned; the use of aviation gasoline
was restricted; 10 airplanes were
diverted from civilian transport
routes TO the Army for special mis-
sion. o. P. M. requested steel COM
panies TO speed up expansion of new
plants, and the Rose Bowl football
game (which definitely comes under
! the head of big business was trans
ferred inland-from the Pacific
Coast TO Durham, N. c.
Pattern Is Clear.
From now on, business is going TO
| be moving in two directions at once.
| Production and distribution aSsoct-
| ated with the war effort will expand
-airplanes, tanks. war and mer-
chant ships, guns and ammunition,
etc On the other hand, output OF
/ goods which do not directly en-
/ hance the country's military strength
and which consume critical mate
rial is bound TO be curtailed. Already
ample evidence is at hand: auto
mobiles. refrigerators, stoves, resi-
7 UtIllldl
plements, tin cans, and so on.
On balance. however. the total
volume of business will be up. AS
indicated by Business Week last
week. production during 1912 may
increase as high as Is per cent over
this year And though industrial
gears may not mesh with perfect
smoothneSs in the peace-to-war pro-
duction transition, aggregate en-
ployment throughout the Nation will
tend to expand fairly steadily.
That applies even though passen-
ger car output is eliminated alto
gether. For remember this. once an
automobile company tor some other
Woodworking or assembly COM
pany) is forced out of its regular line
of business, the pressure to find other
uses for its plant and equipment be-
comes a matter Of extinction or sur
vival Businessmen know only too
well that depreciation has a way Of
going on relentlessly whether plants
are idle or working.
Price Controls Tightened.
In the near future price control Is
bound TO assume ascending impor-
tance in business planning.
Only this week Price Admins
traitor Henderson put a ceiling on
iron and steel quotations of whole
sales and jobbers Heretofore.
United States Steel. Bethlehem and
other manufacturers had to sell at
fixed levels. But on resale, steel
markupS were not restricted.
The net result was that many con-
sumers, looking at the constant level
OF established quotations, wondered
why their costs were going up-sl-
most out of hand. 1t becomes clear
that establishing base prices Is not
enough,
The Office of Price Administra-
ton must follow through TO see that
percentage markups are not raised to
take advantage of the scarcity de-
mand Along with price control.
Washington must tackle the problem
Of civilian rationing.
obviously, II the producuon OF su-
tomobiles or tires is restricted below
demand. then some wav of allocat-
ing the available output to civilians
becomes both exigent and urgent.
Ways must be found to police the
price and rationing structure-to
prevent bonuses, or bribes to dealers.
We are shifting from price econ
omy, in which the man who can pay
the price gets what he wants. TO
rationing economy. AS conse-
quence, workers IN war industries
may become the economic elite. II
an airplane worker needs new tire
to get back and forth to work. he'll
have to get it. or the war effort will
be slowed. Such a standard NAV not
apply, say. to the executive in non-
defense industry or TO the well-tO-do
matron who has been accustomed to
shopping by limousine.