Evening star., 1942-07-19
Russian Losses
Intensity u. 5.
War Needs
Materials to Dictate
How Far Production
Con Be Raised
Special Dispatch 10 The Star.

NEW YORK, July 18-Business
had a plentiful budget of domestic
news to digest this week what with
the final House Ways and Means
version Of the tax bill, continuing
Congressional squabbles over Once
of Price Administration funds, and
the National War Labor Boards
showdown in the Little Steel case.
But most far-reaching for the out
look, says Business Week In today's
issue. are Hitler's spectacular sue
cesses In the Russian campaign.
That puts the emphasis right back
on American production-produc-
ton now, of weapons TO help halt
current Axis drives The threat Is
that Germany will add Russian In
dustry. Caucasian oil. and Japanese
raw materials to It's existing mighty
war potential.
Great as those gains would be, the
magazine states, our own production
could yet more than match them.
But-and this Is what we must rec
ognize-they cannot be discounted
by comparison with some fantastic
food of American arms envisioned
for some far distant date. There u
limit even to what we can do.
Nelson Sees Limit.
Donald Nelson predicts that our
factory war output will rise from 45
billion dollars this year-the rate We
are running at right now--to IS
billion dollars in 1943. Conceivably,
dollar value might soar above that,
if costs were inflated by higher
prices or by inefficient waste OF
man-hours. ~
But In physical terms, II think
that is just about the limit that our
economy can stand. The materials
needed to get production substan-
TALLY higher simply are not avail.
able" he adds.
On the fabricatnig end, industry's
achievements have exceeded expec-
tations. That's not only because Of
rapid conversion of automobile and
appliance factories. Aircraft pro-
ducers have speeded operations
enormously with powered conveyor
lines, and our merchant shipbuild-
ing capacity has scared as result
of prefabrication and assembly
methods.
Indeed, Admiral Vickery said last
week that ships totaling 10000 900
deadweight tons carrying capacity
could be turned OF the existing
ways in 1943. The hitch is the sup
ply of materials. That many ships
would require almost haff Of the
nations steel plate capacity.
Indeed, with our production Of
metals, lumber, textile dbers and
other materials running close to Ca
pacity for some time past, the real
question is: How can we boost arms
output 67 per cent?
Capacity to Increase.
Only part can come from further
civilian curtailment. Already in
June, the Federal Reserve Board re-
ports, half our industrial production
and 10 per cent Of our durable man
ufacturers were going into war. Part
OF the arms increase will come from
expansion Of aluminium, magnesium.
electric steel and other capacity al
ready under way. An additional life
will be derived from increased utii-
zation Of scrap materials, for which
collection drives will have to be In
tensified.
And. supplies now going into In
ventories will have to move into I'M
ished products. This stockpiling Of
materials has been taking two forms
The wasteful process, by which COM
panies with high priority ratings
ordered more than necessary for i'm
mediate needs, is already being con-
trolled and eliminated under the
PURP allocations system.
Last week the War Production
Board freed for war industries in
ventories of critical materials total
ing several hundred thousand tons
which had previously been frozen to
prevent their use by civilian manu-
| facturers.
But we have also had to I'LL up the
pipelines supplying the manufacture
| ing system. Arms production re-
quires that a considerably larger
quantity of goods be 'in process"
than would a comparable level of
peacetime output. Soon this stock
ing-up will be completed, and cur
rent output Of steel and other COM
modities will flow directly into hnal
fabrication.
On our total industrial activity,
the net effect will be a rise. The
Business Week Index. now slightly
above the l80 mark, will surely ad-
vance to the 200 level over the next
year. But, though we are not quite
yet at our ceiling, additional incre-
ments will come harder.