Evening star., 1943-09-28
Outlines Program for
Postwar Conversion.


70 the Editor Of The Star:
Business thinking is generally In favor
Of setting up reserves for changing over
from war production to peacetime acttvi-
ties. And as the battle front news i'm
proves the shooting at home becomes
more intensive on this question.
Obviously, reconversion to normal pur-
suits will be necessary. How much that
reconversion will cost Is impossible to
state now, but this much is certain-it
will be an awful lot of money and quite
likely more than it took to get the Nation
converted to war work. The verMuncer-
tainties as to the amounts involved and,
more Importantly, as to the time when
those monies will be needed have COM
plicated the question.
Thus there are two extreme views.
One is that the Government will take
care of reconversion when and where
necessary. The other Is that business
can and should be permitted to take care
of reconversion out OF current profits.
"un-American," although Government
financing for war is widely accepted.
The other view Is perhaps even more
widely condemned as opening the door
to war profiteering. Between the two
extremes there are all kinds Of possible
compromises and causes for argument.
Thus, 1t is claimed that the postwar
refund of part of the excess-prof1ts tax
will be sufficient to take care of recon-
version-others disagree. Some say that
the solution should be via the tax route.
Others say that contract renegotiation
should provide for such reserves. Among
the strongest opponents of that idea are
the administrators of the Renegotiation
Act. The discussions run the gamut
from principles" and cries OF "inequi-
ties and "favoritism to high profit earn
1ngs" to administrative impracticalities
Now, submit that there is much to be
said for the provision of reconversion
reserves, and that, further, it is not too
important where they are created as long
as they are set up somewhere to be ready
when they are needed. Whether such
reserves are set up by Government in
large fund, by industry and business in
their own treasures or by the people
individually in savings, such as War
bonds, is a matter of method only. The
point is that we must have some kind of
postwar reconversion reserve when
shooting stops.
Currently good deal of pressure is
being exerted by industry in favor of its
own private reserves, independent of
either Government or individual savings.
And it will be generally conceded that
this would be desirable American way
of meeting the problem-if abuse could
be avoided.
Now then, since that is so, and since it
Is immaterial how desirable objective
Is attained as long as no one Is unduly
harmed, the following basis is proposed
for permitting postwar conversion re-
serves to be accumulated by industry out
of current earnings.
1t is suggested:
That each company be permitted to
accumulate postwar conversion reserves
against specific projects filed with the
agency which may have jurisdiction.
That these reserves be accumulated at
the rate of 20 per cent annually.
That retention of such reserves be
made contingent upon their use for the
earmarked or equivalent purpose within
- months after the "cease-fring order"
in whichever major theater of war that
comes first, or contrariwise, the funds
revert to the Government.
This could be accomplished by having
the funds deposited in escrow or, better
yet, in new series of postwar conversion
bonds payable on demand for use as
indicated. In this latter case the Treas
TRY would have the money now and 20