Evening star., 1944-08-13
Postwar Adjustment Plans
TOCover Distinct Periods
Reconversion and Boom Arising Out of Pent.Up
Civilian Demands to Be Followed by
Critical Phase in Recovery.
By Charles G.. Ross.

W. N USJs
Lord Woolton and note how his ap.
praisal with reference to England tallies
with informed opinion on the American
prospect.
I'VE are realizing to the full" he said,
"the Importance of creating plans now
to deal with economic factors that will
arise when hostilities cease. There will
be three periods Of very widely differ
ent nature
Because it Is the nearest, the first
period is the one that is giving me for
the moment the most concern, and that
is the period Immediately after the war
"a period when mems hopes indeed will
be high, but when we shall find our
selves having to move-occupationall
move-something like 10000, 900 people.
It was for that reason that 7
ventured some time ago to urge the
engineering industry, in particular, to be
looking to this period and to make ar
rangements in order that we might more
quickly move to a period in which We
could find employment"
Staggering Total Here.
In this country, similarly, we shall
have millions to move into peacetime
occupations from the armed services
and the war industries-178 millions,
the Brookings Institution estimates. may
face demobilization during the first two
and half years after the end OF the
European phase of the, war. Though
not all of these will seek employment,
the figure will remain staggering.
Jobs must be provided. altogether, for
$4,000, 900 persons, or 5000 900 more than
were employed in the last full year Of
peace, 1910. Henry J. Kaiser and others
in this country, like Lord Woolton, are
urging speed in reconversion to cushion
as far as possible the inevitable shocks
of the transition from war to peace.
Coming to the second period, Lord
Woolton said, precisely as is being said
over here: For some time we will have
very big boom market to satisfy We
will aim in our plans not at getting
boom, but at getting regularity. Alter
native booms and slumps are of no use
to anybody except the speculator.
We must avoid letting the psnt-up de-
mand produce rapid rise in prices
which would absorb the whole of war
savings at the expense of those people
who have put money intorthe govern
ment at current values.
Would Protect War Bonds.
1T would be very wrong, indeed, if We
let prices rise so high that when these
people get their money back they were
not able to get something approaching
the values at which they put their
money in"
fought by every means within the power
Of Government. The 'innationary po-
tential" in this country, measured by
demand deposits and currency, savings
deposits in the banks and Government
securities held by business concerns and
individually (but excluding Government
securities held by life insurance com.
panies and banks will amount on June
80 next, the Federal Reserve System
estimates, to 1874 billion dollars-1l3
billions held by individuals and 81 bill
lions by business. In the three-year
period beginning June 80, 1s41, there
will have been an increase of lis bill
lion dollars in these liquid holdings.
Lord Woolton's statement puts in
concise form the arguments that are
being used here for continuance of the
wartime price controls until such time
as industry can begin producing a
sufficient amount of peacetime goods
to meet the demand.
Warns of Imitation Threat.
Premature spending of the country's
unprecedented accumulation of liquid
funds could result in ruinous imitation.
Beneficent results to the contrary.
would flow from the use of these funds
to sustain production and employment
after the boom period.
The testing period would come, Lord
Woolton said, after the boom, the
period of willing spending had passed.
He recalled what had happened in his
country in the dismal '30s. Public
works had failed to bring recovery be-
cause they had been applied at the
wrong time, when unemployment was
already severe. With this lesson in
mind, the government had under con-
slderation plans to regulate the flow
of public works.
But, he added, there was another
factor that caused unemployment-and
he might have added that here he got
to the root of the problem, This factor
was the failure of demand" If the
government could only find some ECO
nomic thermostat" to keep operative"
the demand that was always present.
said Lord Woolton with characteristics
British caution, it would have done q
great deal toward attacking the prob
lem of unemployment in its early stage
rather enan after 1t had arrived
The key words here are demand
and operative and they tell what is
needed in this country as we'll as in Eng
land. If demand can be kept operative
after the war-which is to say, If a
buying power to match our productive
capacity can be achieved and main
tained-we shall indeed be embarked
.on that adventure in prosperity.
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