Madison County Democrat. (London, Ohio) 19??-1958, 1950-08-08
WEEKLY MADISON COUNTY DEMOCRAT, LONDON OH

working population VIII have TO
produce civilian goods and SER
vices, not only for themselves,
but also for those millions whose
employment in the coming months
however indispensable to the ma
tion's welfare, will be nonproduct-
i've in the economic sense.
In theory the impending trans
ition to quasimilitary basis could
be conSummated with a minimum
OF friction and disruption if all
individuals combined were to re-
duce their aggregate personal ex-
penditures to a level about 10
percent below the rate of spending
which prevailed during the first
half of this year, and if the re-
sulting savings were diverted to
the Federal Treasury in the form
of larger tax payments and de-
fense loans A contraction of that
magnitude in civilian demand,
comparable to that which occurs
in a sharp business recession,
would not only release an ade-
quate supply of manpower, but
simultaneously would provide the
Treasury with enough funds to
finance the undertaking without
initiating the money supply.
The chances that such a sweep
ing retrenchment might take place
voluntarily, however, have drop
ped to zero or below in view of
the pronounced squirt in retail
trade in recent weeks. The spec
tacular ruch for civilian goods of
virtually every description per-
haps the most unexpected immedi-
ate by-product of the Korean
flare-up-has greatly intensified
the problem. On the manufacture
er's desk and at the farmers
market, all evidence points to an
unprecedented civilian demand at
the very time when the exigencies
of the situation call for a tapering
off SO that the necessary number
of men and machine can be di-
verted to production for defense
as rapidly as military orders are
received.
Another solution and one which
theoretically would provide ample
production for both civilian and
defense purposes is that of length
ening everyone's work week by at
least 10 percent. If this were uni
versally practicable, the present
labor force could produce all the
goods and services required by
present military schedules without
imparing the current record level
of civilian production. Under pre-
vailing overtime provisions, how
ever, this solution" would re-
suit in significantly higher costs
straight across the board for mill
tary and civilian producer (and
consumer) alike, and would be
highly inflationary unless, as in
the preceding hypothesis, it were
accompanied by a Federal tax
or by a compulsory savings plan
that would recapture virtually all
of the aggregate overtime remun-
Grafton received. Under such a hy-
pothetical arrangement, every
working person would be contri-
buting 10 per cent of his time, but
in effect without pay, to the pros
ecution of the defense effort.
The prospects for the wide
spread application of such a dras-
tic regimen, like the preceding
one involving voluntary curtail-
ment of personal expenditures, are
exceedingly remote, especially un-
der conditions of twilight or ppar.
tial mobilization. In all probable
ity, most of the millions of mer
and women whose services viii
be required in one form or an.
other in the expanded program
will have to be luled away-ol
taken away-from tasks deemed
something short of essential tt
the defense effort.
The number and attractiveness
of nonessential activities can be
diminished in several ways. Per.
haps the least justifiable in the
long run would be that of per,
mitting the most vital manufact
uring and service industries t.
outbid all other potential employ
ers in the labor market. Blu
given the current feverish state o
consumer demand, such a free
for-all would produce rapidly ad
vancing prices, for military al
| well as civilian goods, with M
assurance that the necessary com
ponents of the defense program
would be forthcoming as needed
Another partial solution is thar
of restricting the extension oi
credit to would-be purchasers Of
automobiles, houses, household
appliances and other articles made
out of material in short supply
However, the existence and avail
ability of an unprecedented vol
ume of liquid assets-a heritage
of the last war-greatly reduces
the potential effectiveness of such
financially restrictive measures
The burden of going withou1
would rest mostly upon those
with relatively the fewest liquic
assets, regardless of need or merit