Shocks for the Taxpayer

OPINION ,

The 35,000 top executives and directors of U.S. business are a likely group to give a sound, shopwise opinion on the value of Government-owned war plants. Last week FORTUNE received their current appraisal, along with their preferences on the policies that should guide the U.S. in disposing of the plants after the war.

FORTUNE had asked: "About what percentage of its $16,000,000,000 war-plant investment do you judge the Government can reasonably hope to recover in the long run?" The consensus of answers: 27-c- on the dollar, a value low enough to shock any taxpaying layman into realizing some of the waste of war. Executives were further asked what portion of the Government plant could be put to some use by business after the war, if only operating and conversion costs had to be paid. The consensus: only 37% of the plant is usable by business in peacetime. (Converse of the consensus: 63% of the plant is either junk or standby, a conclusion which will be equally dismaying to average thinking citizens.)

Turning to postwar policies, 43% of the businessmen gave first choice to quick conversion to avoid an unemployment crisis. The No. 2 policy (first choice of 29%) urged disposal of the war plants to companies that would use them to keep competition vigorous. But if there should be a choice between selling a plant to a big company or leasing it to a smaller competitor, 72% of all the businessmen favored an outright sale. Even though Bernard Baruch's plan suggests that leasing should not be a mask for Government control, businessmen are apparently still skeptical of the device.

The remaining policy suggested--to reduce debt and to lower taxes by having the Government get back as much of its investment as possible--was first choice of 26%. Those executives who put liquidation first estimated that only 33% of the Government plant would be useful to business after the war, while those who chose the first policy--avoidance of unemployment at all costs--estimated that 43% of the plant would be usable.

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