The Road to Peace

The reconversion plan for U.S. industry after V-E day was formally unwrapped last week. Home Front Czar Jimmy Byrnes had given businessmen a good peek at it when he turned over his job to Fred Vinson fortnight ago, but he left it up to WPBoss Julius A. Krug to take off all the wraps. In so doing, WPBoss Krug optimistically predicted that a year after Germany quits, the U.S. will be turning out as many refrigerators, stoves and possibly autos -- and all other consumers' goods -- as it did in 1939.

WPB's reconversion blueprint calls for these steps:

P: A cutback of 12% in war production in the first quarter after V-E day.

P: An additional cutback of 8% in the second quarter.

P: Another cutback of 15% in the last two quarters.

P: Thus, by the end of the first year, even though the Japanese war is still on, industry can count on a minimum cutback of 35% in war production.

P: To speed things up, WPB will loosen the Controlled Materials Plan, which now straitjackets industry. Eventually it will drop it in favor of a simple system of priorities, controlling only such materials as are needed for the Jap war.

P: In short, WPB will take its hands off a big chunk of U.S. industry, free enough materials so that it can make what it wants. Only on scarce materials, such as rubber, tin, textiles and lumber, will WPB keep a tight hold.

First a Trickle. The cutbacks are approximately the same as WPB tentatively set a month ago (TIME, March 19). Big though they seem, they will bring only a tantalizing trickle of civilian goods at the start. The reason: WPB will first shore up the civilian economy at some of its dangerously weak spots, due chiefly to the shortage of railroad rolling stock and agricultural equipment.

The 1,500,000 tons of carbon steel, which the first V-E cutbacks will release, will be almost all chewed up filling these needs.

What is left will go for a sprinkling of consumer items, such as refrigerators (mainly for hospitals, blood banks, etc.), and machine tools needed for the overall reconversion job.

At first, WPB expects to keep a checkrein on reconversion, to make sure that civilians get what they need most.

But by six months after V-E day, WPB hopes that there will be enough materials and manpower available so that the gen eral run of industries can reconvert as they please, let supply and demand govern output.

Cars When? Two days after WPBoss Krug let out his plan, he hustled to Detroit. There he conferred with automen on plans to reconvert the auto industry, biggest job of all.

To help matters, he named young (37) International Harvester executive-on-leave Henry P. Nelson, boss of WPB's aircraft division, to head a special "task force," which will recommend to WPB ways to 1) help the industry clear its plants of Government-owned equipment, 2) juggle contracts so that all will get off to the same start on reconversion, 3) shift contracts, if necessary, to outside contractors so that autos can be turned out quicker.

As to when auto production will start, WPBoss Krug kept mum. But he flatly denied reports that the industry has already been given the go-ahead to turn out 250,000 cars in the fourth quarter of this year. Actually, automen knew as well as Krug that there would be no signal given for auto production until V-E day.

If it should come shortly, there was little doubt that there would be new cars turned out this year. WPBsters guessed: the first cars will roll off the assembly lines about four months after Germany quits. Detroit will not be in mass production for at least eight months.

Then a Flood. Underlying all the haste in reconversion planning last week was a strong suspicion: the cutbacks, when they come, may be greater than now scheduled. Many a businessman was certain that the armed forces had overestimated the demands, enormous though they may be, of the Pacific war.

If so, reconversion would take place much faster. WPBoss Krug seemed certain too. Said he guardedly: "I think the adjustments will be somewhat larger than estimated. They might finally come up to 10% greater than we have indicated."

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