Hill Ahead

The U.S. finally stood at the foot of the Hill of Reconversion. Last week that hill looked quite different from the way it looked a year ago. The shape of the hill, as it began to show itself to many businessmen from their present disadvantage point:

P: It is not as precipitous as it once seemed. Unless the Jap war ends with unexpected speed, half the hill may be climbed before V-J day.

P:This situation has the same advantage that chronic indigestion has over acute indigestion. It is not so dangerous or overwhelming, but its pains will linger longer and provide more opportunity for complaint as well as for alleviation.

P: As war production is cut back, first in one sector and then in another, business activity and unemployment may fluctuate violently and in different directions, from industry to industry and place to place. Some areas, some industries and some plants will work full blast while others face crises, and swift changes will continually alter the picture.

P: One reason for this is that many manufacturers who will be ready to switch to civilian merchandise are not makers of goods but assemblers. But the makers (manufacturers of steel, chemicals, textiles, etc.), who supply semi-finished goods to the assemblers (manufacturers of automobiles, radios, alarm clocks, etc.), will still be tied up with war work till varying dates and in varying degrees.

P: Another reason for varying conditions is that pent-up demand for essential replacements will absorb some 1942 models (the first off the assembly lines), but at some point the public will hold back and wait for the much publicized postwar models. This procedure may produce inventory problems for merchants; it may also force manufacturers rapidly through two reconversions--first from war production to civilian production, 1942 style, then from 1942 to 1946 style.

It began to look less as if the economy would smash itself headlong into a cliff --more as if it were going to run into a series of unexpected, nasty potholes.

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