Gone With the Draft

When Congress passed the first U. S. peacetime conscription bill, many a businessman fretted over troubles it might make for him. His chief worry was: the Act contains a provisional moratorium on draftees' debts. It re-enacts the Soldiers' & Sailors' Civil Relief Act of 1918, which permits the courts to postpone draftees' obligations (depending on their ability to pay). In Congress now are bills giving conscripts additional relief from taxes, rent, insurance. But by last week, having studied the draft, most businessmen decided it would not make them as much trouble as they had feared.

Insurance. Very few policies now outstanding have war clauses; should an insured draftee go to war, be killed, his beneficiaries could collect just as though he died naturally. But if prospective draftees suddenly swamp insurance offices (or the U. S. goes to war), insurance companies will insert war clauses, jump rates. A few insurance companies are already doing so. Should war clauses become commonplace, they may read like the clause of Equitable Life: no payment for 1) death from any cause while in service outside the U. S. (unless in U. S. armed forces); 2) death as a result of war (whether in service or not) while outside the U. S. In the event of such death, premiums received, plus dividends, are paid. Far from worried, insurance men recall that Government policies during World War I made people insurance-minded, hope history will repeat.

Loans. Better-than-average insurance prospects, many draftees are already good personal-loan customers. But only 5 or 10% of all small unsecured loans outstanding are against single men of 21 to 36, who presumably will exceed married men among draftees. (Of the draft eligibles, only about one in ten will march to camp.) If a draftee cannot make payments while in uniform, personal-finance outfits will ice the loan, catch their man when he goes back to work. With only a fraction of their business affected, moneylenders expect the boom in business will offset possible draft losses.

Automobiles. The average single man pays for his automobile by the month. Possible draftees now drive 354,000 partly-owned cars, owe about $200 each or $70,800,000, less than 6% of $1,420,000,000 total auto loans. General Motors Acceptance Corp., No. i auto-finance company, figures possible conscripts hold no more than i?% of its contracts. But other auto financiers say they will examine future buyers more carefully, are considering a new type of contract with a co-maker. They may also ask more cash down, larger monthly payments.

Rent. Since the U. S. can allot a conscript's pay for rent of his dependents, most real-estaters see only the rosy side of the draft picture--many pre-conscription marriages. But if a rent payer is drafted, a War Department bill now in Congress says his dependents cannot be evicted (if his rent is $80 monthly, or less) for at least three months.

Installment Sales. General Electric is No. 1 seller of household appliances. Last week it reported not more than i or 2% of installment contracts would be hit by the draft, much less an upheaval than was caused by the 1937-38 depression. As before, delinquents (draftees or not) probably will arrange smaller payments, extended notes.

Clothes are difficult to repossess. But most "kredit klothiers" plan no stricter rules for young men. On the contrary, at least three Manhattan, one Chicago, two Atlanta stores last week announced new "money back" offers to all military-age men buying now, later drafted.

Labor. Most unions (some of the largest have already exempted drafted members from paying dues) are working on clauses to insure a conscripted employe's job when he returns. But the draft bill already says an employer must return draftees to their jobs "unless . . . circumstances have so changed as to make it impossible or unreasonable to do so." If an employer balks, the returning draftee can get Federal lawyers free.

Showing their patriotism and giving draftees a good send-off at the same time, many big employers have announced generous pay allowances for conscripted employes. The No. 1 U. S. oil company, Standard of New Jersey, will pay its drafted men full difference in salaries for three months plus all regular benefits. Texas Corp. and Consolidated Edison of New York men will have three months' full pay, then leave of absence. Of those to leak out, most generous were the New York Times, a leading trumpeter for peacetime conscription before the Act was passed, and the New York Herald Tribune. The Times (the Tribune's plan is similar) will pay a drafted employe (for entire training period) "50% of the difference between his salary and the total of his pay, plus allowances, from the Government--up to $100 per month."

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