One Way to Get Going

Most businessmen had long thought that the military strategy of beating Germany first was also an aid to reconversion: war orders for the Japanese war would cushion the shock of going back to peacetime. But in recent weeks they have found that the period of grace after V-E day was a hindrance rather than a help to transition. Last week the monthly letter of the National City Bank of New York said:

"In some quarters there is a feeling that in the purely economic sense the country will benefit if the industrial readjustment is cushioned and spread out by tapering war orders, rather than concentrated as it will be if war demands cease abruptly. But this view ... is open to question.

"As long as war orders have to be met the 'bottleneck' problem will persist. There will be shortages of ... raw materials . . . of one component or another ... of key machines. There will be labor bottlenecks. . . . The task of breaking down these bottlenecks in our complex industrial organization is not insurmountable, but we are now learning that it is difficult and timeconsuming.

"On the other hand, if war should be terminated at once, problems that are now acute ... would be rapidly solved. ... The shock would be more severe and the recession temporarily greater. But reconversion would be more rapid."

A Year After V-J Day. As N.C.B. suggested, the jolt from a sudden collapse of war work might not be as painful as most people have feared. Industry has prepared its own shock absorber. According to an industry-wide survey made by the Department of Commerce, U.S. manufacturers plan to spend some $4.5 billion for plant expansion during 1946. Expenditures by public-utility companies and the railroads may reach $1.5 billion. More than that, industry plans to pump out $2.8 billion to restock its depleted inventories of non-military goods. Civilians may spend as much as $100 billion for goods in 1946.

The question seemed not to be so much whether industry would collapse if war orders were suddenly canceled, but whether industry could hustle fast enough to meet the pent-up peacetime demand for its wares.

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