Business: Struggle for Power

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Two top-flight U.S. businessmen last week clashed head on in Washington in a struggle for power that is less indicative of their ambitions than it is of one bitter truth: after over a year of war, the Government's top industrial command is still disorganized.

One protagonist in Washington's latest fracas is tough, shrewd Ferdinand Eberstadt, artillery captain in World War I, outstanding independent investment banker of the '305, and currently charged with WPB's vital materials division. The other is Charles E. Wilson, whom Donald Nelson brought to Washington to take charge of WPB's production division.

In any U.S. business enterprise, materials control and production should be Siamese twins. Not so in Washington. Week ago Donald Nelson touched off the row when he turned over to Wilson (on Wilson's threat of resignation) certain all-important "industry divisions" which Ferd Eberstadt has labored long and hard to build up. Function of these divisions is to see to it that, after raw materials have been divided up between the Army and Navy and other contenders, they flow smoothly to prime contractors and vital component parts manufacturers. They are the vital agencies on which WPB's control of raw materials depends.

Background of Confusion. Such control was the essence of the power of the old War Industries Board of World War I, which the Army hoped the President would duplicate back in 1940. Instead came a dreary series of compromises (the Defense Commission, OPM, SPAB), culminating in WPB itself. By that time the Army and Navy of necessity had acquired vast powers, not only over the ordering of war products (which has always been their function), but over the flow and scheduling of raw materials as well.

Last summer, however, a reasonable compromise seemed to have been hit when Ferd Eberstadt, who had served the Army and Navy well as chairman of their Joint Munitions Board, was switched over to WPB. Promptly he set up his Controlled Materials Plan (TIME, Nov. 9) and attempted to give his authority over raw materials practical force by staffing his production divisions with top-flight talent. To top off the new program Nelson, with Eberstadt's approval, called in Charlie Wilson, who should have become an expediter of particularly serious production bottlenecks.

Instead, Wilson was given the title of chief of production—a high-sounding assignment which technically made him responsible for just about the whole U.S. war economy. At the same time many an ardent New Dealer either within the WPB or without it, who has little love for Ferd Eberstadt's tough realism, urged Nelson into checking Eberstadt's growing power. Finally came the current explosion, partly inevitable, partly the result of clashing authorities over which no one could or would assume a firm control. The explosives: the shortage of vital component parts needed in the Navy's escort program, the Army's high-octane gasoline program, and Bill Jeffers' rubber program.