Business: Boom, Shortages, Taxes, War

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In hinting that the U.S., despite this crop boom, might face a food shortage, the President was thinking of a new X in the war equation: the U.S. manpower reserve. Farmers had already had hired-man trouble as a result of the industrial boom and the draft. If the U.S. now raises and equips a really big army, it will draw still more on the unmobilized muscle of the farms. In that case, can the U.S. farmer feed that army, the U.S. and the Allies too? At year's end, the President had under advisement a proposal to create a referee for these competing musts—a National Man (and Woman) Power Administration.

But men-in-the-mass were not yet a serious problem in 1941. The most interesting manpower problem lay in management.

The Managerial Migration. By year's end some 300 U.S. businessmen had taken $1-a-year jobs in Washington. The number who went to Washington in search of priorities, defense contracts or mere information passed all count. The Mayflower Hotel's 1941 telephone bill was $300,000, 50% more than 1940, 200% more than 1929; and its total liquor sales, which were $410,000 in 1940, rose to $570,000.

This mass migration of management, at least in its early stage, was partly the President's idea, who thought it a means to national unity. If he also thought it a preparation for war, he was wrong.

The managers who took Washington jobs in 1941 were for the most part business' trade-association and front men, not its technicians. (Mr. Knudsen was a technician, but he was given a policy job.) They gave freely and patriotically of their time and effort. The U.S. owed them its gratitude for making the necessary educational mistakes. In 1941 these mistakes cost merely time and reputations; in 1942 they will cost lives.

Their chief mistake was that they thought of defense as a sort of glorified Community-chest drive. Business, as they saw it, was glad to contribute. But to afford the contribution, business had to go on making its living in the usual way.

Ed Stettinius and John David Biggers were typical of the socially-conscious businessmen who came to Washington at Roosevelt's call. Stettinius had inherited wealth and a feeling for public service; when he went to Washington he resigned his board chairmanship of U.S. Steel. Biggers had reached the presidency of Libbey-Owens-Ford by way of the secretaryship of the Toledo Chamber of Commerce.

At OPM, Stettinius had charge of raw materials and priorities; Biggers of production. They were to be the bridge between Army & Navy procurement and the U.S. industrial machine. In the political atmosphere of most of 1941, it would have taken tougher and more ambitious men than Ed & Jack to give orders to either party. Instead, Army and Navy were asked if they felt the U.S. had enough raw materials for their needs; since their own needs at first were small, they said yes. The businessmen, for their part, were asked to do thus and so for the Government as a favor.

When the materials shortages developed, priorities were freely handed out. But since there had been no overall measurement of supply & demand ("They kept raising the sights on us"), priorities orders were soon as unredeemable as Confederate money. Manufacturers, hot for certainty, began to hide and hoard materials; and Ed Stettinius was kicked upstairs to be Lend-Lease Administrator.