Hotels: Strategy for Civilian Goods

Bolstered by the fact that the armed services for whom he is struggling to produce war goods finally gave him a realistic strategy of war production, Donald Nelson last week began to make noises about a “strategy of civilian production.”

A successful civilian goods strategy calls for two decisions: 1) on how much production of civilian goods is essential (not how much can be afforded—only the essential can now be afforded); 2) on concentration of that production in a few factories to conserve manpower and machinery for the war effort. (After that, of course, rationing will be necessary to make sure that the goods are distributed to those who need them.)

So far the first decision has not been attempted and the second, attempted for only three industries, has been of little or no good to any civilians. The returns were in last week on the concentration of the first industry, stoves.

Five months ago WPB ordered all large units in the stove industry to stop producing stoves and start producing nothing but war goods by July 31, leaving all stove production (on a standardized “victory model” basis) to companies which formerly had less than a $2,000,000 annual gross. Now their gross is still smaller: for lack of materials only about half a dozen of 150-odd smaller companies are now making victory stoves at all. When last counted (late in July) there were some 2,000,000 stoves or about six months’ normal supply still in retail stocks.

The returns on the other two concentrated industries—bicycles and typewriters —are already in. They were concentrated down to zero production for civilian use. So far concentration has simply meant liquidation of consumers’ goods. Soon furniture, paper, manufactured foods, farm equipment, even clothing are likely to be concentrated.