Business: Cruel Words

“If a machine hasn’t been used for the last three months and no one can prove it can be used in the next three, find a use for it or scrap it.”

These tough words came last week from WPB’s Industrial Conservation chief, shy philanthropic Lessing Rosenwald, as he announced a new all-out drive for industry’s “dormant scrap.” Donald Nelson backed up his chief junkman in even tougher talk: “The one thing we must not do,” he said, “is to pack machinery and equipment away permanently or in grease against the end of the war.” Every existing piece of machinery must be used now for war production, for replacement parts for other machines, or for scrap.

If Nelson, Rosenwald & Co. meant their words literally, they were promoting a far more drastic operation upon industry than industry’s captains had yet been warned to expect—however harassed they may think they have been heretofore. It would mean that nonwar manufacturers—even those who are limping along without using critical materials or machinery needed elsewhere in its present form—are about to see their means of production go to the junk pile. More important to the U.S. as a whole, it would mean that, when peace comes, there will be no machinery left that is designed to produce for the inevitable tidal wave of post-war civilian demand. $40 for $4,000. An index of what such wholesale destruction would mean came from Detroit, where the auto industry estimated that scrapping their 1942 model equipment (to which Nelson specifically referred when he talked about machinery packed away in grease) would mean a wait of nine to thirteen months after the war before a single new passenger car could be turned out. This would be bad enough for car-hungry customers; but it would amount to nine months of starvation or the dole for the 2,000,000-odd people who normally supply, produce, sell and repair automobiles. Against such a Brobdingnagian reconstruction problem the immediate question of who was to stand the loss if a $4,000 machine is melted down for $40 worth of scrap seems Lilliputian, but this could give WPB a very bad time too—as WPB well knows.

All things considered, it is a safe bet that what Nelson and Rosenwald were really planning to take—at least in the near future—was: 1) the machinery still being used for nonwar production (or for no production at all) that could and should be put to war production; 2) the vast, uncounted hoard of obsolescing and obsolete machinery that should have been written off and junked long ago. Taking the former would merely hasten the demise of a peace plant which is probably doomed for the duration by materials or labor shortages. (Such a plant would become a case for a War Liabilities Adjustment Board, see p. 81.) Scrapping the latter would wipe the U.S. slate clean of a lot of uneconomic production after the war.