Business & Finance: Last Chance for Purp

Don Nelson’s “Purp” is a very sick dog right now; and if it does not soon recover to perform the miracles its master hopes for, it is apt to be a dead dog this autumn.

Purp (formally known as the Production Requirements Plan) is Don Nelson’s way to end the raw-materials “shortage.”‘ The most far-reaching plan ever devised to control U.S. production from Washington, its job is to trail every ton of priority material down to its ultimate use. Purp would stop stockpiling and hoarding by putting all allocations on a short-term basis. The statistical job it requires is so immense that Washington wags say only six men understand it and five of them have gone crazy; it is so elaborate that, during its “voluntary” trial last spring, a lot of war industries hollered “Do you want arms or reports?” and let it go at that.

The voluntary trial flopped. But last month Don Nelson ordered every war contractor to fill out the big blue Purp blanks or else. This week is the deadline for all 25,000 of them to file their estimated materials needs for the last quarter of 1942, and to tell what they did with the materials allocated them last spring. These reports will provide millions of statistics. The real test of Purp will be what use, if any, WPB can make of such a mountain of figures.

Everything was haywire. Last week, Big Bill Knudsen, now happily working for the Army (TIME, Aug. 10), said happily that there is no shortage of steel—”but there is maldistribution.” Said C. E. Wilson, his successor as president of General Motors: “If the Government will review its requirements carefully, it will find the shortages not as bad as feared. The pinch has been exaggerated.” Yet last week, for lack of materials, WTright Aeronautical had to shut down one 3,000-man department of its huge Paterson (N.J.) engine plant for two days; last week WPB admitted that the available supply of steel in June was 5,690,000 tons v. a total demand for 11,075,000 tons. A critical cross section of U.S. war production was working way below capacity for lack of materials. To stop this—through better materials scheduling and through building up a kitty of scarce materials for real emergencies—was Purp’s purpose.

Missouri’s Harry S. Truman, who heads the Senate’s what’s-wrong-with-the-war-program committee, neatly mixed a pair of metaphors by saying it was high time for Don Nelson to “take the bull by the horns and cut off a few heads.” Angry Mr. Truman was on the beam with the U.S. temper. But he had no solution for the raw-materials mess and no over-all explanation either.

Purp or no Purp, the weekly meeting of WPB’s strategic Requirements Committee is a solemn but frequently fantastic scene: one admiral (Navy), one lieutenant colonel (Maritime Commission), one general, at least one bigwig apiece from State, BEW, Lend-Lease and WPB’s Civilian Supply section meet to battle over the absolutely minimum material needs of each absolutely essential division.

But not one of them really knows: 1) how much of what materials there is to be fought over, 2) how much their own suppliers’ really minimum needs are, 3) what really happens to their allotments once they are fed to the factories. Ever since war production began in a big way, every contractor has been so anxious to be well-heeled with materials (and so sure of being shortchanged) that he has been inclined to ask for more than he needed at any one moment. There is no reason to believe Purp can stop this overestimating, since contractors can always alibi later that it was impossible to forecast accurately five months ahead and anyhow they were expecting a contract they did not get.

As Walter Lippmann put it last week, “Mr. Nelson is in the position of a very rich man who does not really keep books and has let all his cousins and his aunts open charge accounts which he has agreed to meet.” When all the Purp reports are in, Don Nelson will have some of the most elaborate books ever kept by man. But until he or somebody else sets up a master plan, and asserts the authority the President gave him to decide what is most important, the Army, Navy and Maritime Commission can go right on upsetting the balance of scarce-materials allocations all over the place, by constantly assigning to their “emergency” orders higher & higher super-privilege ratings that now take precedence over the old top rating of AiA.

Don Nelson has practically staked his control over raw materials on Purp as almost the only means he has left to make sense out of the raw-materials mess. He and his aides are working overtime to squash its statistical bugs in time for the all-out test in the fourth quarter of this year. For he too knows that this will most likely be the Purp’s last chance.

If Purp fails the Armed Forces are lying in wait to bury it with appropriate military honors. With the Navy’s blessing, tough General Somervell, who finds Nelson’s alleged raw-materials authority irksome anyway (TIME, Aug. 3), and tough Ferd Eberstadt of the Army & Navy Munitions Board, think they know a much simpler way to balance supply & demand. They would adopt a reasonable facsimile of Germany’s plan—a warrant system whereby each war contract, when made, includes warrants to obtain specific quantities of materials at the specific times when they are needed. This is vertical allocation v. Purp’s horizontal allocation. The Navy is so enthusiastic about it that WPB is going to test it out in the radio industry, starting this week.

To the layman this panacea also has pitfalls. For one thing, the services themselves have scarcely begun to show any real understanding of how to conserve scarce materials or how to use them to the best advantage. But the least encouraging aspect of this new solution is that, like all the earlier ones, it is not a master plan but a way to implement one. Until there is a plan itself, what Bill Knudsen called “maldistribution” will turn out to be a euphemism for “shortage.”