The mayor's announcement is a direct response to suggestions for such a survey proposed in March by Councilman Henry G. Parks, Jr., Democrat, Fourth District. Mr. Parks urged the mayor to designate a group composed of top-level industrial, labor, and civic leaders to study the problems related to converting area manufacturing from military to peacetime uses. PARKS APPOINTED In a letter to G. Neilson Sigler, chairman of the five-man Economic Development Commission, Mayor McKeldin also announced appointment of Mr. Parks as his personal representative to all conferences concerning defense spending cutbacks. The mayor suggested that a conference be called in the fall to bring together Baltimore area experts and laymen to discuss the topic. He said those who might attend the meeting would be representatives of the city government, the Association of Commerce, the Greater Baltimore Committee, the Baltimore Council of AFL-CIO Unions and other civic, business, and labor organizations. Although the mayor charged the Economic Development Commission with broad responsibilities he requested that it consider specific questions. DEFENSE TIE PROBE Among them: To determine the extent of local dependence on defense industries and what kind of labor is utilized in these factories. The mayor also said that the commission found a means for developing a coordinated program to assist local industries in converting to peacetime use and to establish a climate for attracting new industry. It is estimated that approximately 37,000 persons or one-fifth of Baltimore's manufacturing labor force of 190,000 are employed in military-oriented industries. It is believed that future cuts in the Federal defense budget will inevitably affect local industry. Several area defense factories already have felt the repercussions of President Johnson's $1 billion cut in the recent military budget. SIMILAR STUDIES Because of expected future decreases in future defense expenditures, many private and Government groups throughout the Nation are pushing ahead with studies similar to the mayor's proposal. Several congressional committees are currently investigating the problems connected with industrial conversion. Last month, Mr. Parks represented the mayor in Washington at the National Leadership Conference on Transition to Peacetime Economy. RESOLUTION OF CITY COUNCIL 430 INTRODUCED BY MR. PARKS, MARCH 9, 1964 (Referred to the Commission on Inter-Governmental Relations) City council resolution proposing that Baltimore City form a local metropolitanwide commission on problems of the economic impact of defense and disarmament Whereas President Johnson has cut $1 billion from the military budget this year and has set up a special top-level Commission on the Economic Impact of Defense and Disarmament and simultaneously declared an “unconditional war on poverty"; and Whereas Secretary of Defense McNamara recently announced the closing of 33 obsolete military installations and has indicated that others will follow in the drive for efficiency and economy and Whereas approximately 37,000 persons, or one-fifth of Baltimore's total manufacturing labor force of 190,000 are employed in defense-oriented industries; and Whereas Senators Humphrey, Hart, and McGovern have proposed national legislation for planning our Nation's economic conversion from military to civilian production, and urging communities with large defense-dependent industries, installations and work forces to begin similar planning; and Whereas to win the war against poverty and unemployment, each community must take responsible action to help itself face the problems of the basic shifts in the economy caused by automation and decreased military spending; and Whereas in the face of reconversion from a military-oriented economy, we cannot continue to depend on Government contracts; therefore we must stimulate the creation of new industry, new markets, new jobs, modernization of plant facilities, replacement of capital investment, massive job-training programs and other factors necessary for healthy economic growth and full employment under a free-enterprise civilian economy: Now, therefore be it Resolved by the City Council of Baltimore, That Baltimore take the lead in responding to President Johnson's program by forming a local metropolitanwide commission equivalent to the Federal Commission; and be it further Resolved, That the mayor and city council, through this commission to be selected or chosen by the mayor, call upon the Association of Commerce, the Greater Baltimore Committee, the Baltimore Council of AFL-CIO Unions, the Teamsters' Union, the Health and Welfare Council and other community organizations, and the management and labor forces of defense and other industries, to join with the Commission and begin to study various ways and means of facing this basic and essential shift in our economy, without suffering severe economic dislocations; and be it further Resolved, That the chief clerk of the council be instructed to send copies of this resolution to the mayor of Baltimore City, the Association of Commerce, the Greater Baltimore Committee, the Baltimore Council of AFL-CIO Unions, the Teamsters' Union, and to the Health and Welfare Council. Passed by city council, March 16, 1964. REPORT ON LEADERSHIP CONFERENCE ON TRANSITION TO PEACETIME ECONOMY, APRIL 23, 1964, WASHINGTON, D.C. This conference was called by a group of national nongovernmental organizations to explore with business, industry, labor, civic, and political leaders the problems of conversion from a defense to a civilian economy, in the event of cutbacks in defense spending, due to economy measures, changes in technology, loss of contracts, or moves toward disarmament. The conference was attended by about 150 representatives of national and community groups, local and State governments, defense industry officials, and trade union officials. From Baltimore, there were representatives of the Association of Commerce, the Baltimore Council of AFL-CIO, the mayor's office and the Maryland Department of Economic Development. The Greater Baltimore Committee and the Maryland Academy of Sciences regretted that they were unable to have representatives there, but expressed active interest in the program. BACKGROUND With our Nation's defense needs filled to the point of an "overkill" capacity of many hundreds of times, it has become possible to make cutbacks of various kinds. When asked about resulting job losses, President Johnson has said, "We will not build atom bombs as a WPA project." Secretary of Defense Robert S. McNamara has said, "The Defense Department cannot and should not take responsibility for nor depart from, any consideration except the strictest military need. We will not have a nuclear WPA." Roswell Gilpatric, former Under Secretary of Defense, has suggested that by 1970 we might cut defense spending by 25 percent with no loss to American security. President Johnson is reported to have indicated in private conversations that he aims at such a reduction by the 1967 fiscal year. (April 20 Washington Star.) The President linked the war on poverty with this year's $1 billion defense budget cut and continues to make this connection at every opportunity, stating that, for the poverty program we will take from the "haves" (the military budget) and use it for the "have-nots" (job-training, youth, public, and private programs for domestic needs). 37-895-64- -11 THE CONFERENCE PROGRAM The main speakers were: Seymour Melman, professor of industrial engineering at Columbia University, speaking on "Our Country's Unfinished Business"; Arthur Barber, Deputy Assistant Secretary of Defense, speaking on "Defense Activities to Meet the Problems of Adjustment"; Senators Jacob K. Javits, of New York, and George McGovern, of South Dakota; Dr. Carl H. Madden, director of the economic research department, Chamber of Commerce, U.S.A. Technical papers on "Converting the Airframe Industry" and "Converting the Electronics Industry” were presented. GENERAL SUMMARY During the course of the day's program it became clear that: (1) The Department of Defense is moving toward substantial cuts in its expenditures because it has succeeded at its job of developing the greatest military capability in the history of the world, and because of an apparent lessening of tensions in relations with the Soviet Union. (2) Business and industry are becoming increasingly aware of this development. (3) The Federal Government, which has used (and in part created) the great industrial machine which has built this military force, recognizes that it has a responsibility to help achieve this transition. Several Senators have introduced legislation to deal with conversion adjustments, and President Johnson has appointed a top-level Committee on the Economic Impact of Defense and Disarmament. (4) Decentralization of the planning and preparation for this adjustment is essential to its success. Communities and industries at the local and State level must face up to this development if they are to make it an opportunity to put new resources into unfilled social and economic needs. (5) Planning must begin now, because "leadtime" is necessary to put plans into action in time to be of benefit when they are needed. Presque Isle, Maine, was cited as an example of successful community and Federal action to ease the adjustment when an important base was closed down, throwing hundreds out of work. A survey of resources and aid in developing them have resulted in fuller employment than before the base was closed, with city officials now asking the Pentagon to close down two more installations because they need the space and facilities for expansion of local indusutries. (6) "The race will go to the swift." Those communities and industries which begin now to plan for this basic change in our Nation's economy are the ones which will benefit most. (7) Concentration on development of our defense establishment has absorbed a large proportion of our brainpower and manpower, while domestic and industrial needs were neglected. Illustrations discussed were the shipbuilding industry and the machine-tool industry, where aging facilities and methods have affected their ability to compete in the world market. By contrast, the automobile industry, without Federal subsidy, produces the best and cheapest car per pound in the world, with efficient use of a high cost input creating a low unit cost per product, thus showing that such industries can develop, produce, and compete without Government subsidy. (8) The research-and-development-team concept, developed by the Department of Defense for the basic, creative research in weapon development has proved its value and can now be put to use in solving the human, social, and environmental problems of our Nation and our world. (9) The poverty-stricken fifth of our Nation constitute a potential market which is the equivalent of an underdeveloped nation. (10) Useful work for all citizens must become a national purpose and the key to the war on poverty. Man needs creative work to exist to feel useful and wanted. Today we have families in their third generation on public relief. This form of sustained degradation, with people regarded and regarding themselves as useless and unwanted, cannot be removed by enlargement of income, but only by useful work. (11) Some defense industry representatives reflected resistance to these changes. One stated that no such changes will come "because man will always go on to develop bigger and better weapons." Others indicated that they have already begun to think and plan along these lines. Senators and Congressmen, accustomed to lobbying with the Pentagon for defense contracts for their own areas, and understandably unwilling to "vote unemployment" into their districts, will reinforce resistance to these changes unless it becomes apparent that conversion can be of benefit and not harmful, to their constituencies. This can only happen if communities respond and help lead the way to the opportunities presented by this basic change in our economy. RECOMMENDATIONS FOR ACTION IN BALTIMORE The Baltimore City Council has passed a resolution calling this problem to the attention of the mayor and community, business and labor groups. With further steps Baltimore can be one of the first major cities to lead the way in helping private industry and labor to plan for the time when Federal subsidy will no longer be for instruments of war, but can be either eliminated or partially transferred to our neglected social and human needs. Baltimore's own "war on poverty" declared in March by Mayor McKeldin, is integrally related to this problem of conversion. The summer youth project proposed by president of the city council, Thomas D'Alesandro, is a step in the right direction. The time is near when giant strides may be possible, with planning and foresight. Some things that Baltimore should consider now, to begin moving on this problem are listed below: 1. The appointment of a commission on conversion, or the referral of the problem to an appropriate existing commission which will give it major attention. 2. A study by the Association of Commerce or the department of economic development, to determine answers to such questions as What is the extent of the community's dependence on military contracts? What are the major skills of the labor force connected with defense industries in this area? What kinds of new industry could use this kind of labor? What can be done to help industries convert their facilities and staffs in other directions? How can Baltimore develop a coordinated program to establish a climate to attract new industry? How can specific heavy industries, such as shipbuilding and repair, be encouraged to study their own situation and develop a plan for operation without Federal contracts? Funds for such studies have been granted by the Arms Control and Disarmament Agency of the State Department. If matching local and State funds could also be appropriated for such a study, it could set the pattern for the kind of Federal, State, and local cooperation needed to solve the problems of adjustment. We should try to accomplish such a study in a 6-month period. 3. Encourage individual science and defense industries to set up their own studies. 4. Analyze whether any local expenditures, such as public health, education, transportation, now financed by the city and State taxes which put the heaviest burden on the low- and middle-income family, might eventually be financed with Federal funds, which are levied on a progressive basis, and thus transferred from defense programs to civilian needs. 5. Keep the community informed and aware of the problems and opportunities of adjustment to this transition, through the mass media and community groups. Perhaps an all-day conference in the fall, sponsored by the mayor's office, the Association of Commerce, the Greater Baltimore Committee, the Baltimore Council of AFL-CIO Unions, and other civic, business and labor groups, could be planned, to explore these ideas fully at the community level. Preliminary to this conference it is my opinion that it would be valuable to invite Prof. Seymour Melman, the outstanding keynote speaker of the Washington Conference, to meet with a select group of community and business leaders to explore this problem and set the framework of the Baltimore conference. I recommend that the mayor invite a group such as the Greater Baltimore Committee's Subcommittee on Human Renewal to involve itself in the preliminaries. HENRY G. PARKS, Jr., City Councilman. FARMERS UNION, Hon. WARREN G. MAGNUSON, Chairman, Senate Commerce Committee, U.S. Senate, Washington, D.C. DEAR SENATOR MAGNUSON: The National Farmers Union and I unequivocally support the bill introduced by Senator George McGovern, S. 2274, to create a National Economic Conversion Commission. The 1964 policy statement of the National Farmers Union, adopted at our annual convention in St. Paul, Minn., this past March 18, included the following statement: "Our Government should actively plan for the gradual transition of our economy to a truly peacetime basis and to prevent economic dislocations which might otherwise develop from reduced military expenditures." This bill is needed to help attain this objective. It seems clear to me that central, coordinated and comprehensive national planning is urgently required if we are to avoid dislocations in our economy and the sufferning of millions of American families that might otherwise result in the transition from a cold war world to a peaceful world. It seems equally clear to me that our current defense expenditures are considerably beyond the needs of national security and that, as this fact gains greater public recognition, there will be a sharp and substantial reduction in the proportion of our gross national product devoted to armaments and military manpower. One of the most remarkable, but least appreciated, aspects of the last quarter century has been our large-scale organization of scientific and technical resources on huge projects. The strength of such organizations has exceeded the sum of their component parts. But, all too often, the glamour of the end products has tended to obscure the importance of these creative mechanisms. In the transition from huge military projects to huge peacetime projects, we must not dissipate these underlying strengths by permitting the personnel to scatter and lose the impelling motivation of important goals. As I have said, we strongly support the establishment of a National Economic Conversion Commission. However, despite its importance, I view such a Commission as part of a larger effort in the area of economic and social planning for our free society. Not since the late 1930's and the National Resources Planning Board of President Roosevelt have we had in peacetime any forwardlooking planning agency at the Federal level. Planning is no longer a dirty word in democratic societies; it is, rather, the very lifeblood of our future hopes and aspirations. The time is long past when we can permit the lives of our people to be buffeted about by the errant, unanticipated, and uncontrolled winds of economic fluctuations and social change. The time has come for a frank recognition of the fact that we are not providing our Federal Government with resources adequate to meet our own national needs, excepting defense. Services to our people from the Federal Government are not growing fast enough. Far from doing too much, we are doing. too little. We must do more and, thus, spend more in areas such as health, education, old-age security, and the like. Instead of talking about programs in the hundreds of millions of dollars in these areas we should and could easily afford to devote to them many tens of billions of dollars of national effort. As long as we have idle manpower, unused industrial plant capacity and resources, and the disgraceful paradox of poverty amidst plenty, we are not doing enough. One last word. I have been immensely gratified that the approval of such legislation avoids the trap of assuming that decreased defense expenditures can or should mean decreased over all governmental expenditures. The manpower and resources released from these obsolete armaments programs should and must be devoted to meeting the vast, basic needs of our citizens for goods and services, and for better lives. With admiration and warm regards, Sincerely yours, JAMES G. PATTON. |