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PART I

Letter of Transmittal.
The Honorable JAMES F. BYRNES,
Director, Office of War Mobilization,

The White House, Washington, D. C. DEAR MR. BYRNES: Pursuant to the instructions you gave us to inquire into war and post-war adjustment policies, we submit herewith our report. It is divided into three parts: (1) This letter, which is a rough synopsis of our major suggestions; (2) the report itself, and (3) additions giving a more extensive treatment of three subjectscontract termination, surplus property, and tightening the industrial war machine.

Victory is our first and only duty, but just as we prepare for war in time of peace, so we should prepare for peace in time of war. Through preparation we visualize a prosperity, sound and lasting. We see not merely civilian needs crying to be filled, but a world requiring the things we can supply-an unlimited market for our products.

Our specific assignment was to study the immediate demobilization policies which have to do, necessarily, with the stimulation of the war effort, since victory is the first essential, and with the preparation for peace to follow victory—to win the war and to prepare for peace.

In the development of this theme we find certain considerations to be of first importance. They include:

1. Getting us all back to work in peacetime enterprises.

This may require a special authority under the Director
of War Mobilization to give its entire attention to the
problem of bringing jobs to all workers, with emphasis
laid upon the returning service men and service women

who are our first concern.
2. Taking the Government out of business by-

(a) Payments for work done and work under way.

In connection with this phase of the problem, we have assembled a complete "Financial Kit" that should prove effective. The Government must pay its debts, and pay them quickly and fully, so that Business will have its working capital freed

for pay rolls and purchase of materials. (6) These payments can be made with ample protec

tion to the Government against fraud. (c) Move out and store war materials from plants so

as to make room for equipment and materials for civilian production.

(d) Centralize the control and disposal of surpluses

of all types in such a way as to bring them into ready and effective use and insure orderly mar kets. This, too, may require a special adminis

trator in the Office of War Mobilization. 3. A general tightening up of the industrial war front so as to

finish the bloody business with finality, and thus be ready

for peace.

4. Spreading acceptance by war contractors of the "Uniform

Contract Article," as recommended by us and approved

by you. 5. Place all war agencies under running review to cut them

down as their work dwindles; also review of all war indus

trial controls. 6. Immediate extension of laws governing Price Control,

Priorities and Requisitioning, all three expiring this year. 7. Early engineering on public works to be ready if needed to

fill in the valley of unemployment. 8. Provide credit means for those requiring it during the

adjustment period, particularly for the smaller business

groups and returning servicemen. 9. Prepare now for future action reducing taxes from war to

peacetime levels, thereby providing necessary incentive

for initiative and enterprise and stimulating employment. 10. Prepare an Emergency “X Day” Reconversion Plan to be

used in the event of a sudden collapse of Germany so as to enable us to go on with our crusade against Japan and at the same time to prevent the dislocation resulting from lack of preparation. This phase of the broader plan is to be worked out by the Armed Services with the War

Production Board. Transition from a war economy to that of peace is not easy; nothing worth while is. In our reconversion we shall try, as this country always does, to cure the things that caused us worry and to strengthen the good; to hold to the proven but be ready to test the new. That is progress.

The frame of our operation shows the gigantic nature of the changeover. It affects every part of our economic life. Nothing comparable ever has been known before.

As one indication of the size of the job, about 50 billion dollars of the current annual production represents strictly war goods—that is, things which, when peace comes, we will stop making. This gap must be filled in large part by civilian production and services, if we are to keep the needed volume of employment. The demobilization of the Armed Forces will come gradually. Their absorption by industry will

be aided materially by several factors, the weight of which is not now clear, such as: the giving up of war jobs by many women; the retirement of older workers; the increase of travel and recreation time; the return of many younger workers to school; the resumption of college and professional training by many now in the Services or in war industry; the renewal of many professional and service businesses that have stopped during the war; the starting of new enterprises; the business involved in meeting the needs of the world; reduction in the workweek; the normal enforcement of child labor laws.

The net increase in employment in industry from 1937 to 1944 is estimated at 7,600,000 people. Considering factors mentioned above, the problem of demobilization, though difficult, is soluble-if we create the atmosphere in which private initiative and resourcefulness the traditional American spirit-can again take hold.

It is an easier task to convert from peace to war than from war to peace. With the coming of war a sort of totalitarianism is asserted. The Government tells each business what it is to contribute to the war program—just what it is to make and where it is to get the stuff out of which to make it. . The planning and execution rest upon one overall purpose and a single control. Patriotism exercises a strong compulsion.

With peace, the opposite becomes true. Each has the right to make what he pleases. Governmental direction and aid disappear. The markets become free and each individual is dependent upon his vision, his courage, his resourcefulness, and his energy.

Everyone has the privilege of building up, but no one has the right to pull down. That is democracy at its best.

In the reconversion and readjustment will come improvements in our standards of life-better houses, better clothes, better food, better safeguards for children, better health protection, and wider educational opportunities. These bring hope for the future instead of fear; they give security instead of unrest.

There is no need for a post-war depression. Handled with competence, our adjustment, after the war is won, should be an adventure in prosperity. Our soldiers will not be let down. They are our chief concern. No pressure groups of self-seekers will take our thoughts from the duty we owe them.

Finally, while the producers should be restrained from excessive profits during the war, the workers as long as hostilities are on should refrain from strikes. No grievance, however just, should be permitted to slow our march to victory. Sincerely yours,

BERNARD M. BARUCH,

JOHN M. HANCOCK,
Advisory Unit for War and Post-war

Adjustment Policies, Office of War Mobilization, FEBRUARY 15, 1944.

PART II
Report on War and Post-War Adjustment

Policies. When the war will end either in Europe or Japan is not for us to speculate. Our military leaders have warned that the bloodiest, costliest fighting in Europe still lies ahead. The Germans with a superbly trained General Staff have been withdrawing behind interior lines awaiting our attack, prepared to strike back wherever they can, hoping to catch the United Nations either off guard or, through a suddenly amassed superior force, temporarily driving us off. Then there are the Japanese to finish off.

Regardless of how long it takes we must carry on so that absolutely nothing is permitted to hinder the quickest clinching of victory over both Japan and Germany. With that never out of our minds, we should proceed immediately to develop the organizations, policies, and methods for returning to peace with work for all.

No one colossal plan covering every aspect of the problem that crowded for settlement was possible. We have taken up first those things that had to be done first, bringing them to decision, then moving on to the next problems. Finding Right Path.

The Uniform Termination Article, approved by you recently, was the “first step.” This report seeks to carry that work further to finding the right path out of the maze and to getting started down that path.

Nor was it enough to say simply what should be done; but also how it should be done that is, to develop workable plans which could be put into effect with a minimum of delay. In this, of course, we have taken things as we found them, not as they might or should have been. Unwinding Difficult.

Unwinding our war economy can be expected to be more difficult than was the mobilization. It will be made more so by pressure groups organized for their selfish purposes. As victory comes nearer, we can expect the “but” patriots—those who profess themselves loudly all-out for war but fight any sacrifice or risk of their own—to grow ever louder in their protests, to become ever bolder in "positioning" themselves for the return to peace. All-Important Question.

The question everyone asks, be he a civilian or in uniform, 18: "How am I going to make a living for myself and for those dear to me when the war is over in a manner of my own choosing?

Our entire inquiry has been directed toward that question. In particular, we have been concerned with the demobilization problems of the returning service-man and service-woman and civilian workers now engaged in war industries. The returning soldier should not be forced to look to charity or community help. He has rights that rise above that. When he returns to his home community, there should be one place to which he can go in dignity and where he can be told of his rights and how he can get them. Legislation Needed.

Effective handling of the human problems of demobilization will require the closest kind of cooperative action on the part of both Congress and the Executive branch of Government. Many of the proposals that the American people will want adopted require legislation. At the same time, the first demobilizations of workers and those in Service are likely to take place while the war still is going on and will have to be knitted intimately with wartime manpower controls, with the draft, and other war controls Centralize the Forces.

There is no scarcity of plans and suggestions for dealing with these problems. In fact, we have found their consideration scattered loosely in both the Executive agencies of the Government and among the various committees of Congress. In their preoccupation with the war, the various operating agencies have been able to give these problems only part-time attention. Yet they must be planned for in the light of established administrative mechanisms, tied to the wholo program,

We recommend unifying the Government forces dealing with the human problems of demobilization on two fronts

the Executive and Congress. Everything being done by the Executive branch of the Government should be brought together under a single, unforgetful mind; the Congress to mers the activities of its many committees into a single committee in the Senate and in the House or, if it can be effected, into a joint committee of both Houses. The unified Executive and Congressional groups should then work together on a combined program of legislation and operations that will carry out the objectives that all of us share. “Work Director."

When problems are undertaken in many different places, diffusion of energy results. Much talking is done, much political pressure generated, with little action and small results to those involved.

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