We recommend the creation in the Office of War Mobilization of a new, most important post which, for want of a better title, we would call a "Work Director" to unify the forces of the Executive branch and to work with Congress on the whole human side of demobilization. War Veterans. This Work Director, who should be of such outstanding caliber as to command the immediate confidence of the country, should have full and adequate authority for developing integrated programs, working with the Armed Forces on their plans for personnel demobilization, when such plans are drawn up, studying the demobilization programs of other nations, developing adequate machinery for assisting in job placement and counsel for both veterans and demobilized war workers, integrating these programs with all wartime manpower controls. Care for Disabled. He should develop effective programs in such fields as adequate care for returning veterans, physical and occupational therapy for wounded and disabled; the resumption of education for those whose schooling has been broken by the war; vocational training for all workers. War Workers. He should also study the special employment problems involved in the great war industries where it is known peace will bring mass displacement of workers. He would work with Congress on all these matters. Of course, there is no separating these things from the seemingly impersonal measures that will have to be taken to keep our economy production-strong. Being a part of the Office of War Mobilization, the Work Director will be best situated to keep his own activities linked with the many other aspects of the program we are recommending. To summarize our concept of his job, it is to see that the human side of demobilization is not fogotten. Great Opportunities. It is our conviction that we will emerge from the war with the greatest opportunities any people ever had. A post-war depression is not inevitable. One-half of the world will need rebuilding. Enormous demands, put aside during the war, and added to pre-war demands, await satisfaction. Much depends on the settlement of the peace. If it be one under which men and women can look forward with hopenot fear there will not be enough hands to do what needs to be done. Much will also depend on the measures taken now to prepare for peace and, as important as the measures, on the men who will carry them out. The mistakes and delays made in the mobilization must not be repeated in the demobilization. No Better System. There has been too much loose parroting of the slogan, that if individual enterprise fails to provide jobs for everyone, it must be replaced by some one of the other systems that are around. The war has been a crucible for all of the economic systems of the world, for our own, for Communism, Fascism, Nazi-ism-all the others. And the American system has outproduced the world. America's productive capacity can perform still another miracle in a fine and lasting peace. It will not do so if pressure groups are permitted to turn that productive capacity into a battleground for their own selfish interests or inflate ourselves out of the world market. Speed Essential. Speed in shifting this productive capacity from war to peace is our most effective attack against the two enemies which threaten in the transition and post-war period—unemployment and inflation. The First Questions. What are the things that need to be done to insure this speed, to set our feet on the right path toward work-not alone for those here at home but for the men and women who will be returning from foreign shores? The very first problem to be solved was how to get Government work out of the plants so civilian work could come back in. This raises three questions: How are war contractors going to get the money owed them? How is Government property to be moved out physically from their plants? And, while doing that, how is the public interest to be protected? If plants are choked with Government property, equipment, inventories, and work in process, manufacturers will not have room for the new equipment and new materials to produce peacetime goods. Or, if their working capital remains frozen in unpaid-for Government work, they will lack the money to start up their businesses afresh; to buy new materials and new equipment, to pay their workers. Business Frozen. Business would be at a standstill; workers and returning service men would walk the streets, while the Government was figuring how to pay what it owed. Our country's position today is such that if the war terminated suddenly most of the factories in this country would be shut and there would be unemployment of the worst kind. Of course, the war will not end tomorrow, but "peace jitters" already are cutting into war production. Removing all uncertainties as to the Government's policy on settling terminated contracts is needed for the immediate conduct of the war. Unemployment by Audit. We recommend quick, fair, and final settlement of terminated war contracts through negotiations by the contractors and the procurement agencies. Any course, such as that proposed recently by the Comptroller General, would quibble the Nation into a panic. The Comptroller's suggestion, as we understand it, was that he review every settlement before payment and that no payment be final until approved by him. Pending this audit, the Comptroller proposed that advances and loans be made; but the amounts would be entirely inadequate to keep business and jobs going. If such an audit before payment were decreed, no war contractor would know where he stood, prime contractors would be unable to pay subcontractors, banks would be reluctant to make adequate loans, billions in working capital would be frozen. The delays in settlement could force many concerns into bankruptcy. It would mean unemployment by audit. Fairness the Thing. The essential point to remember about these contract settlements is that they be fair-fair both to the Government and to the contractor. What is fair can be determined just as well in a matter of weeks as in years. Full Review for Fraud. The review powers of the Comptroller General should be limited to fraud, with every administrative aid of all the agencies in the detection of fraud. This is in addition to his determining whether settlement payments are made in accordance with the settlement agreement. To aid in the detection of fraud, we are recommending: That written reports and full records be kept by the Government negotiators of the bases of settlement; also the contractors to keep their records for at least 3 years. Settlement Teams. In all sizable settlements, Government negotiations will be conducted not by one man but by a team. These teams in general will include a Legal Officer, a Termination Officer, an Accounting or Auditing Officer, a Technical Officer, and a Property Disposal Officer, each with his own experts, the whole team working under the direction of the contracting officer who finally makes the settlement. The team idea has been developed to prevent any possible collusion in these settlements and also to encourage the individual team members to exercise their independent courage and judgment in making these settlements. In the final analysis, the Comptroller General would have to delegate his reviewing to many thousands of investigators. By and large he could not recruit a more honest or more capable force than present procurement officers, and it would certainly be less experienced. The men who made the contracts or who have administered them are the best persons to unmake them. Joint Board. The Comptroller's vigilance and experience can be a most valuable contribution. We recommend that both he and the Attorney General be added to the Joint Contract Termination Board. This board has been established in the Office of War Mobilization, under a chairman independent of any of the procurement agencies, to unify and simplify the procedures of all the agencies, and it will control the regulations, instructions, and interpretations for the negotiators. We recommend also that the War Production Board be represented on the Board. Additional Safeguards The administrative procedures of all the procurement agencies are now under review to see where additional safeguards can be wisely introduced. All these safeguards the Comptroller General's full review power for fraud, the presence on the Joint Board of the Comptroller and the Attorney General, settlements being made by teams with written reports from these teams, the requirement that contractors keep their records for a least 8 years-plus the additional administrative safeguards that will be developed, add up to a more effective protection of the public interest than any audit before payment that the Comptroller General would find administratively practicable. Immediate Cash. Even with the best of good will by both Government and contractors, delays in settling are inevitable. An appreciable portion of every claim will be subject to human judgment of values, over which competent men may honestly differ. That is why these settlements do not lend themselves entirely to determination by mathematical formulas, but can be handled best through negotiations. Complete Kit. The importance to the whole economy of freeing the working capital of manufacturers so there will be jobs is such that interim financing which will provide quick cash pending final settlement is essential. Attempts at some one magic formula which could be applied to all alike-prime contractors, subcontractors, suppliers, etc.— result either in something rigid and inadequate or so loose as to be a blank check on the Treasury. We have brought together every workable tool we could find into a financial kit, complete enough to meet the varying needs of all war contractors while fully protecting the Government. This complete financial kit which we recommend includes: 1. Immediate payment-the full 100 percent-for all completed articles. 2. On the uncompleted portion of the contract, immediate payment-the full 100 percent-of the Government's estimate of "factual" items, where proof ordinarily is simple, such as direct labor or materials, and of other items on which the Government is able to satisfy itself, up to 90 percent of the contractor's total estimated costs. 8. Immediate payment-the full 100 percent-of settlements with subcontractors as soon as approved. 4. Payment by the Government of interest on termination claims, until settled. 5. As insurance against delays in validating claims, a new, sim- 6. For those unable to obtain such loans from their local banks 8. Finally, for hardship cases, unable to use any of the tools out- |