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- /. ╚The Postwar Economy
-
-
- [At the war's end, the U.S. stood preeminent in the world. It
- had performed a miracle of production as the "arsenal of
- democracy"--and of financing, in turning out so much war
- materiel while diverting only 40% of its gross national product
- to defense--and of transport, in getting these armaments to the
- U.S. fighting man half a world away and to the other far flung
- places where they would do the most good.]
-
-
- (August 20, 1945)
-
- Marshal Stalin's famed Teheran toast to U.S.
- industry--"Without American production the United Nations could
- never have won the war"-- was never more appropriate. The war
- was ending, and the record was in.
-
- In the five years since the fall of France, U.S. industry and
- labor had turned out:
-
- >>299,000 combat planes (96,000 last year); >>3,600,000
- trucks; >>100,000 tanks; >>87,620 warships (including
- landing craft), 5,200 merchant vessels; >>44 billion rounds
- of ammunition; >>434 million tons of steel; >>36 billion
- yards of cotton textiles for war.
-
- Despite this, U.S. home-fronters had remained the best housed,
- best clothed and best fed people in the world. But U.S. basic
- resources had suffered what might be an irreparable drain. Said
- an anxious Mead Committee report fortnight ago: war has left the
- U.S. with only enough oil for twelve years (at present
- production rates), enough iron ore for eight years, a seriously
- depleted timber supply.
-
-
- [The U.S. had also accomplished other deeds that would have
- a profound effect on post-war life. To the wonder drug
- penicillin, which had been discovered in the 1930s and perfected
- in wartime so that it played a large role in keeping fighting
- men alive, U.S. laboratories added other antibiotic drugs such
- as streptomycin. By the war's end nylon, which had gone into
- parachutes and other war materiel, was available for men's
- shirts and women's stockings. The U.S. spent half again as much
- on perfecting radar (nearly $3 billion) as on the atomic bomb
- program; radar was now set to myriad new peace- time uses. One
- of the most profound pieces of "social" legislation passed, in
- terms of the numbers of people in directly and indirectly
- affected, then and later, was the "G.I. Bill of Rights," which
- pushed millions of ex-servicemen and their families into the
- middle class by making university education and housing
- affordable.]
-
- (April 3, 1944)
-
- To the time-honored list of things which U.S. politicians may
- be counted upon to denounce relentlessly--the housefly, the
- common cold, the man-eating shark--Washington's Senator Homer
- Bone in 1937 added cancer. When he introduced a bill for a
- national Cancer Institute, it bore the sponsoring signatures of
- 94 Senators. (The other two hastened to add theirs before the
- bill came to a vote.) Last fortnight Missouri's Bennett Champ
- Clark hit on something which politicians almost as unanimously
- favor. He introduced a veterans' benefits bill, jointly
- sponsored by 80 other Senators. Last week, amid plaints by the
- remaining 15 Senators that they had not had a chance to sign it
- in advance, the Senate passed the bill unanimously. The House
- is expected to follow suit this week.
-
- The bill came from American Legion. It was nicknamed the "G.I.
- Bill of Rights," as it combined in a single measure most of the
- proposals for helping veterans that have been made in Congress,
- except mustering-out pay (already voted) and the inevitable
- bonus:
-
- Schooling for at least one year, and up to four; in
- elementary, business, high or higher schools; with allowances
- of $500 a year for tuition, plus $50 a month for subsistence and
- an extra $25 for one or more dependents.
-
- Loans up to $1,000 for buying homes, farms, farm equipment or
- business properties, with no interest the first year, and only
- 3% thereafter.
-
- Special job-finding services.
-
- Unemployment benefits up to 52 weeks at $15 a week, plus an
- extra $5 for one dependent, $8 for two, $10 for three.
-
-
- [While the American home front had had it awfully easy
- compared to civilians in other countries, it had suffered its
- share of hardships-- shortages, rationing, the corruption of
- black markets. Now with the coming of peace, Americans wanted
- an end to controls that had seemed warranted in wartime and a
- return to a more unfettered economic life. This was a lot easier
- said than done.]
-
- (March 4, 1946)
-
- During the war, the U.S. had seemed to do a pretty fair job
- of avoiding the symptoms of inflation. But actually the
- Government had failed to combat the real causes of inflation.
- Only 41% of the cost of war was paid for by taxation; the rest
- was financed by selling Government bonds, almost onehalf to
- banks. This created what Federal Reserve Board Chairman Marriner
- Eccles calls "monetization of the public debt": by the complex
- workings of modern finance, sale of a million dollars in
- Government bonds to a bank produces the same end result as
- printing a million $1 bills.
-
- Rough Money. In the wartime economy, everything was scarce but
- this artificially created money. The money was poured out in
- high profits (before taxes) to encourage industry, high wages
- to encourage labor, reasonably high prices to encourage farmers.
- It had--and still has--no place to go.
-
- From Pearl Harbor Sunday to V-J day, savings of individuals
- had risen $145.5 billion. Money in circulation had quadrupled
- over the prewar period. The process was still continuing.
- Individual incomes in the twelve months ending next August are
- estimated at $123 billion. Along with past savings, this will
- give the public around $300 billion of spendable money--and the
- last estimates of the year's production foresee only $101
- billion of goods and services to spend it on.
-
- By the inexorable workings of the law of supply & demand,
- Economic Adviser Chester Bowles was in for a rough year.
-
- Clogged Channels. There was only one real cure--production.
-
- During the war, U.S. manufacturing capacity grew so fast that
- nobody really knows how big it is today. Steel capacity,
- 81,619,000 annual tons before the war, is now 95,000,000 tons.
- The auto industry, which never made more than 4,500,000
- passenger cars a year, can turn out more than 7,000,000 in the
- next twelve months.
-
- But these statistics in the big industries tell only part of
- the story. The channels from factory to consumer are clogged now
- by postwar readjustments, by continuing shortages of parts and
- thread and the little businessman's zippers, by strikes, shifts
- in the working population, hoarding by speculator's who are
- betting on higher prices. Once the channels are clear, they will
- start spouting a flood of automobiles, electric fans, chromium
- bathrooms, aluminum dishwashers, movie cameras and nylon such
- as the world as never seen before.
-
-
- [Price controls were abruptly dropped in mid-1946, after
- Congress failed to reach agreement on how to moderate them.]
-
- (July 15, 1946)
-
- On the surface, the U.S. people's first reaction to the sudden
- end of price controls was violent. Headlines told of prices for
- meat, milk, butter and bread shooting up like fat in a fire,
- accounts of sky-high price boosts sputtered noisily in the news.
- The first day or two it seemed to many that the nation had
- caught panic at the notion of being on its economic own, and
- free of Government price controls.
-
- As the week of uncertainties wore on, many a citizen got over
- his first fright of rocketing prices. By the end of the long
- Independence Day holiday most people felt somewhat better. The
- big blow they had expected had not hit. The nation's economy had
- not been shaken to its roots; it had hardly been shaken at all.
- The dollar had not gone to pot. No panicky buying had developed
- at any market level.
-
-
- (October 21, 1946)
-
- Life among the shortages, like life among the Ubangis, was
- quite comfortable if you only knew the rules. You had to be
- sharp, keep an open mind, and remember that the whole thing as
- a matter of percentages. You had to get up early and work both
- sides of the street. You had to keep your hand on the throttle
- and your eye on the rail. You had to make friends and influence
- people. You had to know Joe and make with the dough with a
- hey-nonny-nonny and a vo-de-o-do.
-
- But in Manhattan a thousand sharpies got the word "beef" on
- the grapevine from the 14th Street Market, were thus able to
- stand in the rain all night, get into the scrimmage and out
- again with the bacon by noon the next day. You could get a bear
- roast in Denver if you knew the right party. And all over the
- U.S. people were eating venison.
-
- Meat was just one of a hundred fields of endeavor. Baked beans
- were scarce in New England. Fatback was scarce in the South and
- thousands of cooks were grumpily boiling vegetables without
- it--just like the dam-yankees. But you could get things, Mac.
- If you wanted to load up on wind, gin, rum or all three you
- could get a new automobile by trading in your used car for a
- reasonable price--say about nine dollars.
-
- Housewives in New York's suburban Westchester County
- maintained espionage networks reporting to each other the
- arrival of chain-store trucks, and got first grab.
-
- Then there was barter. A car would get you an apartment and
- an apartment would get you a car. A butcher in Atlanta was doing
- well in the house construction game--meat got him nails,
- flooring, plumbing fixtures when other builders were shut down
- tight. World Series or college football tickets, good liquor,
- and even soap, automobile batteries, and sugar had become the
- wise guy's wampum.
-
- Millions of U.S. citizens seemed to find the whole business
- highly satisfying. Housewives complained vociferously, but
- brought home overpriced hamburger as proudly as if they had the
- Hope Diamond tied up in a pickle carton. There were other
- millions who got mad, concluded 1) that they were living in an
- immoral age; 2) that somebody was to blame; and 3) that they
- were rapidly going broke. But if they got ugly with the butcher,
- the baker and the candlestick maker they ended up eating
- eggplant. To get the goods you had to smile, smile, smile.
-
-
- (January 13, 1947)
-
- The U.S. in 1946 rid itself of wartime controls as a giant
- might escape form a straitjacket--roaring, ripping and kicking,
- with little regard for himself or the bystanders. Nevertheless,
- Gulliver, freed, defeated most of the Blefuscudians--the
- shortages of foods & goods. And the great drop in Government
- spending ($45 billion less than in 1945) was made up by private
- spending. U.S. retail sales reached a record or $96 billion;
- $105 billion was poured out in wages & salaries, and net
- corporate profits totaled an estimated $12 billion, some 20%
- more than 1944's record high. Farmers raised the most profitable
- crop in history. And the nation's gross national product (goods,
- services, construction, etc.) soared up into the ionosphere. The
- total product-- an estimated $195 billion--was some 61% more
- than in any other peacetime year.
-
- Most of the worst shortages had ended by year's end.
- Once-bare shelves were heaped with white shirts; nylon and meat
- lines melted away; "sale" was reintroduced into the language.
- There was more than there had ever been--at a price. In turning
- it out, the U.S., by any temperate standard, had done a giant's
- job.
-
- Yet no one seemed satisfied. (Americans never are.) For the
- great expectations had been greater than ever Gulliver unbound
- could fulfill.
-
-
- [The biggest, or at least the most visible, problem plaguing
- the U.S. economy was labor. During the war, U.S. labor, with the
- notable exception of John L. Lewis' coal miners, adhered to a
- no-strike pledge. With the war's end, labor felt freed to push
- for higher wages, even though price controls were still in
- effect.]
-
- (October 1, 1945)
-
- Peace was busting out all over. The sights and signs were
- everywhere.
-
- The sign of the times was "52 for 40 or Fight." The sight of
- the times was bluecoated cops standing by at picket lines.
-
-
- (October 15, 1945)
-
- Workers had demanded 52 hours' pay for 40 hours work--the
- national labor formula for making as much in peacetime as in
- war.
-
- The unions, now grown to a total membership of 14,500,000,
- were in no mood to slide back form the earning levels of the war
- years. Their methods of dealing with management had been
- developed to a science. Many of them had to demand wage
- increases and better working conditions to keep from losing
- their newly acquired membership; many of them, despite the
- efforts of top-level bosses, were unable to control rebellious
- and irresponsible locals.
-
-
- [Telephone strikes, bus strikes, steel strikes, meat-packing
- strikes, electrical strikes; by February 1946, more Americans
- were out on strike than ever before. The government finally
- allowed some prices to rise to accommodate wage raises, but it
- was only a respite. Then Lewis' coal miners went out again, for
- what seemed like the most trivial of reasons. The strike lasted
- six weeks. Coming at the end of winter, the strike had crippling
- effects: hundreds of factories shut down and laid off workers;
- rail lines slowed. There were widespread electric power
- shortages, especially in Chicago. European countries dependent
- on U.S. coal shipments were also affected. Nobody could really
- understand the reasons for the strike.]
-
- (May 20, 1946)
-
- Did the great man himself know what he had on his mind? What
- does John Lewis want?
-
- He has no real desire to reform the economy. He is actually
- an economic classicist.
-
- Is he obsessed with a desire for power? Time & again he has
- deliberately thrown away chances to increase his power, as when
- he broke with Roosevelt. Time & again he has recklessly
- doublecrossed with reviled the very men who could help him to
- power.
-
- Is his objective a strong, unified labor movement? No labor
- leader in U.S. history has split labor into so many parts and
- hacked off so many splinters. does he really give a damn for
- labor?
-
- Obviously he wants a bigger and stronger miners' union,
- because that is the platform on which he parades. but he has
- very little association with mining these days. The country's
- welfare is the miner's, and for the country's welfare he has
- shown a little regard.
-
- John Lewis' one objective may be a very simple one: just to
- be in the limelight. Throughout the years, like a potbellied
- moth, he has courted the flame of publicity. History, while
- recording his contributions--his gains for his miners, his great
- exposition of the idea of industrial unionization, his usually
- peerless strategy--may also record that he was one of U.S.
- labor's greatest charlatans.
-
- His strike had approached the proportions of the British
- general strike of 1926, which had boomeranged on labor. He would
- not want that. There was a point beyond which he did not
- care--or dare--to go, which he had carefully calculated. He fed
- on discontent but he had no stomach for disruption.
-
- He waited. He thought he had stirred up just the right amount
- of public indignation to force the President to intercede. He
- liked dealing on the top level.
-
- Then the message came; Harry Truman summoned him--but not a
- moment too soon. Triumphantly, Lewis acted. Three hours before
- he was due at the White House, he ordered his miners back to
- work--not permanently, but for a truce of twelve days.
-
- There might be a truce, but with John Lewis around there could
- never be much peace.
-
-
- [Railway strikes, dock strikes, maritime strikes, sugar
- strikes-- the U.S. economy limped into 1947. Yet another coal
- strike was finally met by government injunctions and fines as
- well as outraged public opinion. This time, Lewis backed down.
-
- In the meantime, partly in backlash, the 1946 midterm
- elections had produced a Republican majority in both houses of
- Congress. The Republicans quickly set about writing a labor bill
- that would repeal some of the liberalizing provisions of the
- Wagner Act of 1935 and other 1930s New Deal legislation and curb
- some of the excesses they deplored. They came up with the
- Taft-Hartley Act.]
-
-
- (April 28, 1947)
-
- The American people had had enough, and the House knew it.
- Labor's spring strike fever had given the nation a new fit of
- chills. The House, even more constituent-conscious than
- labor-shy, reacted with a stunning strike-curb bill, then
- clinched its purpose by passing the measure by a stunning
- majority--308 to 107--plenty of votes to override a presidential
- veto. With the 215 Republicans, 93 Democrats broke ranks to vote
- for the bill.
-
- The 66-page measure struck in three directions: at the
- National Labor Relations (Wagner) Act, at the Norris-La Guardia
- (anti- injunction) Act, at Communist influence in trade unions.
- Its chief points were long, strong and sharp. They were nailed
- down by stern rules and broad new definitions. The only kind of
- "compulsory unionism" the bill permitted was the union shop.*
-
- It would deprive workers of the right to strike over anything
- but questions of wages, hours, work requirements and work
- conditions; strikes over any question of union security would
- be unfair labor practices. These rules drastically revised the
- so-called "Magna Charta of Labor"--the Wagner Act. By giving
- employers the right to ask for court injunctions when confronted
- by an "unlawful strike," the bill drastically revised the
- Norris-La Guardia Act. It attacked Communist union influence by
- barring not only Communists, but even ex-Communists and
- party-liners from holding union office.
-
- Organized labor wailed on agony. William Green had declared:
- "Hartley will be classified as one of the labor's chief
- enemies." C.I.O. spokesmen called the measure "a poisonous
- witches' brew." Old New Dealers in Congress echoed them.
-
- (*Closed shop: only union members may be hired. Union shop:
- workers must join the union after they are hired.)
-
-
- (June 23, 1947)
-
- If Harry Truman signed the Taft-Hartley labor bill, which
- Congress had overwhelmingly approved, organized labor would
- never forgive him. At least that was what labor's spokesmen were
- telling him. On the other hand, if the President vetoed the
- bill, he would bear the brunt of public resentment over any new
- strike crisis.
-
-
- [Truman vetoed the bill, but Congress overrode the veto, and
- the bill became law. Labor reacted defiantly.]
-
- (July 7, 1947)
-
- The C.I.O. and A.F.L., working separately but on parallel
- tracks, opened their legal campaign. There was ample precedent
- for such tactics. All important laws get their court tests, and
- labor laws get the most stringent tests of all.
-
- Labor would also take determined action on other fronts.
- Wherever possible, it would evade the law by such devices as
- forcing under-the- counter closed shops on labor-hungry
- employers. Wherever it could, it would bypass the law; for
- example, by disregarding the new NLRB.
-
- Across the nation, labor's fight on the Taft-Hartley Act would
- go on until every sentence had been challenged and bitterly
- tested.
-
-
- [Organized labor is still trying to have the Taft-Hartley act
- repealed. Another notable piece of legislation was passed by
- that Congress.]
-
- (March 31, 1947)
-
- For the first time in 14 years, Congress last week proposed
- an amendment to the Constitution of the United States. It
- concerned presidential tenure. Under its terms, no person can
- be elected to the presidency for more than two terms, or more
- than one term if he has served more than two years of another
- President's unexpired term.
-
- Thus the maximum term of any president would be ten years to
- the day. Gibed the Democrats: the Republicans had finally, and
- posthumously, been able to defeat Franklin D. Roosevelt for a
- third term.
-
-