The Atlantic Report on the World Today: Washington


WASHINGTON is slaphappy with reshuffles. A wit has said that the object of every reorganization in Washington is “to turn coördinated confusion into regimented chaos.” But one does expect good things of the Office of War Mobilization under James F. Byrnes, hitherto Director of Economic Stabilization. OWM’s job is to unify Washington. The new word is “unification” — probably because “coördination” has lost its elasticity.

OWM begins with a good press because of Mr. Byrnes himself. Mr. Byrnes is “Jimmy” to all Congress, a natural as a go-between for Executive and Legislative. He has vast industry and energy. He has already shown a firm grasp of the ramified problems of the home front. He has a zest for responsibility in a capital marked by timidity of civilian administration. He has native common sense and mental agility. Mr. Byrnes looks to be the right man in the right place.

The establishment of OWM is a tribute to those members of Congress who, through their investigative committees, have long pleaded for it. In report after report the Truman Committee has urged the appointment of a super-duper “agency with centralized authority.” The House has been equally emphatic. Consult the reports of the Tolan Committee and you will find the blueprint for the Office of War Mobilization, even to the name. In Congress, however, there is no disposition to crow — only to welcome.

The men in our new “War Cabinet”

Let us look at the cabinet with whom Mr. Byrnes must work. Secretaries Stimson and Knox are antithetical types. Stimson. owl-like and deliberate, will hear all and say little, waiting to check with his War Department aides, among them some of the ablest men in Washington. Knox will explode with ideas. Mr. Hopkins brings to the cabinet the prestige and experience of his affiliation with the President. It must be remembered that he is head of the important Munitions Assignments Board which assigns the finished war goods among the Allies.

Closest to Mr. Hopkins in expertise is Mr. Nelson, head of the War Production Board, with his hand on the pulse of industrial America. Fred M. Vinson, who succeeds Mr. Byrnes as Director of Economic Stabilization, has a practical knowledge of taxation and prices. As a Congressman he was on the Ways and Means Committee, and in his latter-day post as an Appeals judge he has been intimately associated with price-control cases.

The primary purpose of the Byrnes board is to bring together the top men in both the military and civilian branches of the government under a capable director. Such a liaison has become vastly important in the management of our abnormal war production.

The depletion of butter is now offset by the repletion of guns. But you cannot get Army men to admit a surplus of war goods. As one wise man put it, if you let. them have their way, they would fortify the moon.

The ironing out of conflicts arising from the division of manpower as well as resources is likely to consume much of Mr. Byrnes’s time. Perhaps the size of the army will be reviewed. It was fixed by the Army and ratified by the President. In the circumstances of total war the decision, of course, should have been made by a “War Cabinet.” It is doubtful that Mr. Byrnes will grasp this nettle. But Mr. Byrnes can make Selective Service more selective of the men whom it is still draining from essential service behind the lines.

In general, we have left the allocation and control of manpower to the pulling and hauling of rival administrators. Now, eighteen months after Pearl Harbor, Mr. Byrnes will have to accept the results of the lack of system in manpower and make the best of it. The President in his executive order acknowledges by implication that we wasted precious time before conditions were ripe for introducing overall organization. But why? Why was not Pearl Harbor the signal for an OWM?

Wanted: more teamwork

Mr. Byrnes will have a hard job to unify the congeries of war agencies into an integrated war administration. Divided control has been the bane. It has made the task of fixing responsibility impossible. In the gasoline crisis there are three agencies in the picture: the Office of Petroleum Administration, the Office of Defense Transportation, and the Office of Price Administration. They can all pass the buck. But of liaison there is little, either among the agencies or between them and the armed services.

There are many illustrations. OPA and WPB came out with independent orders on the standardization of women’s rayon hosiery. And on the very day that Mr. Byrnes’s board was appointed to end the confusion, Food Administrator Chester Davis was telling a committee of Congress that he first learned from the newspapers the OPA decision to roll back the retail prices of meat, butter, and coffee. What a commentary on organization!

Confusion has been confounded by the competitive appointments. An example is the situation between the Food Administrator and the Secretary of Agriculture. Mr. Roosevelt gave Mr. Davis sweeping powers over food — which left Mr. Wickard Secretary of Agriculture in name, but without much to do.

These loose ends are entangling international as well as domestic organization. For instance, Secretary Wickard still sits as the American representative on the Combined Food Board, though the place should be filled by Mr. Davis, since the purpose of these boards is to bring together the men with top authority in the Allied countries. The root trouble is, of course, that the President has a congenital — perhaps political — distaste for firing anybody.

Pleasing everybody

First on the list of Mr. Byrnes’s headaches is the sagging condition of OPA, which has almost overwhelmed itself and industry under the weight of its own regulations. Administrator Prentiss Brown made the mistake of trying to be kind to everybody. He started out, to Mr. Byrnes’s dismay, by envisaging a gradual rise in prices. This was welcomed by producers but criticized by consumers. Then, when John L. Lewis went on the warpath, his policy switched to rolling back prices to consumers.

Here he found a technique for pleasing everybody but Congress and the taxpayer. The technique is to keep prices down and retailers’ incomes up by means of subsidies. But subsidies are anathema to Congress, and apparently to the Food Administrator. Mr. Byrnes believes in subsidies and incentive payments for bringing inefficient producers into production. Evidently he will support Mr. Brown in trying to persuade Congress to finance a buffer of subsidies between prices and retailers’ incomes. This was promised the miners in the President’s address of May 2.

Producer-consumer conflicts are reflected in the OPA organization. Here the rivalry is intensified by disputes on the technique of price control, how far it should go, and the manner in which it should operate. Should OPA work through business groups or in spite of them? Should OPA ignore prices in controlling profits or take them into account?

Again Mr. Brown has tried to please everyone. Example: New Dealers on his staff got him to make industry conform to new standards in the manufacture of women’s rayon hosiery, but he refused to apply grade labeling to foods. Thus the Price Administrator has added a staff problem to his troubles. Resignations are frequent and enforcement is weak. Newspaper surveys are reporting widespread violation of OPA ceilings, black markets, and consumer turmoil. A big cache of black-market potatoes was found within a few hundred yards of OPA headquarters.

The outcry for Mr. Brown’s head is consequently loud and shrill. There’s a strong move in Congress, indeed, to transfer OPA’s main functions to other agencies. It is proposed to enlarge the Food Administrator’s powers to include the rationing of food. Mr. Davis is favorably known to both Congress and the President, and is a courageous and able man.

Savings pile up

Most of the critics fail to realize that Mr. Brown is getting precious little aid from the Treasury. Our price problems are fundamentally monetary. Yet the war on inflation has been conducted with pusillanimity, and the facts on inflation are sugar-coated by the pollyannas of the Treasury.

Spendable income is piling up at a tremendous rate. This year the people are saving more than they earned in 1932 and 1933. During the first three months of this year they added over four and a half billion dollars to their holdings of money after paying taxes and liquidating debts, and after subscribing more than two and a half billions for war bonds. They actually added to savings during the Second Victory Loan drive. That this monster drive did not succeed in drawing off even one month’s accumulation of the public’s money holdings is a fact neglected in the Treasury’s handouts.

The Treasury’s publicity policy — aimed chiefly at heading off any demand for compulsory savings — is encouraging complacency. Representative Doughton, chairman of the Ways and Means Committee, actually thinks that the success of the drive dispenses with the need for higher taxes. The Treasury is responsible for Mr. Doughton’s state of mind.

Congress and appointments

Some members of Congress want to interfere with the appointive functions of the President by singling out individuals as not entitled to salary payments out of voted appropriations.

Can the legislature vote what is tantamount to the removal of officers in the Executive branch? Most constitutional lawyers, notably Representative Hobbs, say that such an act would abrogate civil rights. But the fact that such an effort is being made shows the irritation which the administrators have provoked in Congress.

Congress, however, has another weapon. This is to watch more closely over its appropriations. It has decided that none of its war appropriations can be shifted to other than stated purposes. It has already shown its displeasure with the ideological National Resources Planning Board by reducing its budget.

It looks as if Congress intends to build the next social order to its own specifications. One of these signs of the times is the attachment of bodies of experts to Congressional committees. Post-war planning is so important, however, that Executive and Legislative should combine on blueprints, and the sooner the better.

Revising war contracts

Not only the appropriating but the taxing power is thought to be in need of recapture from the Executive. Congress gave to the Executive the power to renegotiate war contracts. But this power has become so great that members of Congress are beginning to see renegotiation as an exercise of the power to levy taxes. It is tantamount to an excess profits tax.

The object of renegotiation was unexceptionable. In the hurry of contracting for new things, prices could not be determined in advance, and provision had to be made for revision. But the system has grown into a method of hijacking business on the basis of its overall profits. There is no formula for renegotiation. Thus the incidence of renegotiation is uneven. An efficient producer may get soaked and an inefficient producer may get off scot-free.

Most businessmen would prefer a higher excess profits tax, which already is an effective 81 per cent, rather than leave administrative agents in the armed services with the power to renegotiate on the basis of getting what the traffic will bear.

A bill is now before Congress to repeal this power. The armed services, of course, are opposing it. A favorite method of propagandizing against repeal is to show how much money has been recaptured, though it is not added that most of this money would have flowed into the Treasury as excess profits tax, anyway.

Where Congress deserves criticism is in the waste of time on issues which should be left to peacetime debate. No sooner had the protracted debate on the Ruml Plan been closed than the poll tax issue was reopened. Payment of poll tax as the condition of enfranchisement still prevails in seven Southern states, and a bill is before Congress to repeal it. That issue only makes for North-South division in wartime and the raising of racism.

What service poll tax repeal would do for the democratic process is problematical. North Carolina did away with its poll tax in 1920, and the percentage of Negroes voting in that state is smaller than in Virginia, which has a tax. Doubtless, moreover, the Southern poll tax states would find a means of evading a Federal legislative mandate. Thus the passage of the repeal would bring a change in form but not substance, and the wrangle would take Congress’s mind off the war and threaten our Federal unity.


The mood of the Capital is that the war with Germany will be over much sooner than is generally anticipated. Some — military as well as civilian — think the Germans will cave in before the year is out. The U-boat has now joined the Luftwaffe in nonreplacement, and this is considered more decisive even than the African conquest. Thanks to Mr. Churchill, Congress is now abreast of war developments and is not likely to challenge the “Beat Hitler first ” strategy. The Capital wonders what the Prime Minister must have thought about our long patience with the obstructionist, Mr. Lewis. Finally, the Capital argues that if the President would do more reporting to Congress, he would save much trouble for himself and incidentally cut short some cockeyed theorizings in the legislature.