Stabilizing Costs


By JAMES F. BYRNES, War Mobilization Director

Broadcast over WEAF, August 16, 1943

Vital Speeches of the Day, Vol. IX, pp. 676-680.

FOR three years or more we have been mobilizing to defend ourselves. Now we are beginning to strike to terrorize the world. The tide of battle has turned in our favor because we have succeeded in mobilizing for war. In total war our fighting men do not win on the battle front unless back home their fathers and mothers, brothers and sisters for months past have worked as a team building up the supplies and the weapons with which battles are won.

Since we have begun to win some real and decisive battles on the fighting front, there has, unfortunately, been a tendency to slow down our production pace and to start quarreling among ourselves. This may be just a relaxation of the tension that gripped us when there was grave danger that we might lose this war before we could mobilize our resources for the fight.

But we must not forget that it was the united effort of our people on the home front that has brought our fighting men where they are in Africa and in Sicily, in the Solomons and the Aleutians, and has made possible their devastating aerial bombardment of Germany's war industries. And it will be only through our continued united effort on the home front that our fighting men will be able without undue delay and unnecessary bloodshed to overcome the Axis powers both in Europe and Asia.

Brilliant have been the achievements of the American, British and Canadian forces in Africa and Sicily. But we have met and defeated less than 7 per cent of the combat divisions which the enemy has in the European area. The strategic results of these victories are of major importance,

since they have given us the initiative, but the initiative is of no value unless followed vigorously with great forces.

Our heroic Russian allies have been fighting against approximately 40 per cent of the enemy's European combat divisions. So the enemy has been using less than half his combat divisions in actual battle, while the Allies have been using nearly three-quarters of all their combat troops which are in the general European area.

Allies Superior Only In Air

If Italy is knocked completely out of the war and her army surrendered, the enemy will still have more combat divisions in Europe than will the Allies, and will have as many divisions as the Allies will have even after the American mobilization is complete with its full strength of over ninety divisions. Only in the air will we have numerical superiority.

Even with Italy out of the war, Germany will be as strong for a defensive war as she ever was for an offensive war. This, of course, involves shortening the Russian front, evacuating much Russian territory and adopting an entirely defensive plan of campaign.

Severe as have been the losses inflicted on the Germans by the Russians, they are still much less than those suffered by the Russians to date. In the war of attrition, the Germans still have a huge net balance in their favor in military and naval losses suffered, strategic advantages gained, territory and peoples conquered, and even in equipment destroyed, as to date the Allies have lost more by U-boat sinkings than the Germans have lost through the magnificent bombing operations of the American and British air forces, although the current operations here are in our favor.

What we have gained is that priceless edge on the enemy, the initiative, and Allied morale and material and resources are increasing, while those of the enemy are decreasing. But our enemies in Europe and Asia have not yet been struck a fatal blow, and we cannot relax for one moment in the vigorous prosecution of the offensive.

In the Far Eastern theater, Japan occupies one-fourth of the territory of China proper, dominates half its population and controls developed resources. In addition, she has taken over from neighboring countries and islands many valuable resources, including 90 per cent of the world's crude rubber.

Early Victory Unlikely

There is nothing to justify the hope of unconditional surrender by the Axis powers in the near future. It is by no means clear that we are today as near winning the war as the Axis was in the summer of 1940. No full-scale offensive against Japan has yet commenced. The heroes of Bataan are still prisoners of the Japs. No Allied army has crossed the borders of Germany. Before that is done thousands of American soldiers will make the supreme sacrifice. The roads to Berlin and Tokio are still long, hard and bloody.

Our overconfidence is based in a great measure upon the belief that the Italians no longer possess the will to fight. That cannot be said of either the Germans or the Japanese. And as the Nazis and Japs read of our reduced production and our absenteeism they may think that the American people no longer have the will to make war. We must realize that the war will be won by those who win the last battle. And the last battle has not been fought.

We have every reason for confidence in an ultimate overwhelming victory over both Germany and Japan, but I am authorized by the President to say that in his judgment as of today the major battles lie ahead of us, not behind us.

The prizefighter who lands a blow weakening his opponent does not immediately stop fighting in order to consider how much money he is going to win and how he will spend it. When he returns to his corner he doesn't quarrel with his seconds, and his seconds do not start quarreling among themselves. On the contrary, the fighter, after being refreshed by his seconds, puts everything he has into the effort to deliver a knockout blow to his opponent. In fighting the Axis we must follow the same course, whether we are fighting on the battle front or working on the home front.

It is frequently said that conditions at home are worse than they were a year ago. If this merely means that, as we have become better mobilized we are feeling the stresses and strains of total war, which we did not feel a year ago, no one could deny it. But if it means that we have slipped badly backward on the home front, I think we should refresh our memories.

Progress Toward All-Out War

We should recall that not so many months ago people were disputing the need of all-out conversion and the stoppage of the production of passenger cars, electric refrigerators and radios, just as today they are disputing the need of drastic limitations on the use of gasoline.

It is not so very long ago that people were debating the need of building so many new steel, aluminum and magnesium plants, just as today they are debating the need of more men for our armed forces.

It is only a few months ago that many people, some in high position, told us we were losing the war and that our whole production program was in confusion.

Yet out of this period of mobilizing for total war we have achieved a war-production program which has caused one strutting dictator to fall almost before the real fighting began. Out of this period of travail we have built and equipped a war machine which has brought fear to the heart of every tyrant and hope to the breast of every lover of liberty.

When we first started mobilizing for war we had, generally speaking, as much as we required for our home needs. But with production reaching unprecedented goals and with millions of our men being drawn into the armed forces, we no longer have goods and services for civilian use in sufficient quantities to satisfy the normal demands of our people.

We do not now have poverty amidst plenty as we had in 1932, but we do have a scarcity of goods amidst a surplus of spending money.

If we did not feel the hardships of war on the home front it would be a certain sign that we had not yet mobilized ourselves for total war. Shortages of goods are in a very real sense evidence not of blundering but of all-out mobilization for war.

It inconveniences us when we cannot use our automobiles for pleasure and for greater mileage. But after all, there are greater sacrifices. Today, our casualties number 90,454.

We complain of the number of physicians who were permitted to enter the armed services because of the inconvenience thereby caused the civilian population. But there is comfort in the knowledge that, whereas in the last war, of our wounded 7.1 per cent died, in this war, of our wounded only 3.7 per cent have died.

Half Of Output Goes For War

At the peak of the last world war little more than a quarter of our national output went for war purposes. Now a full half of our national output is being taken to fight the war.

During the last war our Allies were able to furnish half of the supplies required for every soldier we sent abroad, and that half which our Allies furnished included over 90 per cent of the artillery and the heavy ammunition used by our men. In this war, we have borne the full burden of equipping our own men. American industry has furnished a vast quantity of equipment purchased outright by our Allies.

In addition, we have furnished them material which totals in dollar volume the amount needed for ten million troops, besides huge quantities of aircraft.

Thus, we have sent by lend-lease 45 per cent of our tanks, 46 per cent of our locomotives, 40 per cent of our railroad cars, 23 per cent of our combat cars and carriers, and almost one-fifth of our unprecedented airplane production.

But I do not wish to convey the idea that because we have done so much, we can not and should not do more.

What then can we, or should we, do about the shortages which are producing increasing strains in our civilian economy?

We certainly are not going to take from our fighting men or from the fighting men of our Allies the things which they must have. As to the shortages of goods which are not essential, we must simply make up our minds that we want none of them for the duration. As to the shortages of necessities, we must do what we can to increase the supply without hurting the war effort. We must see that the available supply is equitably distributed in accordance with need and not in accordance with the size of our pocketbooks.

The programming of our all-out mobilization for war was not a simple task. We had to prepare, on the basis of estimates, war-production programs large enough to give us superiority in fighting strength against our known enemies. We could not know all the fields in which we would have to operate. The programs were so vast and complicated that no one, business man or professor, civilian official or military officer, Democrat or Republican could look into the future and tell exactly how these programs, when they swung into full production, would fit into the changing requirements of our war plans.

Programs Under Review

The programs have now developed to the point where they can be subjected to a really critical screening to determine whether, in the light of known war conditions, some of them may not be reduced and others extended to the advantage of our over-all war plans, including necessary civilian supply.

At the request of the Office of War Mobilization the principal procurement agencies have set up within their own agencies committees composed of persons not responsible for the drawing up of the existing programs, to make a critical review of those programs.

The Office of War Mobilization has appointed a special representative to meet with and aid each of these committees. Under this procedure each agency feels a real sense of responsibility for the revision of its own programs. Much progress has been made. As a result, we hope that without lessening the war effort, some essential supplies for civilians will be increased.

But with the most efficient use of our man power and materials there will still be acute shortages of civilian necessities. That is why we, like every other country engaged in total war, must accept rationing and price and wage control as the only effective means by which the necessities of life may be equitably distributed at prices within the reach of the average family.

There is no form of war-time rationing and price control which does not involve a degree of regimentation which we would not tolerate in normal times. But this regimentation of our civilian life is as necessary in a period of total war as military discipline is on the battlefield.

Without rationing and price control there would be a food famine in thousands of American homes. Those with the most money and most influence at the corner grocery store would get more than they are entitled to have in war time and would get it at the expense of their neighbors with less money or less influence.

Factory Pay Up 34.7 Per Cent

To those who demand higher wages it is fair to recall that during the last war, from April, 1917, to November, 1918, a period of nineteen months, the cost of living rose 29.5 per cent. In the first nineteen months of our active participation in this war, from December, 1941, to July, 1943, the cost of living increased only 12 per cent. During approximately the same period the weekly wages of factory workers as a whole went up 34.7 per cent. This does not mean hourly wages. It means the money a man takes home each week.

To those who demand higher prices for farm products, it is fair to recall that the net income of the farmers as a whole in 1942 was 50.7 per cent higher than it was in 1941. It is estimated that net farm income in 1943 will be 24.8 per cent higher than ft was in 1942, when it was higher than ever before in history.

To those who want higher prices for their manufactured products it is fair to recall that the net profits of corporations after taxes in 1942 were 4.2 per cent higher than they were in 1941, and 83.2 per cent higher than they were in the pre-war year 1939. It is estimated that corporation profits after taxes in 1943 are running 12.2 per cent above 1942.

We should remember that our boys are fighting, not to increase the income of any one of us, but to safeguard the liberties of all of us.

We cannot abandon the hold-the-line order on the price front without abandoning it on the wage front. And if we abandon it on both fronts, the twenty millions or more of our people receiving low wages, small salaries and small fixed incomes which have not been increased materially since the war started will be ground below the level of fair subsistence.

Apart from those who before the war were unemployed or were receiving substandard pay, no man or woman who is as well off as he was before the war started has a right to complain that he is not fairly treated, unless he has first done his part to see that those who are less fortunate than he are justly treated.

He should think first of the soldier's wife, the soldier's mother, the preacher, the teacher, the small tradesman, the state, county and city employees, the old folk living on small pensions whose purchasing power has gone down as the cost of living has gone up. There is no room in total war for the politics of pressure groups.

Living Cost Must Be Kept Down

The first interest of every good citizen should be to see that there is no further rise in the cost of living. If, in some cases, increased production costs make further price adjustments unavoidable in order to obtain necessary war production, then we must, by more rigid price control, or subsidy, of other items see that there is no rise in the cost of living. It does not make sense to say that we can use subsidies

to prevent numerous specific food prices from rising but that we cannot use subsidies to reduce a limited number of key items in the family food basket to offset rises permitted in other food items.

Congress, by the act of October 2, 1942, declared that prices and wages should be stabilized so far as practicable at the level of September 15, 1942.

The cost of living rose 6 per cent between September, 1942, and May, 1943. The rise was halted in June and the figures for July indicate a drop of nearly 1 per cent. The June and July figures do not fully reflect the reduction in the cost of living which has been brought about by the recent government action reducing ceiling prices on meat and butter by 10 per cent, on fresh fish by 20 per cent and on cabbage and lettuce by 50 and 25 per cent, respectively. If these reductions were fully reflected they would show that the cost of living today is only 4 1/2 per cent above the September, 1942, level.

At a recent meeting of the War Mobilization Committee the President requested the Director of Economic Stabilization to work out, in co-operation with the Food Administrator, the Price Administrator and the Reconstruction Finance Corporation, a food-price program with a view to stabilizing the cost of living as nearly as practicable at the level fixed by Congress. Definite progress is being made. There will be a substantial reduction in the cost of actual necessities—not of fancied wants.

But wages as well as prices must be held. The fight against inflation can be won if we have the will to win it. It cannot be won if the will for higher wages and higher prices is stronger than the will to keep down the cost of living.

Constructive criticism is helpful, but it is not helpful to disparage our national effort. It has repeatedly been charged by persons of recognized prominence that we have a food shortage, and that it is due to our failure to reclaim 47,000,000 acres which were lost from food production between 1932 and 1939. I admit their sincerity but not their figures nor their conclusions.

Food Output Greater

This figure of 47,000,000 acres is misleading. It apparently refers only to the seventeen principal agricultural crops. During the period of 1932 to 1939 the acreage of other crops increased by 9,000,000. Since 1939 we have increased the acreage of fifty-two agricultural crops by 16,000,000 acres, so that the total harvested acreage in 1942 was only 22,000,000 less than in 1932.

The important thing, however, is not the acres in production, but the food produced. We eat food. We do not eat acres.

With 22,000,000 less acres in production and with less man power in 1942 than in 1932, the American farmer produced 36 per cent more food.

We have done this through efficient soil-conservation programs, by increasing our yield per acre of corn from 26.5 bushels to 35.5 bushels, of cotton from 173 1/2 pounds to 275 pounds, and of wheat from 13.1 bushels to 19.8 bushels, all under the intelligent agricultural legislation developed during the last ten years, and supported by members of both political parties.

Instead of the war resulting in less food for the civilian population, our people are eating more food now than they did before Pearl Harbor. Neither the farmer nor the government can be blamed if the civilian population, because of their increased purchasing power, and our war requirements, cannot be supplied with all the kinds of food they want and as much of every kind as they would like to buy.

There are many persons in and out of government who know exactly how food production can be increased above the record-breaking yield of 1942. They have the advantage of the Food Administrator because they have no responsibility. He has. He finds it a difficult problem, but he has developed a comprehensive food program which is now ready for submission to the President and to the Congress when it convenes.

We need more coal. This is due to increased requirements for civilian needs and for military purposes. At the same time our production of coal has decreased.

Mining Hours Increased

Because of the threatened coal shortage, several days ago the President requested me to ask Secretary Ickes to consider the advisability of increasing the working hours in the mines. Secretary Ickes, in accordance with the law, applied to the War Labor Board for authority to change from a seven-hour day to an eight-hour day, so as to permit a forty-eight hour week. Today the board issued an order permitting an eight-hour day in conjunction with a forty-eight hour week at mines designated by Secretary Ickes. The order has been formerly approved by the President.

Work as hard as we may, we will not preserve a stable economy if we do not have the courage to control the surplus of spending money which is flooding our markets. While a sizable minority of our people have less purchasing power than before the war, rising prices and rising wages have given the majority of our people a vastly greater purchasing power than they have ever before enjoyed and at a time when we have not the man power to produce the goods which they would like to buy.

Allowing for the present higher taxes and for normal savings, our people have nearly twenty billion more to spend a year for goods and services than there are goods and services available for them to buy. It is hard to control prices, enforce rationing and to stamp out black markets when people have so much surplus spending money.

For our own protection we must drain off by taxation or freeze by enforced savings that excess purchasing power. If we do not, we will probably try to outbid one another to get the goods and services we want. If that happens we will not get more but we will pay more, and we will find that the money we have put into insurance policies and into savings accounts is worth less and the dollars we have earned will buy less.

We have spent too much time arguing how much of our past taxes should be forgiven in order to get on a pay-as-you-go basis, instead of getting down to the grim business of imposing the higher taxes which total war requires. We cannot ask our soldiers to do our fighting and also to pay our taxes when they return from the battlefields. War taxation should not become a pawn in a political game. It is a stern duty to be met by every citizen in accordance with his capacity to pay.

Critics Busy In Other Wars

In every war there are noisy minorities engaged in intrigues and cabals to belittle the war effort of the nation both on the home and fighting fronts. During the Revolution even in the Continental Congress there were those who were constantly finding fault with General Washington and his conduct of the war. In the war between the states, there were those even in the Congress who were continually muttering against what they considered the blundering and ineptitude of President Lincoln. It was said that they had lost the confidence of their countrymen. But these littlegroups of little men never understood the patriotic zeal of the common men and women who gave their full devotion to their great war leaders.

In the last war there were those who attacked President Wilson as a war leader and as a peacemaker. But now we realize that, had his health not failed him and had the people supported his wise leadership, this war, in all probability, would never have occurred.

Destructive critics are not confined to any political party.

Nor has any political party a monopoly of those who now in their zeal for party success divert the minds of the people from the war effort. In the fall of 1944 there will be a national election. Then there must be political discussion. Until then, the less the better. The people of America are not concerned about party advantage or personal ambition. They believe in equality of sacrifice. They have faith in the free world for which freedom-loving people everywhere are righting and dying. They have the will to win.