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Moreover, these executives possessed the flexibility gained from quick switching from civilian to war production and back again. L. Clifford Goad, 49, now third in command of General Motors, is the only man who converted auto plants to the production of complete airplanes. Ford's second in command, 53-year-old Ernest R. Breech, turned out radar, parachute flares, ammunition boosters and 6-17 wingtips as wartime boss of Bendix Aviation. Du Pont's boss is 48-year-old Crawford H. Greenewalt who, after getting the Hanford plutonium project in operation, now has the main responsibility for building the H-bomb. Chrysler's 45-year-old new president, Lester Lum ("Tex") Colbert, turned out 18,413 World War II 6-29 engines as boss of Chrysler's Chicago Dodge plant. Huge General Electric Co. is bossed by 50-year-old Ralph Cordiner, who helped Charlie Wilson iron out the kinks of World War II's WPB.
The Money. To men & machines, the nation had to add dollars. How was the vast arms program to be paid for? With a debt of $260 billion, the U.S. could not afford to run deficits as high as World War II's peak of $55 billion without debauching its currency completely. In 1951 the job of paying for arms would not be hard, because actual spending on arms has lagged far behind appropriations, just as in World War II. Then, the biggest appropriations came in 1942, but spending did not build up to its peak until 1945. Now, spending is far slower.
Of the $46 billion appropriated for defense in fiscal 1951 (which ends in July), only $7 billion was spent in the first six months. In the entire year, an estimated $25 billion will be spent. With new corporate and income taxes in effect, the U.S. will take in an estimated $50 billion in the current fiscal year. Thus, with $25 billion spent on defense and $25 billion on nondefense, the U.S. budget might well be balanced on a cash basis at the end of the current fiscal year.
But in fiscal 1952 there will be no such easy solution. Defense appropriations may reach at least $65 billion in an overall budget of $80 billion, and actual spending will probably rise to at least $50 billion.
Could the U.S. be put on a pay-as-you-fight basis? Many a politician was doubtful. But many a businessman at year's end thought that the job could be done by trimming at least $5 billion of fat off non-defense spending, imposing heavier income taxes for individuals and corporations, new excise taxes on nonessential goods, and closing the loopholes that exempt the incomes of insurance companies, farm cooperatives, etc. from taxes. The burden would be heavy. Even though the federal income will rise with the new tax rates and the steadily expanding economy, the Government would have to impose an estimated extra $17.5 billion in taxes to get on to a pay-as-you-go basis.
How Big? The U.S. had the men and machines to shoulder the arms job easily, and, by raising taxes, had made a good start toward finding the money. But at year's end, the outlook for war production was still poor. Since the armed services had not made up their minds what they wanted, no businessmen knew what to give them. From the President down, the vague generalities out of Washington gave no true measurement of the size of the job; instead, they tended to minimize it.