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It is a unique job, a terrible job, a job that would frighten almost any man. In no other country does one man carry so many back-breaking duties on his shoulders. Only snow-haired Bernard Mannes Baruch, now a frequent Byrnes visitor, ever had comparable responsibility in the U.S. when he was head of the War Industries Board in World War I—and the strain on him had not yet become unbearable by the time the war ended.
It is a job of a million details which range from the imposition of a broad fiscal policy down to reducing the number of milk deliveries; it calls for action in any sudden civilian crisis (such as the Eastern fuel shortage), involves umpiring any major dispute between warring Government agencies. It touches U.S. economic life at its periphery and at its core, in a year when that life is rolling along at the fastest clip in history.
The broad outlines of the U.S. wartime economic policy were already drawn when Jimmy Byrnes took his job: ceilings on prices, rents (in defense areas), wages, salaries and profits; rationing of critical commodities; increased taxation and encouragement of saving. As the nation's pay envelope grew bigger & bigger, as the bulging of the nation's arsenal cut production of civilian goods more & more, the problem was reduced to one of crucial simplicity: now there are shortages of everything except money.
Best estimate is that this year income payments, after the deduction of personal income taxes, are likely to reach some $118 billion. If the U.S. people save as much as last year, they will put some $25 billion into savings accounts, war bonds, insurance premiums, payment of debts and mortgages. Washington hopes to cut the amount of purchasable civilian goods and services back to $75 billion. This leaves some $18 billion rolling around loose, and nothing to spend it on—money which may cheerfully be used to break price ceilings. Economists call this the inflationary gap; to Jimmy Byrnes it must seem less a gap than a yawning and terrible crevasse.
Fateful Six Months? That is the crux of Jimmy Byrnes's task: to prevent these loose, jangling dollars from cracking the nation's economic life wide open. As of this week, he hoped to attack it with a pay-as-you-go tax plan and compulsory savings; an attack in which he would need all the help the 78th Congress, convening this week, could give him.
It will be a tough fight, both in & out of Congress. The new Congress is certain to examine closely any Administration proposal; from another angle, its farm bloc is primed for an attack on farm ceiling prices (see p. 77). There will be other difficulties: higher taxation and compulsory savings will inevitably reduce the amount of normal, voluntary savings. It may thus be that Jimmy Byrnes will be forced to take another tack: gradual breaks in the price ceilings and a controlled inflation. So more and more the question arises: What manner of man is this, who is face to face with so many and such awesome problems?