1944 - Commerce

Commerce

The "Baruch-Hancock Report on War and Postwar Adjustment Policies" issued February 18 favors job creation and disposal of surplus property through private enterprise. Office of War Mobilization head James M. Byrnes has asked presidential adviser Bernard M. Baruch and Lehman Brothers official John M. Hancock to prepare the report, which opposes using public works and government planning to achieve its ends.

Britain institutes a Pay-As-You-Earn (PAYE) income tax program beginning April 6 (see Ruml plan, 1943).

The G.I. Bill of Rights (Serviceman's Readjustment Act) signed into law by President Roosevelt June 22 guarantees veterans $300 in mustering out pay, preferential job placement, and weekly allowances of $20 for 52 weeks (a substantial sum given the fact that rents and clothing prices are low, gasoline sells for 12¢/gallon, bus fares, phone calls, and soft drinks cost 5¢, beer 10¢/glass, cigarettes two packs for 25¢), federally guaranteed loans of up to $2,000, and financial help for education and housing. Drafted by Harry Colmery of the American Legion, who called it a "Bill of Rights for G.I. Joe and G.I. Jane," the legislation was introduced by Sen. Joel Bennett Clark (D. Mo.). Some southern legislators initially opposed the measure because it would benefit black veterans as well as white, and some Republicans opposed it out of fear that its weekly allowances would lead to indolence, but supporters recall the social unrest in Germany and Italy after World War I, when unemployed soldiers helped bring totalitarian leaders to power; they also want to avoid any repetition of the "bonus army" that disrupted Washington, D.C., in 1932. Jobs will be plentiful in the United States after the war, only one-fifth of the $3.5 billion set aside for weekly G.I. benefit payments will be used, and although the total cost of the program will be $14.5 billion it will turn out to be a fruitful investment.

A United Nations Monetary and Financial Conference at Bretton Woods, N.H., in July establishes the International Bank for Reconstruction (World Bank) and International Monetary Fund (IMF) as the Western powers look to postwar economic problems. Some 730 delegates from 44 nations have assembled July 1 at the Mount Washington Hotel at Bretton Woods, a 2-hour drive north of Manchester. Among the delegates are Cambridge University economist John Maynard Keynes; U.S. Secretary of the Treasury Henry Morgenthau Jr.; and Morgenthau's assistant for international affairs Harry Dexter White, 51. The monetary system formulated at Bretton Woods pledges every participating country to keep its currency within a percentage point or two of an agreed dollar value, and the IMF is designed to provide moral suasion and credit to keep the system alive. The system will remain in effect until March 1973, when stability rules will be generally disregarded following a 1971 U.S. move unlinking the dollar from any gold value.

The Road to Serfdom by Vienna-born economist Friedrich (August) von Hayek, 45, attacks Keynesian economic theories, pointing out that state planning is both dangerous and inefficient, and that internal contradictions in all collectivist societies not only doom them to failure but also lead logically and inexorably to tyranny (see Keynes, 1936). Marxists have called Fascism (and Nazism) "the last dying gasp of capitalism," but Hayek, writing in Britain, creates a sensation by asserting that Hitler is actually the direct and inevitable consequence of socialism: "The principle that the end justifies the means is in individualistic ethics regarded as the denial of all that is moral," he says; "In collectivist ethics it becomes necessarily the supreme rule," and he insists that even modest economic planning requires a coercive machinery to force people to cooperate with the plan. Collectivism leads inevitably to corruption, bureaucratic tyranny, and even greater inequality than capitalism and the market economy, Hayek says, and his book is read by millions of people within months of it publication. But while hard-money enthusiasts will oppose Keynes and his supporters for generations, supporters of Keynesian economics will argue that such economic views do not necessarily entail collectivism and that lassez-faire economic policies can lead to tyranny by big business. Sir William H. Beveridge has been profoundly influenced by the views of Lord Keynes and defends them in his book Full Employment in a Free Society.

Theory of Games and Economic Behavior by mathematician John von Neumann and his German-born Princeton University economist colleague Oskar Morgenstern, 42, applies Neumann's theory of games strategy to competitive business.

The $70 billion budget submitted to Congress January 10 is sharply reduced from last year's budget, but President Roosevelt observes in November that the war is costing the United States $250 million per day, and he opens a sixth War Loan Drive to raise $14 billion.

The Girls' Volunteer Corps of high-school girls relieves Japanese men for active military service. Organized in January to create a new pool of factory workers, it is changed in March to recruit unmarried girls and women aged 12 to 40; any who refuse to work in industry are subject to 1 year's imprisonment and a fine of ¥1,000. Some 472,000 girls are employed 15 hours per day in the Volunteer Corps, many of them on night shifts, and women in the workforce total 2,256,000, a figure that will grow by next year to 3,130,000.

Carbon monoxide fumes kill more than 100 Italians and possibly twice that many March 2 in a railway tunnel two miles from Balvano. Most of the victims are black-market operators, who have been obtaining chocolate, cigarettes, and other scarcities (often from Allied troops) and trading them for eggs, meat, and olive oil from country people for sale in Naples.

Labor organizer Harry Bridges begins a 2-year effort to bring Hawaiian sugar and pineapple workers into his 7-year-old International Longshoremen and Warehousemen's Union (see 1937). He has been using vigorous tactics since 1939 and will continue to do so until 1953, despite efforts to have him deported for his alleged Communist Party connections.

Wall Street's Dow Jones Industrial Average closes December 30 at 152.32, up from 135.89 at the end of 1943.