The Allocation Phase Begins

Although new priorities orders are still issued every week, the priorities system, as a master pattern for U.S. defense, is through.

Donald Nelson, who inherited the priorities tangle a month ago, was convinced last week that the tangle was beyond straightening. Before a House Committee, he disclosed that priorities soon would be replaced by outright allocation.

No manufacturer, said Nelson, can operate efficiently unless he knows how much of what material he can buy and when. Priority ratings do not tell him, because too many manufacturers in the same business have the same rating. The reaction of many a businessman, in this confusion, is to seek a still higher rating. But "when you get them all up to A-A ratings you are right back where you started."

Few businessmen will mourn the passing of priorities. Charles E. Wilson, president of General Motors Corp., told a House committee last week that the priorities system had created shortages by creating "a fear of shortage."

Priorities are a negative control, and assume a still-functioning laissez-faire economy to make them work. Under them. Army & Navy are competitors of both the businessman and the public--but with pre-emptive right to supplies. To wage total warfare with short supplies, Government, business and civilians must instead be a team. That means allocation, and allocation means planning.

To work out the revolutionary new system, Nelson drafted Albert Jesse Browning, president of big United Wall Paper Factories, Inc. of Chicago. Handsome, nimble-witted Albert Browning previously had worked with Nelson as deputy director of the Division of Purchases.

His basic tenets: the allocation authority should first get the facts on supply, defense needs and civilian requirements; then it should make an "equitable division" between defense and non-defense plants. A first step toward this is the inventory questionnaire sent out last month.

But allocation will not be as easy as that. After SPAB has its facts & figures, it will still have to assert authority over Army & Navy if its authority over business & consumer is to make any sense. On the question of whether it can successfully assert such authority, SPAB's future depends.

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