2, NATIONAL: SECURITY POLICY — - 431

whether it be by increasing supply, redirecting supply, or restricting
certain requirements. And since this over-all programming operation
is central to the whole task of economic. mobilization, it should be
located in one place. Further, this place of location should also be
the place of location for ultimate decisions, short of the President; with
respect to coordination. .of programs, settlement of disputes arising
from conflicting policies or requirements, etc. This is true because no
ultimate coordinator or umpire can act effectively unless armed with
a programming operation to provide the basis for intelligent action.
The Administrative question of where this function 1s located is not
specifically within the: economic sphere, but economic analysis: must
point out that until this operation is functioning on a centralized and
comprehensive basis there can be no effective economic mobilization
either partial or.complete. ©. oe . |

11. The completion of the first effort at . such a . comprehensive
balancing of program requirements and supply would reveal the need,
_and provide first quantitative guide lines, for the expansion of ‘capacity
in critical areas. It would also reveal areas where such expansion could
be given only a low priority. Such an analysis is essential in. order to
give meaningful and detailed content to the term “shortages”, and.
in order to translate the need for expansion into concrete terms.

12. Such a comprehensive programming operation is also essential
to reveal the way in which direct controls should:be used. The need
for such controls is no longer in question. There can now be no doubt
of the early. necessity: for complete allocation of basic materials
throughout the economy, on a scale comparable to the Controlled
Materials Plan of World War II. There can be no doubt that wide-
spread price and wage controls will be requir ed within the near future.
Maximum feasible action in the fields of taxation and credit will be
essential, not in the hope of minimizing the need for direct controls,
but in order to make those controls workable. The probable existence,
under present and pending tax legislation, of a deficit of over 30
billion dollars (annual rate) by the second half of fiscal 19521 is ample
evidence of this. —

18. It would be the height of folly, however, to initiate a , fully
comprehensive system of direct controls before having a reasonably
clear idea of the purposes which those controls were intended to
accomplish, i.e. before major policy decisions had been reached in the
light of a comprehensive analysis of the facts, and of a reappraisal
of existing policies in the light of those facts. Controls without pur-
‘pose could only weaken the economies of the free world and confuse
the populace. Nonetheless, it should be emphasized that certain tasks
to be accomplished by controls are so immediately urgent, and: the
size of the ultimate task so great, that the development of the neces-
sary organization and staff should proceed with utmost speed.