The Department has broken down the production guides into State and county goals, and teams of specialists have visited key production areas to assist local authorities in explaining to farmers the necessity of achieving the goals. Such activities were stepped up just before planting time in important producing areas. The Department is also using its authority to adjust price supports to encourage the output of crops that are most needed.

THE FOOD SUPPLY OUTLOOK IS GOOD

The American farmer has been producing at a rate nearly 40 percent above preWorld War II levels, and the American standard of eating has been high. The present high level of food consumption is expected to continue in 1951. In fact, in spite of higher military demand, civilian food supplies are likely to be a little larger than in 1950, when they were 12 percent higher, on a per capita basis, than in the prewar period of 1935-39. Stronger consumer demand resulting from higher consumer incomes is expected to exert more pressure on the foods consumers want most-meat, dairy products, eggs, fruits, and vegetables.

SHORTAGES IN FARM REQUIREMENTS HAVE ALREADY APPEARED

Shortages that have already appeared will make it difficult for some farmerseven with conversation of existing equipment and use of alternate materials-to hit their 1951 production targets.

Adequate farm labor will undoubtedly be the most difficult problem facing the farmer in 1951, but he may also face some problems in securing equipment,

fertilizer, and pesticides. Material shortages will also complicate the problem of food processors and distributors.

The Department of Agriculture is maintaining a constant survey of needs for machinery, fertilizer, and pesticides in order that allocations of scarce materials can be made with a full appreciation of agriculture's needs.

Farmers themselves can, however, do much to alleviate shortages. They have already been urged to keep their machinery in good repair and to limit purchases of new machinery to essential replacements or to the minimum required to meet expanded production schedules. As pesticides, they can use other effective materials in place of the chemicals they have become accustomed to in recent years. Conservation of cotton and burlap on the farm, especially through reuse of cotton and burlap bags, is urged.

DISTRIBUTION PROBLEMS BEING STUDIED

In addition to adequate production, efficient and equitable distribution of food, fiber, and other farm-produced products is needed if we are to meet defense requirements and hold the line of prices. Special committees are now making estimates of total food supplies from all sources, and of total requirements both for the short and the long run. These estimates will be used in making recommendations on distribution controls, on agricultural production guides, on desirable stock levels, on imports, and for other uses. It has not been necessary, as yet, to impose stringent distribution controls except in a few cases. Exports of cotton, cotton waste, cotton linters, and cotton linters pulp are subject to allocation at the present time. To relieve congestion at seaports, the Defense Transport Administration, in cooperation with the Department of Agriculture, has made the movement of grain through port terminal warehouses subject to a permit system.

MOBILIZATION COMMITTEES ESTABLISHED FOR AGRICULTURE

Spearheading agriculture's defense effort are National, State, and county agricultural mobilization committees established in February by the Secretary of Agriculture. Through them it will be possible to reach quickly every farmer in the Nation in regard to food needs and other defense matters. An advisory Agricultural Mobilization Policy Board also has been established at the national level.

SECTION V. MAKING THE MOST OF OUR MANPOWER RESOURCES

Economic and military strength depend upon the brains and hands that develop, maintain, and operate the machines of production and defense.

Fortunately we have the most highly developed skills and production knowhow of any nation. We have also the advantage of the initiative, resourcefulness, and enterprise of a free people-the products of our democratic way of life. But in numbers our manpower resources are limited.

Therefore, if we are wasteful of our resources, manpower deficiencies could become the limiting factor in production and in military strength.

Our work force is already almost fully employed. The number of young men of fighting age who can be marshaled is limited. Some skilled trades and professions which require long training are already in short supply. Many, if not most, of those who can be brought into our labor force, although they have latent abilities, must be trained before they can become effective.

To make the best use of our manpower resources, we, as a nation, must accomplish the following:

1. We must distribute our manpower between the military services and the civilian economy so as to achieve the best result in terms of the national interest. 2. We must expand the supply of manpower available for defense production, including agriculture, until requirements are met.

3. We must utilize our work force at their highest skills and capacities. 4. We must quickly train adequate numbers for defense jobs and continue the education and training of skilled and scientific personnel.

5. We must provide adequate housing and community facilities and services for defense workers whenever the defense production cannot be located where the workers already live.

6. We must maintain our basic standards of education and health, so as to develop our manpower resources over the long run.

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Many problems that arise will be local in nature and must be solved by local action. National policies for manpower mobilization were defined by the Presi dent in a directive issued to all agencies on January 17.

THE NEEDS WILL BE MET BY VOLUNTARY ACTIONS

All of the foreseeable manpower needs for defense production can be met without using compulsory measures. The desirability of a free choice of his job on the part of each worker was reaffirmed in the President's national manpower mobilization policy. The agencies participating in programs for manpower utilization will carry out this policy.

PROVISION OF MANPOWER FOR THE ARMED FORCES

Since the beginning of the Korean conflict, the Armed Forces have been expanded by more than 1.4 million men. Compared to fewer than 1.5 million last June, present strength is more than 2.9 million-two-thirds of the increase needed to meet the goal of about 3.5 million. This has been accomplished through an intensified recruitment program, recall of reserves and mobilization of National Guard units, and a revival of inductions through selective service In order to provide an adequate pool of manpower to meet the future needs of the Armed Forces, as well as to make provision for a long-range program of universal military training and service, the Senate has passed legislation which provides for lowering the draft age to 18, and extending the period of service from 21 to 24 months. The legislation is pending in the House of Representatives

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1949 1950 1951 Projected 4th Qtr. Averages

Occupational deferment.-Certain occupational skills which are critical to the maintenance of defense production and essential civilian services have been identified in order that men possessing them may be called into the Armed Forces only to the extent that their skills are actually needed in military service. These skills are contained in a "List of Critical Occupations" which, along with a "List of Essential Activities," was prepared by the Departments of Commerce and Labor. The lists are used by the Department of Defense in determining who should be deferred in calling reserves to active duty. The Selective Service System has also distributed these lists to their local boards for their information in considering requests for occupational deferment.

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The Selective Service Act was amended on September 9 to authorize the special registration, classification, and induction of certain medical, dental, and allied specialists under 50 years of age. Although the registration is complete, sufficient volunteers have made unnecessary so far any involuntary inductions under the "doctor draft."

Student deferment.-Since the present critical world situation may last for many years, we must not deplete one of our principal assets-our highly trained personnel in many specialized fields. Enough engineers, scientists, doctors, and other specialists must continue to flow out of our colleges for replacements and to meet the increasing demands of our complex modern society.

To meet this need, a sufficient number of students will have to have their service in the Armed Forces postponed and be allowed to continue with their college education. Financial assistance should be provided for exceptionally qualified students unable to pay their own way. Specific plans for this purpose are now under consideration by the executive agencies and the Congress.

DEFENSE PRODUCTION WILL REQUIRE 3 TO 4 MILLION MORE WORKERS

To meet our defense production goals, the portion of the labor force engaged directly or indirectly in defense production will have to be increased by 3 to 4 million workers in 1951.

Part of this requirement may be met by a shift of workers from nondefense to defense production. However, in order to meet the requirements fully, and at the same time maintain nondefense production as, fully as possible we need to add a large number of persons to the present working force as a whole.

Such an increase to the working force is feasible, despite the fact that the number of employed workers is now at record heights.

By February 1951 we had 61,300,000 men and women in our civilian work force. Of these, 58,900,000 were employed-the largest number ever at work in February. Unemployment was down to 2,400,000, compared with the 4,700,000 unemployed in February 1950.

The rise in employment in defense production has thus far been moderate, largely because of the length of time it takes to translate defense plans and appropriations into actual production and jobs. The initial employment increases occurred chiefly in industries already engaged in production of munitions and related items, such as aircraft and ordnance. With the building, expansion, or reactivation of defense plants, sharp employment gains also occurred in the machinery and related metal-working industries, as well as in industrial construction. Increased procurement of civilian-type goods, such as food and clothing items, for the growing Military Establishment also contributed to an expanding demand for workers

However, during this initial phase of the defense program, employment on defense orders has been very largely superimposed on the continuing high volume of goods produced for the civilian economy. The major part of the employment impact of the defense program upon civilian industries still lies ahead.

Expansion in both civilian and defense production has led to a general tightening of the labor supply. As shown on the map on page 27, in January, 38 of the 151 major industrial centers of the country reported unemployment at less than 3 percent of the labor force, compared to 19 centers in July 1950. In an additional 68 of the major centers, unemployment was down to between 3 and 5 percent in January. Since then, further drops in unemployment have resulted in a further tightening in most of the major labor markets of the country. Local shortages are particularly severe in some occupations. Demand has exceeded supply in some localities for engineers and draftsmen and for certain of the skilled metal-working occupations, such as machinists, tool and die makers, aircraft assembly workers, and pattern and model workers. In a few localities, recruitment problems have extended even to semiskilled occupations. While troublesome in some areas, these labor shortages have not yet significantly retarded defense production.

The major sources of the 3 to 4 million new defense workers will be: Transfer from nondefense activities.-Much of the need for defense workers will be met by the transfer of workers from civilian activities. Many will shift without leaving their present job stations as their establishments convert to defense production.

Reduction of unemployment.-Although the number of unemployed workers is already relatively low, we can expect a further movement of unemployed workers into jobs as defense production accelerates.

Addition of new workers.-In recent years our labor force has grown at an average rate of nearly 1 million annually, due mainly to the growth in the population of working age and to the increasing employment of women. This growth will be less in the years immediately ahead because of the increased requirements for military service.

As shown in the accompanying chart, about 38 million persons of working age and not in school are not in the labor force. Of these, 5 million were men and 33 million were women. Important reserves of manpower are available among housewives with grown children, older persons near the conventional retirement age, and the handicapped. If industry adapts its hiring practices and job standards to utilize these sources of manpower, we can add an additional million workers or more from these sources this year.

Increased hours of work.-For each hour of overtime added to the workweek in manufacturing establishments, we would gain the production equivalent of almost 350,000 new workers. The workweek in manufacturing industries averaged about 41 hours in February 1951. Many workers are still employed less

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