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on how to de-mobilize, or re-mobilize for peace. Some overall supervisory agency is indicated, which can pull together information from public and private sources and coordinate national, state and local efforts. . The Smal! Business Administration is one resource for smaller firms in need of financial backing to convert their plants to peacetime pursuits. Other government measures that might be studied are selective tax benefits during a specified period of change. Tax credits could be allowed for losses during a period of reconversion, and tax carry-forward provisions liberalized to encourage plants to hold onto their workers even if output were small for atime. Careful study is needed of possible graduated tax reduction as an aid to private buying and investment. The California Legislature in April 1958 adopted and sent to Congress a Joint Resolution requesting a complete study of the economic problems of disarmament. This, it said, should cover “ways of providing Federal aid to areas depressed by a reduction in defense expenditures,” and also the “strengthening of government employment services and compensation sys- tems, and the possible methods for retraining and relocating workers facing major readjustments.” The resolution quoted research findings that a 50 per cent cut in our defense spending could result in layoffs of 120,000 people in Southern Cali- fornia alone. It emphasized that all the facts should be brought together as to the numbers of people employed in various defense industries, where those industries are, and how they could be helped to change their plants and resources over to non-defense industry—all of this with the cooperation of Federal, State and local agencies, The sample disarmament timetable which we suggested earlier would take over five years to bring about a reduction of SO per cent below 1958 levels. Meanwhile, some economists point out that present losses in produc- tivity and employment, simply from letting the economic machinery run far below capacity, would equal a 100 per cent cut in armaments. They insist that by bringing production up to its full potential the country could have bombs AND butter if it wished—‘butter” meaning all the desirable civilian programs, including foreign aid, which are denied or cut back. On this point official opinion is not convinced. Congress, while voting more money for arms than is asked for by the military departments, uses ¢ economy plea to pare civilian programs and appropriations for foreign economic aid and technical assistance: and our Government states that we cannot afford to take part in a world plan such as SUNFED (Special United Nations Fund for Economic Development) until we get disarmament. The overall problem of financing the transition will not be serious if any savings from disarmament are immediately used to finance other needed government programs or tax cuts. The danger of a depression will be mini- mized if we avoid trying to reduce defense expenditure and the national debt at the same time. ; . “Lage