Ford Richmond Assembly Plant - The Roosevelt Administration Mobilizes Industry for War
Much has been written about the new set of government programs and agencies the Roosevelt administration put in place to mobilize American industry for war. One thing that must be noted about these programs and agencies at the outset is that Roosevelt created them on the heels of the New Deal, during which the federal government gained valuable experience in working with firms in private industry. The experience of managing multiple firms working together on giant projects has already been described. In addition the government gained valuable experience during the New Deal in protecting its programs against excess profits by firms trying to take advantage of the situation and in establishing wage and price safeguards in the face of inflationary pressures. The potentials for inflation and excess profits would be even greater during wartime, as government and industry had learned during World War I. Another pitfall both government and industry wanted to avoid was the havoc that befell the U.S. economy following World War I, when reconversion of industry to peacetime pursuits was poorly planned.
Several government organizations for stimulating or coordinating mobilization already existed as war approached. For example, the government had created the Army and Navy Munitions Board in 1922, but it had little money or authority until 1939, when Roosevelt put it under his direct control, giving it a greater role in planning industrial mobilization programs and setting priorities for procurement contracts let by the U.S. Army, U.S. Navy, U.S. Coast Guard, and U.S. Maritime Commission. The Maritime Commission had already begun to expand the nation's ship-building capacity in the late 1930s. In May 1940, following the surrender of several European nations in the wake of Hitler's Blitzkrieg, Roosevelt issued an Executive Order creating the Office of Emergency Management, intended to coordinate the activities of the many government agencies that the government was creating to implement various facets of the mobilization program. He also asked Congress to authorize hundreds of millions of dollars to manufacture fighters and bombers and to build additional bases, depots, hospitals, and other physical plant needed for the anticipated expansion of the military. The burst in mobilization agencies and contracts yielded increasing dissatisfaction among industry, labor, farmers, and Congress, leading Roosevelt to try to reorganize matters. He issued a new Executive Order in January 1941, creating the Office of Production Management (OPM). In the face of continuing squabbles among top army and navy officers, industry leaders, and other interests essential to the successful mobilization of the economy for war production, Roosevelt issued another executive order on 16 January 1942, abolishing the OPM and establishing the War Production Board (WPB), to be headed by Donald Nelson, a former executive at Sears & Roebuck who had joined the Roosevelt Administration late in the New Deal.
To set the tone for the new agency, which he had not yet announced, and to inspire American citizens and companies to rise to the challenge, Roosevelt addressed the nation through his State of the Union Address to Congress on January 6th:
"The superiority of the United States in munitions and ships must be overwhelming, so overwhelming that the Axis nations can never hope to catch up with it. In order to attain this overwhelming superiority, the United States must build planes and tanks and guns and ships to the utmost limit of our national capacity. We have the ability and capacity to produce arms not only for our own armed forces, but also for the armies, navies and air forces fighting on our side. "
"This production of ours in the United States must be raised far above its present levels, even though it will mean the dislocation of the lives and occupations of millions of our own people. We must raise our sights all along the production line. Let no man say it cannot be done. It must be done-and we have undertaken to do."
"Only this all-out scale of production will hasten the ultimate all-out victory. Speed will count. Lost ground can always be regained-lost time, never. Speed will save lives; speed will save this nation which is in peril; speed will save our freedom and civilization-and slowness has never been an American characteristic."
In his speech, Roosevelt called on the nation to expand its production goals for ordnance, increasing the goals for airplanes built in 1942 from 50,000 to 60,000 and to 125,000 in 1943, and increasing the goals for tanks to 45,000 in 1942 and to 75,000 in 1943. To arrive at those figures, Roosevelt had arbitrarily revised them upward from levels his advisors had thought attainable. Commenting on the speech, US News & World Report said that the figures in Roosevelt's production goals "reached such astronomical proportions that human minds could not reach around them." Reflecting on Roosevelt's speech, Donald Nelson later wrote:
"The meeting at which these figures were first mentioned was inspirational, but also rather awesome. We thought that the goals set by the President were out of the question. But the records will show that he knew his country better than we did."
According to a tally by the Automotive Manufacturers Association after the war, the automotive industry by itself made 3,250,000 airplane, marine, tank, and truck engines during the war; nearly 6,000,000 guns of various kinds (about 50 percent of the nation's total production); more than 200,000 tanks and other combat vehicles; 2,600,000 military trucks; 22,160 airplanes; and numerous other items like ammunition, rockets, helmets, water and gas cans, electric motors, etc.
During the war, the Roosevelt administration created a plethora of special agencies and government-owned corporations to manage and engage in facets of the economy. Other umbrella agencies were created to coordinate the activities of agencies managing interdependent facets of the economy. For example, the Office of Price Administration had the authority to control prices in the economy as necessary to prevent inflation. The War Labor Board had the authority to approve or disapprove of any wage increases or decreases. The Metals Reserve Corporation purchased ores and metals from neutral countries and then resold those commodities to U.S. manufacturers engaged in war production. The Defense Plant Corporation built plants for processing certain strategic materials, like aluminum, manganese, synthetic rubber, and tungsten, and then leased the facilities to private entities who operated them.
One result of the government programs aimed at diverting materials and supplies to war production (coupled with price controls) was that some goods needed by the civilian population were in short supply. In an effort to keep the shortages from wreaking havoc in the market, the federal government rationed some commodities, like sugar, tires, and gasoline. Although rationing placed some hardships on the U.S. population during the war, it also should be stated that the U.S. applied a smaller proportion of its gross national product to the war effort than any of the Axis powers or our major allies. It was the position of the War Production Board that Americans were "subjected to inconvenience, rather than sacrifice." During the peak years of war production for the U.S., 1943 and 1944, the nation devoted 42 percent of its gross national product to war purposes (up from 1.4 percent in 1939). In comparison. Great Britain, Canada, and Japan each spent 51 percent of their respective gross national products on war purposes in 1944.